Stella International Holdings is closing its large factory in Dongguan, which employs some 10,000 workers, at the end of this month, due to rising labor costs. The plant has been making mainly women's shoes for brands like Prada, Rockport and Nike. The Chinese producer will move most of the production to Southeast Asia.
Stella saw its manufacturing revenues increase by 5.1 percent in the last quarter of 2015 to $389.2 million. They finished the year at $1,705.0 million, up 8.5 percent, with continued strength in sports fashion footwear. The company saw average selling prices fall by 4.0 percent during the quarter to $26.10 per pair, mostly due to lower raw material costs, particularly leather. Shipment volumes rose 10 percent in the quarter and the year, to 14.9 million pairs and 58.2 million pairs respectively.
Stella's small Chinese retail business saw sales fall 27.4 percent to $17.0 million in the quarter, with a decline of 21.5 percent in same-store sales. Chinese retail sales were down 23.4 percent for the year to $70.9 million on slowing economic growth and a warm early winter selling season.