Global Sourcing for Smitten Luxury Lingerie

Global Sourcing Strategy: Smitten NYC

Elizabeth Paladeau, Taylor Block, Ana Sabrina Carmona, Ashley Pollard FASM 420 - Global Sourcing Simulation May 21, 2012

Table of Contents Company Profile – 5 Strategic Development Process – 11 Country Analysis – 12 Country Rankings – 25 Country Comparison – 32 Supplier Ranking – 33 Supplier Comparison – 37 Costing – 39 Negotiated Prices – 40 Strategy Development – 45 Finalized Strategy – 48 Conclusion – 49 Works Cited – 51 Appendix - 54

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Company Profile

Smitten NYC is a high-end intimates company located in Soho, New York City. We aim to create high quality, luxurious intimates that make women feel sexy and stylish. We are currently in the process of sourcing suppliers and manufacturers to produce a range of luxury intimates and loungewear for the Smitten woman. We currently have one boutique in Soho but if it is a successful endeavor we plan on opening multiple boutiques in other major cities. We offer one of a kind customer service and pride ourselves on knowing our customers’ needs and knowing them by name. We hope to create an intimate and high end buying experience for our customers with products of the highest quality.

In order to create the atmosphere we desire we have imported French antiques in order to make it feel like a boudoir. Heavy drapery and dim lighting will create the romantic vibe our customers crave when shopping for their intimates. Our employees will wear black and all be trained to know the fit of each of our bras and how to do a bra fitting.

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What Do We Stand For:

As a company we have come up with a strict set of ethical guidelines that suppliers and manufacturers must adhere to in order the work with us. These sourcing guidelines have helped determine what we are expecting from people we do business with.

Sourcing Guidelines Smitten seeks to select suppliers who are committed to conducting business in a very efficient, and responsible manner. As Smitten is a global force in the intimates industry today, it is important that suppliers and manufacturers conducting business with Smitten remain compliant with all guidelines set forth in this document. We will not conduct business in any country where the reputation of our company would be put in jeopardy due to political, economic, or social upheaval.

The International Labor Organization (ILO) Core Labor Conventions, as established by the tripartite United Nations affiliated agency, have served as the foundation upon which much of these Guidelines are based.

------------------------------------------------------------------------Employment: 1. Non Discrimination Smitten will not engage with vendors who discriminate in recruitment, hiring, training and employment practices, including compensation, benefits, advancement, discipline, termination or retirement, on the basis of race, color, religion, age, national origin, sex (including pregnancy), sexual orientation, marital status, physical or mental disability or any other category that does not affect an individual’s ability to do the job.

2. Child Labor Smitten will not engage with vendors who employ any person under the age of 18 (or 14 where local law allows) or younger than the age for completing compulsory education in the country of manufacture where such age is higher than 18. Workers under 18 years of age should not perform work likely to jeopardize the health or safety of young persons.

3. Involuntary Labor Smitten will not engage with vendors who use any forced or involuntary labor, whether prison, bonded, indentured or otherwise. Vendors will not require employees to relinquish any personal identification, including but not limited to passports, identification cards or work permits, as a condition of employment.

4. Coercion and Harassment Smitten requires that vendors treat each employee with dignity and respect, and will not use corporal punishment, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse.

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5. Working Hours and Operation Smitten requires that vendors comply with all wage and hour laws as mandated by applicable country law or industry standard. Smitten also expects that employees will not routinely work in excess of sixty hours per week and employees will be provided with a minimum of one rest day in every seven-day week.

6. Employment Records Smitten requires that vendors retain one year of complete and accurate records and documentation,including employment contracts, residence and work permits (if applicable), proof of age documentation, maternity leave records, industrial injury reports, and work time and pay records, relating to employees in manufacturing and operations positions necessary to demonstrate compliance with these Guidelines other than information and records that applicable law requires vendors to retain for a shorter period of time.

7. Disciplinary Practices Smitten will not use business partners who use corporal or other forms of mental or physical coercion 8. Wages and Benefits Smitten will only do business with partners who provide wages and benefits that comply with any applicable law and match the local manufacturing or finishing industry practices.

Health & Safety and Environment: 1. Healthy and Safety Smitten requires that vendors provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum, occupational safety, machine guarding, emergency preparedness, industrial hygiene, reasonable access to potable water and sanitary facilities, fire safety, and adequate lighting and ventilation. Any vendor that is a manufacturer will also ensure that the same standards of health and safety are applied in any housing or canteen facilities that it provides for employees.

2. Environment Smitten requires that vendors comply with all applicable environmental laws and regulations and ensure that all required environmental permits and registrations are obtained, maintained and kept current and that operational and reporting requirements are followed.

3. Community Smitten will become involved in the community when the right opportunities arise and will encourage our employees to become good and active citizens. Furthermore we will favor business partners who share our commitment to community involvement.

All new and existing factories involved in the manufacturing or finishing of products for Smitten are regularly evaluated to ensure compliance with our above guidelines. Our goal is to find positive results by working with our business partners to find long term solutions that will benefit the inidividuals who make our products and will improve the quality of life in the communities.

If Smitten determines that a contractor is not complying with our guidelines, We require that that contractor implement a correction plan within a specified time period. If a contractor fails to meet a correction plan commitment, Smitten will terminate business with them.

Price Range

The Smitten Brand wishes to compete with those of a luxury standard. For this reason we have priced our product at a prestige price point. This means that all of our products will be between $100-$500 in order to dictate the quality and care that went into manufacturing our product.

Target Customer

Smitten’s target market are middle aged women between 20-45 residing in Manhattan, New York.

They are women who stay current to local happenings throughout the city as well as global news. These women are also fit and conscious of their bodies. They treat themselves to the finest of things and enjoy feeling feminine and sexy. Of course Smitten’s customers are aware of fashion trends and enjoy the latest styles. These women are either single or involved in a relationship with no children. They are career oriented, driven and most likely hold a job in something creative such as interior design making roughly $250,000 annually. She most likely resides on the Upper West or East Side or in Chelsea. Having plenty of disposable income she most likely takes taxis or private cars all over the city. She can afford to not take the subway. During her free time she enjoys spending time with friends or her significant others, getting involved at charities, visiting museums, attending various events, and of course shopping. Aside from Smitten, some of her favorite stores include Saks Fifth Avenue, Calvin Klein, and Stella McCartney. Smitten’s target customer in summary makes up the elite of the younger Manhattan society.

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Target Customer

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Products

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Strategy Development Process Why?

Companies often look to source globally because you can often find cheaper manufacturing rates, more unique product offerings, and varied techniques and on occasion, higher quality. However variations in lead times, duties, tariffs, and customs must all be considered as well as the cultures and social, business, and economic climates of the countries you are looking to do business with.

Smitten NYC is looking to source globally because we believe that in order to maintain the quality that our customer is looking for we must look to outside suppliers and manufacturers. Also, in order to obtain the styles we want to create it is necessary to source our fabrics from other countries.

Product Breakdown Total Number of Products: 2,500 Style 100: 250 units Style 101: 300 units Style 102: 200 units Style 103: 300 units Style 104: 300 units Style 105: 200 units Style 106: 250 units Style 107: 250 units Style 108: 250 units Style 109: 200 units

Our product offering is of a seasonal nature. We consider ourselves to be fashion-minded therefore we create fashion forward products that will continue to change as the industry progresses.

We have a total of 2,500 units because as of right now we are a small boutique in Soho so we only have the capacity for small amounts of product. We have neither the space nor the selling capabilities to move large quantities of product.

We broke up our product distribution by determining that our bigger seller are our panties because women replace them more frequently than bras and more than one panty can be worn with one bra. For this reason we order the largest amounts of our panties (300 units). This being said we decided not to order 300 units of the high-waisted panty (style #109) because it is more of a seasonal, fashion item that would not 13

be purchased as regularly. We also decided to buy 300 units of style #103 because it is the only negligee we carry so we expect it to be popular and it matches the panties style #104.

We decided to carry only 200 units of style # 105 because they are the most expensive item to produce because they are made of entirely Chantilly Lace. We also only ordered 200 units of style #102 because we considered the bodysuit to be a more specialty item that not everyone would need. The bras and the robe we ordered 250 units off because we consider them to be staple products that will sell regularly.

Country Analysis Country Selection

France:

France has one of the most infamous textile industries in the world. The French minister of finance for Louis IV once said that fashion could be to France what the gold mines of Peru were for Spain. However, since then the general size and support of the industry has been on the decline. The world famous couture industry still exists however its size has decreased tremendously and it no longer turns a profit.

This is largely due to the decrease in the customer base as well as the high labour costs of the ateliers, whose salaries the couture houses aren’t willing to discuss.

This being said in December 2010 textile and clothing sales were on the decline for the third consecutive year. Sales of clothing and textiles were 2.2% lower in December 2009 than in December 2008.

Of that total figure, department stores had the highest growth with 10.4% and independent and multibrand stores both generated increases of 0.3% and 0.2% respectively.

Specialty chains and hyper/supermarkets had the biggest decline with -5.7% and -8.6% where as chain stores fell by -1.6%. Distance selling also slightly decreased by -0.7%. Where as most market segments are on the rise small women’s pieces and children’s clothing are the most affected by the decline in consumer consumption.

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Retail sales for Year 2003 (Menswear, Womenswear, Childrenswear cumulated ) • Dresses, skirts: 49 747 thousand pieces • Pants: 102 394 thousand pieces • Jeans: 66785 thousand pieces • Pull-overs: 101 332 thousand pieces • Shirts and blouses: 64 044 thousand pieces • Baby wear: 119 465 thousand pieces • Underwear: 277422 thousand pieces • Lingerie: 197 071 thousand pieces • Blousons, suits, jackets: 40 990 thousand pieces • Coats, raincoats, parkas: 38 528 thousand pieces Comparatively these are the retail sales in 2003 with 197,071 units of lingerie being sold and 277,422 units of underwear. Individually underwear is the highest selling product category and lingerie is second.

