Sun.Star Cebu <> Friday, October 31, 2008
BY NANCY R. CUDIS, Sun.Star Staff Reporter
A FASHION retailer finds opportunity in direct selling as malls and department stores are becoming “a bit challenging” for the retail industry due to the global economic crisis that is pushing consumers to become conservative spenders.
“We have always been into brand retailing. We are strong in what we do. We are now in malls and department stores but direct selling is a distribution strategy for us to reach out to other potential customers,” said Bernie Liu, chief executive officer of Golden ABC Inc. that owns popular apparel brands Penshoppe, Oxygen, Memo and Forme.
After more than a year of extensive research, his company launched Red Logo, a wholly-owned direct selling subsidiary of Golden ABC, last April when “things started to slow down.”
In the process, Liu said that micro-entrepreneurs can augment their family income with their new distribution mechanism that carries “sustainable” products and gets support from the company.
“The market response is doing very well. We generated more than 10,000 dealers in less than six months since we launched it. That is pretty good for a start-up business strategy,” Liu told reporters last Wednesday during the general membership meeting of the Philippine Retailers Association (PRA) Cebu.
Red Logo’s first four branches are located in Metro Manila, catering to a nationwide market. Liu said that Red Logo may put up a branch in Cebu sometime next year to cater to the Visayas market.
The Red Logo catalogue carries it own brands like Fuel and Agenda, but also allows Penshoppe, Memo and Forme to be its guest brands for a certain period.
“In the brick and mortar (meaning infrastructure), malls and department stores are a bit challenging right now (for us) because of the global crisis that slows down consumer spending. Direct selling, on the other hand, is flying. While the crisis is a problem for one (sector), it is also an opportunity for another,” Liu said.
He said companies can take advantage of the slowdown by lowering retail prices.
“Expand strategically. Companies need to set their sights globally while at the same time seizing opportunities in real estate in their own backyards. Retail expansion through directly-owned or franchised stores presents numerous opportunities (such as) negotiating better prices with malls regarding rent,” he told members of PRA Cebu Chapter.
He stressed that the crisis is not an excuse for a retailer to slow down as well, especially if he has the resources.
Golden ABC now manages about 400 stores nationwide, including outlets in department stores. The company is in negotiations with interested franchisees who want to open stores overseas.
At present, Golden ABC has four stores in Saudi Arabia and three stores in China.