Problems and Solution

1. Poor Advertising Strategies

Padini has the weakness in advertise their product. There are less effective
advertising implement by the marketing department. In order to bear with this weakness,
they need to implement a strategy by increase awareness of customers about their product
through media. One of the way is participate in Mega Carnival sales that implement by
government.

Although Padini Holdings Berhad is a well-known in Asia and Arabian countries,

it still facing the weakness of lacks international presence in most major markets outside
those countries. So, they can take the opportunities from ETP projects to further fuel
growth of retail and tourism sector by implement the strategy of getting service from
agency centre in foreign countries. Do marketing research and also doing an aggressive
advertising.

2. Face Difficulty In Forecasting Fashion Trend

To solve the weakness of facing difficulty in forescasting fashion trend, Padini

Holdings Berhad can implement the strategy gain and do marketing research by expert.
They can build a marketing research department so that the problems can be solving
effectively.

Other than that, poor advertising and aggressive a competition from new brand
labels penetrating the domestic market might give them the risk that consumers will choose
for substitute products. in order to bear with the risk, Padini need to implement a strategy
of aggressively advertise their product in market such as expose more on media by organize
and sponsor activities

Weaknesses

From what we can observe, the Group is unable to secure the best suppliers in the
global market given its relatively small scale compared to global giants like Zara, H&M
and Uniqlo. So, it is possible to decline in quality to remain competitive with fast fashion
rivals, hence may lose some existing customers. Frequent and prolonged sales periods
may adversely affect the Group as it provides incentive to consumers to withhold their
purchases until discounts are offered. Thus, may result in the Group indirectly positioning
itself in the same market already being served by the Group value-themed concept store
Brands Outlet.

Threats

The threats that this company is facing is the entry of reputable foreign brandswhich
has made competition stiffer and more competitive which may decelerate the growth in
sales and begin the thinning of margins. We saw this most evidently in the Group’s
2QFY13 numbers following the opening of H&M in Malaysia on 22 Sept 2012 during
which growth in revenue decelerated to a low 2.6%yoy while a negative net profit growth
was recorded. Net profit margin also declined to 9% from 14% a year ago.

Next, Padini Holdings Berhad suffers from very challenging business environment.
Padini faces strong competition both directly and indirectly. Many competing fashion
retailers operate at the same level playing field as Padini while at the same times, general
retailers though not necessarily targeting the same segment, do pose an indirect threat to
Padini as spending habits may change in tandem with economic cycles. There is also a
growing trend of deep-pocket international retailers entering the market, and together
with the local brands, they compete on location and retail space, front-line retail staff ,
product quality and pricing and last but not least, the consumer trends and preferences.
Prime retail locations have become scarce though with 8.0m sq ft of new retail floor
space coming on-stream in the Klang Valley over the next four years, opportunities do
exist for Padini to sustain its new store growth trajectory. However, of central importance
are the timing and location risks associated with the new mall openings. With the
completion of new malls, there exists a multitude of question marks in relation to
demography, visitor traffic, and catchment areas and even whether or not the new malls
would be disruptive of visitor traffic to existing malls.