Safeguarding their operating stability and tackling new business segments: such are the two pillars on which Stella International are planning to build up again 2020 activity, playing from China. In doing so, they aim to overcome Coronavirus outbreak emergency. In 2019, the footwear group, headquartered in Hong Kong, faced several up and down vicissitudes. Revenues have been decreasing, but profits went up. They are going to deal with a number of difficulties in the next 12 months. Yet, they do want to surmount them all.
Stella International look at 2020
“In 2019, we managed to achieve a few relevant enhancements to ensure our long-term success alongside our profitability. We primarily focused our efforts on boosting margins with regard to the increase of shipping volumes – commented Chi Lo-Jen, managing director of the group –. Such strategy has driven a sound improvement of operating results and net profits as well. Looking ahead at the whole of 2020, our top priority will be to safeguard our operating stability and, at the same time, to keep optimising our profit margins, if possible”. Obviously, we shall see how Covid-19 epidemic progression goes along. During these months, pointed out the company, they will complete the relocation of production from mainland China to South-East Asia. Simultaneously, a few companies, which stand outside the group’s listed branch, are striving hard to develop some leather accessories, which might be included in the company’s core business during the first semester of the current year.
The virus impact
The Hong Kong group does not run any manufacturing plants in the province of Hubei. Besides that, just a few of their workers come from that area. As regards the group’s production, 70% of it is located outside mainland China. As for the remaining 30%, “they had to delay manufacturing recovery in compliance with guidelines and regulations issued by government”. Likewise, in The Philippines they suspended productive activities for a month as well. Yet, announced the company, now production is gradually going to run at full speed again.
Lights and shadows in 2020
At the end of 2019, Stella International shipping volumes amounted to 59.4 million pairs of shoes, therefore dropping by 1.3%. Average price keeps steady, 25.8 dollars, despite the fact that the group changed their product line and strove to engage new brackets of customers. As pointed out by the Asian company in a press release, “demand for our sport products kept increasing soundly: on top of that, orders coming from our most important client, which takes provisions from the new manufacturing plant in Vietnam, have been rising”. “Furthermore, we are also planning to expand the range of our customers in this segment while focusing, at the same time, on the premium end – continued Stella International –, whereas luxury fashion brands are striving to join the sport market”.
Picture taken from stella.com.hk