HONG KONG: Top Form International Ltd, a Hong Kong bra maker that supplies brands including Calvin Klein and Maidenform, plans to increase manufacturing capacity as retailers in the US and Europe restocks and demand rebounds.
Top Form, which has almost tripled in market value over the past year, may build a fourth factory in the mainland, Chairman Willie Fung Wai Yiu said. He declined to say when it may be built.
"Rising costs are a concern but China, especially for our trade, still comes ahead in that the quality and skill levels are higher," Fung said. "Right now, our priority is to rebuild our capacity because we see that demand is coming back."
Workers package bras at a Top Form underwear factory in Longnan, Jiangxi province. The company expects to make as many as 45 million units this year. [Agencies]
The underwear and nightwear market in the US may grow 2.4 percent to $12.9 billion this year after declining 8.6 percent in 2009, according to Euromonitor International. Top Form, which is 23 percent-owned by Belgian luxury lingerie maker Van de Velde NV, also supplies other brands sold by retailers including Victoria's Secret and Wal-Mart Stores Inc, Fung said.
Top Form fell 3.13 percent to 62 Hong Kong cents Wednesday, while benchmark Hang Seng Index fell 0.75 percent. The stock has climbed 193 percent in the past year.
Net income for the bra maker in the six months to last December was HK$33.8 million ($4.4 million) compared with a loss of HK$10.6 million a year ago. Sales fell 12 percent to HK$633.2 million over the same period.
Top Form expects to make as many as 45 million units in its 2010 fiscal year, which ends in June, Fung said. The company sold 45.8 million units in the previous 12-month period and 49.4 million units in the 2008 fiscal year.
"Business is still difficult," Fung said. "It's going to be volatile and the good news is that it can't be worse than 2009."
The company's planned factory may be located in the southwestern province of Sichuan or in northeastern China.
Setting up a factory typically costs more than HK$10 million if the land is leased, Fung said. Top Form makes 60 percent of its products in the mainland, 33 percent in Thailand and the rest in the Philippines.
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