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Similar to MONO Kids Casual Clothing Store Turnaround
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MONO Kids Casual Clothing Store Turnaround
- 1. + MONO: Casual Clothing Final Presentation
- 2. + Executives Summary We are assigned to run and manage a clothing store and we purchased a store that sells casual clothes. The store itself was a family business and they sold clothing items at moderate prices. We decided to keep selling casual clothes. However, we decided to focus on selling clothes for children. Our store is called “MONO” which comes from the word Monogamy (Alone or One). We had quite a big loss in the very first quarter. However, we managed to increase our performances as we went forward.
- 3. + Agenda Executives Summary Business Goals, Mission and Initial Position Marketing Policy & Results Finance Policy & Results Inventory Policy & Results Human Resources Policy & Results Exit Options & Conclusion
- 4. + Business Goals, Mission & Position Product: Casual Clothing Target Market: Middle Class family with children in Germany • We focus on selling children clothes yet we also provide selections of matching casual clothes for the parents Location: Main Street Competitors: • Similar Products: UNIQLO, United Colors of Benetton • Others: ZARA Kids, H&M Kids, Next
- 5. +
- 6. + Business Goals, Mission & Position Business Goals: • Gaining Brand Recognition • Establishing a good reputation • Developing relationship with customer • Maximizing Profit and Minimizing Loss • Improving shopping experience for customers • Maintaining Quality and Customer satisfaction Mission To sell casual everyday clothes for children that are comfortable, easy to wear and price friendly
- 7. + Marketing Policies & Results Marketing Strategies: • Differentiation Strategy: Most of the retailers nowadays sell trendier pieces; and we are focus on selling basic clothes that can be worn all year round • Cross Media Marketing Strategy: Sending and giving information about our services and products to our customers using multiple different channels like social media, websites, email and in-store promotions.
- 8. + Marketing Policies & Results Quarter 0: • Total Advertising Budget: $ 7,004 • Website: $ 4,000 • Social Media: $ 3,004 • Total Promotion Budget: $ 5,000 Quarter 2: • Total Advertising Budget: $ 7,004 • Total Promotion Budget: $ 3,000 Quarter 3 - 8: We switched our advertising budget from Social Media to Flyers • Total Advertising Budget: $ 6,002 • Total Promotion Budget: $ 2,500
- 9. + Results Our Marketing Expenses decreased each quarter Our total expenses also decreases Our profit and sales went up and down after the first quarter, but it did not extremely decreased Our Inventory system helps with the increase of our Profit in the last 3 quarters
- 10. + Finance Policies Finance: Bank loan Reducing Principal Balance
- 11. + Finance Results Finance: Bank loan Because we sold few inventory and had a huge loss in Q1, average ROA was -4.1% for Q1〜Q4. • To Aim Maximizing Profit and Minimizing Loss: We tried to cut our expenses on marketing, cost regarding staff to pay loan with 8% interest and make profit. Quarter ROA
- 12. + Finance Results Reducing Principal Balance • for Q5〜Q8, our average ROA was 9%. • However for quarter 6 we got low score due to forget paying loan to bank. • As such we started to pay extra loan payment to reduce our principal balance and special dividend for shareholder Quarter ROA
- 13. + Finance Results Reducing Principal Balance • As a result our loan balance and stock price improved .
- 14. + Inventory Policy Staple Merchandise • Our casual clothes are easy to Forecast sales by predictable demand. • Paying attention to not only predict the demand but also add some safety stock Buy in Smaller Lots Strategy • Reducing average inventory without reducing sales.
- 15. + Inventory Results Staple Merchandise: Inventory Trends • We are convinced to decide amount of inventory following a trends.
- 16. + Inventory Results Buy in Smaller Lots Strategy :GMROI/IT • Tops: because we carefully monitored deliveries, IT of Tops successfully Reducing average inventory without reducing sales.
- 17. + Inventory Results Buy in Smaller Lots Strategy : STS ratio • Pants: Because 2nd year popularity of pants was fewer than we expected, STS ratio diminished .
- 18. + Human Resource Policies & Results Human Resource Policies • Since we are selling casual products, we need not special and excellent, but typical and average manpower. But we also need employees who are well trained to give useful information to our customers; employees who exceed average level. • To meet the standard we made, we set the standard wage as $8.5 which exceed US minimum hourly wage in 2013,$7.25. • We , as a member of the community, believe that it is important to create jobs and treat our employees as an owner of MONO with an honesty.
