Padini eyes higher overseas sales

PADINI Holdings Bhd, owner of local fashion brands Padini and Vincci, is on the verge of a major overseas offensive that aims to have sales from abroad rising from the current 7% to 50% of total group revenue, executive director Chan Kwai Heng said. 

“We are seeking a balance between local and foreign sales. It may take some time to achieve, but it will be an inevitable move as the Malaysian market gets increasingly saturated,” he told reporters yesterday after the company’s EGM in Shah Alam.  

Last year, Padini achieved revenues of RM188mil, of which only about 4% comprise overseas sales.  

Managing director Yong Pang Chaun said overseas contributions for the essentially still local fashion house had since increased to 7% and he expects this figure to hit “double digits” by the year-end.  

The company, currently listed on Bursa Malaysia's second board, expects to migrate to the Main Board in August.  

As a first step to being an international player, Yong said, the company was establishing a global sourcing centre in Hong Kong that would specialise in building and improving the group’s sourcing capabilities and quality control and be responsible for logistics, all of which were crucial for a global operator. 

Between 60% and 75% of the garments under the Padini brands are made under licence outside Malaysia, with a large proportion sourced from China. The company’s own factories in Malaysia manufacture less than 4% of its current requirements.  

Chan said the centre in Hong Kong would be a key cog for the group’s operations in the future; handling the merchandising for most of its international sales.  

He said the company would focus on South-East Asia and the Middle East, but this may be extended later to cover other regions. 

In a move that is likely to be replicated elsewhere, the company recently signed memorandums of understanding with 2 parties – in preparation for the awarding of exclusive distributing rights to Padini brands in Saudi Arabia and the United Arab Emirates. 

Locally, Chan said, the company, which operates some 75 stores in Malaysia, would not be looking at increasing the number of outlets but at consolidating some of them into concept stores that were some 10 times bigger in area.  

Padini currently has 5 such concept stores of over 10,000 sq ft that showcase products of all of the group’s brands. 

“These concept stores allow us to better display our products and better serve our customers,” Chan said. 

In smaller urban areas, Chan said, the group would be looking to local franchisees. This has allowed Padini to establish a presence in the peninsular’s east coast as well as in Sabah and Sarawak recently.  

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