BOONTHAVORN HOLDS BACK PLAN FOR MORE OUTLETS

       Company watching economic trend closely before proceeding with expansion plans
       Boonthavorn, like its retail customers, has grown cautious about spending billions of baht on building up its chain of speciality stores for construction materials and home improvement products, despite the upturn in the economy.
       "Although the economy overall shows signs of recovery, we need time to be sure in which direction to go," Sitthisak Tayanuwat, commercial vice president for Boonthavorn Ceramic, said yesterday.
       The company is considering whether to speed up or put on hold its expansion plan to cover all the big cities upcountry such as Chiang Mai, Phuket and Hua Hin. Its provincial sales account for only 20 per cent of its total sales. A brokerage source said Boonthavorn had planned to raise funds from the public, but there has been no movement for a while.
       Instead, Boonthavorn has opted to widen its market into a younger segment by refreshing its brand and renovating its six showrooms with a five-year budget of more than Bt1 billion. This is considered its biggest overhaul in 30 years of doing business.
       The six Boonthavorns are located in the Ratchada, Rangsit, Pinklao, Suvarnabhumi and Thon Buri-Pakthor areas of greater Bangkok and in the beach resort city of Pattaya.
       Construction on the new Kaset-Navamin branch in Bangkok with total retail space of 40,000 square metres is already 75 per cent complete. When it opens next quarter it will also display furniture and lighting.
       "Changes in people's lifestyles such as the way they think or make buying decisions led us to refresh our Boonthavorn brand and showrooms to expand our target group to youngsters, who just graduated or started working, aged down to 25 years," Sitthisak said.
       "Up to the present, our target group was concentrated on middle-age customers who are more than 35."
       Customer buying behaviour is proactive, as shoppers come to Boonthavorn for the purpose of buying something. But over the past six to 10 years, what the new generations want are convenience and value for their money, he said.
       Major products carried by Boonthavorn stores are wall and tile ceramics, kitchenware, sanitary ware, paints, lighting, tools and hardware.
       Boonthavorn offers strong brands and a wide variety with 80,000 items from its suppliers and 30,000 patterns of ceramics. But, its name does not register with youngsters, he said.
       Boonthavorn's customers come in four categories - retail, regular, deep pocket and project. The company's sales were most hit by project customers since fewer real estate developments were started.
       Retail represents 25 per cent of total sales. This group was affected only slightly by the economic crisis, but individual customers are more cautious than before.
       The regular group, consisting of professionals such as architects, contractors and designers, has experienced a drop in home-building work. The company tries to retain this group by launching a CRM programme for two years.
       Recently, Boonthavorn opened a Builder Contractor and Designer Club, which now has 100,000 members, at its Ratchada showroom for architects and home-building specialists to use as a library or centre for meeting with their clients.
       The deep-pocket customers, who normally spend a large sum per bill, have largely escaped the economic contraction.
       This year the company has spent Bt200 million-Bt300 million on improving its product variety.
       Boonthavorn's workforce numbers 2,000 and has never been reduced since the wake of the economic crisis of 1997.
       The company recently lowered its sales target for this year to Bt7.5 billion from Bt8 billion set earlier. It booked Bt7.3 billion in sales last year.