INRODUCTION

Company Background
Padini Holdings Berhad began as a backend operation in Malaysias apparel industry,
manufacturing, trading and supplying garments to order for retailers and distributors.
However, driven by a vision, Padini Holdings Berhad ventured into distribution and retail by
creating its own brands catering to specific consumer niches.
Today, Padini Holdings Berhad has entered the new millennium as a major force in
Malaysias multibillion textiles and garment industry, a brand leader involved in the
distribution and retail of its own fashion labels through 330 freestanding stores, franchised
outlets and consignment counters in Malaysia and around the world. It labels proudly carried
the Made in Malaysia stamp abroad with its products exports to Bahrain, Brunei, Cambodia,
Egypt, Indonesia, Kuwait, Morocco, Myanmar, Oman, Pakistan, Philippines, Qatar, Saudi
Arabia, Syria, Thailand and United Arab Emirates. The success of the company can be
attributed to the foresight of its management and the dedication of its staff.
Padini Holdings Berhad address fashion conscious consumers of both genders and all ages
through our ten distinct brands: Padini, Padini Authentics, Seed, PDI, P&Co, Vincci, Vincci
Accessories, Miki Kids, Tizio and Brands Outlet. Each of these labels represents a particular
fashion philosophy and encompasses a comprehensive range of products that fit into our
targeted consumers universe.

Planning and Strategic Management
Basic Strategies used to respond for uncertainty
Padini Holdings Berhad is defined as a prospector. Padini had a strong foothold in the
domestic market with a vast retail network of nine labels under its profolio namely Padini,
PadiniAuthentics, PDI, P&CO, Seed, Vincci, Vincci+, Vincci Accessories, and Miki Kids. Its
major subsidiaries include Vincci Ladies Specialties Centre SdnBhd, Padini Corporation Sdn.
Bhd, Seed Corporation Sdn. Bhd, Yee Fong Hung (Malaysia) SendirianBerhad, Mikihouse
Childrens Wear Sdn. Bhd, Vincci Holdings Sdn. Bhd, Padini Dot Com SdnBhd, The New
World Garment Manufacturers SdnBhd, and Padini International Limited.In year 2000,
Padini Dot Com SdnBhd was established to provide electronic business services and
solutions for the group.
Padini began operations as Hwayo Garments Manufacturers Company and manufactured
ladies garments which were sold to departmental stores wholesale. Then, sole
proprietorship expanded into textile trading two years later, and in 1975, the company
entered the retail industry with the flagship brand, Padini. Vincci was launched in 1981,
representing a brand for ladies shoes, bags, belts and accessories. The company subsequently
launched the Miki brand to distribute childrenwear in 1987. The Seed and Rope labels were
then created in 1990.In 1991, Home Stores SdnBhd was established as a holding company for
the Group's retail, wholesale and manufacturing businesses. The holding company was then
changed to Padini Holdings Sdn Bhd. Soon after, the brand PadiniAuthentics was launched.
In 1995, Padini became a public company as we know today - Padini Holdings Berhad.
In 1998, Padini Holdings Berhad was listed on the Second Board of the KLSE and in the
same year, P&Co was launched. The PDI label followed suit a year later along with the first
of the Group's multi-brand concept store - The Padini Shop. The group also ventured into the
F&B industry with Seed Cafe.Padini was relaunched as a career wear brand in 2001. In these
five years, Padini had also expanded its foreign presence in markets such as the Philippines,
Saudi Arabia and Thailand. In 2004, Padini was transferred to the main board.Vincci+,
Vincci Accessories and Brands Outlet were launched in 2007. It opened it's first store in
Oman and received a valutaion by Interbrand at RM 245million. Subsequently, in 2009 and
2010, Padini launched its first stores in Syria, Qatar and Pakistan.Padini launched more stores
in the Middle East, South East Asia and North African countries as well as its first Vincci
store in Myammar.In year 2000, Padini Dot Com SdnBhd was established to provide
electronic business services and solutions for the group.Besides that, two cafes are operated
under the Padini Holdings Berhad, one at the Mid Valley Megamall and the other at their
office in Shah Alam.

