US: K-Swiss faces shortfall as Thai plant shuts
Footwear company K-Swiss is facing a potential loss of customer orders to the tune of US$5m after one of its manufacturing units in Thailand closed.
K-Swiss said that a contractor in Thailand, which it did not name, had ceased operations and would not be able to fulfill orders for 700,000 pairs of shoes scheduled for the second and third quarters of 2010.
It is one of only three manufacturers utilised by the company in its global supply chain, and primarily supplies canvas products for the K-Swiss brand.
Most of the shoes were being produced to fulfill orders primarily for Latin America and to a lesser extent Europe, the company said.
K-Swiss is now looking to secure production capacity with other facilities instead, but anticipates delays and said it was not certain when and how much capacity will be replaced.
"Assuming the company cannot fulfill any customer orders from previously scheduled Thailand production, the company estimates a total impact of approximately $5m in lost revenues during the second and third quarters of 2010," a statement added.
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