Garmex Saigon survives thanks to Pickleball court rental
Pickleball maintains cash flow for Garmex Saigon: from February 2024, more than 3,000 m² of factory space will be converted into a field, bringing in more than 63% of the 452 million VND in revenue in the third quarter of 2024.
The “knock knock” sound of pickleball rackets and balls echoes through the empty factory of Garmex Saigon – where thousands of workers and sewing machines used to hum. Since February 2024, more than 3,000 square meters have been converted into pickleball courts under a lease agreement with Vinaprint Joint Stock Company, bringing vital cash flow to the business after many quarters of losses.
Cash Flow from Pickleball: The Numbers Say It All
The third quarter 2024 report shows that Garmex Saigon's daily revenue is less than 5 million VND, of which more than 3 million VND comes from Pickleball court rentals. Total quarterly revenue reached more than 452 million VND, with more than 63% coming from sports space rental contracts. These revenues are not large, but enough to keep the business running during a period of almost "freezing" production.
- Conversion area: more than 3,000 m² factory (from February 2024).
- Daily revenue: less than 5 million VND; of which more than 3 million VND from Pickleball.
- Total revenue in the third quarter of 2024: over 452 million VND; over 63% from field rental.
| Target (quarter III/2024) | Data |
|---|---|
| Total revenue | More than 452 million VND |
| Sports field rental rate | More than 63% |
| Financial revenue | More than 1 billion VND |
| Bank deposits | Nearly 72 billion VND |
| Business management costs | More than 7 billion VND/quarter |
| Loss in the third quarter of 2024 | Nearly 6.5 billion VND |
| Accumulated loss | Nearly 125 billion VND |
From textile giant to 29 employees
Garmex Saigon was founded in 1976 and used to own 5 factories in Ho Chi Minh City and Quang Nam with more than 4,000 workers. During the period 2012-2021, revenue reached thousands of billions of VND, putting the company in the top textile and garment exporting group. But from the end of 2022, fluctuations in the global supply chain and the fact that major partner Gilimex had its production cut by Amazon Robotics LLC pushed Garmex into crisis. By May 2023, the company temporarily stopped production and laid off thousands of workers. By the end of the third quarter of 2024, Garmex had only 29 employees.
In terms of the capital market, GMC shares were forced to be delisted from HoSE from the end of 2023, transferred to UPCoM and still restricted from trading. From a price of more than VND 28,000/share in 2021, GMC is now only around VND 5,000.
Survival strategy: rent a field, diversify, take advantage of deposit interest
In addition to Pickleball, Garmex has expanded into pharmaceuticals, medical devices and some other services, accounting for about 35% of revenue in the third quarter of 2024. The company also maintains nearly 72 billion VND in bank deposits, bringing in more than 1 billion VND in financial revenue from interest and exchange rate differences. However, this profit is not enough to cover the management costs of more than 7 billion VND per quarter, causing Garmex to continue to lose nearly 6.5 billion VND in the third quarter of 2024 - the sixth consecutive quarter of loss.
Fixed cost and cash flow pressure
Balancing short-term cash flow with sports field rentals and interest on deposits helps Garmex “breathe”, but the weight of fixed costs remains a bottleneck. Without new orders, profit margins from core operations cannot recover.
Pickleball as a trend
Pickleball – a sport combining tennis, badminton and table tennis – is becoming a trend in Vietnam thanks to its low investment cost, easy accessibility and suitability for many ages. Taking advantage of this trend has helped Garmex maintain operations in the context of stagnant production.
The road to recovery: waiting for new revenue sources
Management hopes the Phu My housing project can bring in new revenue to improve finances. But to stay afloat, the company needs a longer-term strategy instead of relying on a few sports fields and interest on deposits.