Stepping up

A name change has accompanied each of the milestones of the business started by the Castro family in Marikina.

The company started out as Phentoe Shoe Supply in 1973, with a capital of P2,000 to buy the shoe accessories it sold. It became Gibi Shoes in 1984 when the company ventured into the making of shoes. Now that the company is a subcontractor of well-known foreign shoe brands, it is known as Stefano Shoes.

The bulk of Stefano’s revenues come from the local market. It retails shoes in 33 Gibi Houses from Baguio to Zamboanga. To further broaden its market without too much cash out, the Gibi brand is also sold in supermarket chains. "Counting the supermarkets, our shoes can be found in 120 outlets," said Stefano director Roger Py.

Gibi Houses account for 60% to 70% of total local sales. Viajeros (those who buy shoes at wholesale prices and then retail these, either on installment or cash basis to their clients) account for another 10%. Supermarket sales account for the balance.

"We’ve been exporting small volumes to the Middle East since 1998. In Kuwait alone, we’ve exported 8,000 pairs," said Py.

That same year the company entered into an exclusive production contract with Florsheim USA for the production of Florsheim for Kids. Every quarter, 1,500 pairs are shipped to Florsheim’s regional office in Hong Kong.

Recently, Stefano has shipped out 400 pairs of Florsheim shoes for adults to Florsheim, Korea.

Production

Stefano’s production for both local and foreign shoes is centered in Marikina, where it operates three plants. Two of its plants are mechanized. The third (and newest) plant is in the process of being mechanized through a P12 million loan extended two years ago by Planters Development Bank.

Part of the bank loan was used to put up a four-story building for Stefano’s administrative offices and stock rooms on a 750 sqm. prime property in Marikina. An adjacent four-story building is currently being built to house the company’s expanded staff and increased stock.

Competitiveness

Stefano’s long-term strategy to develop partnerships with high-end global brands while nurturing its local brand is deliberate. Aside from the wider margins, the world appetite for shoes is huge at 11 billion pairs a year. Of this total, two billion pairs each are supplied by China and by Vietnam. Another two billion are made by India and Thailand.

"How could Marikina shoemakers compete with the production of cheap shoes from China?", asked Py, who is concurrent director general of the Philippine Footwear Association.

Ten years ago, the Philippines was the tenth largest producer of shoes in the world. Today, it no longer ranks, in part because of lower per capita shoe purchases. Filipinos buy an average of two to three pairs a year, half of the per capita consumption of other Asian countries.

"Although the Philippines has never made it as a top producer and supplier of shoes in the world, it has gained a reputation for producing quality and fashionable shoes," said Py. Stefano’s foreign partners couldn’t have said it better.