The fact that the apparel industry in France is decreasing will affect our ability to locate and work with manufacturers and suppliers. It will also affect the availability of artisans who have the skill set to manufacture the quality of product we desire in the quantities we need. However, France is possibly one of the only countries in the world that could create the product that we need. It is also important to note that in France lingerie decreased -5% in independent chains because this is the same store structure that we have. It is also important to notice that specialty chain stores account for the second highest amount of consumption. It is also extremely important that underwear and lingerie are the highest selling product categories because this means that there are prevalent markets and industry for these products in the country.

This chart displays the Change in Revenue (in %) in the different stores within France. It is important to note that Lingerie increase 1.7% in independent chains, decreased -5% in specialty chain stores, increased 1% in chain stores, decreased -3.8% in large stores, decreased -1% in popular stores, decreased -3.8% in hyper-stores and overall decreased -1.8%

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This chart displays the Change in Revenue (in %) in the different stores within France. It is important to note that Lingerie increase 1.7% in independent chains, decreased -5% in specialty chain stores, increased 1% in chain stores, decreased -3.8% in large stores, decreased -1% in popular stores, decreased -3.8% in hyper-stores and overall decreased -1.8%.

Other Factors: Social Climate: France’s status as such a developed and powerful country gives it higher standards and access to better resources. Higher incomes, life expectancies, educations standards, and employment rates all work in our favour to boost the moral of workers who could potentially be working with us; in general, the higher the morale the better the quality of work. A general lack of corruption also works in our favour because it will make things like the logistics of transportation and taxes easier because, for the most part, the officials will be less concerned with their personal gain and more concerned with the growth of the industry in general.

Economic Climate: Due to the fact that the government is in the process of privatizing their economy, this means that we would have limited financial support from the government when it comes to manufacturers and suppliers. This being said, overall France’s economy is strong, as well as its trade relationships, meaning that business relationships are obtainable. It is also very important to note that one of France’s key exports is luxury goods, considering Smitten is a luxury intimates brand. This is one of the main reasons France is being considered as an option for manufacturers due to their reputation in the industry for producing such high quality goods. The most important thing to take from this is that bras are France’s biggest textile export, which is extremely important seeing as we are looking to source bras to France.

Business Climate: Because France and the United States have such an established business relationship doing business with France should be easier considering a more established path has been established. This will make all future ventures that much easier because trade routes, tariffs, trade organizations and associations and logistics have all been put in place to make it easier for France and the United

States to do business with each other. Also, considering the France is such a big player in the luxury goods market both parties should be familiar with the processes involved with sourcing and manufacturing luxury goods.

Labour Laws: The high productivity workers that France’s short work week of 35 hours and high minimum wage has created will benefit our company when it comes to finding manufacturers and suppliers because we will need them to be efficient. However, the high minimum wage of $12.22 will cause our labour costs to be higher than they would be. The low unemployment rate in young people won’t affect us as much because the young won’t necessarily have the skill set we require to create our product. The low employment rate in the older people however might mean that those that are trained in the art of creating luxury lingerie have been booted from the labour market due to increased litigation.

The decrease in the textile industry in general will also cause a decrease in the availability of manufacturers and suppliers and their ability to produce our product due to lack of support and funding.

Thailand: Thailand’s modern textile and apparel industry, which began in 1936 when the Ministry of Defense imported textile machinery to produce textiles for military applications, has become a leading industry in that export-oriented country. According to the Ministry of Commerce’s Department of Export Promotion, private textile mills were established shortly after World War II as a result of textile shortages. In 1960, the Investment Promotion Act prompted local and Chinese investors to buy and expand mills that were once military-owned. Soon after, some Japanese companies joined Thai textile firms in joint ventures. Thailand’s modern textile industry has since grown beyond its military beginnings and now plays a key role in the Southeast Asian country’s economy.

Presently, Thailand boasts a fully integrated textile industry. In June 2005, the industry consisted of 18 man-made fiber, 150 spinning and 1,300 weaving enterprises, according to Phongsak Assakul, chairman, Federation of Thai Textile Industries and Thai Textile Manufacturing Association, based in the capital city of Bangkok, reporting at a regional seminar sponsored by the United Nations Economic and Social Commission for Asia and the Pacific’s (UNESCAP’s) Trade and Investment Division. There were 400 dyeing, printing, and finishing firms, in addition to 2,500 apparel firms. Those mills employed more than 1 million workers, or 22.1 percent of the country’s entire industrial labor force.

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Other Factors: Social Climate- Thais are among the world’s most tolerant people and will forgive your cultural faux pas as long as they are unintentional; however, there are two things that you must respect during your stay in Thailand: the royal family, and religion. While it is possible to discuss political problems, never criticize the monarchy, and always stand during the National Anthem. Religious objects and sites, such as Buddha images and the wat (Buddhist temples), are sacred to the Thais. It is important for visitors to show respect by dressing conservatively whenever they visit a wat. Remove shoes and keep feet pointed toward the back when you sit down. Women should not hand anything directly to a Buddhist monk or touch the monk or his robes in any way as doing so would violate one of his most important vows - not to touch women.

Economic Climate- The World Bank has upgraded Thailand’s income categorization from a lowermiddle income economy to an upper-middle income economy in July 2011. This is due to Thailand’s progress in social and economic development, despite facing a number of financial/economic and political challenges. After recovering from the “Asian Crisis” of 1997-1998, the Thai economy took off again. From 2002-2006, Thailand’s growth averaged at 5.6%. As such, Thailand has been one of the great development success stories, with sustained strong growth and impressive poverty reduction. In the decade that ended in 1995, the Thai economy was one of the world’s fastest growing at an average rate of 8-9% per year. After recovering from the Asian Crisis of 1997-1998, the Thai economy took off again, with growth averaging about 5% per year in the period 2002-2007. Primarily due to the high rates of economic growth, poverty has been falling steadily since the late 1980s. Over the last decade, poverty has been reduced from its recent peak of 21% (a result of the 1997 crisis) to about 8% in 2009. Poverty in Thailand is primarily a rural phenomenon, with 88% of the country’s 5.4 million poor living in rural areas.

Business Climate- There are many reasons why Thailand is a favorable choice for investors. First, it has a growing economy. Thailand consists of 64 million people and is characterized by steady growth.

Abundant natural resources and a skilled and cost-effective work force helps attract foreign investment, which enables them to prosper and help develop industry in Thailand. Second, Thailand has a great infrastructure. It has an improved and modernized transportation facilities, as well as upgraded communications and IT networks, that ensure optimum business and living conditions. State-of-the-art industrial estates boast sophisticated facilities and superior services. Last, Thailand has a good social and political stability. Thailand is a welcoming country. The country’s form of government – constitutional monarchy – allows democratic processes and reforms, and is balanced by the Thai people’s peace – loving nature, of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.

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Canada:

Of the top 10 products exported out of Canada, apparel and textiles don’t even make the list.

Though present, the textile industry is small in Canada. It is not a driving force for the country’s economy and is not a service the country is known for. Though they possess the skill their expertise lies elsewhere, mainly in oil and automobiles. Seeing as Smitten wants to be known for its quality, Canada may not be the first choice. It does not possess the reputation of quality and craftsmanship as countries such as France or Italy.

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Social Climate: Canadians are described as agreeable, polite, quiet, reserved, and passive-aggressive.

Since Canadians largely share the above traits, they’re generally a punctual lot. They are also world renowned for their politeness. Because conflict isn’t common in Canada, Canadians probably wouldn’t raise the subject of your tardiness if you are late, but they would remember it. It’s often been said about Canadians that while they are polite, they are not a friendly people compared to Americans. Canadians pride themselves on their tolerance and of being non-judgmental, which means that Canadians often times prefer not to express opinions on various subjects for fear of offending, which, to many Canadians, is seen as a faux pas. According to the United Nations Canada is ranked 3rd among 180 countries for the quality of life it offers its population, ahead of countries such as the USA, Japan, the UK, France, Italy or Germany.

It puts Smitten at ease knowing that we are doing business with a country that hasn’t dealt with any recent social upheavals or any serious issues that can endanger our business contract. Knowing that society, as a whole is well mannered and agreeable is an attraction to us.

Political Climate: Politically, Canada has a stable government with no major political issues that stand out as red flags. Policy priorities of the Conservatives under Prime Minister Harper have remained fairly consistent since 2006: lower federal taxes, especially on consumption and corporate taxation; reducing crime; increasing defense spending; asserting sovereignty in the Arctic; and raising the profile of Canada’s role abroad, through first its combat, then training mission in Afghanistan, contributions to post-earthquake reconstruction in Haiti, and renewed engagement in the Americas. As the graph demonstrates the majority of the country considers themselves members of the Conservative Party, which currently holds majority power.

There have been no indicators of politics interfering with business, especially relating to the textile industry. Politically, Canada is on favorable ground with the US and ties are strong. For this reason, Smitten holds no hesitation in proceeding in business with the country.

Economic Climate:Canada is one of the world’s wealthiest nations with a high per capita income. Canada is a free market economy with slightly more government intervention than in the United States, but much less than most European nations. Canada has traditionally had a lower per capita gross domestic product (GDP) than its southern neighbor but higher than the large western European economies. Since the early 1990’s, the Canadian economy has been growing rapidly with low unemployment and large government surpluses on the federal level. Today Canada closely resembles the US’ economy. As of October 2009, Canada’s national unemployment rate stands at 6.3% and is still low compared with other industrialized nations. According to the OECD’s 2003 ranking of nations by GDP, Canada came in 8th, well above Germany, Italy, France, the United Kingdom, and Sweden.

Canada enjoys a substantial trade surplus with the US, which absorbs nearly 80% of Canadian exports each year. Given its great natural resources and skilled labor force, Canada has enjoyed solid economic growth. In 2008, growth slowed as a result of the global economic downturn and a drop in world commodity prices. Public finances are also expected to diminish for the first time in a decade.

The strength of the banking system demonstrates the strength of Canada’s economy. The banks coped relatively well with the crisis, and their capitalization has remained through the deficit. By 2010, companies thus enjoyed easier access to bank loans and the credit situation is expected to ease even more. In 2010, the debt ratios of Canadian companies declined, and although their profits rebounded earnings remained below the levels prevailing before the crisis as indicated by the above graph.

Knowing that Canada is economically stable despite the world’s deficit is wonderful news to a company partaking in a new venture. We are taking a risk starting a new business in hard times. Knowing that our manufacture is on stable ground is one less thing for us as a company to worry about.

