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Business Plan Retail

This document outlines a retail business plan for Lontessa, a proposed women's fashion boutique. It discusses objectives like sales, profitability, and target market. Key aspects of the plan include selecting the right location, developing a product mix of stylish and fashionable designs, determining pricing, identifying competitors, and ensuring a positive customer experience. The executive summary proposes positioning the brand as offering distinct Maori-inspired female fashion that makes women feel attractive. The retail strategy focuses on location, products, customer service, pricing, and promotion.

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Lontessa Retail Business Plan - 2016
Lontessa  Retail objectives : sales revenue, turnover per m2, profit  Location, Location, Location !  Target market – who they are, where they shop, what they want ?  Retail image – combination of attributes  Composition of product mix – style & design  Pricing – cost of production – value equation of product vs price  Competition – what are the trends and who is our market?  Dichotomy of distinct product offering, positioning in the market and the attraction of the right consumer segment ?  Definite opportunities - but also Risks in terms of length of return on investment  Customer Service – shopper experience  Advertising & Promotional tools – communication Executive Summary
Lontessa Positioning : The business opportunity is for a differentiated female fashion boutique that caters for female consumers looking for a distinct Maori infused design and styling that is attractive, fashionable, and sexy; making ladies feel attractive and gives them a pleasurable shopping experience Retail Strategy : Right Location to meet the target market needs  Physical Attributes – Location for footfall, Visibility, Exterior  Product & Merchandise – Assortment & range  Customer Service – shopper experience in store  Pricing – from value to premium offerings  Promotional tools – communication & perfect sizing / fit Market Gap
Lontessa 4 Market Dynamics The biggest spenders in the Underwear category are : Singles at home, Young couples and Families (25 - 34); Single Parents The fashion market has a bias to 21- 35 years and always bouyant to trends Growing middle income group that is price and value oriented Consumer Category Drivers : Need new underwear Specific occasion need – special day Emotional need – spoil myself Impulsive buy – Feel like it Something new – feel special
Lontessa Physical Attributes : Location !!!  Exterior facilities – aesthetic surroundings  Visibility and uniqueness of exterior  Geographic Area and surrounding retailers  Outer window attraction, branding and display  Accessibility and parking  Visual representation : Positive Brand colours and image  The look and layout : Fixtures, fittings, lighting and ambience  Dressing room facilities – fitting service  Allocation of space and traffic flow  Customer shopping Experience - pleasurability  Merchandise layout and displays  Service strategy – moment of truth : connect on service Retail Image
Lontessa Store Atmosphere and Experience :  Exterior : Storefront, Entrance, Display windows, Branding, Visibility and uniqueness  Visual : Colours, lighting, flooring, temperature, scents, Fixtures, wall textures, dressing facilities, display, Staff interaction, service, merchandise, pricing and Payment Technology (card), modern tills, cleanliness  Store Layout : Floor space, product groupings, ease of flow, Display stands, units, cupboards, couches, arrangement, relaxed  Interior display : Assortmnet, themes, racks, signage, wall decorations Overall ambience, visual representation, quality and image Retail Image
Lontessa VALUE PREMIUM Growth + + Size ++ + Motivations Convenience Treat myself Market Dynamics Marketing mix Price and value Quality and Style Role of brands Low importance Very important Ability to compete Low - competitive Good Rationale Role of brands is low Compromising brand image (quality) Retail margins good – more volume at a value price Match consumer profile Meeting consumer expectations Build Consistent brand values Expertise in product design, quality, function and fashion
Lontessa Product Portfolio CONVENIENT ASPIRATIONALSEGMENTATION CHANNEL STATUS • General retail • Multi-category chains • Department stores • Independant boutiques • Specialized Chains 1. Low product differentiation vs Private Label 2. Product quality issues 1. Perceived aesthetics or design appeal 2. Product superiority and quality
Lontessa Class of trade segmentation CONVENIENT ASPIRATIONALSEGMENTATION • Accessibility / more Traffic • Variety and Choice • Value for money • Shopping experience • Quality / styling / comfort • Brands – meet specific •needs REASON TO BE High Varies a lot … Meet consumer expectations PERFORMANCE LEVEL
Lontessa Mass Market Mail Order Depart. Stores Specialty Chains Other Indep. retailers Channel Growth (%) -10% +10% 0.750.50.250.1 1.5 2.0 2.5 3.0 Source : Consumer panel TNS (Europe : France, UK, Spain, Italy) Multi Brands Chains Distribution channel Analysis Web based
Lontessa Aspirational classes of trade Prediction Flat - loyal Probability of destination shop On decrease Long term risks Web sales continue to increase DEPARTMENT STORE INDEPENDANTS MAIL to WEB Size + + + Growth - -+ + Attractive - ness Average Ave / Low Ave/ High DIAGNOSIS Investment ? Mass production Current strategy Future Opport
