Garmex Saigon survives by renting out its pickleball court.
Pickleball maintains cash flow for Garmex Saigon: from February 2024, over 3,000 m² of factory space was converted into a yard, generating over 63% of the 452 million VND in revenue in Q3 2024.
The "clack clack" sound of rackets and pickleballs echoes through the empty factory grounds of Garmex Saigon – once home to thousands of workers and the rumble of sewing machines. Since February 2024, over 3,000 m² has been converted into a pickleball court under a lease agreement with Vinaprint Joint Stock Company, providing vital cash flow for the business after several quarters of losses.
Cash flow from Pickleball: the numbers speak for themselves.
The Q3/2024 report shows that Garmex Saigon's daily revenue was less than 5 million VND, of which over 3 million VND came from renting out the pickleball court. Total quarterly revenue reached over 452 million VND, with more than 63% coming from sports venue rental contracts. These revenues are not large, but they are enough to keep the business running during a period when production was almost "frozen".
- Area to be converted: over 3,000 m² of factory space (from February 2024).
- Daily revenue: less than 5 million VND; of which over 3 million VND comes from Pickleball.
- Total revenue for Q3/2024: over 452 million VND; over 63% from field rentals.
| Targets (Q3/2024) | Data |
|---|---|
| Total revenue | Over 452 million VND |
| Sports field rental rate | Over 63% |
| Financial revenue | Over 1 billion VND |
| Bank deposits | Nearly 72 billion VND |
| Business management costs | Over 7 billion VND/quarter |
| Loss in Q3/2024 | Nearly 6.5 billion VND |
| Accumulated loss | Nearly 125 billion VND |
From a textile giant to a company with only 29 employees.
Established in 1976, Garmex Saigon once owned five factories in Ho Chi Minh City and Quang Nam province, employing over 4,000 workers. Between 2012 and 2021, its revenue reached trillions of VND, placing it among the leading textile and garment exporters. However, from late 2022, global supply chain disruptions and the reduction of production by its major partner, Gilimex, by Amazon Robotics LLC plunged Garmex into crisis. By May 2023, the company temporarily suspended production and laid off thousands of workers. By the end of the third quarter of 2024, Garmex had only 29 employees left.
Regarding the capital market, GMC shares were compulsorily delisted from the HoSE at the end of 2023, transferred to UPCoM, and remain subject to trading restrictions. From a price of over 28,000 VND/share in 2021, GMC is now only around 5,000 VND.
Survival strategy: rent a venue, diversify into multiple industries, and leverage interest from deposits.
Besides Pickleball, Garmex expanded into pharmaceuticals, medical devices, and other services, accounting for approximately 35% of its Q3 2024 revenue. The company also maintained nearly 72 billion VND in bank deposits, generating over 1 billion VND in financial income from interest and exchange rate differences. However, this profit was insufficient to offset management expenses exceeding 7 billion VND per quarter, resulting in Garmex continuing to incur a loss of nearly 6.5 billion VND in Q3 2024 – its sixth consecutive quarter of losses.
The problem of fixed costs and cash flow pressure.
Balancing short-term cash flow through sports stadium rentals and interest income from deposits has helped Garmex "breathe," but the burden of fixed costs remains a bottleneck. With no new orders, profit margins from core operations have yet to recover.
Pickleball as a trend
Pickleball – a sport combining elements of tennis, badminton, and table tennis – is becoming a trend in Vietnam due to its low investment costs, accessibility, and suitability for a wide range of ages. Capitalizing on this trend has helped Garmex maintain operations amidst production slowdowns.
The path to revival: waiting for new revenue streams.
The management expects the Phu My housing project to generate new revenue to improve its finances. But to remain sustainable, the business needs a longer-term strategy instead of relying on a few sports fields and interest income from deposits.
