Exec director: Pace of expansion will be slower
KUALA LUMPUR: Fashion retailer Padini expects annual sales growth in fiscal 2010 to slow from a year earlier as it expands at a slower pace.
The pace at which the company would add retail space would fall by more than half, Padini executive director Chan Kwai Heng said.
Sales for the year to June 2009 jumped 24% to RM477mil from a year earlier while net profit was up 19% to RM49.5mil, company data show.
“That kind of growth could be a bit hard pressed to sustain because for FY10, we are not adding a lot more space,” Chan said in an interview.
Padini would add about 40,000 sq ft of retail space in fiscal 2010, versus 90,000 in 2009 and 140,000 in 2008, he said.
Malaysia, Asia’s third most trade-dependent economy after Singapore and Hong Kong, shrank 3.9% in the second quarter after a 6.2% drop in the first quarter from a year earlier.
Padini’s business is growing despite the downturn, with the company rolling out new product lines and opening more outlets. “The increase in sales is mainly generated from (new retail space),” Chan said.
A company that began as a garment manufacturer for bigger brands in 1971, Padini moved to building its own brands in the late 80s and early 90s when a booming economy boosted domestic consumption in the country.
Padini now sells nine brands of fashion goods ranging from garments to women’s shoes and accessories in 12 countries in South-East Asia and the Middle East.
Foreign retail brands such as Top Shop, Zara and MNG have flooded the local retail market in recent years to tap into the growing consumer market.
Chan said the company had no intention of beefing up its exports despite rising competition at home. Currently, overseas sales account for about 10% of the total. — Reuters
“We do not have a concerted plan or strategy as to what we shall do to go for the export market,” he said. “For us, the retail market at home is still so lucrative and it is still doing so well for us, because of that we will really pay attention to this part,” he said.
