BGT Corporation Plc sells ready-to-wear retail apparel and accessories under the trademark of Body Glove with the Hand Device logo. It has distributed through both its own stores and department stores since 1988 and has expanded throughout Thailand. Chief executive Dickson Goh Kok Cheng discusses the company’s strategy and outlook.
What is BGT’s business model?
Body Glove Thailand’s business model is to promote the culture of Body Glove throughout Thailand and Asia. We are not selling fashion, but instead promoting a culture, specifically the original California lifestyle culture. I am so excited by the growing casual wear market in Thailand. Today we still see a huge opportunity and will continue to refine our business model.
What brands does BGT manage today?
We operate two brands in Thailand: Body Glove and People’s Market. We are keeping People’s Market low key until 2012 when the Summer Olympic Games in London begin. The reason is People’s Market represents London fashion culture. When you think of London you are reminded of its contribution to rock music history: The Beatles, The Who, Rolling Stones, David Bowie and so forth. This brand focuses on the way Brits dress, the way they express themselves, and through their utterly unique lifestyle they have always influenced youth culture worldwide. So when the next Olympic Games begin, this naturally will be followed by a lot of advertising that comes with such a global event. This is when BGT will begin to expand the market for People’s Market throughout Bangkok. We are also considering the introduction of another brand under the Body Glove banner to serve the university market culture that is just emerging in Thailand. Our research indicates that this important group does not have a genuine brand that represents them.
How many outlets does BGT have today?
We have 135 stores in Thailand with 42 in Greater Bangkok. Our stores and counters are in hypermarkets and shopping centres throughout Thailand. We opened an additional 24 stores and counters this year through the second quarter. Central Pattana, Robinson, The Mall, Big C and Tesco Lotus hypermarkets have more than 250 locations in Thailand. Presently we are at 80 of their locations so we still have plenty of room to grow.
Will BGT look to expand throughout Asia?
Our investment is still mainly in Thailand because we continue to see growth potential here. We are still exploring opportunities in the Philippines and have recently been talking with several strategic partners in China about opening a store in Shanghai.
What differentiates BGT brands from its competitors?
In Thailand if the price is not that different between a local brand and an international one, Thais will naturally purchase an international brand. We do not compromise on the quality of our product but it is easily accessible for the middle class in Thailand. We have no competitors in the California Lifestyle casual wear market in Thailand, so if we lose ground we have no one to blame but ourselves.
How do you see the retail fashion market in Thailand today?
Local players that have expanded well and continue to grow will see how difficult it is to compete with international brands in Thailand. Zara, Uniqlo and Forever 21 have already opened here and they are doing very well. H&M will also look to expand into Thailand soon, so I see local fashion brands struggling in the future.
BGT increased its capital in 2010. Please explain why and what will the capital be used for?
It was for stock dividend payments from operating results in 2009.
How is BGT performing financially?
We have consistently grown our revenue and net profit since we listed in 2007 despite the global crisis and local political problems.
What are the biggest risks facing BGT today?
The biggest risk we face is getting complacent, so we have to focus on continually improving ourselves and ensuring we promote the culture of the brands we manage.
Where do you expect to see BGT five years from now?
Five years from now I expect to see the California Lifestyle Culture more ingrained in Thais. I also expect People’s Market will be performing well after the Olympic Games. And I hope university students will look at our new brand as their brand of choice for casual lifestyle wear. Internationally we hope to expand more overseas in China and around Southeast Asia.
The Executive Q&A Series is presented by ShareInvestor, Asia’s leading financial internet media and technology company and the largest investor relations network in the region with more than 400 listed clients. This interview was conducted by Pon Van Compernolle, a vice-president of Merchant Partners. For more information, e-mail firstname.lastname@example.org or email@example.com or visit ThaiListedCompany.com