Vincci is the most prominent brand of the Padini family. It is a footwear brand that
focuses on chic and affordability. Most of its shoes are made from syntheticmaterials. It also
sells watches, sunglasses, PVC handbags and bead accessories. Miki has two brands under it,
which are Miki Kids and Miki Maternity. The Miki Kids is designed for toddlers, while the
Miki Maternity is designed for fashionable mums-to-be. The clothes of these two brands are
mostly made up of polyester spandex, poly rayon spandex, cotton poplin and cotton nylon.
Seed focuses on the urban office-wear for the masses. Its business is affordable and forward-
looking. The clothes under this line are usually jackets, shirts, and a variety of denims, khakis,
and knitwear.

Moreover, one of its bright spots is the groups export markets. Padini has 65 franchises
located mostly in the Middle East and 16 dealer stores in Thailand. Combined, the export
market accounted for 8.3% of total revenue in FY12. Revenue from this segment has grown
from RM38.7m in FY08 to RM60.0m in FY12 at a 4-year CAGR of 11.6%. Furthermore,
Padini had recently signed an exclusive 10-year deal with Singapores leading fashion retailer
FJ Benjamin Holdings Ltd to distribute Vincci shoes and accessories under the brand name
VNC in Indonesia. The collaboration entails a master franchise agreement where a total of
25 stores will be opened within the next five years, the first of which is expected to open as
soon as December this year.

MISSION
To Exceed Customers Expectations and Our Brands Promise
Padini Holdings Berhad started from humble beginnings in the apparel industry. Their roots
are in the manufacturing, trading and supplying of garments to retailers and distributors.
However, driven by a vision, they ventured into distribution and retail by creating our own
brands catering to specific consumer niches. They are very committed in achieving their own
goal through hard work, discipline and creative endeavour. Currently, Padini Holdings is
consolidating its operations in order to be even more streamlined. In the long terms, they will
continue to maintain their high standard of design and manufacturing quality as well as
affordability. They are also working towards expanding the business on a regional basis. At
present, They have a growing presence in their neighbouring countries, and they believe that
there is great scope for growth.

VISION
To Be The Best Fashion Company Ever
The vision of the Padini Holdings Berhad is to be the best fashion company ever. They aspire
to be a global leader in the fashion and retail industry with the highest standards in design,
manufacturing, quality, customer service, branding and innovation. As a creatively driven
and design oriented group, they want to create fashion consciousness that is stylish yet
affordable within their brand niches.



SWOT ANALYSIS
Strengths
Padini Holdings Berhad has its own nine core brands which are Padini Authenthics, PDI,
SEED, Tizio, MIKI, Vincci, P&Co, Brands Outlet and Padini. These nine core brands have
strong presences which provides for higher sales of products that are associated with
the brands, better acceptance of new products, higher ability to increase market share
through advertising, and stronger resistance to price erosions in the market. Besides,
given its longer-than-competition track record in Malaysia of 21 years since the opening of its
first Seed store, the Group has a more extensive distribution network. Furthermore, we
believe that competition is unlikely to mimic the Groups distribution network or any
expansions in its distribution network given that the target markets of the most formidable of
competition are confined to the mid-upper income earning urban population. The Group on
the other hand, offers value as well as basic merchandise targeting also the mid-lower income
population. Itsdiversified offerings also manage to prevent its demand from fluctuating,
instead tapping into almost every age and income segment of the market. Next, the Group
also caters to only one geographical market according it with a single focus on catering to the
preferences of Malaysians. Large international brands, on the other hand, are unlikely to incur
additional localization costs given that Malaysia is a relatively small market in their global
portfolio.

Weaknesses
From what we can observe, the Group is unable to secure the best suppliers in the global
market given its relatively small scale compared to global giants like Zara, H&M and
Uniqlo. So, it is possible to decline in quality to remain competitive with fast fashion rivals,
hence may lose some existing customers. Frequent and prolonged sales periods may
adversely affect the Group as it provides incentive to consumers to withhold their purchases
until discounts are offered. Thus, may result in the Group indirectly positioning itself in the
same market already being served by the Group value-themed concept store Brands Outlet.