Business Climate: According to the World Bank’s Doing Business 2008 several factors such make Canada one of the best place for engaging in business. Among 178 countries, Canada ranks particularly well. They are rated 2nd for the ease in creating a new business, 5th in the protection of business investors and 7th for the access to credit. According to the international consulting firm KPMG, Canada offers the lowest business startup and operating costs within the G7 countries. The seven other countries that are members of the finance group are France, the US, the UK, Germany, Italy, and Japan.

Shipments by Canadian textile manufacturers in 1989 were over $7.7 billion, making it the largest year in the industry’s history. While shipments have declined since then because of the recession, the industry is well positioned to participate in the economic recovery.While much new technology has appeared in clothing manufacturing, it is still essentially a labor-intensive industry with relatively low capital investment.

Knowing that Canada as a country is very supportive of new business start ups is a huge plus. Having the support and backing of a foreign country you’re doing business in is wonderful. Also, knowing that Canada offers the lowest business startup and operating costs really helped us make the decision to ultimately manufacture in the country.

Strong Trade Ties: Canada is a member of one of the most successful trade agreements to date, NAFTA or the North American Free Trade Agreement. The trilateral trade bloc involved Canada, the United States and Mexico. The goal of NAFTA was to eliminate barriers to trade and investment between the US, Canada and Mexico. It’s creation in 1994 brought the immediate elimination of tariffs. However most U.S.-Canada trade was already duty free. NAFTA also continues to see to eliminate non-tariff trade barriers and to “protect the intellectual property right of the products.”The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico. Like Mexico and the U.S., Canada received a moderate positive economic benefit as measured by GDP. Canadian manufacturing employment held steady despite an international downward trend in developed countries.Textile and clothing trade between the U.S. and Canada began to increase before the FTA was really in effect. Interestingly enough this phenomenon is repeating itself with NAFTA. Exports of textiles from Canada to Mexico have grown by 85% in 1992 while exports of clothing more than doubled. Of course these numbers have decreased since due to the recession. Imports of both textiles and clothing from Mexico have begun to increase too.

If Smitten decided to manufacture in Canada all of our goods would be duty free, quote free, and broker free. It could be a substantial and positive price cut for Smitten’s budget.

Cost of Manufacturing:The minimum wage in Ontario is currently at $10.25. This was the first year that minimum has not been raised since 2003. That being said Ontario has the highest minimum wage in the country and is much higher than the United States. The minimum wage in Quebec was just raised 25 cents on May 1st to $9.90. It’s important to keep minimum wage in mind as the workers in the factories we might manufacture in will be required to receive at least minimum wage.

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According to Industry Canada, as of 2009, supplies and materials made up 71% of manufacturing costs.

The remaining 29% was spent on wages and energy. Considering materials are the major factor in manufacturing the market is vulnerable to any fluctuation in the prices of materials and supplies.Canada also has low investment taxation. Data published by the Canada and Quebec ministries of Finance show investment marginal taxation rates to be particularly low in Quebec and Alberta. This is crucial information to Smitten seeing as a lot of possible manufacturers are located in Quebec. Their taxation rate in these provinces is much lower than elsewhere in industrialized countries and the USA.

Quebec businesses in particular, pay one of the lowest rate of taxation of profits, are reimbursed for sales taxes paid on equipment purchases, and as of January 2011, will no longer pay any tax on capital.

As stated earlier Canada has the lowest business startup and operating costs within the G7 countries.

This is extremely valuable information considering that Smitten is considering doing business in France, which is a member on the G7. Because Canada lacks raw textile materials, Smitten will have to take into account the cost of importing textiles.

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Honduras: Honduras hosts some of America’s most successful apparel manufacturers. They produce brand-name items in fashion wear, lingerie, sports wear and casual wear. The apparel industry has tremendous potential for expansion due to the combination of inexpensive and experienced labor, a solid managerial base, and the non-existence of fees and taxes for exporting companies. Today Honduras is the largest textile exporter in the Caribbean Basin. Honduras is the seventh-largest exporter of apparel and textile products by volume to the U.S. market behind countries such as Mexico and China; Honduras is first among Central American and Caribbean countries.

• Skilled workforce • The workforce is young, readily available, and industrious.

• Active workforce is 2.8 million strong.

• Literacy rates in the largest cities are 92-94 percent.

• Low cost of labor makes Honduras very competitive.

• Extensive educational network educates the population through 1,050 secondary schools (150 bilingual), 122 technical high schools, and 30 universities. Honduras has the largest number of bilingual schools in the region.

• Students can train at the Instituto Politécnico Centroamericano (IPC).

• Students train for technical jobs using state-of-the-art equipment.

• IPC works with companies to re-train workers on new technology.

• IPC partners with companies to develop new programs and help place students in jobs upon graduation.

Historically dependent on exports of agricultural goods, the Honduran economy has diversified in recent decades and now has a strong export-processing (maquila) industry, primarily focused on assembling textile and apparel goods for re-export to the United States, as well as automobile wiring harnesses and similar products. Despite the recent economic diversification, there continues to be a large subsistence farming population with few economic opportunities. Honduras also has extensive forest, marine, and mineral resources, although widespread slash-and-burn agricultural methods and illegal logging continue to destroy Honduran forests.

Because of a strong commercial relationship with the United States, Honduras was hit hard by the international economic downturn, especially in the maquila industry, where orders were estimated to have declined about 40%, and where about 30,000 workers lost their jobs in 2008 and 2009 out of a pre-crisis workforce of 145,000. The maquila sector began to see an upswing toward the end of 2009 as the U.S. economy stabilized, and it has begun re-expanding its employment base. Over one-third of the Honduran workforce was considered either unemployed or underemployed in 2010.

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In 2006, 42% of Honduras manufacturing industry exports to the US were knit shirts and blouses (55% of exports in terms of value), and 30% was cotton underwear (13% of total value). The low value of these items suggests commoditization: on average, the US pays $2.77 per square meter equivalent (SME) of shirts or blouses from Honduras, and $0.97 per SME of cotton underwear, compared to $21 per SME of wool suites and $11 per SME of bras made out of man-made fiber (MMF). The prices of these products from all exporting countries are $4.54 for equivalent shirt and blouse categories, and $1.22 per SME of cotton underwear, reflecting the current cost-competitiveness of Honduras in these categories. In addition, cotton and man-made fiber products are notably lower priced than other materials such as wool and silk.

This graph shows that Honduras is prominent in cotton and basic apparel which points out another factor why Honduras isn’t a good option for Smitten. Intimates manufacturing in Honduras is notably lower than other apparel items.

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Political Climate: Honduras is a democratic constitutional republic, independent from Spain since 1821.

Since then, despite relative tension with El Salvador, Honduras has overall peaceful relations with its neighbors. The country is currently ruled by the Liberal Party of Honduras, under President Manuel Zelaya. There are five main political parties, and for the past decades, the National Party of Honduras and the Liberal Party of Honduras have ruled alternatively. The election swings and policy inconsistency between these two parties have made policy reform progress very difficult. This is recently compounded because the current administration lacks majority in the National Congress.

Honduras has had a stable democracy over the past 25 years which has consolidated as one of the few countries in the region with such stability. The annual GDP of Honduras is approximately $8 billion. Its international trade amounts to $6 billion of which $4 billion represent imports and $2 billion represent exports. Despite the high levels of unemployment, inflation and poverty, the Honduran economy has displayed sustained growth averaging 5% annually. With the passing of the Central American Free Trade Agreement between the U.S., Central America, and Dominican Republic (DR-CAFTA), increasing foreign investment and further economic growth is expected.

The current president’s term, Manuel Zelaya ends in 2010. The president along with his 128 representatives in Congress are supportive of this agreement after approving in March 2006 the new laws for the full implementation of DR-CAFTA starting April 1, 2006. Honduras has become the third major importer of textiles to the United States after China and Mexico. More than half of Honduran exports are traded with the United States which is his main trading partner. The general election for President of the Republic of Honduras was won by the candidate of the National Party of Honduras, Mr. Porfirio Lobo Sosa,under a tense state of political turmoil and ongoing coup, the 29 November 2009, beating his opponent the candidate of the Liberal Party of Honduras, civil engineer, Mr. Elvin Ernesto Santos Ordoñez. Porfirio Lobo Sosa, was sworn in office as president in 2010 and declared its tasks to be to bring order to the country and reapply for acceptance of Honduras within the OAS.

Social Climate: Honduran society is, for the most part, rural and poor. The overall standard of living in the country is one of the lowest in the Western Hemisphere. Foreign as well as domestic assessments of the country have focused on its poverty to the point where this assessment dominates the outlook of the Honduran people.

Almost all social indices show Honduras lagging in development. The annual per capita income is low, health services are extremely deficient, infant mortality and child mortality rates are high, and literacy rates and other educational indicators are low. In 1993 the majority of the population in Honduras remained poor, and a high rate of population increase made alleviation of that poverty in the near future unlikely.

Honduras’s relatively low population density would seem to be a positive factor. An abundance of land, however, has not ensured the availability of land for cultivation. The terrain consists for the most part of mountains with only narrow coastal plains. Much of the arable land is used for export crops and is not available to small farmers. Banana (and some pineapple) agribusinesses predominate in the country’s most fertile land in the Caribbean coastal plains. Land available for agriculture has actually decreased since the 1950s, as farmland has been converted to rangeland to support an expanding cattle export industry.

The continued underdevelopment of the country produced a crisis of confidence in Honduran society in the 1980s. Indeed, during that decade, economic and social pressures produced an acute sense of disorientation in Honduran society. The combination of a worldwide economic crisis, a sharp rise in crime, and t

he absence of an independent police force and judicial system left the average citizen with a pronounced sense of vulnerability.

Despite the depressing statistics, however, Honduran society has numerous strengths. Among some of the positive factors are a relatively high number of grassroots organizations, a peasant movement that has continued even during periods of repression, and a corporatist political system in which organizations and classes instead of political parties make their political demands. Positive, too, is the absence of civil war and the high level of terrorism experienced by neighboring countries.The country’s limited resources, to deal with severe poverty and to avoid the repression and violence that poverty often engenders.

