ZARA
ATHLETIC
Table of contents COMPANY PROFILE AND ANALYSIS Excecutive Summary Company Overview Current Merchandise and Distribution Market Analysis Competitive Analysis Consumer Overview
3 4 6 9 12 14
NEW STRATEGY INITIATIVE New Strategy Initiative Athleisure Trend ZARA Athletic
19 20 22
BUYING PLAN Buying Plan Assortment Plan Availability
30 34 36
excecutive summary Based on the new athletic influences in ready-to-wear fashion seen both on the streets and in runways, a new target market has developed. ZARA is a customer-focused fashion retailer, renowned for its quality and design clothing at an affordable price. In order to dive into the athleisure market, ZARA Athletic will launch for Spring 2016. This capsule collection will allow ZARA to expand its current product categories by investing in this highly profitable market. In addition a 6 month buying plan has been developed for the same collection taking into consideration forecasted sales and the market going forward.
Company Overview ZARA Based in Artexio, Galicia, this Spanish retailer has settled itself as one of the largest international fashion companies. ZARA is the flagship chain store of the INDITEX Group, parent company of retailers such as Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Uterq端e, and ZARA Home. This privately owned company operates all over the globe with it main offices located in Spain. As of 2014, INDITEX reported total revenues of $20.48 billion. The current chairman and CEO of INDITEX is Pablo Isla, responsible for all subsidiaries. This vertically integrated company is known for their best practice business model. As all production is located in close proximity, the highly responsive production chain allows their success. INDITEX is responsible for the design, the manufacturing, and logistics associated with their lines. Their customer based business model allows for quick response to market trends, and an effective turnover.
Company History 1975 Founded by Armancio Ortega in La Coru単a, Spain 1980 Expansion of ZARA throughout Spain 1988 Opened first international store in Portugal 1989 Opened store in NY 1990 Opened store in Paris 2007 ZARA branched out to include menswear and kids fashion
Current merchandise and Distribution ZARA offers products for men, women, and children. Their current assortment includes, accessories, footwear, and clothing. ZARA offers the latest trends and edgy minimal clothes for their customers. ZARA’s vertical structure allows them to have an exemplary supply chain that can get merchandise to a market in a low amount of time. Their highly responsive supply chain is responsible for their success in the fast fashion market. Their business model is based on their customer. The design-customer link is an important part in the creation process; therefore no traditional advertising is needed. New products are delivered to the stores twice weekly to meet the customer’s needs. Each store has a personalized delivery based on the best sellers for each set of customers. Daily in-store feedback allows constant modification of collections.
“PIONEER IN FAST FASHION BASED IN HIGHLY RESPONSIVE SUPPLY CHAIN” BUSINESS OF FASHION
Distribution Model There is a heavy emphasis in the Inditex sustainable business model.
Inditex produces 30,000 models every year of which ZARA is responsible for 18,000 models. 55% of their production is based on proximity, while the rest is sourced from the rest of the world creating a very effective supply chain for a highly responsive brand. ZARA offers their products in over 2,000 stores throughout 88 countries; also available online on the biggest markets throughout the globe.
Market Analysis ZARA currently has 53 stores in the US (as of Jan 2015). About 78% of ZARA’s target market are women, accounting for the majority of sales for ZARA. The athletic market, now booming as a result of both the athletic and athleisure trends in fashion, is one of the most promising moving forward. Sales for sportswear and sports-inspired clothing accounted for US $361 billion at retail in 2013. With a growth percentage of 4.5% for the past 6 years, the sports market is surpassing the denim market. Sports-inspired fashion sales were US $20.51 billion in 2013 in the US alone, marking a clear difference in its preference in comparison to previous results. Forecasted sales for sportsinspired fashion for 2018 is US $24.37 billion at a 3.5% growth rate. By analyzing the surprising predictions for this market, it is no surprise that more and more retailers and designers are jumping in the sports wagon. ZARA’s consumer based business model then allows for the creation of a line that emphasized and supports this new, active lifestyle.
