Minor sees M&A as best fit for fashion sales goal

Chak Charlermchai, the company’s vice president for new business development and real estate, said Minor was negotiating with at least 10 Thai brands for their products ranging from bags to sporting goods, to be added to its portfolio. 
Minor is looking for products that have established businesses behind them and the potential to catch on abroad. They also need to fit into market categories that attract sales of Bt1 billion to Bt3 billion. Minor said it expected to conclude business deals with the Thai brand owners by the end of the year.
Minor distributes 12 brands covering international fashion, lifestyle items and kitchenware, including Esprit, Bossini, Gap, Charles & Keith and Banana Republic.
“As the purchasing power of the Thai consumers has not rebounded, we have only been able to grow our sales by 10 per cent per year from our existing businesses. Therefore, we have to rely more on an M&A strategy to help propel our business over the next three to four years,” Chak said.
The company aims to continue adding international brands to its portfolio to boost sales growth. However, each brand needs to have good potential in the market with annual sales of at least Bt300 million.
“We will no longer market any products with a market value of less than Bt300 million per year. For this reason we stopped distribute the Red Earth beauty brand last year,” Chak said.
He said the fashion items in the Minor portfolio were aimed at middle-income consumers.
Building on this base, the company will bolster its portfolio with fast-fashion brands for the mass market. The company is negotiating with fast-fashion brands from Italy and Germany for exclusive distributorships in the Thai market. Minor said it expected to finalise deals by the end of the year.
The company is keen on fast fashion (designs that move from catwalk to shops quickly to cash in on current trends) because the number of brands in the market segment is small and the demand continues to grow each year.
Yesterday, the company launched Etam, a French lingerie label, with similar offerings to the UK’s Victoria’s Secret brand.
“We extended our portfolio to lingerie because the market size for it is about Bt10 billion, with only five top brands,” Chak said.
“As for the broader fashion clothing market, this is worth about Bt200 billion, but with up to 300 brands available.”
Minor hopes Etam will shake up the premium segment dominated by international brands. Bangkok has 12 Etam shop-in-shop outlets and free-standing shops. The company expects to open eight more Etam shops this year, bringing the total to 20 by the end of this year.
The company expects annual sales of Etam lingerie to reach Bt1 billion over the next three years.
The Etam brand has been available in France for a century. “Thailand’s lingerie market is huge and shows constant growth. 
The growth rate tends to exceed that of the menswear and womenswear, particularly in the premium segment,” Chak said. 
He added that people aged 25-35 with high purchasing power demanded brand-name lingerie products with lavish designs and innovation. These are rare in Thailand, which is mainly dominated by functional underwear.
Etam also offers nightwear and other lines.
Dararat Boonthum, Etam brand manager for Minor, said all Etam items were imported from France, with a 15-per-cent price differential.
Chak added that the company targeted between Bt350 million and Bt400 million in sales revenue from Etam this year.