SABINA

Editorial Staff

SABINA optimistic that wage hike will boost consumer spending and sales, underscoring sustained growth of net profit margin

SABINA assesses that its sales in the first half of 2023 is on track to meet the goal, maintaining the growth of its net profit margin.

Ms Duangdao Mahanavanont, CEO of Sabina Public Company Limited (SABINA), manufacturer and distributor of SABINA lingerie, disclosed that the company’s first-half sales are on the path to the set target, with more sales made through the retail channel in department stores and Sabina Shops than through retailers. Likewise, sales through TV shopping in the non-store retailing (NSR) channel rose whereas sales through the OEM channel accounted for only 10% of all sales in line with the global economic slowdown, particularly in Europe.

“The climbing sales from retailers, the online channel, TV shopping, including the slowed down OEM channel, resulted in a mild contraction in our gross profit margin, but our main aim is to buoy the growth of our net profit margin (NPM) which reflects our profitability, and we are on the right track. Before the coronavirus outbreak in 2019, our NPM stood at 12%. Now in the latest quarter of 2023, our NPM has risen to 13.4% and shows a steady upward trend, which is instrumental in sustainable profitability–one of SABINA’s core missions,”

As regards the issue of the minimum wage increase that has sparked concern among several parties, SABINA holds an optimistic view that the rate hike will increase the population’s income and boost their purchasing power. At the same time, SABINA as a retail business directly benefits from spending surges, so the company might need to prepare to stimulate consumer spending after new wage rates take effect.

For the anticipation that the minimum wage hike will escalate production costs, SABINA already made preparations since 2022 by investing in cutting-edge machinery. In 2023, the allocated budget for this matter is approximately 50 million baht from the usual 10-20 million baht per year. Currently, SABINA’s workforce has decreased by about a thousand employees because some of them decided to exit the labor force during the pandemic, and this has gradually reduced the company’s payroll expenses.

“Looking on the bright side of the minimum wage hike, given that we are in the retail sector, our sales could go up because higher income would lead to more spending. We may even outpace the increasing production costs owing to our use of innovative manufacturing machinery with greater efficiency, enabling us to raise product prices in certain segments, which in turn will continue the growth of our NPM,” Ms. Duangdao said.