Bangkok--15 May--i2C Communications
For its Q1/2020 performance, SABINA disclosed that in spite of the impact from COVID-19 after the government shut down shopping malls and thus led to declining income from SABINA shops and counter sales, SABINA still reaped a net profit of 70.44 million baht. The identified key factors for maintaining SABINA’s net profit were its production cost control plan, which had been implemented since early March and resulted in 10% cost reduction, as well as its new service line of manufacturing cloth face masks to keep employees at work. SABINA reiterated that it will take good care of its staff. There will be no factory closures, no lay-offs, and no salary cuts. NSR sales grew by 9% while export sales to the CLMV group jumped by 31% due to the delayed COVID-19 impact on these neighboring countries. SABINA is certain that it will still bring in profits in Q2 before making a solid recovery in Q3.
Mr. Bunchai Punturaumporn, CEO of Sabina Public Co., Ltd. (SABINA), manufacturer and distributor of “SABINA” lingerie, revealed that for the Q1/2020 performance (January-March), SABINA posted a net profit of 70.44 million baht, a 26.05% year-over-year decrease, while sales revenue was reported at 672.44 million baht, a 12.66% year-over-year decrease, and net profit margin stood at 10.3%, a 12.3% year-over-year decrease. The major factor for the lower net profit and sales revenue is the government’s shutdown of shopping malls countrywide to slow the spread of the novel coronavirus (COVID-19). Stores were gradually shut down since 22 March, leading to a drop in income from the retail channel through SABINA shops and counters in malls, which is the main distribution channel.
“Despite our lost income from the retail channel, in the first quarter SABINA still enjoyed growth through online sales, aka Non Store Retailing (NSR), which grew by 9% after we adjusted our strategy to gear executives and staff for more sales via social media. Moreover, SABINA organized Facebook Live activities more frequently, and our “S t a y H o m e S t i l l D OO M M” campaign which aligns with social distancing measures created an online trend that led to a satisfactory online sales growth. At the same time, income from exporting “SABINA” products to CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) soared 31% year-over-year because they were affected by COVID-19 later than Thailand, so in the first three months of this year SABINA still received a continuous flow of orders. However, OEM service orders from customers in Europe fell by 14.1% due to the global economic slowdown,” Mr. Bunchai stated.
The CEO of Sabina Public Co., Ltd. also said the fact that SABINA can still earn profits in such difficult times is a satisfactory performance. Another contributing factor is that in early March, the management had jointly assessed the signals of the impending impact from the COVID-19 outbreak and found that it might be more severe than expected. Therefore, SABINA decided to revamp budgets in order to control production costs. Consequently, in Q1/2020 SABINA reduced costs by 10% without any factory closures, employee lay-offs, nor salary cuts because helping the staff sail through this crisis is one of SABINA’s important missions. At the same time, SABINA used this opportunity to upskill the staff in sales and manufacturing and also decided to start a new line of making cloth face masks to keep employees at work. To date, SABINA has received over five million pieces of cloth mask orders from leading organizations with the manufacturing plan spanning to June.
Although Q2 (April-June) is the period that SABINA is affected by the mall shutdowns, SABINA still generates sales via the online channel, which is projected to grow continuously. In April, SABINA launched the ThaiFruit summer collection of lingerie including face mask with matching colorful Thai fruit patterns targeted at teenage customers. Then in May, SABINA released the Triple Mask, an anti-dust and anti-bacteria cloth mask, via the online channel as well. Therefore, SABINA is certain in its ability to maintain profits in Q2 and forecasts that its figures will make a strong recovery in Q3/2020.