São Paulo –Grendene, a Brazilian maker of shoes, shipped 42.5 million pairs to the foreign market last year, according to figures disclosed by the company last week. Shipments dropped 22.2% over the previous result, when sales had totalled 54.6 million pairs. Export revenues dropped 5%, from US$ 224.3 million to US$ 213 million.
According to the company, the lower foreign sales had been expected since early 2011 and were mainly due to a change in Grendene focus, as the company decided to sell higher value-added shoes. The company also kept two million pairs that should have been sold to Argentina in stock, due to the new customs regulation adopted by the government of Argentina. Furthermore, exchange rates were unfavourable to exports.
With the reduction in exports and also the lower sales on the domestic market, sales of Grendene shoes dropped to 150 million pairs, as against 170 million in 2010, 11.4% less. In Brazil, there was a reduction of 6.3% in sales, to 107.6 million pairs. The performance in the domestic market had not been expected, said director Francisco Schmitt, in a company statement.
Grendene says, in its 2011 report, that due to the economic conjecture presented last year, the company had much lower results than expected, though solid. Adaptation to the lower result was through cost control and increase of the gross margin. The company modified its dividend policy, which resulted in 80.3% greater dividend distribution than in 2010, with R$ 219.5 million (US$ 127.5 million).
Gross revenues with Grendene sales reached US$ 1.8 billion, with 7.6% reduction. Net revenues were 7.6% down too, to US$ 1.4 billion. Net profit reached US$ 305 million, with reduction of 2.2%. However, the company maintains its targets for coming years, with 8% to 12% expansion in gross revenues from 2011 to 2015 and growth of 12% to 15% in net profit. Grendene has 12 shoe factories, all in Brazil.
*Translated by Mark Ament