Conclusion: All things considered Smitten does not consider Honduras a viable option for manufacturing. Although Honduras is a strong country for manufacturing cotton apparel and fast fashion, it is not the best option for Smitten as we are high end, boutique level company. We seek high quality fabrics such as chantilly lace, silk chiffon, and viscose polyamide that would not be found in Honduras. Honduras is also a risk to do business with since we feel strongly about our sourcing guidelines and Honduras has been known for subpar working conditions as well as child labor. Honduras also lacks innovation and skilled labor which are two very important factors for Smitten, as we strive for our products to be of the finest quality in the market. Latin America in general is also known for being a risky location for businesses because of its high rate of corruption which is another deciding factor, despite its current efforts to stabilize its government.

24

Country Rankings France

Location – 8: France is roughly 6 hours away from New York City by plane and 9.55 days by boat. For this reason it was given an 8 because its distance from New York will not severely affect our lead-time however it will have to be considered.

Government – 10: France has one of the most stable governments in the world, even considering its recent election. It is a founding member of the G-8 summit and also a member of the G-20 making it a very stable and powerful country.

Business Climate – 9: France has a very stable business industry and is considered prosperous and influential all over the world. However the decrease in the textile and apparel industry keeps it from getting a perfect score.

Textile Industry – 8: Although famous all over the world for its quality and innovation the textile industry is on the decline which is why it is given a rating of 8.

Trained Work Force: France is known for having some of the most trained Artisans in the world however as generations grow older they are not being replenished which is why it receives a rating of 8. receives a high rating for benefits.

Trade Agreements – 7: There is no direct trade agreement between France and the US because France relies on the WTO (World Trade Organization) to regulate trade between its trading partners.

Costs – 4: Because of the high quality of the garments in France as well as the high labour costs it receives a low rating for costs because of the high prices.

Sourcing Guidelines – 8: France’s regulations about the shortness of a workweek would adhere to our sourcing guidelines as well as their health as safety regulations. However, there may be some discrepancies about the legal age for work.

Benefits – 8: Because of the high quality garments we would receive if we were to source with France it receives a high rating for benefits.

Risks – 8: There are few risks except for the high cost of labour and materials; therefore there is also a high rating for risks.

Quality – 10: The quality of the French apparel industry is world-renowned; therefore it receives a perfect score.

Thailand

26

Location - 6: Thailand consists of four regions. These are the North; the Central Plain with the Chao Phraya River Basin and some other, smaller rivers basins; the North-east, also known as the Khorat Plateau; and the South on the northern half of the Malay Peninsula. Thailand has many cities and ports that make it beneficial for sourcing internationally.

Government - 7: Thailand has a constitutional monarchy with a bicameral legislature, the parliament and the senate, form the system of government. The country comprises 76 provinces, called Changwat in Thai, which are subdivided into districts or amphoe, sub-districts or tambon, and villages or mu ban. An elected governor administers metropolitan Bangkok; it is subdivided into 50 districts called khet in Thai.

Social Stability - 7: Thailand is a welcoming country. The country’s form of government, constitutional monarchy, allows democratic processes and reforms, and is balanced by the Thai people’s peace, loving nature, of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.

Business Climate - 8: Thailand has a growing economy. It has an abundance of natural resources and skilled workers. Thailand’s cost-effective work force helps attract foreign investment, enables them to prosper and help develop industry in Thailand.

Textile Industry - 8:Thailand boasts a fully integrated textile industry. In June 2005, the industry consisted of 18 man-made fiber, 150 spinning and 1,300 weaving enterprises, according to Phongsak Assakul, chairman, Federation of Thai Textile Industries and Thai Textile Manufacturing Association, based in the capital city of Bangkok, reporting at a regional seminar sponsored by the United Nations Economic and Social Commission for Asia and the Pacific’s (UNESCAP’s) Trade and Investment Division. There were 400 dyeing, printing, and finishing firms, in addition to 2,500 apparel firms. Those mills employed more than 1 million workers, or 22.1 percent of the country’s entire industrial labor force.

Trained workforce - 6:Thailand historically has been known for its affordable labor cost and highly trained workforce. However, according to pay and productivity rankings by the World Economic Forum in 2011, Thailand was ranked 29th globally lower than Singapore (1st), Vietnam (4th), Malaysia (6th) and Indonesia (20th). Another analysis shows Thailand’s labor rates for manufacturing are 20-45% higher than in Indonesia and Vietnam. With the increase in the daily minimum wage from 215 baht per day to 300 baht, Thailand’s labor force competitiveness may drop further. There will be a strong need to invest in further vocational and English language skills training for the workforce to raise its productivity and justify Thailand’s higher cost structure relative to its neighbors.

Trade Agreements - 7: Thailand’s foreign policy includes a close and longstanding security relationship with the United States. It also strongly supports ASEAN’s efforts to promote economic development, social integration, and stability throughout the region. Relations with China are steadily increasing across the board. Thailand served as the chair of ASEAN from July 2008 to December 2009 and served as host to the ASEAN Summit (heads of government meeting) in February 2009, as well as the ASEAN Ministerial Meeting, Post Ministerial Conference, and Regional Forum in July 2009. Thailand is also apart of the WTO, World Trade Organization.

Costs - 8:The costs for manufacturing lingerie in Thailand are relatively low. This can be attributed to the countries average hourly wage and the strength of the bhat to the U.S dollar currency.

Sourcing guidelines - 8: Thailand’s codified employment laws, administered by the Department of Labor, Protection and Welfare, stipulate working conditions such as maximum work hours, holidays, sick leave, minimum wage and severance pay. The laws, which may significantly affect a firm’s decision to do business in Thailand, also provide employers with flexibility in managing labor, such as in staff recruitment

processes, retrenchment policies and employee transfers. Work Hours, Holidays and Sick Leave.

Benefits - 6: Industries in Thailand have always benefited from the regulatory predictability in its operating environment in contrast to some of its neighbors. Additionally, the recent reduction of corporate income tax to 23% from 30% has helped to increase the country’s attractiveness. An even more attractive corporate tax scheme and robust trade treaties will help to support Thailand as an exporting hub for the region.

Also, marketing efforts such as the recent government investor roadshow to Japan will be done more often to show Thailand’s attractive investor policies.

Risks - 5: Political stability is the key criterion for companies’ long-term strategic investment. Thailand’s political uncertainties in recent years have been a concern. Fortunately, despite political backlash, investors’ confidence in the country’s long-term growth remains intact as proven by a steady stream of FDI from 2010-11 _ estimated to be 180 billion baht, up by 17% from 2009. Nonetheless, with the recent terrorist threats and city bombs, it is doubtful the confidence level will remain high. In addition, the flood crisis has been a rude shock for many companies with plants in Thailand and a huge public relations disaster overall.

Quality - 7:In general, Thailand appears to have a good standard of quality when it comes to manufacturing goods. Many of the manufacturer’s researched have specially trained, in- house quality assurance and quality control teams that inspect and monitor garments from conception to completion.

Honduras

28

Location - 8: Honduras is in Central America, bordering the Caribbean Sea, between Guatemala and Nicaragua and bordering the Gulf of Fonseca (North Pacific Ocean), between El Salvador and Nicaragua.

It has 7 ports and harbors, and 112 airports altogether.

Government – 5: Honduras has a democratic and constitutional republic that is only recently stable.

Social Stability – 5: Latin America is know for being socially corrupt and things like bribes are often standard if you want to get things done quickly.

Business Climate – 6: Nearly half of Honduras’s economic activity is directly tied to the US, with exports to the US accounting for 30% of GDP and remittances for another 20%. The US-Central America Free Trade Agreement (CAFTA) came into force in 2006 and has helped foster foreign direct investment, but physical and political insecurity, as well as crime and perceptions of corruption may deter potential investors.

Textile Industry – 8: Honduras is one of the United States’ most successful apparel manufacturers, specializing in cotton products, fast fashion, and casual wear. However, Honduras does not necessarily have the capacity to produce the products that we need.

Trained Work Force – 8: There is room for expansion in the textile industry in Honduras due to the inexpensive and experienced workforce.

Trade Agreements – 8: CAFTA eliminates most tariffs and other barriers for U.S. goods destined for the Central American market, provides protection for U.S. investments and intellectual property, and creates more transparent rules and procedures for conducting business. CAFTA also aims to eliminate intraCentral American tariffs and facilitate increased regional trade, benefiting U.S. companies manufacturing in Honduras.

Costs – 9: Labour in Honduras is rather inexpensive with a solid managerial base and no fees and taxes for exporting companies Sourcing Guidelines - 5: There are around 300,000 children currently employed in Honduras and 69% of the labourers in the factories are young women. There is also limited access to water and sanitation for most of the population. This is against our sourcing guidelines.

Benefits – 6: There are substantial benefits such as close proximity to the US, high number of ports, low cost, strength of the industry, and Trade agreements with the US. Risks – 5: There are also a substantial amount of risks such as hurricanes, corruption, child labour and health and safety concerns, transshipment point for narcotics, and some money-laundering activity.

Quality – 6: Honduras produces mainly casual cotton products which is not in line with our product offering.

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Canada

Location - 10: With Canada’s close proximity to the US and New York specifically, they are an ideal choice for manufacturing. Transport would be an easy 6-8 hour truck ride. For this reason we awarded Canada a 10 for location.

Government - 10: Canada has had a strong, stable democratic republic for a substantial amount of time.

Canada gained its freedom from Britain not through a violent war but through a peaceful treaty. Canada’s government is also known its flexibility and willingness to cooperate with new business ventures. According to the World Bank’s Doing Business 2008 Canada ranked 2nd among 178 countries for their ease in creating a new business, 5th in the protection of business investors and 7th for the access to credit. For this reason their government was awarded a 10.

Social Stability - 10: Canadians are described as agreeable, polite, quiet, reserved, and passive-aggressive. According to the United Nations Canada is ranked 3rd among 180 countries for the quality of life it offers its population, ahead of countries such as the USA, Japan, the UK, France, Italy or Germany.

Because of their clear social stability we awarded them a 10.

Business Climate – 8: According to the international consulting firm KPMG, Canada offers the lowest business startup and operating costs within the G7 countries. The seven other countries that are members of the finance group are France, the US, the UK, Germany, Italy, and Japan. Also, shipments by Canadian

textile manufacturers in 1989 were over $7.7 billion, making it the largest year in the industry’s history.

