Garment maker Tainan Enterprise Co (台南企業) yesterday downgraded its revenue growth target for this year from the 20 percent it forecast at the end of last year to 10 percent because its clients opted for cheaper products.
“Since our clients are under pressure to push up their sales, they chose to order apparel made of cheaper fabrics,” president and chief executive officer Cathy Yang (楊富琴) said.
As a result, the company expects its average selling price will drop 3 to 4 percent this year to about US$10 per item of apparel this year from last year.
In the first six months of the year, the company’s revenue fell by 5.25 percent to NT$4.73 billion (US$158.02 million) from a year earlier.
However, Yang said sales would start to pick up this quarter as the company begins to ship products to new clients in Europe and Japan, including Swedish fashion retailer Hennes & Mauritz (H&M) AB.
The company is expanding its capacity in Indonesia by 300,000 units per month to 1.4 million units per month by the end of this year to meet the demand from H&M, while its capacity in Cambodia is expected to rise to 800,000 units per month by the end of this year from 600,000 units a month.
Along with a capacity of 600,000 units to 700,000 units per month in China, overall capacity will rise to between 2.8 million and 2.9 million units a month by the end of this year, said the company, which also supplies goods to global brands such as White House Black Market, Ann Taylor, Macy’s, Gap and Reitmans.
In the first quarter, the company posted profit of NT$80.73 million, or NT$0.55 per share, down 46.49 percent from the same period last year.
Yang said Tainan Enterprise’s profit this year would remain flat compared to last year’s NT$235.35 million, or NT$1.61 per share, while losses at its subsidiary, Tainan Enterprise (Cayman) Co (台南企業開曼), would decline slightly from the NT$660.1 million posted last year.
Tainan Enterprise (Cayman), which is 53.54 percent held by its parent company, sells apparels under brands such as Tony Wear and Emely.
Meanwhile, Tainan Enterprise yesterday launched a new brand, VANIFESTO. The new line is aimed at young women who have just graduated from university and entered the job market.
Tainan Enterprise recruited Wenlan Chia (賈雯蘭), the founder of Twinkle by Wenlan garment brand, as the director of VANIFESTO, as well as four designers from Shih Chien University’s College of Design, Yang said.
VANIFESTO apparel is priced between NT$590 and NT$2,290 per item, the company said, adding that it has designed 80 pieces so far.
The new brand will be sold online at RUE58.com, a Web site set up by Tainan Enterprise that will begin operations on Friday, Yang said.
RUE58’s Facebook page already has 7,971 fans, and the company said it plans to increase that number by 10,000 a month.
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