Lontessa Future Opportunities INTERNET CATALOGUES HOME PARTIES DOOR TO DOOR Activity Sell through website Sell through a catalogue / email Sell through ambassadors in consumers' house Sell @ home through ambassadors Rationale Matches consumer profiles Succesful in other categories FIT and comfort ? Matches consumer profiles Intimate way of choosing underwear Communicate on all range (image) Lingery very talkative topics Women's story Intimacy amongst friends Intimacy Women's story Brand Fit High Med High High
Lontessa Product Segmentation - 6 groups More special lingerie Everyday underwear Basic Everyday Pretty Everyday Weekend / Relaxed Everyday Fancy Lacy Sexy Feel Good confidence each group fulfils a particular need or occasion. Super Sexy Attractive
Lontessa Modern Fulfilled Trendy Total Fancy Elegant Sexy 30 - 40 40 - 50 21 - 33 Base 1380 166 (12%) 260 (18%) 260 (18%) Marks & Spencer / Farmers 49 34 70 47 Superstores (ASDA, Sainsburys, Tesco)/ K- Mart 19 19 19 23 Department stores (Debenhams, John Lewis, House of Fraser) / Farmers 30 27 26 36 Specialized underwear chain stores (e,g, La Senza, Knickerbox, Top Shop) : Bendon, NZ 8 9 5 20 Fashion clothing chains that also make underwear (e,g, Gap, H&M, Benetton ) 10 16 7 17 Independent underwear shops 9 7 7 9 Mail / Internet -order - catalogues (Euro) 25 28 17 24 Other (e,g outdoor markets, bargain basements) 7 11 4 9 Q - Type of stores where you usually buy underwear Consumer Access
Lontessa Create Sexiness and superior differentiation : Customer pleasure and experience Distribution • Retail Independents • Internet • Home parties Product Innovation & differentiation : speciality Product offer : Designs, styles, range, colors, more frames to meet consumers’ needs and sexy fashion trends Communication Awareness in Wellington 25 – 40 years • Show what the brand is about • Made for you ! Radio advertising ? Relevant brand ambassador to tell it : I’m attractive when I wear Lontessa Build strong brand values
Lontessa FACT ISSUE OPPORTUNITY Comfort expectations are increasingly high Can we deliver on comfort or will it be average ? Develop comfort through ’perfect fit’ measurements. Innovation Aesthetic appeal is the main driver, for bras in sexiness and attractiveness Aesthetic : design, gore detail, material or finishings Invest in gore details and finishings that set us apart and create premium perceptions Perceived premium is driven by a multi sensorial experience : pleasurable experience, sensual colours, patterns, designs, shapes & forms Create emotional connection with sexy, sensual, attractive and appealing to consumer tastes Create more emotion through product features :colours, styles and design. Tell an emotional story ! Attention given to the inner part of the bra (design, logo) : means that the brand is for me / it cares for my needs Attention to brand values - meet consumer expectation Relook brand and swing tags - inner- side of the bra Product Strategy
Lontessa Brand Strategy THE BRAND LAUNCH PLAN PRODUCT The sexy superior offer… DISTRIBUTION In the right place IMAGE of an aspirational and modern brand Own sexiness & superiority : Intensive product differentiation Improved perceived value in design, attractive, attention to details, portfolio : product type, colours, shapes, lace, materials Branding & packaging Out of store : Brand communication Special PR project - endorsement In-store : Merchandising / Brand ID Own stores Other Retail stores - need Volume Online – website orders
Lontessa Product strategy - Major initiatives PRIORITY TOPIC INITIATIVE 1 INNOVATION •Develop a strong product pipeline •Launch new styles and innovation every month : ‘new rack’ 2 COMFORT CUES •Define the new standards of comfort •Implement ‘perfect fit’ with customers • Enhance shape 3 PERCEIVED QUALITY : ATTENTION TO DETAILS •Reinvest in details and finishings 4 PRODUCT BRANDING •Leverage branding •Implement improved logo and label tags
Lontessa Key Initiatives PRIO RITY Priority INITIATIVE DESCRIPTION TIMING 1 PRODUCT Launch PR Launch of the brand April 16 4 Innovation New styles each month – seasonal colours June 16 5 COMM Brand communication Wellington catchment – radio / media (Exciting launch campaign) June 16 9 Events / Sponsoring Product Endorsement 2017 3 BRANDING Create brand identity Branding & packaging April 16 8 SERVICE Bra Fitting service Service in store - provide superior fit Sept 16 6 Web Online Website, direct mail orders 2017 2 DISTRIB Location - Categories Wellington store / Auckland stores April 16 / Sept 16 7 OPPORTUNITY Home parties Extend the brand franchise 2017Sleep and Night wear Swim wear
Lontessa Distribution Strategy Positive Consumer trend : Luxury and superior quality : high attractive power I indulge with expensive items for spoiling myself and for on occasion, specific reasons I can afford luxury, but expect more from the product to justify the premium Location of stores in high traffic fashion areas - Independent Boutique stores, specialty stores Retail department stores – mass convenience in shopping malls – highly price competitive (lower margin but volume drives costs down) Online website growth trend – but correct fit for underwear Having the right product, in the right place, at the right time to offer complete customer service Benefits of a Test store : Cuba street with 63m2 @ $4000 per month / short term lease
