Angela Chew Increasing Utilization And Strength Of Private Label Brands Ny
Upcoming SlideShare
Loading in...5
×
 

Angela Chew Increasing Utilization And Strength Of Private Label Brands Ny

on

  • 3,792 views

apparel fashion garments style project

apparel fashion garments style project

Statistics

Views

Total Views
3,792
Views on SlideShare
3,781
Embed Views
11

Actions

Likes
1
Downloads
113
Comments
0

2 Embeds 11

http://www.slideshare.net 10
http://www.fashion-networks.com 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Angela Chew Increasing Utilization And Strength Of Private Label Brands Ny Angela Chew Increasing Utilization And Strength Of Private Label Brands Ny Presentation Transcript

  • GLGi: Increasing Utilization and Strength of Private Label Brands Tuesday, July 31, 2007 New York
    • Council Member Biography
    • Angela Chew is a partner at L&M Global Sourcing, a factory group with facilities in New York, China, Bangladesh and Central America. The company is serving Target, Macy's, Wal-Mart, Guess, Michael Kors, Nautica and others. She has 20 years of experience in retail, wholesale, design, merchandising, sales, global production and product development. She has worked with large corporations such as Macy's (Federated) Dept Stores, Saks Fifth Avenue, Ann Taylor, Victoria's Secret, Kohl's and Calvin Klein; as well as small start up fashion brands & design companies and a national food franchise,Domino's Pizza. Her product knowledge includes women's, men's & children's apparel, intimates, activewear, maternity and home goods. She has experience in direct mailing, franchising, licensing, buying and selling small companies.
    • About GLG Institute
    • GLG Institute (GLGi SM ) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community.
    • GLGi hosts hundreds of Seminars worldwide each year.
    • GLGi clients receive two seats to all Seminars in all Practice Areas.
    • GLGi’s website enables clients to:
      • Propose Seminar topics, agenda items and locations
      • View and RSVP to scheduled and proposed Seminars
      • Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members
      • Share Seminar details with colleagues or friends
    • Gerson Lehrman Group Contacts
    • Randi Culang
    • Consumer Goods & Services Global Research Head
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-750-1229
    • [email_address]
    • Christine Ruane
    • Senior Product Manager
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-984-8505
    • [email_address]
    • IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project.
    • You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event.
  • Topics Of Discussion
    • I. The Apparel Private Label Paradigm
    • II. National Apparel Brands Counter Strategy
    • III. The Future of Apparel Private Labels
  • Private Label Market Share Source: adapted from Cotton Inc.
  • Overview
    • Worldwide Private Label retail sales have passed US$1 trillion
    • 2006 US apparel & shoes retail sales: $358.6 Billion
    • 2006: 45% apparel sales were private label
    • 2005: 39% apparel sales were private label
    • 2002: 35% apparel sales were private label
    • By 2010, private label merchandise expects to increase by 22% to 55% of total apparel sales
    Source: US Dept of Commerce, expand on May 2007 Apparel and Textile News
  • Why The Growth?
    • Consolidation of retailers
    • Brands sell to same retailers and become a commodity
    • Retailers need differentiation and better margin
    • Declining retail prices (women’s apparel prices dropped 2.4% 2007 vs. ‘06)
    • Globalization of Production
  • Decline in Retail Prices From 1996 to 2006, the average retail price declined a minimum of 9% Source: adapted and expanded from Cotton Inc. winter 2003 -6.1 Shirts/Dresses -11.2 Other -16.3 Sweaters -4.2 Off-price -8.1 Shirts -7.5 Mass merchant -12.6 Sweat Apparel -5.8 Specialty -4.9 Shorts -9.0 National Chain -11.7 Slacks -13.7 Department -5.5 Jeans -8.9 Total -8.9 Total % Change Retail Channel % Change Product
  • Global Sourcing
    • Imitate designer brands to reduce R&D costs
    • Source direct with factories to eliminate middlemen cost
    • Buy in larger volume to receive lower cost
    • Source from low cost, duty and/or quota free countries: China, India, Bangladesh, Vietnam, Pakistan, South & Central America, Africa
    How do retailers achieve low PL prices?
  • Types of Private Label
    • Generic –very promotional, very low margin, Conway, Walgreen
    • Fast Value Fashion – knock-off brands, Zara and H &M
    • Premium Store Brands – Retailer’s own brand offers same or better quality at better price. The most profitable strategy in private label.
    Source: The Private Label Strategy, Harvard Business School Press,
  • Premium Store Brands
      • Highly competitive - same or better quality at
    • better prices, average 37% less than national brands
      • Higher Gross Margins (est. 58 – 68%)
