Decline of just over 25% for Stella International
Footwear group Stella International has reported full-year revenues for 2020 of just over $1.1 billion, a decline of 26.5% compared to the previous year.
In terms of volume, Stella shipped 43.4 million pairs of shoes, boot and other footwear in the course of 2020, down by 26.9% compared to the figure for 2019.
It said the decline in revenue and shipment volumes was attributable to decreased demand from its brand customers owing to the covid-19 pandemic, with retail stores around the world being forced to close on government lockdown orders.
However, Stella said the situation gradually improved in the third and fourth quarters of the year; business started to recover and some customers sought to replenish inventory levels after experiencing understocking ahead of the holiday season.
Manufacturing operations were also impacted by local covid-related shutdowns at the beginning of 2020, which had a negative impact on production schedules and profitability.
There were one-off costs in the form of severance payments and other factory closure costs, but Stella said these were partially offset by subsidies from the Chinese government. The group also sold some land.
In 2021, Stella said its main priorities would be steady volume growth and margin improvement. However, order visibility for the second half of 2021 remains low with customers currently adopting a ‘wait-and-see’ approach.
Announcing the figures, Stella chairman, Lawrence Chen, said: “The pandemic has strengthened the long-term trends facing the industry. More and more brands will seek shorter lead times and smaller batches that better cater to their growing online sales.”