Lontessa Pricing Strategy Grow Sales – what is the demand for the product range ? Production Costs versus competition - affects on Gross margin and profitability The cost of goods is a major profit determinant – weakness is the lack of volume to achieve lower prices through manufacture Service and customer retention will lead to improved financial gains The Retail mix : Balancing quality and price is a key element to the profitability equation – what is the product mix that will achieve max profit The consumer will pay the premium if the styling, quality and service are superior and can be justified – low volume, high price will affect demand and profit Invest in building the brand image with advertising message that informs, persuades and grows awareness and positioning, but product range must deliver on the promise Communicate service excellence and ‘made for me’ individual service Radio, print, online media communication – up-front investment in brand awareness
Lontessa Retail pricing / margins Product Costings / Retail Pricing Example Value Added Value Premium Standard cost 16 22 25 W/sale price 24 44 52 Retail price 46 83 100 GP% 35% 43% 52% Margin is eroded selling through large retail department stores But, Can achieve the volumes required to achieve critical mass and reduce costs
Lontessa Product range Multiple styles and shapes – balconette, contour, padding From market fashion norm to super- sophisticated & sexy Palet of colours Specialized (dept stores/ independent retail) Entry price $45 to Premium $90
Lontessa Merchandising & store lay out Consumer based sizing : start with A – C cup (may need D for segment needs) Sales data will help support and validate customer base x frequency The number of garments we currently sell vs future demand in each consumer segment – determine future range Consider store ambience and which parts of the store are more important the more ‘special product’ areas are key for drawing people in and enhancing their shopping experience. Understand product range and choice available – space for display Attract a specific consumer market (the more involved shoppers) Think about who we are competing with and where our range will do do best – where can we excel and take the lead ? 24
Lontessa Merchandising - visible & easy navigation. The vibrant and exciting product should draw shoppers in. 25 Natural flow from one sub-category to next to encourage browsing ENTRANCE POINT ENTRANCE POINT Price competitive Fancy Lacy Super Sexy Fancy Sexy Feel Good Value range - using back wall Prominent display position to pull shoppers in Given more privacy & draws shoppers deeper Bright & aspiration – good tone Staff point (manned)
Lontessa Segmenting the store - We need to build a story around the segment to bring it to life and aid visibility 26
Lontessa Use displays, decoration, imagery, atmosphere and accessories to maximise the total effect 27
Lontessa Window dressing done well - attractive 28
Lontessa The segments aren’t just about underwear. Add accessories and other items that build the mood 29
Lontessa Bare minimum – female heads and a few accessories make all the difference. 30
Lontessa The segments ARE a continuum – lead onto each other . Sexy lingerie - trendy sexy – fashion lace : creates the impact and inspiring 31
Lontessa The sections must be exciting. Break up colours, display matching sets, and mix and match 32
Lontessa Displays don’t have to be hanging - break up the area and pace accessories for impulse buys 33
Lontessa Loose panties get placed in the most relevant theme section Promotions and placement that encourage impulse purchase work well. 34
Lontessa 35 3 Things WE Have to Do Make a statement on launch Launch with Point of sale / photography of product in the range and PR Launch a range together, not just a style, visible in store difference Filling Gaps in our range Targeted approach to Product, Channel and Price – draw customers and take market share from competitors Filling gaps in the Market Review complete ranges of all products and prices on offer, and determine market gaps that exist Need to be outward focused on trends identified – not just personal tastes What does the market want ? Listen to your shoppers.
Lontessa 36 How we can Differentiate ourselves Develop who our “core” market is Develop styles and colours across the size curve that meets customer needs Core product range that competes effectively must have full availability – our ‘bread and butter’ to revenue realisation Price to product Develop product based on consumer perceived value and develop to that price point and have specific costs objective. If product cost too high for perceived value, do not launch – Its Risky ! Product for the channel : it will sell if high value = exclusive ranges In store merchandising must be different Go “Crisp and Fresh” Get retail consultants to be actively involved in customer needs and experience merchandise display and layout with customer shopping flow in mind