While shipments have declined since then because of the recession, the industry is well positioned to participate in the economic recovery. Despite the world deficit, Canada’s business climate has remained fairly stable. Therefore, we awarded them an 8.

Textile Industry - 6: Despite their fairly strong economy, Canada’a textile industry is weak, especially related to intimates. There is lack of raw materials and skilled workforce. While much new technology has appeared in clothing manufacturing, it is still essentially a labor-intensive industry with relatively low capital investment. Because of the small market for it in Canada, Smitten gave them a 6.

Trained Work Force - 7: As stated, Canada’s workforce is proficient but limited. For this reason Smitten gave them a 7.

Trade Agreements - 10: Canada is a member of one of the most successful trade agreements to date, NAFTA or the North American Free Trade Agreement. The trilateral trade bloc involved Canada, the United States and Mexico. The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico. Interestingly enough this phenomenon is repeating itself with NAFTA. Exports of textiles from Canada to Mexico have grown by 85% in 1992 while exports of clothing more than doubled.

Costs - 5: Manufacturing in Canada is more expensive than the US, which is already expensive. For this reason we have them a 5.

Sourcing Guidelines - 7: Canada as a country has stricter guidelines compared to the US when it comes to business. Their minimum wages are significantly than the US and their environmental protection laws are much stricter than the US. Smitten is not concerned that Canadian will be able to meet our personal guidelines. For this reason we awarded them a 7.

Benefits - 8: Based on Canada’s limited public debt, strong banking system, close proximity, low taxation rates, low operating costs, stable government, acceptance of new business ventures, and low operating costs Smitten feels strongly about manufacturing in Canada.

Risks - 8: We feel Canada’s benefits out way its risks. However some of their risks to consider are their harsh climate, high household debt, high minimum wage, lack of raw materials, and lack of high quality, expert workforce.

Quality – 7: Canada’s overall quality is sufficient and acceptable but not up to the standard of other countries such as French that are masters of intimates. Smitten gave them a 7.

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Country Comparison France Location Government Social Stability Business Climate

Textile Industry Trained Work Force Trade Agreements

Costs Sourcing Guidelines

Benefits Risks Quality Average

Thailand 8 10 10 9 8 8 7 4 8 8 8 10 8.17

Canada 6 7 7 8 8 6 7 8 8 6 5 7 6.92

Honduras 10 10 10 8 6 7 10 5 7 8 8 7 8.00

8 5 5 6 8 8 8 9 5 6 5 6 6.58

Through our rankings we have decided to manufacture in France, Thailand and Canada and eliminate Honduras. France was chosen because of the strength and high quality of the apparel industry as well as the availability of our fabrics, such as Chantilly lace. Despite a decline in the apparel industry it is still one of the most highly regarded in the world and luxury goods and lingerie still remain on of France’s top exports. Thailand was chosen because of skilled manufactures and cost effective work force. This overrides the large distance between Thailand and New York as well as the political uncertainties. Canada was chosen despite its limited apparel industry because of its close proximity to New York, and stricter sourcing guidelines, minimum wage laws, and environmental protection laws. Honduras was eliminated because of its slack sourcing guidelines and child labour laws as well as its lack of luxury lingerie manufacturers.

Supplier Rankings - France

Cost

Lead Time

Quality

Capacity

Clients

Sourcing Guidelines Capabilites

Macosa 2 - Due to the high quality garments that they produce Macosa has high costs, giving it a low ranking.

5 - Due to its location in France it would take 9.55 days by boat to get to NYC. 10 - Macosa prides itself on having the highest quality products for the highest caliber of clients.

7 - Macosa is unable to ship orders over 4,000 units.

Wolf Lingerie 4 - Wolf produces product for multiple brands at multiple price points ranging from high to low.

5 - Due to its location in France it would take 9.55 days by boat to get to NYC. 7 - Wolf produces product at a range of price points and qualites.

9 - Wolf Lingerie is able to produce 12 million units per year through their separate Hong Kong facilites.

7 - Wolf produces product for 10 - Macosa has the highest calibar of clients such as mainly French brands, however some of their products Dior, Hermes, Nina Ricci, are similar to ours. etc.

8 - Because it is in France 9 - Wolf prides itself on being Macosa must abide by a family-run and familyFrance’s strict labour laws. oriented business.

9 - Because of the quality of 9 - Wolf has facilites in both the garments Macosa works France and Hong Kong, douwith highly skilled artisans. bling their capabilites.

Infrastructure 6 - Macosa only handles the 8 - Wolf is vertically integratproduction, fabric and trims ed and handles production must be provided. and shipping but no additional services.

Versatility 9 - Macosa produces linge- 9 - Due to their price range rie, corsetry, knitwear, and Wolf is able to produce very loungewear. versatile products.

Innovation 9 - Macosa works with high- 9 - Wolf’s brands are regardend innovative clients proed as some of the most well ducing looks each season kept French lingerie brand.

7.60 7.50 Average

Cassy Concept Designs 2 - Cassy produces high quality garments at high prices, giving it a low ranking 5 - Due to its location in France it would take 9.55 days by boat to get to NYC. 9 - Cassy produces lingerie that is runway presentable, meaning it is of a high quality.

5 - Cassy is a small company, with only a couple sewing and pattern making machines.

6 - Cassy does not provide a list of its clients, however it does provide a gallery of photographs.

9 - Because it is in France Macosa must abide by France’s strict labour laws.

9 - From the photographs of their work we are able to tell that Cassy can produce our products.

7 - Cassy does not handle distribution however they do handle everything else.

9 - Cassy produces couture lingerie, knitwear, and swimwear.

9 - Cassy produces looks that walk the runway each season.

7.00 33

Supplier Rankings - Thailand

Cost

Lead Time

Sabina Fareast Co.

Bema Co. Ltd.

7 - Cost was determined by evaluating companies annual revenue, mark-up percentage, and client base.

5 -Sabina produces roughly 1,000,000 units per month, and ships internationally.

5 - Cost does not seem to be very high when looking at the p.o.s price and possible mark up percentage.

5 - Bema has a moderate leadtime, because of the high number of units and merchants.

Quality

6 - In house QC team that ensures each garment is manufactured to company standards.

Capacity

8 - Sabina can produce upwards of 1,000,000 units per month in a variety of styles and sizes

Clients

6 - Sabina has it’s own self-titled brand which is as well as OEM brands throughout Europe and Asia.

7 - Sabina’s sourcing guidelines were clearly illustrated on its website and aligned closely to Smitten’s.

7 - Sabina has four factories and more than 4,000 employees.

Sourcing Guidelines

Capabilites

Infrastructure

Versatility

Innovation

Average 34

Vanity Export Co.

6 - Vanity’s cost are moderate because they produce in small quantities and have many resources.

4 - Vanity’s lead-time is dependent on how many pieces and where the units are being shipped.

7 - The raw materials are inspect- 5 - Although they don’t show ed before manufacturing and their clients, however state that garments are monitored routinely they do have an in house QA/ along the way.

QC team of 5-10 individuals.

9 - Bema produces roughly 1,100,000 units per month in a variety of sizes for a variety of merchants.

6 - Some of Bema’s clients areBali, Playtex, Spanx, etc. Which are aesthetically different from us.

4 - Vanity is a small manufacturer with limited resources and workers.

1 - No clients are listed on the manufacturers website and none could be found during a general search.

1 - The company does not show it’s sourcing guidelines on it’s website, and none were found during a general search.

4 - Vanity is not capable of fulfilling large orders and work at a much slower pace than their counterparts..

5 - Vanity has 11-50 employees and 4 production lines. The factory itself is below 1,000 square meters.

3 - Although Vanity does manufacturer lingerie sets, its primary focus is on lace.

8 - Sourcing guidelines were prominently displayed on the companies website and were similar to Smitten’s.

7 - Bema ‘sprofessional team of merchandisers are capable of handling specific requests of customers.

7 - Sabina is a vertically inte7 - Bema is vertically integrated. grated facility and assists with They also have a marketing merproduct development and market- chandising service. ing.

7 - Sabina produces many styles 9 - Bema has tech savvy mathat consists of one-piece, plus, chines that allow them the and push-ups. capabilities to produce a varied merchandise.

5 - Sabina has the ability to be a 5 - Many of Bema’s products 4 - Vanity is not really innovative fashion forward manufacture but produced are basic items and are when manufacturing their bra produces some what basic styles. not fashion forward. sets. They are simple and not trendy.

6.50

6.80

3.60

Supplier Rankings - Canada

Claudel Lingerie Inc.

Gordon Battah Inc.

Cost

5 - The min, wage in Quebec was raised to $9.90.This is important because we are required to pay at least minimum wage.

Lead Time

8 -It’s roughly a 7-hour truck ride from Quebec to New York.

Quality

7 - Our high standards of quality can be reached because of their other clients similar business structures.

7 - Claudel has a 50,000 square foot factory with roughly 155 employees.

3 - Compared to the other manufacturers Gordon Battah was the most expensive. Also their annual revenue is smaller than Claudel at roughly $1 million.

8 - Gordon Battah is also located in Quebec. As stated it’s roughly a 7-hour truck ride from Quebec to New York.

8 - Gordon Battah Inc. really prides themselves on their exceptional quality.

Capacity

Clients

Sourcing Guidelines

Capabilites

Infrastructure

Versatility

Innovation

Average

9 - Claudel’s clients include small, high quality boutiques similar to Smitten. They are Lillianne Lingerie, Moments Intimates, Body & Beach etc.

7 - Canada as a whole has stricter sourcing guidelines, and minimum wage, and environmental protection laws.

8 - As stated Claudel is completely vertically integrated as well as offering marketing and sales value added services.

8 - Claudel is completely vertically integrated. They are able to make patterns, cut, sewing, finish, and ship all goods.

7 - Claudel specializes in lingerie but they are also proficient in making loungewear and robes as well.

6 - Claudel is one of the first manufacturers in North America to adopt the system of modular production.

7.20

Diamond Tea Gown

3 - Diamond Tea Gown Inc. was very costly. Their annual revenue is $2 million. For this reason we also gave Diamond Tea Gown Inc. a 3 for costing.

