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Jim Thompson braces for hit in second half
KRISSANA PARNSOONTHORN & WORANUJ MANEERUNGSEE
Booth: US expansion stalled by slowdown |
The Thai Silk Co, the producer and distributor of silk and products under one of Thailand's most famous brands, Jim Thompson, is worried that reduced tourism in the past few months will undermine its business in the second half of the year.
Eric Booth, the company's international marketing director, said the current political uncertainties had shrunk the number of foreign tourists during the past few months. If the situation continues, it may hurt the business of Jim Thompson, which mostly sells Thai silk and home-furnishing products to tourists.
"We're not certain about the tourism business in the second half. The situation is now reversing the local sales performance in the first half, which grew 10%" he said.
About 95% of customers buying Jim Thompson products from more than 30 shops in Bangkok and the provinces are foreign tourists and business travellers. Local sales represent 60% of the total sales with the rest exports, which were worth 400 million baht last year. Of the total, 35% came from Europe, 30% from United States and the rest from Japan and Middle East.
In general, the local market for Jim Thompson is saturated and The Thai Silk Co is moving toward expanding overseas markets.
Mr Booth said the company was looking for possibilities to open its own subsidiary and outlet in the US, which has been the largest export market for Jim Thompson products for years.
"But this plan may be delayed as the sub-prime mortgage crisis is dragging down the home-furnishing market in the US as well," he said.
During the first half, the company enjoyed export growth of 10% in terms of volume but the export value got an impact from the strong baht.
Mr Booth said Jim Thompson products have been sold in many countries through 30 distributors and The Thai Silk Co wanted to have its own subsidiaries in key regions to handle outlets and marketing activities.
Last year, the first subsidiary, Jim Thompson Europe Co, was set up and the first outlet outside Asia was opened in Munich.
Mr Booth said the situation both at home and abroad did not appear very favourable this year. The Thai Silk Co will try hard to save costs and cut unnecessary investments.
However, the plan to invest an additional 60-70 million baht in new technology for its silk factory in Pak Thong Chai district, Nakhon Ratchasima, cannot be delayed.
Apart from this, the company will invest 100 million baht to open a Thai restaurant in Singapore this year. Currently, it has four restaurants in Bangkok, two in Japan and one in Malaysia.
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