Labour Shortage Footwear Retailers

On July 12th, Hong Kong media reported that the shortage of labour generated by factory workers in the mainland due to low pay has begun to affect the sale and operation of some retailers. Daphne (00210) indicated to the securities industry that its outsourcing factories affected the company's inventory due to labour shortages, thereby affecting the second quarter sales. However, BELLE International (1880), which produced most of the outsourcing, did not encounter the same problem.

BELLE means nothing.

After meeting with Daphne management, UBS issued a report, which quoted Daphne management as saying that the same store turnover increased by only 1% to 3% in the first half of the year, which was mainly affected by the shortage of labour in the second quarter, which caused the company's stock to be tight. This also led to the failure of the first half of the year to open up the number of shops.

After a consultation with Daphne management, Dahua and Daphne confirmed that the outsourcing companies in Dongguan were affected by labor shortages. The proportion of Daphne's different brands accounted for 20% to 60% of the total sales, while the company originally planned to open 500 new sales outlets this year, but only 140 additional products were sold at the end of the year.

BELLE, who also produces and sells leather shoes, has pointed out that there is no labor shortage in the company itself or its outsourcing factories, according to fund managers who had contacted them earlier.

It is understood that BELLE accounts for 30% of the total sales ratio.

All production and procurement were outsourced to the surplus group of Dongguan manufacturers (1386). Zhu Xianwen, chief financial officer, admitted that the local shoemaking industry was indeed in existence. Especially after the start of the wage increase, "there are factories that have problems with the shortage of workers, but we have 40 to 50 suppliers, and the supply of goods is very scattered, so there is no effect."

Daphne became the first retail company to suffer from rising wages. Some retail analysts said they had not heard of similar situations in other listed companies.

Yuyuan salary will increase by more than 1.

As the world's largest footwear manufacturer, Yuyuan industry (551), which has relatively simple production processes, says that the monthly salary of the employees in the group is between 1300 yuan (RMB. The same below) to 1500 yuan, which is higher than the minimum wage stipulated. Therefore, there is no shortage of sports shoes.

Yuyuan employs 330 thousand staff, about half of whom work in the mainland.

Yuyuan also said that the wages of workers all over the country rose sharply this year. The main reason was that there was no adjustment in salary last year. The mainland's total wages will be raised by a low double-digit rate next year. However, if the mainland's minimum wage is really raised to 2000 yuan as Foxconn (2038), it will not only affect Yuyuan, but also affect the entire Chinese industry.