9 - Diamond Tea Gown Inc. is also located in Quebec. As stated it’s roughly a 7-hour truck ride from Quebec to New York.

8 -Diamond Tea Gown prides itself on one of a kind, exceptional quality, using only the finest of fabrics.

6 - Though larger than Gordon 4 -Gordon Battah only has 12 Battah Inc. there factory is still employees. Though we’re only buying 2,500 units this may be a smaller than Claudel’s with only large order for their company and 50 employees. we need timely deliveries.

9 - Diamond Tea Gown prefers 9 - Though Gordon Battah’s clients are small, high quality to keep their clients information boutiques such as us. Some of private but offers up testimonials. All reviews on their comtheir clients are Aubade Paris, pany are exceptional.

Rosy, and Corbin.

7 - Canada as a whole has strict- 7 - Canada as a whole has er sourcing guidelines, minimum stricter sourcing guidelines, wage laws, and environmental minimum wage laws, and enviprotection laws. ronmental protection laws.

7 - Gordon Battah is able to pro- 6 - Seeing as Diamond Tea vide textiles, make patterns, cut, Gown Inc. is only capable of and sew. There capabilities are completely labor, their capabilireasonable. ties are limited.

7 - Gordon Battah is almost com- 6 - Diamond Tea Gown is not pletely vertically integrated. They vertically integrated. This is are able to make patterns, cut, problematic for Smitten because sewing, and ship all goods. it would make our job more time intensive and raise prices.

5 - Gordon Battah specializes 4 - Although Vanity does manuspecifically in lingerie. They would facturer lingerie sets, its primary not be able to manufacture any of focus is on lace. our loungewear.

6 -Though proficient in their field 5 - Vanity is not really innovative Gordon Battah is making few when manufacturing their bra indications to set trends or be sets. They are simple and not innovators in the industry. trendy.

6.50 6.30

Supplier Rankings - Honduras

Cost

Lead Time

Quality

Capacity

Clients

Sourcing Guidelines

Capabilites

Infrastructure

Versatility

Innovation

Average

Zip EL Porvenir

Confecciones Dos Caminos

Sara Lee Intimates

7 - Zip is cost efficient, because of the low cost in labor which means it gets a higher ranking.

7 -Zip’s workers live close to the factories, and the factory is 10 minutes from airport and 40 minutes from the main Honduras Port.

4 - Zip manufactures basic cotton undergarments that are not quite up to par with the products that we would be producing.

7 - Confecciones is cost efficient because of Honduras’ low labour costs.

8 - Workers in Honduras often live close to the factories and Honduras is close to the US, limiting lead time.

7 - Sara Lee is cost efficient because of Honduras’ low labour costs.

7 - Sara Lee’s workers live close to the factories, and work quickly and efficiently.

4 - Confecciones also only manu- 6 -Sara Lee produces basic cotfactures basic cotton undergarton undergarments which is not ments that do not match up with in line with our product offering. our product offering.

7 - Zip’s factories are customized 5 - Confecciones has customized to fulfill requirements of size and factories for their product, howdesign based on their clients. ever they would not be equiped to produce our products.

6 - Zip manufactures for Fruit of 7 - Confecciones also manufacthe Loom and Anvil. tures for Fruit of the Loom and Anvil.

5 - They have a connection to the 6 - Confecciones has a connection to the Honduran Apparel Honduran Apparel Association.

They also have a appropriate Association. website that shows building structures, as well as guidelines.

5 - There is a large labor work force available and factories are massive in size and can manufacture a large number of units.

8 - They are vertically integrated, and have quality assurance buildings to fulfill requirements of size and design.

6 - Zip is committed to its manufacturing services and will assist you through all the phases of evaluation.

5 - They have 20 years of experience and a privately held group of entrepreneurs, but manufacture very basic underwear.

6.00

7 - Sara Lee’s factories are customized to fulfill requirements of size and design.

8 - Sara Lee manufactures exclusively for Hanes.

4 -They have the guidelines set but it’s not certain that they follow them properly, since it is a poor country and child labor is very hard to avoid. Factories that are most trusted are those that have a connection to the Honduran Apparel Association.

6 - There is a capable labor work force available. They are quick and capable sewers.

4 - Confecciones has a large labour force and a large factory space but is still not capable of producing our products.

8 - Confecciones is vertically inte- 7 - They are vertically integratgrated and can handle all stages ed, and have quality assurance of production. buildings to fulfill requirements of size and design.

7 - Confecciones only produces 6 - Since Sara Lee only probasic cotton undergarments duces for Hanes they produce a which is limited as well as not limited range of products. what we need.

5 -Although they have experience 5 - Though experienced and a they are not experienced in the privately held group of entrepretype of products that we need. neurs, but they do manufacture very basic underwear.

6.10 6.30

Supplier Comparison

Overall the manufacturers in France had the highest ranking with Macosa (Manufacturer 1) having the highest average ranking. Canada was a close second with Claudel (Manufacturer 1) having the highest ranking. Thailand was third with Bema (Manufacturer 3) having the highest average ranking. Honduras has the lowest overall rankings which is one of the reasons it has been eliminated as a sourcing option for Smitten.

Supplier Conclusion

We have decided to manufacture our products in France, Thailand, and Canada. The three French manufacturers were chosen because they are both capable of producing our products and can do so at a high quality. In France we have chosen Macosa mainly because of their high quality and vast array of luxury clients. Because of this we believe that they will be able to produce our product assortment and handle our fine fabrics such as Chantilly Lace and Viscose Polyamide because they will be familiar with

them. Cost will be an issue but with high cost comes high quality. Even though they do not provide fabrics or trims Chantilly Lace is found easily within France and so transport costs will not be high. Macosa also states that they do not handle distribution if the order is over 4,000 units, however we are only manufacturing 2,500 units due to the size of our store so this is not a limitation that concerns us. We look forward to experiencing hand-made French lingerie production first hand.

We have also chosen to manufacture in Thailand. All three manufacturers were chosen because they are the top lingerie manufacturers in Thailand and produce similar merchandise to Smitten’s product assortment.

Smitten ultimately chose to manufacturer with Bema Co. Ltd. because of their relatively moderate prices and quality merchandise. The factory has extensive capabilities that will ultimately benefit Smitten.

Their lead-time is shorter than other lingerie manufactures in Thailand because of the amount of factories, employees and machines that allow the company to manufacture garments quickly. The company offers a variety of services such as assistance with marketing and product development. Bema also has a comprehensive in-house quality assurance and control team that routinely checks the merchandise from conception to completion to ensure that the products adhere with quality requirements. The companies sourcing guidelines are very similar to Smitten’s, and they have a reliable list of satisfied clients. After evaluating all facets of the company, Bema was determined to be the most viable selection to manufacture Smitten’s products in Thailand.

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Costing

We are looking to source in France, Canada, and Thailand, which are countries that have very different costing. Through our negotiations we have determined that France has the highest costing due to its high labour costing. France’s labour laws are some of the most unique in the world having both the world’s shortest workweek of 35 hours and one of the highest minimum wages of $12.22 per hour. In order to make France more competitive the National Assembly passed four bills, introduced by President Sarkozy that aimed to both modernize the economy and reform the labour market. The laws state that any work done beyond the 35-hour workweek is excepted from income and taxes. This was meant to spur worker productivity per hour, which in France is the highest out of the G8 countries. This means that although we will be paying more for labour in France we will be getting a more productive work force.

We also took into consideration the materials when we were determining costs. All products with Chantilly Lace are to be manufactured in France because Chantilly Lace is cheaper, and more readily available in France, seeing as it originated there. It would also be of the quality that we desire.

In Thailand, employees are entitled to 13 national holidays per year, plus a minimum of six days of vacation after one year of consecutive work. Thirty annual paid sick days is standard, and an employer may require a doctor’s certificate for sick leave of three days or more. Female employees are entitled to 90 days of maternity leave, including 45 days of paid leave. The minimum daily wage rate varies, depending upon location, from 137 baht (US$ 3.43) in some provincial areas to 175 baht (US$ 4.38) in Bangkok.

Employers must pay workers a fair wage. If employers are found guilty of not paying workers adequate wages, legal action make be taken.

When determining costs of manufacturing style 103 and 106 in Canada, we took into account the price of raw materials but more importantly the price of labor. According to Industry Canada, as of 2009, supplies and materials make up 71% of manufacturing costs. The remaining 29% is spent on labor and energy. Considering materials are the major factor in manufacturing the market is vulnerable to any fluctuation in the prices of materials and supplies.

We knew that it would be most cost effective to manufacture all of our products with Chantilly lace, in France. But we also knew that Claudel Lingerie Inc. is known for their expertise in loungewear. For that reason we chose to have our silk chiffon robe and negligee manufactured in Canada. The negligee is made from a simple Nylon/Spandex blend as well is Viscose polyamide. They are not unusual textiles for a mill to carry and since Claudel is vertically integrated, the cost wouldn’t be obscene.

Looking at labor, the minimum wage in Ontario is currently at $10.25. Ontario has the highest minimum wage in the country and is much higher than the United States which had a definite effect on the overall cost of manufacturing.

39

Negotiated Prices

Style 100 - Bridgitte Bra will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$13.15 % Increase

Subtotal

30% $ OTHER

13.15

Cost $ $ $

Freight Duty Broker

Final $

17.10

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 18.79

Retail Price: $250 Margin: 92.48% Style 101 - Bridgitte Panty will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$11.86 % Increase

Subtotal

30% OTHER Freight Duty Broker

$11.86 Cost $ $ $

Final $

15.42

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

GRAND TOTAL

$ 17.11

Retail Price: $300 Margin: 94.3%

40

1.69

Style 102 - Collette will be manufactured in Thailand because it is a slimming body suit and Bema Co. Ltd. is also a manufacturer for Spanx. It was negotiated that Thailand would increase costing by 5% because their labour costs are not nearly as high as our other countries SUBTOTAL NEGOTIATED

$ % Increase

Subtotal

5% $ OTHER

7.83

Cost $ $ $

Freight Duty Broker

7.46

Final $

7.83

$Total 0.14 -

$ $ $

0.14 -

$

0.14

Insurance OTHER

Cost

$

GRAND TOTAL

7.97

Retail Price: $140 Margin: 94.31% Style 103 - Genevieve will be manufactured in Canada because it is a nightgown and our Canadian manufacturer specializes in loungewear. It was negotiated that Canada would increase costing by 10% because its labour costs are in the mid range.

