KNOWSLEY cushion maker Caldeira could switch some production from its China factory to Merseyside, due to “rampant inflation, a rising currency, increasing labour costs and high interest charges”.
Founder and managing director Tony Caldeira revealed in the company’s annual report that he is considering restructuring the Chinese division, near Hangzhou, in Zhejiang province, and “possibly even returning some manufacturing to its UK headquarters in Merseyside”.
The figures showed the group made a loss after tax of £166,000 in the year to December 31, compared with a profit of £287,000 in 2009, despite a rise in sales from £20m to £21m.
Mr Caldeira, who began in business on a Great Homer Street market stall, blamed rising costs, as well as losses at retail arm The Fabric Warehouse, due to heavy snows which affected customer footfall and refurbishment costs throughout the 14-strong chain.
But he said: “Considering the perfect storm that the company has faced, Caldeira has traded well and continues to strongly outperform its rivals.”
He insisted the firm will return to profit in the current financial year: “Over the years, the Caldeira Group has reinvested its profits and as a result has a very strong balance sheet.
“This has helped the company through this perfect storm.
“I am confident that the company will emerge from this unprecedented trading period better, stronger and more competitive than ever.”
The Knowsley Business Park factory, which employs more than 40 staff, remained profitable, despite the collapse of several customers including the 2010 administration of the then Knowsley-based Ethel Austin group.
Caldeira USA, based in New York, saw a 50% increase in sales and the addition of more leading North American retailers to its customer base. And, while Caldeira China improved sales, a surge in costs adversely affected profit margins.
The Fabric Warehouse suffered from a fall in big ticket sales as the economy and housing market continued to falter, and Mr Caldeira admitted that the division will remain loss-making throughout 2011.
Last year, Caldeira added a property company to the group, acquiring a building previously rented by The Fabric Warehouse in Waterlooville, Hampshire. Further properties will be added to the portfolio as opportunities arise.
Mr Caldeira said trading conditions are still tough, but he remains positive about the long-term prospects.
Despite losing some customers, Caldeira UK has added Argos and Speke-based Shop Direct to its client base this year which, he said, will more than offset the loss of sales.