Lontessa 37 Action Key Tasks & Activities Timing Retail Action Plan Store Location, Lease agreement, and Fittings Range of Products April 2016 Negotiate store Lease Agreement Book in January for 1 March start of work Launch first store in Wellington • Store Location & selection of position in CBD Cuba street boutique district • Opportunity to take up current Rex Royale store from March 2016 • Negotiate a 1 year lease – 1 month for renovations : store plans and refurbishment • Test our product concept and range of styles Fittings and Furnishings • Space allocation and store layout • Investment in loose fittings that are moveable without additional costs • Agree with shop fitters what furnishing are required • Opportunity for Window display and front shop impact • Logistics of store, systems, concepts and aesthetics Product range and mix of merchandise • Confirm the launch Range and commission full buying and production with suppliers – manage supplier leads times once stock turn achieved • March delivery : inventory planning, analysis and merchandising guide • Product Photographic shoot and brand ambassador – creative development • Development of style rests with understanding local trends and design instinct February March April
Lontessa 38 Action Key Tasks & Activities Timing Retail Action Plan Communication Initiatives Price Realisation April Feb Monthly from May PR Campaign • Launch event with local PR and relevant target market representation, free radio • Create excitement around the new store and product concept Communication campaign • Distribute Leaflets in the area, print in local newspaper, radio campaign Pricing Plan • Pricing strategy that makes sufficient margin to cover overheads to start. • Position product mix to cater from mid market value to premium quality and style • Growth in profit as revenue generated - Stock turns and inventory management key metric : rate of sale, days cover, supply
Lontessa 39 Objectives, Goals, Strategies Objective Goals Strategies Createasustainable Financial Wheretoplay longtermtoplinegrowth Growtoplinesales quarter Priceproductrelevanttocompetitorsatincreasedmargin paththroughpricepoint byquarter Channel:Getlingeriebrandintootherboutiqueretailstoresatthe$100pricepoint initiatives Enhancemarginsthroughcost Increasemargindollars Product-findagoodvalueproductwithhighvolumepotential(sexyset/panty) reductioninitiatives Holdpricepointstocompeteeffectively Commercial Structureproduct,priceand Positionbrasatpricepoints Testtheproductinotherretailstores(competewithLonely) promotionsinordertoensure competitivepositionstocater Testupperendproduct-exclusiverange-intopcenters(egultimatestrapless)andhighendstores wecreateexcitementand for$45-$75market Producttobeofftheshelfpurchased,exclusiveandimported drawcustomerstoourstore andafullsetfor$100tooffer goodvalueversusLonely Doresearch,ensureproductremainsfashionable,ntunewithcustomerneedsandouterweartrend Productisdifferentiated,makesastatementinpresentationandmerchandising-sellin-sellout. DevelopnaCoreprogramofwhite,blackandskintoneforeverydaywear Ensureproductistruetoitspromise
Lontessa Product Costings Units 3000 List Sales per unit 15 Discount promo Net Sales 45000 Raw materials 30% Packaging 10% Direct labour 5% COGS Transport / freight 4% Warehousing 4% Direct retail costs 5% COS Gross Margin / GP 35% Product Costings – model
Lontessa Profit & Loss – Financial Projection Projected Forecast 2015 2016 2017 A Key Action Sales: 5,245 16,445 18,600 Volume 135 139 Mix + Price 334 344 NET SALES 5,245 16,445 18,600 % Growth in Revenue 213.54 13.10 B Key Actions GPM: 2,000 4,963 5,212 Volume 62 64 Mix + Price 196 202 GPM 2,000 4,963 5,212 GPM % 25.0% 33.0% 35.0% C Key Actions MAP: 260 600 700 PR & Communications (21) (24) Promo activity + Out of Store Sales (28) (42) MAP 260 600 700 % SALES 5.0% 3.6% 3.8% D Overheads: 2,000 3,500 4,000 S G & A 2,000 3,500 4,000 % SALES 38.1% 21.3% 21.5% Financial year Financial Model - Example
Lontessa 42 Retail P&L – Model Retail Metrics Wellington Auckland Total Stock Balance 1,387 1,087 2,474 SALES 1,400 2,000 3,400 COS / PURCHASES 950 1,150 2,100 PAYROLL 60 105 165 RENT - SHOP 4,000 6,000 10,000 ADVERTISING 15 15 30 TRANSPORT & FREIGHT 4 8 12 SECURITY 10 10 20 SERVICE CHARGE 9 10 19 OTHER OPERATING COSTS 38 59 97 TOTAL COST 250 230 480 PROFIT 200 620 820 •SQM 65 75 140 •Turnover per square (YTD) 21.5 26.7 24.3 •Ebitda 200.3 619.8 820.2 •Store line contribution rands and percentages 228.3 652.2 861.5 16% 47% 62% •Stock Turns (YTD COS) 5.8 3.8 4.7 •Payroll % of turnover 4% 5% 5% •Rental (Monthly) $5,000 $12,000 $12,000 •Rental % of turnover 286% 300% 294%
Lontessa Appendix – for further development
Lontessa 44 Profit and Loss P&L EXTRACT Lontessa FY16 FY17 FY18 Avg WSP / Unit ($) 4.57 4.71 4.90 Index to PY 103 104 Avg RSP / Unit ($) 9.83 10.13 10.54 Index to PY 103 104 Units (K) 415 524 662 Index to PY 126 126 Net Sales 1896 2468 3244 Index to PY 130 131 Standard COGS 938 1189 1667 Index to PY 127 140 Total GPM 958 1279 1577 Index to PY 134 123 GPM % of Net Sales 50.5% 51.8% 48.6% Media 76.4 67.2 83.7 Index to PY 88 125 Media % of Net Sales 4.0% 2.7% 2.6% Promotion 27.0 28.0 45.0 Index to PY 104 161 Promo % of Net Sales 1.4% 1.1% 1.4%
Lontessa Retail Launch plan April 16 May 16 Oct 16 Jan 17 July 17June 16 Winter range, eg. Outerwear /coats Well. Store Opening Launch /PR Communication / awareness to attract Akl. Store opening Launch /PR Assessment of Well. Store Production economies / Develop the range

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Business Plan Retail

  • 1.
  • 2.
