History: Padini began as a backend operation in Malaysias apparel industry, manufacturing, trading and supplying garments to order for

retailers and distributors. It has entered the new millennium as a major force in Malaysias multibillion textile and garment industry, a brand leader involved in the distribution and retail of its own fashion labels through 190 freestanding stores, franschise and consignment counters. It has also proudly carried the Made-in-Malaysia stamp abroad, with its products exports to Thailand, Brunei, Saudi Arabia, Philipines, Cambodia, India, Egypt, Oman, UAE, Indonesia and Syria. The success of the company can be attributed to the foresight of its management and the dedication of its staff. Our Products 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. Our Brands We addresses fashion-conscious consumers of both sexes and all ages through nine distinct brands: Padini, Padini Authentics, PDI, P & Co, Seed, and Miki. Vincci, Vincci+ and Vincci Accessories have focused on the fastchanging tastes of woman consumers on shoes, bags and accessories, and Seed Cafe opens an exciting new dimension in food operations for the company. In The Pipeline Padini will maintain and increase its leadership position in Malaysias fashion industry through various strategies. New brands and increased product diversity are key expansion policies. The company will continue to upgrade the image of its products while emphasising value and quality. Vincci is the company's successful toehold in the lucrative but competitive womens footwear market. There are plans to strengthen its dominant position with improved production lines and increased capacity Having successfully etched its brand names into the consciousness of Malaysian consumers, Padini is moving to turn its various labels into regionally-recognised fashion leaders.

It intends to fulfil the potential of the export market, especially in the Asean region, and will also step up overseas marketing for its products.

Strenght/Opportunity: Padini Holdings (Padini), a well-established retailer of fashion apparel and footwear, and came away with a positive medium-term outlook on the company. Strong brand recognition and large nationwide store network place Padini in favourable position to capitalise on any strengthening consumer sentiment and spending. Padini Corp and Vincci Ladies are the most significant subsidiaries in Padini Group, together constituting 70% of FY10 group revenue and 84% of pretax profit. Padini-branded clothing and footwear with the Vincci label have consistently resonated with Malaysian consumers thanks to the groups effective merchandising strategy. Ex: Vincci the sub-brand of Padini has opens in Dubai. Padini has the ability to control its distribution channels. This is part of Padinis defensive strategy in the chain value to capture the value added instead of giving it to the middlemen such as suppliers and retailers Its aggressive strategy accomplished through diversification and communication is also another of Guccis strengths. Padini changed its strategy of carrying a single brand to branching out to a multi brand group (PDI-Padini, Padini Authentics, PDI, Seed, P&Co, Miki and Vincci.). This strategy is done in order to allow the positioning of the brand in the industry to differ depending on the number of brands and the number of business segments the company wants to compete in. This is the idea behind focus (mono brand) versus diversification (multi-brand).

Padini also has 83 foreign stores and 10 department store counters. Padinis foreign stores operate on the franchise business model that lowers risk for the group as the cost of setting up stores and operating expenses are born by franchisees. Padini outsources the manufacturing of its apparel to third party suppliers in China and footwear to suppliers in Malaysia. This allows the group to focus on its strengths- design and retail.

Weakness/Risk: Padinis response to higher rental rates has been to consolidate its freestanding single brand stores into multi-brand concept stores that would lower average rental rates and fit-out costs. Further, the group is faced with mounting labour costs due to shortage of experienced sales people and high staff turnover (above 50% per month). To counter this, Padini has begun to offer

shorter working shifts (4 hour blocks) for permanent staff and a management trainee programme for fresh graduates. Recent spike in cotton prices in CY10 is likely to raise cost of sales for Padini. Cotton prices have more than doubled to US1.55/lb in November 2010 from US$0.72/lb in November 2009 as a result of Indias cap on exports. While Padini has not seen any impact from the higher cotton prices as yet, there is likely to be pressure on margins when cost of merchandise rises in response to garment manufacturers looking to pass on higher raw material costs. Dip in consumer spending as a result of weaker sentiment from increased inflation or negative macroeconomic news would jeopardise demand for Padinis products. Padinis mid-range product offerings are not strictly consumer staples and as such, subject to elastic demand and sensitive to any contraction in disposable income. In the near future, threats include rationalisation of subsidies for sugar, fuel and higher price of food commodities. Foreign markets have proven to be tougher to penetrate than initially expected. The fresh and affordable business model employed by Vincci in Malaysia has proven to be less viable in foreign markets due to 1) restrictive import taxes as in India and 2) unsuitability of product (design and materials for tropical climate) for temperate countries such as Australia. Further, the pace of export growth is largely dependent on the franchise-holder. FY10 saw several foreign store closures due to the political turmoil in Thailand, highlighting the operational risk foreign ventures. Domestic expansion is limited by small market size with population of only 28.3m and intense competition particularly from foreign brands. Padinis products are constantly exposed to the risk of changing fashion trends. The companys designs will have to keep up with consumers changing tastes in order to maintain market share,