SWOT STRENGHTS Global Outreach Strategic Locations Distribution Strategy Fast changing collections Vertical integration
WEAKNESSES Limited stocks No marketing Customer acceptance Diluting the ZARA message Price points not in line
OPPORTUNITIES Demand for leisurewear in designer market Growing athleisure lifestyle Expansion to new market Demand for high fashion at affordable prices
THREATS Rough competitors New to market New merchandise Growing competition
FUTURE Growth Plans Inditex is planning an overall expansion for their stores and online services to the Asian market, as well as the Americas, and further expansion in Europe. For ZARA, the plans for the future include an extensive plan for flagship stores enlargement including the New York flagship store in 5th Ave. In addition, Inditex is looking for the optimization of their retail stores and the roll-out of a new store image. Increased product visibility and enhanced in-store experience are part of their plan.
competitive analysis ZARA has been a brand that even though it possesses a great competitive advantage in terms of their distribution model, has its own set of competitors. Brands like H&M and Michael by Michael Kohrs have been actively trying to catch up and launch their own set of collections that target their specific markets. As the athleisure trend grows more retailers are joining the market and introducing lines that target the fashion sportswear market. Sports giants like Nike and Adidas have introduced fashion lines to their assortment as they test the athleisure market. As a pose to fashion brands such as H&M and Rebecca Minkoff that are launching sportswear and sports-inspired collections that target the growing athleisure market. As it can be seen on the following graph, brands are slowly moving from the extremes and joining at the center of fashion and sports driven fashion. As a fashion brand, ZARA has the opportunity to develop a line that can be used for athletic purposes without compromising their core fashionable product.
Consumer Profile Overview The ZARA customer looks for sophistication and style. Like-minded fashionistas recur to ZARA to look for quality, trendy clothes at an affordable price. The clothing offered by ZARA is new, chic, and straight off the runway allowing their customer to sport the latest trends months in advance. ZARA’s customers are mostly strivers within the VALS profile. These are millennial women that look forward to be trendy and fun. For strivers money defines success; they look forward to wearing the latest fashion trends at an affordable price. These are women who like to have fun and live a very active, style driven lives.
KAREN KATES Age 23 Advertising Lives in Chicago, IL Annual Income $75 K She enjoys fashion and is very trend savvy. As a graduate student she understands the importance of a polished look. However she is a very active person, works-out 3-4 times a week and her closet demands versatility. She loves pairing joggers with a polished shirt and tennis for the perfect athleisure look.
“WE PROMISE TO PROVIDE NEW DESIGNS MADE FROM QUALITY MATERIALS THAT ARE AFFORDABLE.” ZARA
ANNA GIBSON Age 28 Human Resources Trainer Lives in Reno, NV Annual Income $50 K As a professional she loves to dress in style for work. She is budget conscious, but enjoys clothes that show her edgy style. As a follower of trends she has embraced a more relaxed, casual look that she enjoys wearing to the office and while relaxing. She loves to pair loose shorts with a blouse and through a sweater and necklace to enhance her style.
“ZARA IS ALWAYS STRIVING TO MEET THE NEEDS OF ITS CUSTOMER” CEO
New Strategy Initiative This line, that will be launched as part of the Spring/Summer 2016, will be comprised of basic athletic items that can be worn both to a professional and to a more casual environment. These twelve pieces can be mixed and matched in order to create casual or chic clothes that fit all needs during a busy women’s day. The purpose of ZARA Athletic is to fill the existing gap in the athleisure market for the ZARA customer. Specifically developed for the American market, this capsule collection will be launched in the United States for the season, filling the growing need in the athleisure market.
Athleisure Trend This trend was born based on the interest of engaging in a healthier lifestyle. Due to the hectic lifestyle of consumers, and no time to dedicate to the gym in a overtaxed schedule, athleisure was born based on the need for clothes that filled the functionality of wearing to the gym and being available for everyday wear. Because of its demand and impact on the market, the athleisure trend has evolved into a lifestyle. The demanding functionality of the modern women’s closets, specially millenials, created this niche market that was at first filled by Lululemon Athletica, and further on embraced by both fashion and athletic wear companies. During this time, sweatshirt sales, and active bottoms rose, as these are the signature garments of the athleisure lifestyle.
“GYM-TO-STREET CLOTHES EVOLVED AS AN OFFICIAL CLOTHING CATEGORY.” STYLE.COM
ZARA ATHLETIC
The new athleisure lifestyle creates a great opportunity for ZARA to launch its athletic collection for Spring/Summer 16. Healthy lifestyles and the introduction of athletic wear into everyday clothing represent an opportunity to expand the existing product categories.
