Kingmaker Footwear Holdings (1170), a major casual fashion and baby footwear manufacturer, says sales to the United States have increased despite shrinking demand for luxury items and the appreciating yuan.

Kingmaker recorded a 3.8 percent rise in average selling price in the six months ended September 30. But earnings dropped 18 percent because of setbacks in higher-margin premium goods sales, indicating that cash-strapped consumers are choosing cheaper products.

Analysts expect luxury items, including high-end fashion products, will be most severely affected in the coming months.

Kingmaker chairman Mickey Chen Ming-hsiung said the current order book for early 2009 is "sluggish." But he believes there will be solid demand, especially in the casual and children's categories.

Kingmaker still has to face the European Union's anti-dumping tariff on leather shoes. This will affect its 25 production lines in the mainland and 10 in Vietnam.

The punishment tariff - 16.5 percent for Chinese products and 10 percent for Vietnamese - will remain until the investigation by the EU finishes.

Kingmaker now makes shoes for international brands like Skechers and Clarks, which accounted for 93.11 percent of total turnover of HK$795 million in 2008.

Orders from the US and the EU contributed 54.74 percent and 36.07 percent, respectively, to turnover.