Opportunities
Given the rural area like Sabah and Sarawak it may be a growth area since penetration
there is currently low. With that, the Group can target places like rural areas to build an outlet
there to gain more customers and expand the business. In addition, the relatively limited
connectively between cities and town will make each area within Sabah and Sarawak a
captive market. This may provide for the offloading of older designs, while providing the
Group with stable income streams. Furthermore, the expansion of the Groups large-format
value-themed stores, Brands Outlet, is another likely growth area given the flexibility of the
stores value concept which allows the Group to tailor products mixes according to the
locality of the store, and the strong revenue growth from the operation of the Brands Outlet
which registered a 15.2% same store sales growth (SSSG) in FY12 which is similar to the
Padini Concept Stores SSSG of 15.8% and higher than the aggregate SSSG from single-
brand stores of 6.6%.

Threats
The threats that this company is facing is the entry of reputable foreign brandswhich has
made competition stiffer and more competitive which may decelerate the growth in sales and
begin the thinning of margins. We saw this most evidently in the Groups 2QFY13 numbers
following the opening of H&M in Malaysia on 22 Sept 2012 during which growth in revenue
decelerated to a low 2.6%yoy while a negative net profit growth was recorded. Net profit
margin also declined to 9% from 14% a year ago. Next, Padini Holdings Berhad suffers from
very challenging business environment. Padini faces strong competition both directly and
indirectly. Many competing fashion retailers operate at the same level playing field as Padini
while at the same times, general retailers though not necessarily targeting the same segment,
do pose an indirect threat to Padini as spending habits may change in tandem with economic
cycles. There is also a growing trend of deep-pocket international retailers entering the
market, and together with the local brands, they compete on location and retail space, front-
line retail staff , product quality and pricing and last but not least, the consumer trends and
preferences. Prime retail locations have become scarce though with 8.0m sq ft of new retail
floor space coming on-stream in the Klang Valley over the next four years, opportunities do
exist for Padini to sustain its new store growth trajectory. However, of central importance are
the timing and location risks associated with the new mall openings. With the completion of
new malls, there exists a multitude of question marks in relation to demography, visitor
traffic, and catchment areas and even whether or not the new malls would be disruptive of
visitor traffic to existing malls.