Style No. SS1601 Sizes S/M/L/XL Colors
Season S/S 16
Style No. SS1602 Sizes S/M/L/XL Colors
Season S/S 16
Style No. SS1603 Sizes S/M/L/XL Colors
Season S/S 16
Style No. SS1606 Sizes S/M/L/XL Colors
Season S/S 16
Style No. SS1604 Sizes S/M/L/XL Colors
Style No. SS1605 Sizes S/M/L/XL Colors
Season S/S 16
Season S/S 16
Style No. SS1607 Sizes 0/2/4/6/8 Colors
Season S/S 16
Style No. SS1608 Sizes 0/2/4/6/8 Colors
Season S/S 16
Style No. SS1610 Sizes 0/2/4/6/8 Colors
Season S/S 16
Style No. SS1609 Sizes 0/2/4/6/8 Colors
Season S/S 16
Style No. SS1611 Sizes XS/S/M/L Colors
Season S/S 16
Style No. SS1612 Sizes XS/S/M/L Colors
Season S/S 16
“ZARA’S STRATEGY INVOLVES STOCKING VERY LITTLE AND UPDATING COLLECTIONS OFTEN” BUSINESS INSIDER
OPPORTUNITY
The new athleisure lifestyle creates a great opportunity for ZARA to launch its athletic collection for Spring/Summer 16. Healthy lifestyles and the introduction of athletic wear into everyday clothing represent an opportunity to expand the existing product categories.
MASTER PLAN Spring 2016 Plan Net Sales, Spring 2016 Est. Net Sales, Spring 2015 Plan % Last Year Average Stock, Retail Inventory Turnover Planned Reductions, $ Reductions % Sales Plan IMU%
(000’s) $ 17,227.00 $ 15, 498.00 11% $ 9,570.56 1.80 $ 3,100.86 18% 55%
Buying Plan Net Sales % Spring Plan BOM Stock Stock / Sales Raio Plan EOM Stock Plan Reductions % Spring Purchases Retail Purchases, Cost
February
March
April
1,033.62
2,067.24
3,962.21
6%
12%
23%
2,997.50
5,374.82
11,490.41
2.9
2.6
2.9
5,374.82
11,490.41
12,989.16
248.07
465.13
465.13
8%
15%
15%
3,659.01
8,647.95
5,926.09
1,646.56
3,891.58
2,666.74
May
June
July
SPRING 2016
4,479.02
3,617.67
2,067.24
17,227.00
26%
21%
12%
100%
12,989.16
7958.87
7,028.62
7,973.23
2.9
2.2
3.4
7,958.87
7,028.62
40,000.00
682.19
775.22
465.13
3,100.86
22%
25%
15%
100%
130.93
3,462.63
35,503.75
57,330.36
58.92
1,558.18
15,976.69
25,798.66
Assortment Plan CLASSIFICATION
TOTAL % PURCHASES ($)
UNIT PUCHASES
Tops Bottoms Outerwear
39% 46% 15%
$ 9,360,062 $ 11.040,074 $ 3,600,024
187576 184308 45057
Total
100%
$24,000,160
416941
AVG. RETAIL $ 49.90 $ 59.90 $ 79.90
TOPS Sizes XS S M L
TOTAL %
PURCHASES ($)
UNIT PURCHASES
23% 35% 30% 12%
$ 2,154,814 $ 3,276,022 $ 2,808,019 $ 1,123,207.49
43143 65652 56273 22509
100%
$ 9,360,062
187576
AVG. RETAIL $ 49.90 $ 49.90 $ 49.90 $ 49.90
BOTTOMS Sizes XS S M L XL
TOTAL %
PURCHASES ($)
UNIT PURCHASES
20% 30% 35% 10% 5%
$ 2,208,015 $ 3,312,022 $ 3,864, 026 $ 1,104,007 $ 552,004
36862 55293 64508 18431 9215
100%
$ 11,040,074
1843308
AVG. RETAIL $ 59.90 $ 59.90 $ 59.90 $ 59.90 $ 59.90
OUTERWEAR Sizes XS S M L
TOTAL %
PURCHASES ($)
UNIT PURCHASES
21% 35% 32% 12%
$ 9,060 $ 15,001 $ 13,806 $5,117.11
113 189 173 65
100%
$ 43,143
540
AVG. RETAIL $ 79.90 $ 79.90 $ 79.90 $ 79.90 $ 79.90
AVAILABILITY ZARA Athletic will be available in stores as part of the many spring/summer 16 collections developed by Inditex. Available for a period of three months, this collection will be sold online for the American market. Available only in a limited amount of brick and mortar stores, the launch will take place in prime locations, such as the 5th Avenue store in NY, and stores in Chicago, Los Angeles, San Francisco, and Miami. Following the ZARA distribution model, specific colors and styles will be available in each store according to selling records and assortment will be reevaluated for each specific location.
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