Despite fierce competition in a market dominated by international brands, E-Maxim hopes to cut a slice of the market share with its robust business model
THE uncertainty in the economy is deepening and consumer sentiment is still wobbly, but the growing middle-income urbanites are the target of a new women's clothing boutique franchise.
Home-grown Le Ann Maxima is creating a niche market by offering high-end products at reasonable prices for urban women who enjoy fabulous fashion.
"There is no middleman in our business model because we design, cut, sew and market the clothes ourselves. This makes the products more affordable for the end-customers," E-Maxim Fashion (M) Sdn Bhd chief executive officer Francis Lim said.
Speaking to Business Times at Le Ann Maxima's chic flagship store in Petaling Jaya, Lim said clothing is a consumer item, and is a necessity.
"We launch a new range of clothing every single month," he said, while keeping an eye on store assistants who were dressing the mannequins with the newly arrived spring-summer collection.
Despite fierce competition in a market dominated by international brands, E-Maxim hopes to cut a slice of the market share with its robust business model.
"We have developed an efficient and evolving business operations as well as support system to nurture and bring out the best of our franchisees.
"We have created Flexible Stock Intake System (FSIS) to manage the geographic and demographic coverage of our franchise," he said,
Franchising is the company's strength. Lim said. Unlike other retailers that are sole proprietors, E-Maxim can sell its clothes at its franchised outlets, thus reducing the risk of unsold stocks.
In the clothing business, it is important for retailers not to keep stock because the value of the stock falls fast.
"Five out of 10 boutique owners fail in business because they can't be at two places at the same time," he said, adding that perseverance is also important in the retail business.
One would not expect that Lim, who speaks passionately about the fashion industry, came from an information technology (IT) background.
The establishment of E-Maxim as the franchisor of Le Ann Maxima chain of boutique can be traced back to nine years ago, when Lim's wife, Leann Yeap, who had her own boutique, invited Lim and his friend, Bryan Chang, to start a clothing wholesale business.
"We started off as two IT-based individuals who believed in the local fashion industry and its big potential. Now we stand as three major partners - Yeap, the inspiration behind the name of our retail franchise, Chang, our senior vice-president of finance and marketing and myself," he said.
Both Lim and Chang utilised their expertise to enhance the company's operations and business management. Together, they developed several systems such as customised Business Intelligence software, FSIS, 'Cost vs Quantity Break Even Report' and a customised 'Tracking System'.
After a couple of years, the partners decided to get away from the price war in the traditional wholesale business and create their own design for specific market segment.
They started doing segmentation for their clothing range and by 2001, they came out with Le Ann brand. The Le Ann range of clothing was targeted at medium to high-end boutiques.
Later, the partners wanted to explore deeper into the local fashion industry. By 2005, they were toying with the idea of franchising their boutiques.
"There were a few components of the business which were not streamlined yet, such as pricing, product range and actual projection of brand image. So, we came out with Le Ann Maxima brand to streamline the whole retail business concept," Lim said.
He said the word "Maxima" represents the company's aim to maximise its business model.
From the beginning, the company's expansion was financed from internally generated funds.
"I don't believe in borrowing," Lim said.
However, not long ago, a foreign bank approached E-Maxim, offering business loans.
"They said they had been following our progress. They'd like to be our partner to make us grow further, so we took up the loan," he said.
That brought about the opening of the Le Ann Maxima flagship store in November last year.
"We never thought of having our own showroom because we are interested in franchising," he said, adding that the flagship store has attracted many potential franchisees.
E-Maxim has 10 contract manufacturers in China for Le Ann and Lee Ann Maxima brands. Each has between 25 and 45 tailors, with a capacity from 20,000 to 60,000 pieces of clothes per month.