SUBTOTAL NEGOTIATED

$7.93 % Increase

Subtotal

10% $ OTHER

7.93

Cost

$

8.72

$Total $ $ $

1.69 -

TOTAL OTHER

$

1.69

GRAND TOTAL

$ 10.41

Freight Duty Broker

$ $ $

Final

1.69 -

Insurance

Retail Price: $350 Margin: 97.03%

41

Style 104 - Genevieve Panty will be manufactured in Thailand because it is the most basic of our undergarments. It was negotiated that Thailand would increase costing by 5% because their labour costs are not nearly as high as our other countries.

SUBTOTAL NEGOTIATED

$ % Increase

Subtotal

5% $ OTHER

2.78

Cost $ $ $

Freight Duty Broker

2.65

Final $

2.78

$Total 0.14 -

$ $ $

0.14 -

$

0.14

Insurance OTHER

Cost

$

GRAND TOTAL

2.92

Retail Price: $120 Margin: 97.57% Style 105 - Madeline will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$20.99 % Increase

Subtotal

30% $ OTHER Freight Duty Broker

20.99

Cost $ $ $

Final $

27.29

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

GRAND TOTAL

$ 28.98

Retail Price: $300 Margin: 90.34%

42

1.69

Style 106 - Sophie will be manufactured in Canada because it is a robe and our Canadian manufacturer specializes in loungewear. It was negotiated that Canada would increase costing by 10% because its labour costs are in the mid range.

SUBTOTAL NEGOTIATED

$7.93 % Increase

Subtotal

10% $ OTHER

7.93

Cost $ $ $

Final $

8.72

$Total $ $ $

1.69 -

TOTAL OTHER

$

1.69

GRAND TOTAL

$ 10.41

Freight Duty Broker

1.69 -

Insurance

Retail Price: $400 Margin: 97.4% Style 107 - Clementine will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$6.26 % Increase

Subtotal

30% $ OTHER Freight Duty Broker

6.26

Cost $ $ $

Final $

8.14

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

GRAND TOTAL

$

1.69

9.83

Retail Price: $200 Margin: 95.09%

43

Style 108 - Penelope Bra will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$12.76 % Increase

Subtotal

30% OTHER

$12.76 Cost $ $ $

Freight Duty Broker

Final $

16.59

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 18.28

Retail Price: $300 Margin: 93.91% Style 109 - Penelope Panty will be manufactured in France because it contains Chantilly Lace. It was negotiated that France would increase costing by 30% due to elevated labour costs and the high quality of the garments.

SUBTOTAL NEGOTIATED

$11.00 % Increase

Subtotal

30% OTHER Freight Duty Broker

$11.00 Cost $ $ $

Final $

14.30

$Total 0.002 0.29 0.02

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 15.99

Retail Price: $270 Margin: 94.08% Note: Initial Cost Sheets and complete Tech Packs can be found in the Apendicies 44

Strategy Development Smitten chose and designed it product line based on trend forecasting for the Autumn/Winter 2013 season. We researched databases such as WGSN to gain inspiration on what to expect in terms of colors and silhouettes for the upcoming year. From there we were inspired by retro silhouettes. We kept all this in mind when evaluating our first collection.

After designing our collection we evaluated what our volume would be. Being a small boutique located in Manhattan we knew space was and issue. Therefore we were ordering a rather small volume, 2,500 units to be exact. We ordered 250 units of all of our bras and slightly more of the panties at 300 units because consumers usually replenish underwear more than bras. We are purchasing only 200 units of the high wasted panty because they are more of a fashion item and aren’t suitable for every body type.

We realize that not everyone will be purchasing them and are therefore ordering less of them. Lastly, we are ordering 250 units of our robe. It is the only evergreen item in our product line and will be replenished each season.

Smitten spent a great deal of time evaluating the cost of manufacturing our products in Canada, Thailand, France, and Honduras. We took into account the price of fabrics, components, labor, freight, import taxes, and other fees. However, costs can only be estimated and will often change as you enter into negotiations. When negotiating with Canada we found that prices were marked 10% higher than our initial quotes. France marked up 30% and Thailand marked up 5% from our preliminary costs.

Through our negotiations we also determined factors such as lead-time and cash discount. We determined that we wanted to have our product by the holidays (November). This being said we were able to negotiate that for France and Thailand the lead-time would be 5 months. This means we would get our product at the end of October, just in time to market for the holiday season. For Canada, because the distance between Quebec and New York is smaller, we were able to negotiate a lead-time of 3 months so we would get our product at the end of August.

We also determined that we are paying in cash. In France our manufacturer has asked for 75% up front. But with that money up front after 2 seasons of future production we will receive a 5% cash discount.

This is important because it establishes a more long term relationship with our manufacturer and business relationships are something that are very important to the French. Our Canadian manufacturer asked for 55% up from and did not negotiate a cash discount with us.

We ultimately decided on France, Thailand, and Canada for a number of different reasons. Though both possess risks and benefits, together they make the perfect combination for Smitten’s manufacturing team.

We have evaluated some risks and benefits for each country: France Benefits • Quality of infrastructure and public services • Good demographics • Relative energy independence • Top world tourist destination 45 • Number two agricultural power

• Competitive international groups (energy, environment, pharmaceuticals, luxury goods, food, distri-

bution) • Dynamic population growth, qualified workforce, high productivity Risks • Relatively small contribution of exports to corporate turnover • Limited presence of French companies in emerging regions • Weakness of small and medium businesses • Low youth and senior employment; high youth unemployment • Deterioration of public finances Thailand Benefits • Open and Welcoming Economy • Diverse Manufacturing Sector • Pro- active Government Policies • Large, Adaptable and Cost-efficient Workforce Risks • Political Uncertainties • Unstable Climate • Location • Terrorism threats Canada Benefits • Limited public debt • Strong banking system • Close proximity to New York • Low taxation rates • Low operating costs • Strong environmental protection laws • Stable government • Very accepting of new business ventures • Strong trade agreement ties • Friendly social environment • Mostly English speaking country Risks • Strong concentration of exports geographically and by economic sector (US accounts for 75% of

exports) • Harsh climate • International competitiveness weakened by the strong Canadian dollar • High household debt • High minimum wage • Lack of raw materials • Partly French speaking country

• Not a strong textile industry

Smitten chose the three manufacturers based not only on quality, cost, location, lead time, capacity, clients, capabilities, and infrastructure, but also on the value added services the could provide for us.

Macosa, located in France, specialized in handmade lingerie and offers unparalleled expertise on French lingerie. Claudel Lingerie located in Canada is unique because they not only provide a completely vertical integration but also sales and marketing services. Bema Co. Ltd. located in Thailand provides marketing and manufacturing services. Having these extra services were an added benefit for us. Though our ultimate decisions were based on the above factors, these value added services gave us the confidence that we chose the right manufacturers for Smitten.

Smitten’s entire goal is to maximize profit margins. Though basic markup is 68%, Smitten has marked up its merchandise by between 90-95%. This seems high; it’s the target market we’re attempting to reach. We have used prestige price to establish ourselves in the marketplace as high quality and high priced and we intend to stay true to our word. Additionally, the higher the markup, the higher the profit margin. Through our countries and our manufacturers within those countries we have been able to find the highest quality fabrics and the best trained workforce and still maximized margins.

47

Finalized Strategy

This graph displays where our products were placed, in which countires, with which manufacturers and at what quantities. France was chosen because of the strength and high quality of the apparel industry as well as the availability of our fabrics, such as Chantilly lace. Despite a decline in the apparel industry it is still one of the most highly regarded in the world and luxury goods and lingerie still remain on of France’s top exports. Thailand was chosen because of skilled manufactures and cost effective work force.

This overrides the large distance between Thailand and New York as well as the political uncertainties.

Canada was chosen despite its limited apparel industry because of its close proximity to New York, and stricter sourcing guidelines, minimum wage laws, and environmental protection laws.

When determining many factors were considered. Macosa was chosen because of their expertise in lingerie and corsetry and luxury clients. Claudel was chosen because of their strict sourcing guidelines, familiarity with boutiques, and close proximity to New York. Bema Co. was chosen because of their skilled and cost effective work force as well as their clients.

Our products have been distributed based on the materials, and the specialties of the manufacturers. We chose to produce Styles 100, 101, 105, 107, 108, and 109 in France with Macosa because they have Chantilly lace, which is most easily sourced in France. Macosa is also the most skilled manufacturer and can handle that delicate fabric the best and is the most familiar with it due to their luxury clients. Styles 102 and 104 will be manufactured in Thailand because one of their clients is Spanx and style 102 is a slimming body suit. Style 104 is our most basic undergarment and can easily be handled by Bema’s work force. Styles 103 and 106 are to be manufactured in Canada because they are a nightgown and a robe and our Canadian manufacturer specializes in loungewear.

We are a high end boutique and have chosen to give our products prestige pricing, ranging from $120 - $400. For this reason our profit margin is higher than the required 68%, averaging 94.65%.

48

Conclusion

There are many benefits of the overall sourcing strategy developed by Smitten. The strategy aligns with our company’s ethics and values. All of the manufactures chosen have strict labor laws and sourcing guidelines that are comparable with Smittens. Smitten’s detailed guidelines will ensure that the chosen suppliers be committed to conducting business in a very efficient, and responsible manner. As Smitten is a global force in the intimates industry today, it is important that the suppliers and manufacturers will be ethical and will adhere to the stipulated requirements.

This strategy will maximize the planned margins because Smitten’s manufacturing costs are severely low compared to projected P.O.S prices. Though the basic markup is 68%, Smitten has marked up its merchandise by 400%. Though this seems unusually high, it’s the target market we’re attempting to reach. We’ve established ourselves in the marketplace as high quality and high priced and we intend to stay true to our word. Additionally, the higher the markup, the higher the profit margin. We’ve found the highest quality fabrics and the best trained workforce and still maximized margins. All of the manufactures chosen have quality assurance teams that will routinely check the quality of our products during manufacturing. Smitten will verify that our products are made from quality raw materials as to ensure that our products are innovative and fashion forward.

