Moving production out of China is expensive. Stella International, which has been slowly relocating production from China to South-East Asia, is well aware of that. The group’s revenue result at the end of the year was of -1.3%, but the group is optimistic for 2020.
The income statement
Stella International archived 2019 with a revenue of 1.5 billion USD from its production operations (-1-3%). “The reason behind this decrease is the lower volume of shipments, which went down by 1.3% to reach 59.4 million pairs”, recites a company’s official statement, which confirms the numbers are in line with the forecasts.
The goals
The goals for 2019 were focused on improving productive efficiency, transferring the related operations to South-East Asia and increasing the product and client mix. According to the company, the results obtained are in line with expectations. Moreover, Stella International is specifically betting on Indonesia, where “new production” capabilities have been implemented and where investments will be focused.
The comment
“The strategy continues to slow down volume growth in the short term – commented the CEO Chi Lo-Jen -, but it will allow us to increment our profitability and thus positioning us towards a path of sustainable long-term growth”. “We trust we will be able to continue growing our profits – adds Lawrence Chen, the group’s president – into 2020”. This year the company will continue following the chosen strategy: prioritize margins and strengthening all efforts relating to the relocation of production.
Picture from Stella Luna, one of the group’s brands
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