      • Higher selling price per square foot than other
      • Private label strategies
      • Biggest threat to national brands
      • Brand Loyalty
    What is the preferred PL strategy? See Appendix 2
  • Key USA Retailers *Sales in billions include all private label & exclusive products Macy’s percentage includes 18% private label and 15% exclusive merchandise Target Macy’s Wal-Mart Kohl’s JC Penney Retailer $59.5 $27 $312.4 $15.5 $19.9 2006 Total Sales 32% 33% 40% 35% 50% Private Label % to total sales $19.4 $ 8.9 $124.96 $5.42 $9.95 Private Label Sales in USD *
  • Premium Private Label Brands
    • JC Penney’s – a.n.a., Arizona, Ambrielle
    • Macy’s - INC, Alfani, Style & Co
    • Wal-Mart - Faded Glory, George
    • Target - Mossimo, Circo
    • Kohl’s - Urban Pipeline, Sonoma, Apt 9
  • Private Label Trends
    • Combined effort, a win-win strategy:
    • American Living, Simply Vera, Isaac Mizrahi
    • One time exclusive deal – H & M, Target
    • Blending in with Premium brands - INC, Arizona
    • Marriage with a celebrity name – Sarah Jessica Parker, Hilary Duff
  • National Brand Counter Strategies
    • Develop unique products and stay ahead as a trend leader
    • Create own stores
    • Develop a compelling marketing strategy
    • Increase brand loyalty
    • Combine effort by offering exclusive lines. I.e, Simply Vera, American Living, Liz & Co
    • Create one shot exclusive deliveries and SKUS
    • Evaluate sourcing strategy and production cost
    • Maintain net price (minimal promotions & discounts)
    • Improve forecasting and turn around time
  • Future of Private Labels
    • Becoming national premium lifestyle brands: INC, Alfani, Arizona
    • Branching out to create specialty chain business: George apparel stores, Wal-Mart, UK
    • Increasing depth of multi dimensional merchandising product mix (Tony Hawk mens, boys, footwear and etc)
    • Spin off PL brands (Aeropostale)
    • Cannibalize weaker PL brands
  • Private Label Pros & Cons
    • PROS
    • Exclusivity & differentiation
    • Bring customer loyalty
    • Better margin
    • Better control in deliveries
    • Brand equity
    • Freedom in pricing strategy
    • Increase bargaining power with both national brands and PL factories
    • CONS
    • Inventory risk
    • Higher R&D expense
    • Higher marketing expense
    • No markdown or return allowance from branded suppliers
    • If product fails, will create negative image
    • Quality control, complex production & import issues
  • Private Brands To Watch
    • KOHL’S
      • New Launches– Simply Vera by Vera Wang, Elle Apparel, Food Network Kitchen estimated growth rate 6-7% for 2 nd half of 2007
      • Tony Hawk, board-sports inspired, a hot category
    • JC PENNEY
      • American Living by Ralph Lauren 2008
      • C7P – Chip & Pepper Denim 2007
      • Liz & Co
      • Arizona - $1 billion lifestyle premium brand
    • MACY’S
      • INC, Alfani, Style & Co, Martha Stewart, Field Gear, Epic Threads
    • WAL-MART *
      • George - $3 billion men’s urban fashion
      • Faded Glory - $3 billion lifestyle premium brand
    *Wal-Mart figures represent worldwide sales
  • What This Means
    • To differentiate
    • To gain and maintain consumer loyalty
    • To achieve higher gross margin
    • To compete with national brands
    I. Retailers believe private brands are their strategy:
  • II. National brands should: What This Means
    • Change mind set and realize that Private Labels are
    • competing brands
    • Innovate and stay as market leaders to beat PL
    • Stay focused on target audience
    • Increase and market brand imagery to gain and maintain
    • customer loyalty
    • Partner with retailers to produce exclusive brands,
    • SKUS, one-time offers or lines
    • Price competitively and streamline expenses
  • III. Future of private labels:
    • Private brands will continue to play an important part of the assortment to their growth strategy
    • Become national lifestyle premium brands
    • Deploy a multi-layer strategy in brand, price and quality
    • Cannibalize weaker private and national brands
    What This Means
  • Appendix 1 Retail Price Comparison Average price gap 37% based on quality equivalent categories Average price gap 21% based on national brand’s quality is perceived to be less than private label brands. 30-39% $45-55 GM 50-54% Nautica Men’s Polo $34.50-42.0 GM 58-68% Alfani (Macy’s) Men’s Polo $16 – 40.00 GM 40 – 48% $19.68 GM 45-48% $158-178 GM 48-56% Retail $ Gross Margin 20 –25% 37% 37% Price Difference betw. Brands National Brands Retail $ Gross Margin Private Label Brands Dickie’s, Shady’s & etc $ 16-28.00 GM 60-62% Sonoma (Kohl's) Menswear Levi’s Denim For Wal-Mart $10.77-14.42 GM 38-54% Faded Glory (Wal-Mart) Denim BCBG Dresses $79-129.00 GM 60-69% INC (Macy’s) Dresses
  • Increasing Utilization and Strength of Private Label Brands New York July 31, 2007 Boston August 1, 2007