As retail brands catering to middle-income customers fight tooth and nail for a bigger slice of the crowded retail market, industry observers see Malaysia’s local brands end up bloody and bruised from the resulting profit margin squeeze.
Hence, most are recommending that investors wait for the latest quarterly results, post-goods and services tax (GST) – scheduled to be released in the next two weeks – before making investment decisions on retail-related counters. For example, analysts are expecting local brands such as Padini Holdings Bhd and Bonia Bhd to perform weaker in the three months ended June 30.
William Capital Plt chief investment officer William Ng said Padini, which carries brands such as Padini, Vincci, SEED, Yee Fong Hung and Mikihouse, are competing head-to-head with international brands such as Uniqlo, Topman, Topshop, and Dorothy Perkins (brought in by Wing Tai Malaysia Bhd) and MNG (brought in by Jerasia Capital Bhd) in the middle-class consumer market.
(Source: The Malaysian Insider)