Makalot Industrial Co (聚陽實業), the nation’s leading garment manufacturer, yesterday reported revenue of NT$1.57 billion (US$48.63 million) last month, a double-digit decline from a year earlier.
That represented the fourth consecutive month of annual decline in revenue, according to a company filing with the Taiwan Stock Exchange.
Revenue rose 9.86 percent from the previous month, but the annual decline expanded to 15.01 percent last month from the previous month’s annual drop of 1.47 percent.
The company’s investor relations official attributed the 15.01 percent annual decline in sales to the traditional slow season.
“This [month’s revenue] will not affect our company’s long-term strategy,” the official said by telephone.
However, plans to open new production lines in Vietnam might be suspended, depending on buyers’ decisions on shipment requests in the second half of this year, the company said.
Revenue for the second quarter was NT$4.59 billion, plummeting 27.14 percent quarterly and 7.7 percent annually, the filing showed.
That brought revenue in the first half to NT$10.90 billion, an increase of 1.34 percent from NT$10.75 billion in the same period last year.
Makalot chairman Frank Chou (周理平) told a shareholders’ meeting last month that the second quarter might be the company’s lowest point this year, but performance would improve in the third and fourth quarters.
The pessimistic atmosphere in the garment industry has expanded since last year, Chou said, adding that global clothing companies, especially fast fashion brands, tend to be more conservative on future order forecasts.
Makalot had planned to increase its production lines in Southeast Asian countries to more than 100, but it had only added 45 as of last month.
The timing of the other lines to begin production depends on demand from global buyers, Chou said.
Chou told shareholders that the company would keep increasing production capacity on its higher-margin sportswear products in a bid to benefit from rising global demand for sportswear products.
Daiwa Capital Markets Inc analyst Helen Chien (簡君穎) said in a report on Thursday last week that rising demand for sportswear products from consumers has changed the dynamics of the clothing industry.
The demand for sportswear products might grow faster than for traditional clothing products, Chien said.
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