    Lontessa  Retail objectives: sales revenue, turnover per m2, profit  Location, Location, Location !  Target market – who they are, where they shop, what they want ?  Retail image – combination of attributes  Composition of product mix – style & design  Pricing – cost of production – value equation of product vs price  Competition – what are the trends and who is our market?  Dichotomy of distinct product offering, positioning in the market and the attraction of the right consumer segment ?  Definite opportunities - but also Risks in terms of length of return on investment  Customer Service – shopper experience  Advertising & Promotional tools – communication Executive Summary
  • 3.
    Lontessa Positioning : The businessopportunity is for a differentiated female fashion boutique that caters for female consumers looking for a distinct Maori infused design and styling that is attractive, fashionable, and sexy; making ladies feel attractive and gives them a pleasurable shopping experience Retail Strategy : Right Location to meet the target market needs  Physical Attributes – Location for footfall, Visibility, Exterior  Product & Merchandise – Assortment & range  Customer Service – shopper experience in store  Pricing – from value to premium offerings  Promotional tools – communication & perfect sizing / fit Market Gap
  • 4.
    Lontessa 4 Market Dynamics The biggestspenders in the Underwear category are : Singles at home, Young couples and Families (25 - 34); Single Parents The fashion market has a bias to 21- 35 years and always bouyant to trends Growing middle income group that is price and value oriented Consumer Category Drivers : Need new underwear Specific occasion need – special day Emotional need – spoil myself Impulsive buy – Feel like it Something new – feel special
  • 5.
    Lontessa Physical Attributes :Location !!!  Exterior facilities – aesthetic surroundings  Visibility and uniqueness of exterior  Geographic Area and surrounding retailers  Outer window attraction, branding and display  Accessibility and parking  Visual representation : Positive Brand colours and image  The look and layout : Fixtures, fittings, lighting and ambience  Dressing room facilities – fitting service  Allocation of space and traffic flow  Customer shopping Experience - pleasurability  Merchandise layout and displays  Service strategy – moment of truth : connect on service Retail Image
  • 6.
    Lontessa Store Atmosphere andExperience :  Exterior : Storefront, Entrance, Display windows, Branding, Visibility and uniqueness  Visual : Colours, lighting, flooring, temperature, scents, Fixtures, wall textures, dressing facilities, display, Staff interaction, service, merchandise, pricing and Payment Technology (card), modern tills, cleanliness  Store Layout : Floor space, product groupings, ease of flow, Display stands, units, cupboards, couches, arrangement, relaxed  Interior display : Assortmnet, themes, racks, signage, wall decorations Overall ambience, visual representation, quality and image Retail Image
  • 7.
    Lontessa VALUE PREMIUM Growth ++ Size ++ + Motivations Convenience Treat myself Market Dynamics Marketing mix Price and value Quality and Style Role of brands Low importance Very important Ability to compete Low - competitive Good Rationale Role of brands is low Compromising brand image (quality) Retail margins good – more volume at a value price Match consumer profile Meeting consumer expectations Build Consistent brand values Expertise in product design, quality, function and fashion
  • 8.
    Lontessa Product Portfolio CONVENIENT ASPIRATIONALSEGMENTATION CHANNEL STATUS •General retail • Multi-category chains • Department stores • Independant boutiques • Specialized Chains 1. Low product differentiation vs Private Label 2. Product quality issues 1. Perceived aesthetics or design appeal 2. Product superiority and quality
  • 9.
    Lontessa Class of tradesegmentation CONVENIENT ASPIRATIONALSEGMENTATION • Accessibility / more Traffic • Variety and Choice • Value for money • Shopping experience • Quality / styling / comfort • Brands – meet specific •needs REASON TO BE High Varies a lot … Meet consumer expectations PERFORMANCE LEVEL
  • 10.
    Lontessa Mass Market Mail Order Depart. Stores Specialty Chains Other Indep. retailers Channel Growth (%) -10% +10% 0.750.50.250.11.5 2.0 2.5 3.0 Source : Consumer panel TNS (Europe : France, UK, Spain, Italy) Multi Brands Chains Distribution channel Analysis Web based
  • 11.
    Lontessa Aspirational classes oftrade Prediction Flat - loyal Probability of destination shop On decrease Long term risks Web sales continue to increase DEPARTMENT STORE INDEPENDANTS MAIL to WEB Size + + + Growth - -+ + Attractive - ness Average Ave / Low Ave/ High DIAGNOSIS Investment ? Mass production Current strategy Future Opport
  • 12.
    Lontessa Future Opportunities INTERNET CATALOGUESHOME PARTIES DOOR TO DOOR Activity Sell through website Sell through a catalogue / email Sell through ambassadors in consumers' house Sell @ home through ambassadors Rationale Matches consumer profiles Succesful in other categories FIT and comfort ? Matches consumer profiles Intimate way of choosing underwear Communicate on all range (image) Lingery very talkative topics Women's story Intimacy amongst friends Intimacy Women's story Brand Fit High Med High High
  • 13.
    Lontessa Product Segmentation -6 groups More special lingerie Everyday underwear Basic Everyday Pretty Everyday Weekend / Relaxed Everyday Fancy Lacy Sexy Feel Good confidence each group fulfils a particular need or occasion. Super Sexy Attractive
  • 14.