Grand Strategy of Padini Holdings Berhad
Padini Holdings Berhad uses the growth strategy in expansion, sales growth,
increase in employees and diversified products. Its growth strategy has not changed very
much in recent years.
The quantum leap in domestic retail store expansion has also had seen the group's
retail floor space almost tripled from 245,700 sqft in FY07 to 699,136 sqft in FY12 as the
group took advantage of the rapid growth in retail floor space capacity via mall extensions as
well as the launch of new malls across the country. In fact, Padini had a bumper year in FY12,
adding 129,600 sqft, which comprised of 3 Brands Outlets, 6 Padini Concept stores and 1
free-standing store. With an additional Brands Outlet store having opened at Fahrenheit 88 in
the first quarter of FY13, its store count currently stands at 48 single-brand stores, 26 Padini
Concept stores and 20 Brands Outlet stores. Beyond that, five more stores are scheduled to be
opened in early FY14, which include a Brands Outlet store in Seremban and another Brands
Outlet and Padini Concept store in Miri. However, management has commented that the right
locations with the right kind of environment that Padinis brands have been thriving on have
become few and far between. While there is no dearth of new malls being opened,
management has found many of them to be unsuitable for its brands.
The new store openings allowed Padini to boost its year-on-year sales growth, but
with fewer floor space expansion plans on the horizon, we believe Padinis revenue growth
trajectory will be one that is less sanguine than in previous years. Padinis same-store sales
growth has been increasing at a 4-year CAGR of 9.8%, very much below the corresponding
20.5% growth rate of both new and existing stores. Going forward, we expect Padinis top
line growth to be driven by the gradual maturing of the new stores it opened in recent years,
which is expected to see higher per square foot sales generated. Management has guided that
they would be achieve this by attracting customer spend by tweaking its store merchandise
mix and perceived value and quality of Padinis offerings, improving design to delivery of its
products to keep up with the ever-changing consumer trends and preferences, as well as
continually refurbish existing stores to attract customers.
Padini Holdings Berhad also focus the main thrust of theircorporate social
responsibility activities on the area of education and practical training for pressing issue of
unemployable graduates, providing practical pre-job training, and building up a labour
resource from which they may select suitable candidates to fill executive-level vacancies
available in Padini. There are two programme are ste up, which are Retail Trainee
Programme and Graduate Retail Internship Programme. Retail Trainee Programme is
introduced to replace the Management Trainee learning Programme which is introduced in
year 2011. This new month-long programme is opened to fresh graduates interested in
pursuing a career in retail, and it covers both classroom and on- the-job training. While the
classroom training imparts skills required to manage a retail shop, and informs about the
prospects and rewards of such a career, the on-the-job training exposes the participants to the
rigours and demands of the job.While, Graduate Retail Internship Programme is introduced to
an earlier internship programme.new programme focuses exclusively on the practical aspects
of the retail trade. Participants who are existing undergraduate students spend the entire
duration of the programme in the retail shops operated by the Padini Group. This programme
which runs over a 3 to 6 month duration depending on the policies of the universities from
which the participants were selected, rotates each participant among the various brands that
the Padini Group owns. The intention here is to let each participant experience how each of
the Groups brands is being positioned and how the different brand identities will impact
upon how retail is conducted.
Padini Holdings Berhad has a vast retail network of nine labels under its profolio
namely Padini, PadiniAuthentics, PDI, P&CO, Seed, Vincci, Vincci+, Vincci Accessories,
and MIKI Kids.Padini's apparels consists of the chic, simple, formal and smart casual wear
for young executives.SEED apparels focuses on contemporary, trendy and creative designs
for both casual and work apparels, which targets the fashion conscious. SEED offers runway-
inspired collections which is in line with its aspirations to bring runway fashions onto its
racks, for men, women and children.PadiniAuthentics offers a casual line that embodies
individuality and confidence, for men, women and children.P&Co's clothing line targets the
eclectic, edgy and individualistic fashion-minded consumer.PDI offers smart and simple
basic-wear for both men and women, including denims, jeans, T-shirts, jackets, shirts, polo-
Ts and accessories.MIKI's line of clothing consists of MIKI Kids and MIKI baby which are
wearing for kids and babies.

Competitive Strategy used by Padini Holdings Berhad
Among the Porters Competitive strategies, cost leadership strategy and
differentiation strategy are the two strategies that used by Padini Holdings Berhad. Cost
leadership strategy is keeping the costs and prices low for a wide market, while
differentiation strategy is offering unique and superior value.
Padini Holdings Berhads operating expenses as a percentage of revenue have also
been on a declining trend over the past four years as the group benefited from the economies
of scale. Additionally, the revenue per square foot for Padinis single brand stores, Brands
Outlet stores and Padini Concept stores have also been increasing, reflecting managements
efficient use of floor space and good P&L control. One such initiative was the allocation of
larger floor space for the higher-margin Vincci accessories in its stores. Generally, the major
cost components for garment manufacturers are cotton price and labour costs. There exists
the risk that manufacturers would not be able to pass on the rising costs to fashion retailers.
Thus far, Padinis costs of good sold have been relatively steady despite the rising input and
Chinese manufacturing labour costs due to the low bargaining power of manufacturers.
Padini also designs most of its own products, which affords the company a better control of
input costs while retaining the flexibility of varying its merchandise mix via its Brands Outlet
stores. Since the cost of producing is low, the price of products is cheaper. A multi-brand
retail store, Brands Outlet, which is one of Padinis subsidies offers a variety of lesser known
house brands at a reasonable and affordable price. The outlets use all year round
promotions, value buys and value-for-money merchandise as a marketing strategy.
Padini provides different products for different costomers. Padini's apparels consist
of the chic, simple, formal and smart casual wear for young executives. SEED apparels
focuses on contemporary, trendy and creative designs for both casual and work apparels,
which targets the fashion conscious. Padini Authentics offers a casual line that embodies
individuality and confidence, for men, women and children. P&Co's clothing line targets the
eclectic, edgy and individualistic fashion-minded consumer. PDI offers smart and simple
basic-wear for both men and women, including denims, jeans, T-shirts, jackets, shirts, polo-
Ts and accessories. MIKI's line of clothing consists of MIKI Kids and MIKI baby. Vincci
offers shoes, in-trend bags and accessories. Brands Outlet comprises of various styles of
clothing and accessories for men, women and children.

