Chataweekij Corporation Ltd, the licensee of the Crocodile clothing brand, will expand its business to Laos and Cambodia next year, one year later than its original plan because of a production shortage. Managing director Somsak Chataweesak said the company was planning to spend about 100 million baht to build a new factory in a suburban location next year. The production capacity could double or even triple to between 200,000 and 300,000 pieces to serve both domestic and export markets.
''Though many fake Crocodile fashion apparel items made in China and Vietnam are available in Laos and Cambodia, we think it is the right time to go there,'' he said. ''We are confident we can tackle this problem after fighting it for 20 years in the Thai market.''
He said the company would have partners in Laos and Cambodia to distribute its products.
At the same time, the company will expand its customer base from adults to teenagers by introducing Stand Up, a new Crocodile fashion line.
Also, the company plans to spend 100-200 million baht next year to support aggressive expansion in the domestic market next year. The funds will go to recruiting more staff as well as designers, and extending its product lines to jeans, shoes, bags, belts and other accessories.
The company expects sales to rise to between 500 million and 600 million baht in 2008, up from 250-300 million baht forecast this year.
Crocodile's expansion comes at a time when the sluggish Thai economy has been taking a toll on local sales of fashion apparel.
According to Mathew Kichodhan, chief operating officer of Minor Corporation, the distributor of imported Esprit clothing, the market for fashion apparel in Thailand would contract by 10% this year. The figure is an improvement on first-half performance, when a 20% year-on-year contraction took place.
''The purchasing power for fashion apparel started recovering in July. We have been able to turn Esprit sales around, from a 9% decline in the first half of this year to a 13% increase during the past three months,'' Mr Mathew said. The pickup reflects a business plan adjustment to offer cheaper prices and introduce new products at its shops every 12 days.''Since we've stopped competing in the market with price dumping, customers have been visiting our shops more often because they no longer wait for sales promotions,'' he said.
Minor has also been building the Esprit brand among customers through a corporate social responsibility programme. It is currently staging a ''Do it with Love'' campaign with a budget of 30 million baht, inviting customers to donate sweaters at 24 Esprit outlets nationwide until Jan 2.