    Lontessa Modern Fulfilled Trendy TotalFancy Elegant Sexy 30 - 40 40 - 50 21 - 33 Base 1380 166 (12%) 260 (18%) 260 (18%) Marks & Spencer / Farmers 49 34 70 47 Superstores (ASDA, Sainsburys, Tesco)/ K- Mart 19 19 19 23 Department stores (Debenhams, John Lewis, House of Fraser) / Farmers 30 27 26 36 Specialized underwear chain stores (e,g, La Senza, Knickerbox, Top Shop) : Bendon, NZ 8 9 5 20 Fashion clothing chains that also make underwear (e,g, Gap, H&M, Benetton ) 10 16 7 17 Independent underwear shops 9 7 7 9 Mail / Internet -order - catalogues (Euro) 25 28 17 24 Other (e,g outdoor markets, bargain basements) 7 11 4 9 Q - Type of stores where you usually buy underwear Consumer Access
  • 15.
    Lontessa Create Sexiness andsuperior differentiation : Customer pleasure and experience Distribution • Retail Independents • Internet • Home parties Product Innovation & differentiation : speciality Product offer : Designs, styles, range, colors, more frames to meet consumers’ needs and sexy fashion trends Communication Awareness in Wellington 25 – 40 years • Show what the brand is about • Made for you ! Radio advertising ? Relevant brand ambassador to tell it : I’m attractive when I wear Lontessa Build strong brand values
  • 16.
    Lontessa FACT ISSUE OPPORTUNITY Comfortexpectations are increasingly high Can we deliver on comfort or will it be average ? Develop comfort through ’perfect fit’ measurements. Innovation Aesthetic appeal is the main driver, for bras in sexiness and attractiveness Aesthetic : design, gore detail, material or finishings Invest in gore details and finishings that set us apart and create premium perceptions Perceived premium is driven by a multi sensorial experience : pleasurable experience, sensual colours, patterns, designs, shapes & forms Create emotional connection with sexy, sensual, attractive and appealing to consumer tastes Create more emotion through product features :colours, styles and design. Tell an emotional story ! Attention given to the inner part of the bra (design, logo) : means that the brand is for me / it cares for my needs Attention to brand values - meet consumer expectation Relook brand and swing tags - inner- side of the bra Product Strategy
  • 17.
    Lontessa Brand Strategy THE BRAND LAUNCH PLAN PRODUCT Thesexy superior offer… DISTRIBUTION In the right place IMAGE of an aspirational and modern brand Own sexiness & superiority : Intensive product differentiation Improved perceived value in design, attractive, attention to details, portfolio : product type, colours, shapes, lace, materials Branding & packaging Out of store : Brand communication Special PR project - endorsement In-store : Merchandising / Brand ID Own stores Other Retail stores - need Volume Online – website orders
  • 18.
    Lontessa Product strategy -Major initiatives PRIORITY TOPIC INITIATIVE 1 INNOVATION •Develop a strong product pipeline •Launch new styles and innovation every month : ‘new rack’ 2 COMFORT CUES •Define the new standards of comfort •Implement ‘perfect fit’ with customers • Enhance shape 3 PERCEIVED QUALITY : ATTENTION TO DETAILS •Reinvest in details and finishings 4 PRODUCT BRANDING •Leverage branding •Implement improved logo and label tags
  • 19.
    Lontessa Key Initiatives PRIO RITY PriorityINITIATIVE DESCRIPTION TIMING 1 PRODUCT Launch PR Launch of the brand April 16 4 Innovation New styles each month – seasonal colours June 16 5 COMM Brand communication Wellington catchment – radio / media (Exciting launch campaign) June 16 9 Events / Sponsoring Product Endorsement 2017 3 BRANDING Create brand identity Branding & packaging April 16 8 SERVICE Bra Fitting service Service in store - provide superior fit Sept 16 6 Web Online Website, direct mail orders 2017 2 DISTRIB Location - Categories Wellington store / Auckland stores April 16 / Sept 16 7 OPPORTUNITY Home parties Extend the brand franchise 2017Sleep and Night wear Swim wear
  • 20.
    Lontessa Distribution Strategy Positive Consumertrend : Luxury and superior quality : high attractive power I indulge with expensive items for spoiling myself and for on occasion, specific reasons I can afford luxury, but expect more from the product to justify the premium Location of stores in high traffic fashion areas - Independent Boutique stores, specialty stores Retail department stores – mass convenience in shopping malls – highly price competitive (lower margin but volume drives costs down) Online website growth trend – but correct fit for underwear Having the right product, in the right place, at the right time to offer complete customer service Benefits of a Test store : Cuba street with 63m2 @ $4000 per month / short term lease
  • 21.
    Lontessa Pricing Strategy Grow Sales– what is the demand for the product range ? Production Costs versus competition - affects on Gross margin and profitability The cost of goods is a major profit determinant – weakness is the lack of volume to achieve lower prices through manufacture Service and customer retention will lead to improved financial gains The Retail mix : Balancing quality and price is a key element to the profitability equation – what is the product mix that will achieve max profit The consumer will pay the premium if the styling, quality and service are superior and can be justified – low volume, high price will affect demand and profit Invest in building the brand image with advertising message that informs, persuades and grows awareness and positioning, but product range must deliver on the promise Communicate service excellence and ‘made for me’ individual service Radio, print, online media communication – up-front investment in brand awareness
  • 22.