Recommendation
Utilizing the identified strengths and opportunities
Strengths
With the strong presences Padini Holding Berhad can have a better sale as more customers
will know about them. They may also increase their amount of sales by selling more product
as they have such amount of shops. On the other hand, with the extensive distribution
network their name will be more worldwide known. On the internet, they may distribute their
product in detail so that the customers may know more about their product. By having
diversified offering more customers would like to spend their money to buy their product as it
is cheaper. They may also have a greater increase in their income as more customers are
willing to spend their money on their product.
Opportunities
With the rural area such as Sabah and Sarawak which has less competitive it would be a
chance for them to make a larger market. By this they would have an opportunity to increases
their amount of customers. Due to the relatively limited connectively between cities and town
old fashion design are also available which will increase their income. As old fashion can be
use, their customers would have a variety of choice to purchase.
Overcome the identified weaknesses and threat
Weakness
To overcome the problem of unable to secure the best suppliers, Padini Holding Berhad must
do their best to maintain the quality of their stocks so that their quality may not lose to their
rivals. To maintain their quantity they would need to examine all their supply before using it
so that they would not use the wrong or poor material in their product. On the other hand, a
frequent and prolonged sale periods may be overcomes by having more stocks for sales. By
having more stocks they may able to face the problem as they could use a lesser price and
earn more by selling out more.
Threats
To overcome the problem of entry of reputable foreign brands, Padini Holding Berhad could
try to invent more new brand of stock. Basically, we humans are more attracted by the new
brand. Padini Holding Berhad may also maintain their quality so that their stock would not
easily thorn or destroyed. This would also attract more customers as who does not want a bag
or cloth that would not easily thorn or destroyed? Padini Holding Berhad could try to design a
more different style of design than the other company to overcome the problem of business
environment. By having a different style of design they could attract more customers and
they may have a great increase on their amount of customers.

Conclusion
Padini is mainly an integrated operation that controls its products - fashion wear and
accessories - from concept stage to manufacturing, merchandising and image marketing.
Each brand represents a fashion philosophy; each philosophy covers a comprehensive range
of products aimed at a targeted consumer. Brand image is strongly backed up by real value:
quality, functionality and price.
Every company has to face a lot of uncertainty to succeed in their business world. Padini
organize their company very well, their objectives is to be the market leader in the retail
industry and to be the best fashion company ever. To achieve this goal, Padini work hard,
discipline and creative endeavour. Besides, Padini try to provide the high quality of the
products and the price can afford by everyone so that the customers will loyal and satisfy
with the products. Padini is also working towards expanding the business on a regional basis.
At present, they have a growing presence in neighbouring countries, and they believe that
there is great scope for growth.
As at 30th June 2006, the Padini Group has 149 stores and consignment counters in Malaysia.
Padini is also the only consumer goods retail brand in Malaysia to make it into Forbes Asias
200 Best under a Billion list of companies of 2006.
Futhermore, Retail Outlook 2007 classifies Padini as a Grade A brand, characterised by
high market share and rapid growth rates. Its financial performance in 2006 includes an 18%
sales increase with stronger operating profit margins at 14% of revenues while market
capitalisation was up by 81% at RM 309 million.

References
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f00
17a6bf/9df142a6dad6ea0848257ac200235360/$FILE/PADINI-
AnnualReport2012%20(587KB).pdf
http://cdn1.i3investor.com/my/files/dfgs88n/2013/01/29/1478219426--281781513.pdf
http://en.wikipedia.org/wiki/Padini#Background
http://klse.i3investor.com/files/my/ptres/res16933.pdf
http://www.padini.com
http://www.thestar.com.my/story.aspx?file=%2f2009%2f9%2f14%2fbusiness%2f4684806&s
ec=business


Appendix