Padini to focus on Brands Outlet expansion

By Vasantha GanesanPublished: 2010/05/10


The garment and shoe retailer is not looking to grow its other brands such as Vincci, Padini and Seed outlets as aggressively

Garment and shoe retailer Padini Holdings Bhd's (7052) expansion plans will focus on its Brands Outlet stores over the next three to five years.

It is not looking to grow its other brands such as Vincci, Padini and Seed outlets as aggressively as it does not see many new suitable malls to locate them.

Brands Outlet, which offers value brands, made its debut in 2007. Today, there are 10 Brands Outlet stores.

Brands Outlet offers a similar retail concept as those at FOS and Reject Shop.
Executive director Chan Kwai Heng said that unlike the multi-brand Padini Concept Store, a Brands Outlet does not require huge investment.

"For Brands Outlet we don't need to spend too much money on the facade or flooring. It costs 50 per cent less than a Concept Store," Chan told Business Times in an interview.

A Padini Concept Store generally carries several brands. Each outlet may have a different layout to portray a certain image and brand.

Chan said that Padini was working towards making the same margins from its Brands Outlet stores as its other brands.

However, he was not able to disclose the number of stores it will open annually.

On its performance for the financial year ending June 30 2010, Chan said he was expecting revenue to exceed last year's RM475.48 million.

He also expressed hopes of matching the RM49.53 million net profit of the last financial year.

"We are growing, but at a slower pace," he said.

A lot of its growth comes from expansion. In the current financial year, it only opened 46,000 sq ft of space compared with 90,000 sq ft and 140,000 sq ft in fiscal years 2009 and 2008 respectively.

Chan said that while several indicators pointed to a recovery in the economy, it had yet to be reflected in its sales.

Nevertheless, Padini expects to perform better in the second half of the year, particularly in the July-September period. August sales will coincide with shopping for the Hari Raya festival.

"We have not felt the impact yet. Our sales are better during the festive season. Retail is still very much driven by sales and promotion," Chan said.

He also disclosed that Vincci will be vacating its prime spot at the concourse of Suria KLCC in September as the mall operator plans a refurbishment.

As at June 30 2009, Padini had 232 stores, including freestanding outlets and consignment counters.

Other brands under the group include P & Co, Miki Kids, Miki Mum and Vincci Accessories.