3. British Heritage and International Comfort able Elegant British Excellence Masculinity Luxury Craftsmanship Adventuress Wealthy globe-trotting Motoring and Travel English-educated elite Status British belonging Well-educated Gentleman’s club Classic English lifestyle Luxury leather goods English identity and eccentricity feel the passion, delight in the details, British Heritage Traditional Successful Gentleman Traditional Aristocratic PHYSICAL PERSONALITY RELATIONSHIP CULTURE REFLECTION SELF-IMAGE Brand DNA: Brand identity
4.
5. Brand Value Since 1893, Alfred Dunhill’s strength has been built on the founding principles of creating innovative and functional products, crafted from the very best materials and manufactured to the highest standards.
6. International Retail Strategy Alfred Dunhill has five main retail regions: Europe, Asia Pacific, China, Japan and the United States. We have over 180 stores and over 3,500 wholesale points of sale around the world. Quick expansion in China. Have about 45 directly-owned doors and 30 franchised stores in the country, and it is performing very well. Fourth Home store opening in Hong Kong later this year, to add to the ones we have in London, Shanghai and Tokyo. Southern Asia and China is an invest-to-grow market and Dunhill will continue to put a lot of investment behind our businesses out there.
9. Clement Court Clement Court sat on the board for SAFAD (dunhill’s operation in France) in the 1920s and was retail manager for the Paris store at 15 Rue de la Paix. Like Alfred, Clement enjoyed an enthusiasm for exquisite and unique collectable art. This passion impacted on the product sold in-store and saw the Paris shop develop into an stylish boutique and gain the following description: “Le Rendez-Vous Elegance.”
11. Customer Service No doorman, but staff quickly opened the door with a smile Staff member said bonjour and then left me alone Very informative, and told me the history of the products and gave me their business card The staff was friendly and spent time on me and made me feel important Develop long-term relations by high quality P2P relationship.
12. After Sales Service They help repair damaged products Educate clients how to take care of their leather goods This location does not offer Valet (cleaning clothes for customers) like Tokyo House location Luxury goods specialist Alfred Dunhill has set up a customer relationship management solution with IBM and Computer Software Group (CSG).
13. Creating Luxury Experience Antiques, keep it as original different than other brands (historical products of the brand) Have special boxes where there are historical pieces such as Alfred Dunhill’s Bobby spotters that create a luxury feeling The glass cabinets looks very expensive and the light inside is dim so it give a feeling of in a vintage boat. feeling of adventure.
15. Products Products are Italian, some clothes made in Turkey with Italian designs Leather is made in Italy Ties are made in Italy Leather goods sell the best 6 years best selling product bulldog cufflinks
16. Products 85 Euro entry product for shirt point tips 124,000 Euro diamond incrusted pen and 76,000 Euro for limited edition pens No discounts at stores for leather bags, normally clothes go on sale for 40% at end of season, then they are moved to outlets
17. Merchandising Orientation Felt that the store had little empty space, all the space either had furniture The bags were put on these printing tables together, felt that it was that it made the product very accessible and clustered The shoes were displayed on a round table, there was no places to sit right beside to try on, I would have put them nearer to clothing area
18. VIP Service No bespoke tailing at this location Standard suits tailoring, but takes 6-7 weeks to receive after Do not need to make appointment No barber shop because they don’t have it in the store
19. Store maintanence Shoes put on a table, did not feel luxurious Some of the suits were hanged crooked The store was generally clean.
21. Store Personals Handsome store clerks wearing suits, gentleman, mid-30s Woman was wearing business suit, mid-40s 1 Taiwanese Female 3 French All staff members speak English and French Store personals are chosen because brand knows who their target customers are.
22. Brand Communication Store is in intimidation/aristocratic mode From the outside it looks like a museum Metal grid bars inside the windows
23.
24. Do not have much marketing in France because they need to justify costs to headquarters
25.
