Difficulties pile up
In the last week, Ninomaxx and Maxxstyle, the two well-known fashion brands, have announced the price discounts of 80 percent, goods liquidation, a step of the plan to shut down some shops of the chains. The information that Thoi trang Viet Company, the owner of the two brands, has fallen into big difficulties has also stirred up the public.
Ignoring the explanations by the shops’ managers, the business circle still has raised doubts about the health situation of Ninomaxx and some other fashion brands such as Viet Thy, Foci, Legamex and May Saigon 2, since the number of shops, product items and the number of buyers have dropped dramatically.
Deputy Director of a well-known domestic fashion brand said that he saw the low demand before Tet, therefore, he decided not to make out products in big quantities. However, even with the limited products, the clothes of the company still have been left unsold.
He said that the company has cut down 50 percent of the new designs, while having focused on making products for export, or making products to the orders by companies and schools.
Home appliance centers prove to be the biggest sufferers in the crisis. A director of a home appliance center in HCM City said that the purchasing power has dropped by 40 percent since 2011. The revenue of the chain has dropped sharply, while it still has to pay money for the retail premises.
High costs, low demand, big stocks all have pushed enterprises against the wall. Especially, the establishments which have been set up recently in the “wave of home appliance centers” have been facing high risks. Leaving the market quietly
In mid-2011, a lot of retailers had to leave the market quietly because of the goods unsalability. Not only small home appliance centers located in the suburbs-- WonderBuy, a big brand, also declared bankruptcy in June 2011 after it lost 52 billion dong after one year of operation.
Prior to that, Loc Le, Vietnamshop.com also had to shut down because of few buyers. The list of the shut down home appliance centers has seen a new name – Best Carings in Phu My Hung new residential quarter in district 7 of HCM City.
In Hanoi, Pico, Tran Anh and Media Mart have also narrowed their business scale.
In late February, Nhat Nam Company closed Fivimart Phu My Hung, the last supermarket of the once-existing four supermarkets in HCM City. Vu Thi Hau, Deputy General Director of Nhat Nam, admitted that it was really very difficult to do business in HCM City due to the stiff competition there.
In mid-November 2011, Satra Bau Cat, belonging to the Saigon Trade Corporation, also shut down. No official statement was released about the event, but the business circle believes that it was because of the ineffective business.
Meanwhile, analysts believe that the leave of the two supermarkets is just the start of the “enterprise filtration process” occurring as a result of the opening of the Vietnamese market to foreign investors.
Foreign retail groups have been flocking to Vietnam. Besides Metro, Aeon, Casino, Lotte, many other foreign investors are planning to jump into the Vietnamese market. The existing retailers have been trying to open 4-5 new supermarkets a year and they have revealed the plan to set up many more supermarkets in 2012. Le Khac