Footwear developer, manufacturer and retailer Stella International has reported a drop in revenue for both its third quarter and for the nine months to September 30.
Stella’s revenue was about US$475.3 million for the third quarter ($569 million for the same period last year) and $1192.8 million for the nine months (2015: $1366.2 million) – a fall of about 16.5 and 12.7 per cent respectively.
However, strong demand continued for the group’s athleisure products, which are still a key growth driver.
Separately, the performance of the group’s retail business in China improved 4.6 per cent to $16.1 million for the three months.
Looking forward, the group says it expects orders for its footwear products to stabilise toward the end of this year and the beginning of 2017. At the same time, the group expects to improve efficiency through cost controls and further cutting its workforce.
Stella will also focus on building long-term competitiveness of its retail business by selectively opening standalone stores in high-potential locations in China, and by expanding its presence in Europe.
It will continue to work with global retailers and department stores, including Barneys New York and Lane Crawford, which have made the group’s retail brands available on their eCommerce platforms. Stella also plans to enter new markets such as Hong Kong and the US.
The group says a fall in revenue and shipment volumes has been mostly attributable to the ongoing decline in orders for its casual footwear products.
There has also been a fall in the average selling price of its footwear products, mainly because of falling raw material costs, particularly for leather, changes in product mix, as well as greater pricing competition.