Rising leather prices can't dampen Stella's optimism
High-end footwear manufacturer Stella International is to set up a factory in the Freeport Area of Bataan that will create an initial 5,000 jobs.
The Taiwanese company supplies shoes to major brands including Clarks, Deckers, ECCO, Rockport, Timberland and Wolverine and is planning to increase the workforce at the new site to 10,000 when it is up and running, according to Bataan’s mayor, Jose Enrique Garcia III.
Last week the group revealed revenue for the six months to the end of June rose 3.6% to $722.6 million, while gross profit across declined 6.1% to $154.6 million. Shipment volumes fell 0.4% to 23.7 million pairs, while the average selling price of footwear rose 5.6% to $28.4 per pair, primarily due to the rising cost of leather.
Stella’s CEO, Lawrence Chen, said: “Improving economic conditions in our primary export markets has started to be reflected in our financial performance and we were pleased to witness a pick-up in customer orders towards the end of the interim period. Some risks remain however and we are continuing to maintain ongoing measures to strengthen our cost-controls and further improve the quality of our products.”
During the six month period, the group expanded production capacity at manufacturing facilities in inland China, Vietnam and Indonesia in anticipation of an expected upturn in orders in the second half of 2014.
It also “further explored the feasibility and growth potential” of new business streams, including the manufacture of high-end leather goods, “particularly for products that already appeal to Stella’s established base of customers”.
Chairman Jack Chiang added: “We are cautiously optimistic the prospects of our business in the second half of the year, especially in light of the better-than-expected 4% rebound in the US economy in the second quarter of this year. We look forward to delivering further value to our customers in the form of innovative footwear products – and increasingly leathergoods products – and delivering stable returns to our shareholders.”
