Danish footwear maker ECCO halts Vietnam factory operations

Danish footwear manufacturer ECCO has ceased operations at its Vietnam factory, marking a part of the company's global restructuring strategy to cut costs amid a tough economic climate. The Bau Bang factory, situated in Ho Chi Minh City's Bau Bang Industrial Park, ceased production on November 2, employing 1,611 individuals, which includes 259 outsourced workers.

This decision is part of ECCO's strategic plan to consolidate production at a few existing plants, focusing on expanding its Denmark headquarters and other current factories for long-term sustainability.

A small group of employees will stay for the next few months to aid in the factory's closure process, as per regulations. They will be informed about their future job scenarios. Most of the remaining employees' contracts will end on November 30. ECCO, founded in Denmark in 1963, has manufacturing operations in Vietnam. The Bau Bang factory, covering 120,000 square meters and with a registered investment capital of $38.18 million, started operations in April 2020.

ECCO has also decided to halt production at its Portugal factory, which employs around 650 people. The Danish brand's global restructuring encompasses an additional 400 positions that will be lost across various global and regional roles. The company has faced declining sales, particularly in its direct-to-consumer business, over the years.

Global supply chain shifts and Vietnam's strong manufacturing growth, aided by improved transport infrastructure and strategic connectivity, have drawn foreign investment into northern Vietnam's industrial parks.