Minor Group has slashed this year's marketing budget for fashion clothes and accessories by half, mainly due to the economic downturn, which has discouraged consumer spending.

The budget was initially set at 5 per cent of the annual sales target. The company has also cancelled the contract to sell an unprofitable clothing brand called Rampage.

Jantip Palakavong na Ayudhaya, operations director of Esmido Fashions Ltd. a unit under Minor Group that is responsible for fashion-product imports, said the company considered all its current long-time-marketing brands - Esprit, Bossini, Sinequanone, Tumi, Timberland and Zwelling JA Henckels - to already have strong awareness among targeted groups, as well as being products people did not have to buy every day.

While the marketing budget has been cut, the company has also focused its available funds on arranging marketing activities rather than advertising through mass-media channels.

The number of marketing activities has increased 50 per cent from last year.

To assist its business performance, the company also decided that any brand unable to achieve Bt100 million in annual sales would be taken from its portfolio, and sexy-style clothing brand Rampage was the first to go after being on sale for a year.

The company introduced a new brand from Singapore called Charles & Keith to the Thai market six months ago. The brand, with a maximum selling price of Bt2,000, targets teenagers. The company expects it to achieve Bt100 million in sales by the end of the year.

Jantip estimated the company might see only 5-per-cent sales growth during the third quarter of this year, which would be 3 per cent down on earlier expectations. Looking longer term, sales this year are likely to grow only 10 per cent to Bt1.5 billion, Jantip said.

The overall imported fashion market this year is expected to grow at the same rate as the company's estimated annual sales growth, to Bt6 billion-Bt7 billion, while the whole fashion market, both imported and local brands, might grow 20 per cent.

In the second quarter of next year the company plans to introduce two or three new cosmetic brands from either Europe or Australia and two new fashion brands from Europe and Asia in the third quarter. All the new brands are expected to help Esmido achieve sales growth next year of between 12 and 15 per cent.

Nitida Asawanipont

 The Nation