    Lontessa Retail pricing /margins Product Costings / Retail Pricing Example Value Added Value Premium Standard cost 16 22 25 W/sale price 24 44 52 Retail price 46 83 100 GP% 35% 43% 52% Margin is eroded selling through large retail department stores But, Can achieve the volumes required to achieve critical mass and reduce costs
  • 23.
    Lontessa Product range Multiple stylesand shapes – balconette, contour, padding From market fashion norm to super- sophisticated & sexy Palet of colours Specialized (dept stores/ independent retail) Entry price $45 to Premium $90
  • 24.
    Lontessa Merchandising & storelay out Consumer based sizing : start with A – C cup (may need D for segment needs) Sales data will help support and validate customer base x frequency The number of garments we currently sell vs future demand in each consumer segment – determine future range Consider store ambience and which parts of the store are more important the more ‘special product’ areas are key for drawing people in and enhancing their shopping experience. Understand product range and choice available – space for display Attract a specific consumer market (the more involved shoppers) Think about who we are competing with and where our range will do do best – where can we excel and take the lead ? 24
  • 25.
    Lontessa Merchandising -visible & easy navigation. The vibrant and exciting product should draw shoppers in. 25 Natural flow from one sub-category to next to encourage browsing ENTRANCE POINT ENTRANCE POINT Price competitive Fancy Lacy Super Sexy Fancy Sexy Feel Good Value range - using back wall Prominent display position to pull shoppers in Given more privacy & draws shoppers deeper Bright & aspiration – good tone Staff point (manned)
  • 26.
    Lontessa Segmenting thestore - We need to build a story around the segment to bring it to life and aid visibility 26
  • 27.
    Lontessa Use displays,decoration, imagery, atmosphere and accessories to maximise the total effect 27
  • 28.
    Lontessa Window dressingdone well - attractive 28
  • 29.
    Lontessa The segmentsaren’t just about underwear. Add accessories and other items that build the mood 29
  • 30.
    Lontessa Bare minimum– female heads and a few accessories make all the difference. 30
  • 31.
    Lontessa The segmentsARE a continuum – lead onto each other . Sexy lingerie - trendy sexy – fashion lace : creates the impact and inspiring 31
  • 32.
    Lontessa The sectionsmust be exciting. Break up colours, display matching sets, and mix and match 32
  • 33.
    Lontessa Displays don’thave to be hanging - break up the area and pace accessories for impulse buys 33
  • 34.
    Lontessa Loose pantiesget placed in the most relevant theme section Promotions and placement that encourage impulse purchase work well. 34
  • 35.
    Lontessa 35 3 Things WEHave to Do Make a statement on launch Launch with Point of sale / photography of product in the range and PR Launch a range together, not just a style, visible in store difference Filling Gaps in our range Targeted approach to Product, Channel and Price – draw customers and take market share from competitors Filling gaps in the Market Review complete ranges of all products and prices on offer, and determine market gaps that exist Need to be outward focused on trends identified – not just personal tastes What does the market want ? Listen to your shoppers.
  • 36.
    Lontessa 36 How we canDifferentiate ourselves Develop who our “core” market is Develop styles and colours across the size curve that meets customer needs Core product range that competes effectively must have full availability – our ‘bread and butter’ to revenue realisation Price to product Develop product based on consumer perceived value and develop to that price point and have specific costs objective. If product cost too high for perceived value, do not launch – Its Risky ! Product for the channel : it will sell if high value = exclusive ranges In store merchandising must be different Go “Crisp and Fresh” Get retail consultants to be actively involved in customer needs and experience merchandise display and layout with customer shopping flow in mind
  • 37.
    Lontessa 37 Action KeyTasks & Activities Timing Retail Action Plan Store Location, Lease agreement, and Fittings Range of Products April 2016 Negotiate store Lease Agreement Book in January for 1 March start of work Launch first store in Wellington • Store Location & selection of position in CBD Cuba street boutique district • Opportunity to take up current Rex Royale store from March 2016 • Negotiate a 1 year lease – 1 month for renovations : store plans and refurbishment • Test our product concept and range of styles Fittings and Furnishings • Space allocation and store layout • Investment in loose fittings that are moveable without additional costs • Agree with shop fitters what furnishing are required • Opportunity for Window display and front shop impact • Logistics of store, systems, concepts and aesthetics Product range and mix of merchandise • Confirm the launch Range and commission full buying and production with suppliers – manage supplier leads times once stock turn achieved • March delivery : inventory planning, analysis and merchandising guide • Product Photographic shoot and brand ambassador – creative development • Development of style rests with understanding local trends and design instinct February March April
  • 38.