- 19. + Human Resource Policies & Results Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 No. staff 15 8 8 7 7 7 7 7 Hourly Wage $9 $9 $8.5 $8.5 $8.5 $8.5 $8.5 $8.5 Training fee $1000 $750 $700 $650 $600 $550 $550 $550 Total part time wages $26,325 $14,040 $13,260 $11,603 $11,603 $11,603 $11,603 $11,603 Sales per employe es $12,271 $27,884 $22,504 $26,688 $22,210 $26,026 $24,095 $25,507 Our Human Resource Expenses sharply decreased in the quarter2 and stand firmly in the last quarters. Our Sales per employees increase double by cutting back unnecessary workforce Our decision to change HR strategy helps us recoup the loss in the quarter1 and make some profit
- 20. + Conclusion: Exit Options # 1 : Sell Store ($19,330*5)- $17,515+$10,000=$89,135 #2 : Sell Shares $23.37*5,000=$116,850 #3 : Retain Shares #4 : Liquidate $57,162(total liabilities) #5 : Keep Store Balance Sheet Total Assets : $74,677 Total Liabilities : $17,515 Total Equity : $57,162
- 21. + Conclusion: Lessons Learned The opportunity to know the real way of running businesses. Dealing with consequences that came from each of our decisions Managing employees, inventory system, pricing and policy Problem Solving and Leadership skills More in depth knowledge of how retail business works Time Management
- 22. + Retail Strategy Rizka Amalia Soetjoko Akiho Takase Kim Danbi Thank You!
Editor's Notes
- http://www.howtostartaclothingcompany.com/how-to-write-a-mission-statement-for-your-clothing-company/ A store along the mainstreet of the town, 6000$ per quarter. The street is stadily becoming a shopping area: good opportunities
- http://smallbusiness.chron.com/business-goals-clothing-line-20736.html
- We will also use information from databases to identify our customers and potential customers and be able to develop a customizable communication to promote our products. We can also use this to identify the costumer’s preferences when purchasing our products.
- Wanted do delete flyers but afraid it will affect our sales.
- Add reason!
- Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- http://www.howtostartaclothingcompany.com/how-to-write-a-mission-statement-for-your-clothing-company/ A store along the mainstreet of the town, 6000$ per quarter. The street is stadily becoming a shopping area: good opportunities Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- http://www.howtostartaclothingcompany.com/how-to-write-a-mission-statement-for-your-clothing-company/ A store along the mainstreet of the town, 6000$ per quarter. The street is stadily becoming a shopping area: good opportunities Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- http://www.howtostartaclothingcompany.com/how-to-write-a-mission-statement-for-your-clothing-company/ A store along the mainstreet of the town, 6000$ per quarter. The street is stadily becoming a shopping area: good opportunities Inventory We have experienced the out of stock situation once in quarter 1 and shortage of inventories twice. In the beginning of simulation, we didn't realize the importance of inventories and just thought that it was the best if we predict demand as precise as possible. But after a few quarter, it turned out if we don't have enough inventories, it will have a negative impact on our score and stock price. The customers will complain about our shortage and it will lead to loss of sales. Now we are paying attention to not only predict the demand but also add some safety stock. Finance Because we had huge loss, in the second quarter, we tried many changes. At first, we decided to cut some employees. It was quite a large restructuring for us. We fired 6 employees. Also, we cut our expenses on marketing and other category of staffing like wage and training. The situation was getting better, but since we experienced a huge loss in the first decision, it was hard to cover the losses. But we continually have tried to cut down our expenses.
- To decide the exit options, we did some calculation. # 1 : Sell Store In the second year, we earn $19,330(profit after taxes). So if we decide to sell MONO, we are expected to sell it at $96,650. But since we still have $17,515 Loans Payable, we can get $79,135 and $10,000 rent deposit. ($89,135) #2 : Sell Shares Our current stock price is $23.37. Since we chose the bank loan, not the angel investor, we have 5,000 shares. We can get $116,850 #3 : Retain Shares Since the upper two options seem attractive and we don’t think that it’s worth carrying MONO, we don’t choose this option. #4 : Liquidate We can get $57,162 after paying off liabilities. It doesn’t seem the best choice because we don’t have much debt. #5 : Keep Store MONO has steady profits. But we cannot see an improvement of this brand. We decide not to keep the store and try to have a new adventure to launch a new brand which is profit-making and improving. Based on this,we decide to sell shares.