Domon shelves expansion plan

"We cannot prepare a business plan for next year until we see the results of the economic stimulus efforts of the government including a full recovery of international tourists," Busaba Watanaharuetai, deputy managing director, said yesterday.

International tourists are the main customers of Domon. Their business dropped by 50 per cent from the second quarter to the third quarter before improving slightly late in the third quarter.

The company has to be more cautious about investment next year after it experienced difficulties from the political turmoil and drop in tourists, she said.

If the situations clear up, Domon hopes for sales next year of more than Bt200 million, she said.

Last year Domon returned to doing serious marketing for its three clothing brands - Domon Basic, D square and Domon Umo - after an 11-year hiatus following the 1997 financial crash.

The company projected sales to grow at 15 per cent this year from Bt180 million last year, but the snap closure of Suvarnabhumi Airport last November had hurt its sales in the second and third quarter of this year because foreigners lost confidence in Thailand.

"Our business in the first nine months is up only 2-3 per cent, which is behind target, due to the political situation, which has reduced the number of international tourists," she said.

The company is optimistic that this quarter, which is the high season, will help Domon to hit its figures.

Domon has planned to expand by five shops this year, of which three have already started operating, and the others in Khon Khan and Samui will be opened this quarter.

The company opted to locate shops in tourism provinces in anticipation of a return of visitors to the country.

Foreign customers account for 40 per cent of Domon Basic's sales and 60 per cent for D Square.

The company prefers foreign customers because their spending per bill is higher than local customers.

For local customers, the company has to hold more marketing activities to create brand awareness. It has allocated Bt15 million for marketing activities this year and Bt10 million for next year.

The company has also budgeted Bt10 million for the renovation of five outlets, she added.