    Lontessa 38 Action KeyTasks & Activities Timing Retail Action Plan Communication Initiatives Price Realisation April Feb Monthly from May PR Campaign • Launch event with local PR and relevant target market representation, free radio • Create excitement around the new store and product concept Communication campaign • Distribute Leaflets in the area, print in local newspaper, radio campaign Pricing Plan • Pricing strategy that makes sufficient margin to cover overheads to start. • Position product mix to cater from mid market value to premium quality and style • Growth in profit as revenue generated - Stock turns and inventory management key metric : rate of sale, days cover, supply
  • 39.
    Lontessa 39 Objectives, Goals, Strategies ObjectiveGoals Strategies Createasustainable Financial Wheretoplay longtermtoplinegrowth Growtoplinesales quarter Priceproductrelevanttocompetitorsatincreasedmargin paththroughpricepoint byquarter Channel:Getlingeriebrandintootherboutiqueretailstoresatthe$100pricepoint initiatives Enhancemarginsthroughcost Increasemargindollars Product-findagoodvalueproductwithhighvolumepotential(sexyset/panty) reductioninitiatives Holdpricepointstocompeteeffectively Commercial Structureproduct,priceand Positionbrasatpricepoints Testtheproductinotherretailstores(competewithLonely) promotionsinordertoensure competitivepositionstocater Testupperendproduct-exclusiverange-intopcenters(egultimatestrapless)andhighendstores wecreateexcitementand for$45-$75market Producttobeofftheshelfpurchased,exclusiveandimported drawcustomerstoourstore andafullsetfor$100tooffer goodvalueversusLonely Doresearch,ensureproductremainsfashionable,ntunewithcustomerneedsandouterweartrend Productisdifferentiated,makesastatementinpresentationandmerchandising-sellin-sellout. DevelopnaCoreprogramofwhite,blackandskintoneforeverydaywear Ensureproductistruetoitspromise
  • 40.
    Lontessa Product Costings Units 3000 ListSales per unit 15 Discount promo Net Sales 45000 Raw materials 30% Packaging 10% Direct labour 5% COGS Transport / freight 4% Warehousing 4% Direct retail costs 5% COS Gross Margin / GP 35% Product Costings – model
  • 41.
    Lontessa Profit &Loss – Financial Projection Projected Forecast 2015 2016 2017 A Key Action Sales: 5,245 16,445 18,600 Volume 135 139 Mix + Price 334 344 NET SALES 5,245 16,445 18,600 % Growth in Revenue 213.54 13.10 B Key Actions GPM: 2,000 4,963 5,212 Volume 62 64 Mix + Price 196 202 GPM 2,000 4,963 5,212 GPM % 25.0% 33.0% 35.0% C Key Actions MAP: 260 600 700 PR & Communications (21) (24) Promo activity + Out of Store Sales (28) (42) MAP 260 600 700 % SALES 5.0% 3.6% 3.8% D Overheads: 2,000 3,500 4,000 S G & A 2,000 3,500 4,000 % SALES 38.1% 21.3% 21.5% Financial year Financial Model - Example
  • 42.
    Lontessa 42 Retail P&L –Model Retail Metrics Wellington Auckland Total Stock Balance 1,387 1,087 2,474 SALES 1,400 2,000 3,400 COS / PURCHASES 950 1,150 2,100 PAYROLL 60 105 165 RENT - SHOP 4,000 6,000 10,000 ADVERTISING 15 15 30 TRANSPORT & FREIGHT 4 8 12 SECURITY 10 10 20 SERVICE CHARGE 9 10 19 OTHER OPERATING COSTS 38 59 97 TOTAL COST 250 230 480 PROFIT 200 620 820 •SQM 65 75 140 •Turnover per square (YTD) 21.5 26.7 24.3 •Ebitda 200.3 619.8 820.2 •Store line contribution rands and percentages 228.3 652.2 861.5 16% 47% 62% •Stock Turns (YTD COS) 5.8 3.8 4.7 •Payroll % of turnover 4% 5% 5% •Rental (Monthly) $5,000 $12,000 $12,000 •Rental % of turnover 286% 300% 294%
  • 43.
    Lontessa Appendix – forfurther development
  • 44.
    Lontessa 44 Profit and Loss P&LEXTRACT Lontessa FY16 FY17 FY18 Avg WSP / Unit ($) 4.57 4.71 4.90 Index to PY 103 104 Avg RSP / Unit ($) 9.83 10.13 10.54 Index to PY 103 104 Units (K) 415 524 662 Index to PY 126 126 Net Sales 1896 2468 3244 Index to PY 130 131 Standard COGS 938 1189 1667 Index to PY 127 140 Total GPM 958 1279 1577 Index to PY 134 123 GPM % of Net Sales 50.5% 51.8% 48.6% Media 76.4 67.2 83.7 Index to PY 88 125 Media % of Net Sales 4.0% 2.7% 2.6% Promotion 27.0 28.0 45.0 Index to PY 104 161 Promo % of Net Sales 1.4% 1.1% 1.4%
  • 45.
    Lontessa Retail Launch plan April16 May 16 Oct 16 Jan 17 July 17June 16 Winter range, eg. Outerwear /coats Well. Store Opening Launch /PR Communication / awareness to attract Akl. Store opening Launch /PR Assessment of Well. Store Production economies / Develop the range