Deckers forms JV with Taiwan-based Stella to sell shoes in China

July 10 (Reuters) - Deckers Outdoor Corp (DECK.O) said it formed a $5 million joint venture with Taiwan-based shoe maker Stella International Holdings Ltd (1836.HK) to open retail stores and enable wholesale distribution of Deckers' core UGG Australia brand in China.

Deckers, which plans to open one to two stores in China in 2008, said it would own 51 percent of the joint venture while the rest would be owned by Stella International.

The initial investment of $1 million will be contributed by each party in proportion to their respective ownership in the joint venture, Deckers said.

Stella, which operates over 100 high end Stella Luna and What For retail stores, makes footwear for brands including LVMH (LVMH.PA), Paul Smith, Prada, Hugo Boss (BOSG_p.DE), Camper, Nine West, Clarks, Kenneth Cole and Timberland (TBL.N).

The Taiwan-based company, which went public last year, makes shoes at its facilities in Guangdong Province, China and through processing and contractual arrangements in both China and Vietnam.

Shares of Deckers, whose other brands include Teva, Simple and Tsubo, were up $2.69 at $125.99 in trading after the bell. They closed at $123.30 Thursday on Nasdaq. (Reporting by Dhanya Skariachan in Bangalore; Editing by Deepak Kannan)