26. Store Blueprint Side Entrance Changing room Men’s Clothing Cashier Small leather goods Leather bags Company material that cannot be seen gloves shoes Leather bags Cufflinks Pens Lighters Main Entrance
27. Merchandising Leather bags when first enter the store, on left are the cufflinks, pens in old wooden cabinets, on eight display cases, there is a limited edition of belts As you keep walking on the L shape there are small leather goods on the left hand size, wallets and key ring In the corner of the first section, there is a rugby set for sale, which is the rich traditional of Dunhill The back selection after the umbrella is the clothes, then you have suits on the end with the changing room in the left hand corner There are 2 printing tables that can be adjusted in every angle Sofa just upholstered, exactly the same as before Beside counter to the right side was gloves on round table. Near the counter are pipes dating back, then there are gloves placed on round table Pipes to the left side of the cashier.
46. Paris Location Positioned on Rue de la Paix, where traditional luxury jewelry store located Near tourist destinations Ie. Place Vendome , Tuileries, Louvre, Place de la Concorde Madeline. Opera Highest concentration of 5 Store hotels Ie. Westminister, Park Hyatt, Ritz, Westin Hotel, Near luxury stores, Ie. Cartier, Bacarrat, Mont Blanc, Tiffany and Co. Near Tourism office
48. Street view towards Place Vendome Street view Opera Street view of second entrance Rue Daunou
49. Relevance of Location Brand that needs to be exposed to traffic Dunhill is revamping and redefining itself to it’s English roots, it needs to be on Rue de la Paix to reaffirm its positioning to its international buyers It is important to be on a street where there are other brands, so men can shop and their females friends and family can shop Dunhill needs to be close to their target customers, where there is a high concentration, especially when there are global brands competing against each segment Continue to be in premium locations, which is consistent with their brand position Dunhill, New York Dunhill, Tokyo
52. Store size/ Rent 120 sq/meters ~6.5m x 18.5m Estimation of rent = 4000/sq/m (Place Vendome area) 480,000 Euro/year Rent Side Entrance Changing room Cashier Main Entrance
53. Key money/Goodwill/ “Droit au bail” Assumption- 7 years left on lease Using coefficient 8.5 Present annual rate 1800/sq/ Difference is 264,000/year x 8.5 = 2,244,000 for key money
54. Staff Number, Cost Structure Number of staff = 7 Store Manager- 90,000 Euro/year Assistant Manager- 60,000 Euro/year 5 rotating Sales- 40,000 Euro/year Total Salaries= 350,000 Euro Miscellaneous SG&A costs- Renovations, electricity, maintenance- 50,000 Euro
55. Yearly Net Sales Forecast Average sales/transaction estimate 500 Euros based on the average of customers who purchase small gifts and large spenders There were 2 purchases during a 30 minutes Saturday afternoon, normally there will be less traffic. Assuming they open 10am- 7pm (10 hours) and averaging peak hours and bottom hours Use 5 hours to offset peak and bottom hours. 1000 Euros x 5 x 6 = 30,000 per week 30,000 x 4 = 120,000/month 120,000 x 11 = 1,320,000 + 240,000 Christmas month with double sales = 1,560,000 per/year retail sales
56. Strategic Profit Model Higher bound( best case scenario) 1,560,000- 390,000(COGS) - 480,000 (SG&A rent cost) - 400,000 (SG&A costs) x (1-tax rate) Assuming tax rate 37.5% EBITA- 290,000 Net Profit = 181,250 Euro COGS assumed as 25% of net sales, using the assumption of directly operated store, 5% Freights and duties to France + 25% of Dunhill France subsidiary wholesale margin + 60% retail store margin.
57. Profit Model 181,250 (Net profit) /1,560,000 (Net Sales) = .11 Best case scenario Dunhill is making 11% gross margin this is along the lines of other full price stores.
58. Conclusion This store is likely to make money because Dunhill likely owns this store, but after calculating economic costs it would be breaking-even if Richemont decides to sell this good well, but this store has value being the oldest Dunhill store.