All of the countries have thriving economies and the manufactures chosen are steadily growing, in clientele and revenue. All three manufacturers have different specialties but appear to be viable options for Smitten in future manufacturing opportunities.

The three manufacturers chosen Macosa (France), Claudel (Canada), and Bema (Thailand) offer flexibility and value added services. Macosa offers its expertise in hand crafted luxury garments while Claudel has a short lead-time and assists with marketing and sales. Bema is a vertically integrated infrastructure that can assist with product development and merchandising. All manufacturers have the ability to produce that quantity of units that we desire and when evaluating lead-time, all three factories would be able to manufacture and ship our final completed products by the date we need them.

Smitten is very proud to tell everyone in what countries we have chosen to manufacturer in and who our chosen suppliers are. The manufacturers and their countries were chosen because of their viability to produce the type of lingerie needed and the mitigation of risk as well as the combination of distance, labor costs, maturity of the textile industry. All three manufacturers meet Smitten’s sourcing guidelines and have the ability to accommodate our product quality, and number of products in a very efficient and effective manner that will ensure that Smitten’s products are of high quality, fashion forward, and cost friendly.

49

50

Works Cited “AmCham Honduras.” AmCham Honduras. Web. 6 May 2012. <http://www.amchamhonduras.org/economia_en.asp>.

Andre Avio. Web. 21 May 2012. <http://www.andreavio.fr/>.

“Bema Co., Ltd.” Bema Co., Ltd. Web. 11 May 2012. <http://www.bemathai.com/profile.html>.

“Bureau of East Asian and Pacific Affairs-Background Note: Thailand.” U.S. Department of State. U.S. Department of State, 3 Jan. 2012. Web. 28 Apr. 2012. <http://www.state.gov/r/pa/ei/bgn/2814.htm>.

“Canada.” GlobalEDGE: Your Source for Global Business Knowledge. Web. 2 May 2012. <http://globaledge.msu.edu/countries/Canada>.

“Central Intelligence Agency.” CIA. Web. 30 Apr. 2012. <https://www.cia.gov/library/publications/the-worldfactbook/geos/ho.html>.

“Central Intelligence Agency.” CIA World Factbook. Web. 25 Apr. 2012. <https://www.cia.gov/library/publications/the-world-factbook/>.

“Claudel Lingerie - Official Website.” Claudel Lingerie - Official Website. Web. 3 May 2012. <http://www. claudellingerie.com/eng/index2.htm>.

Denslow, Lanie, and Mary Nadler. World Wise: What to Know before You Go. New York: Fairchild Publications, 2006. Print.

“Diamond Tea Gown Co Inc.” Profile Canada. Web. 10 May 2012. <http://www.profilecanada.com/companydetail.cfm?company=121841_Diamond_Tea_Gown_Co_Inc_Montral_QC>.

Diamond Tea Gown Inc. Web. 30 Apr. 2012. <http://www.diamondtea.com/>.

“Entreprises Gordon Battah Inc, Les - Montreal, Quebec, Canada.” Entreprises Gordon Battah Inc, Les. Web. 12 May 2012. <http://www.salespider.com/b-128585966/entreprises-gordon-battah-inc-les>.

“Espace Adherent.” Federation Nationale De L’Habillement. Appiacom. Web. 21 May 2012. <http://www. federation-habillement.fr/>.

“Explainer: Thailand’s Political Crisis.” CNN. 19 May 2010. Web. 1 May 2012. <http://articles.cnn. com/2010-05-19/world/thailand.explainer_1_prime-minister-abhisit-vejjajiva-anti-government-protestersbangkok?_s=PM:WORLD>.

Federation Franaaise Du Pret e Porter Feminin. Federation Franeaise Du Pret e Porter Feminin. Web. 21 May 2012. <http://www.pretaporter.com/accueil.aspx>.

“France: Introduction.” GlobalEDGE. France. Web. 08 Apr. 2012. <http://globaledge.msu.edu/countries/ France>.

“France.” The World Factbook. The Central Intelligance Agency. Web. 8 Apr. 2012. <https://www.cia.gov/ library/publications/the-world-factbook/geos/fr.html>.

“Gordon Battah Inc.” Profile Canada. Web. 15 May 2012. <http://www.profilecanada.com/companydetail. cfm?company=113253_Gordon_Battah_Inc_Montral_QC>.

“G8.” France-Diplomatie -. French Ministry of Foreign and and European Affairs, 27 Oct. 2010. Web. 08 Apr. 2012. <http://www.diplomatie.gouv.fr/en/france-priorities/global-economy/economic-and-financial/ g8/>.

Gola, Peter. “Labor Law in France.” Labor Law in France. Confederation Fiscale Europenne. Web. 08 Apr. 2012. <http://www.cfe-eutax.org/taxation/labor-law/france>.

“History of Honduras.” History of Honduras. Web. 5 May 2012. <http://www.nationsonline.org/oneworld/ History/Honduras_history.htm>.

“Honduras.” GlobalEDGE: Your Source for Global Business Knowledge. Web. 4 May 2012. <http://globaledge.msu.edu/countries/Honduras>.

Institut National De La Statistique Et Des Etudes Economiques. Systeme Statistique Europeen. Web. 21 May 2012. <http://www.insee.fr/>.

La Federation De La Maille & De La Lingerie. La Federation De La Maille & De La Lingerie. Web. 21 May 2012. <http://www.la-federation.com/>.

LA MODE FRANCAISE. UFIH. Web. 21 May 2012. <http://www.lamodefrancaise.org/en/index.html>.

Legifrance. Republique Francaise. Web. 21 May 2012. <http://www.legifrance.gouv.fr/Traductions/enEnglish>.

“Lingerie Claudel Inc.” Manta. Web. 11 May 2012. <http://www.manta.com/ic/mtqyc2d/ca/lingerie-claudelinc>.

“Lingerie Francaise - Accueil.” Lingerie Francaise. Lingerie Francaise. Web. 21 May 2012. <http://www. lingeriefrancaise.com/en/>.

Macosa Lingerie. Macosa Lingerie. Web. 21 May 2012. <http://www.macosa-lingerie.com/>.

“Manufacturers, Suppliers, Exporters & Importers from the World’s Largest Online B2B Marketplace-Alibaba.com.” Alibaba. Web. 1 May 2012. <http://www.alibaba.com/?src=Google>.

Miller, Amanda. “Thailand Culture and Social Life | Thai Property.” Thailand Culture and Social Life | Thai Property. Web. 20 Apr. 2012. <http://www.thaiproperty.co.uk/thailand-culture-and-social-life.html>.

Ministre De L’Economie, Des Finances Et Du Commerce Exterieur. Republique Francaise. Web. 21 May 2012. <http://www.economie.gouv.fr/>.

“Textiles De France.” Textiles De France. Union Des Industries Textiles. Web. 21 May 2012. <http://www. textile.fr/>.

“Negotiations and Agreements.” Foreign Affairs and International Trade Canada. Web. 14 May 2012. <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/index.aspx?view=d>.

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Singh, Akanksha. “Thailand’s Biggest Challenge Is ASEAN Economic Integration.” Thailand Business News. 7 June 2010. Web. 1 May 2012. <http://thailand-business-news.com/asean/16912-how-does-thailand-can-meet-the-target-for-aseans-integration>.

“Thailand.” Thailand. Web. 1 May 2012. <http://www.worldbank.org/en/country/thailand>.

“Thailand.” GlobalEDGE: Your Source for Global Business Knowledge. Web. 1 May 2012. <http://globaledge.msu.edu/countries/Thailand>.

“Thailand Profile.” BBC News. BBC, 11 Sept. 2011. Web. 1 May 2012. <http://www.bbc.co.uk/news/worldasia-15641745>.

53

Tech Packs

54

Apendix

55

Womenswear

S100 Bridgette Bra

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

COO/Size/Care Label

Edgestitch sides of Main Label only Sew to main label at center right

Main Label

101

Smitten

Bridgette Panty

1 Fashion Avenue New York, NY 10001

Intimates 100% Cotton

212.555.5555

Rose (Pink)/ Noir (Black) detail

212.555.5556

Designer Label High Tech Label co.

Los Angeles, CA Size tab Print-Avery Dennison machine

Autum/Winter

100% Poly

1 per garment Gross Measure

Center back neck on facing

3 color

100% Poly

1 per garment

Center back neck, under designer label; right of care label

1 color

Care Label Print-Avery Dennison machine

100% Poly

1 per garment

Center back neck, under designer label;left of size tab

1 color

Bar-code tag Perfect China Supplies Ltd

Transparent Paper

1 per garment

Attach by Dennison gun to on right side

2 color

Hangtag Perfect China Supplies Ltd, Kowloon, Hon Kong

Cardboard Laminate

1 per garment

Attach by Dennison gun to on right side

3 color

03-31-2012

Pull from stock

Print to ll order Machine wash Gentle cycle Print to ll order Order by size range, color, and style number

Pull from stock

Womenswear

S101 Bridgette Panty

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only

Main Label

COO/Size/Care Label Sew to main label at center bottom

Womenswear

S102 Colette

Intimates

Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012 Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only

COO/Size/Care Label Sew to main label at center bottom

Main Label

Womenswear

S103 Genevieve baby doll

Intimates

Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only

COO/Size/Care Label Sew to main label at center right

Main Label

Womenswear

S104 Genevieve Panty

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only Sew to main label at center bottom

Main Label

COO/Size/Care Label

Womenswear

S105 Madeline Shorts

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only

COO/Size/Care Label

Sew to main label at center bottom

Main Label

Womenswear

S106 Sophie Robe

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012 Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label Edgestitch sides of Main Label only

COO/Size/Care Label

Sew to main label at center bottom

Main Label

Womenswear

S106 Clementine Bra

Intimates Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

COO/Size/Care Label

Edgestitch sides of Main Label only Sew to main label at center right

Main Label

Womenswear

S108 Penelope Bra

Intimates

Label Placements Cancel Date

Self Fabric Ship Date

Autum/ Winter 2012

Delivery Date Origin Created 03-31-2012 11:49 AM Revised 03-31-2012 11:50 AM

Main Label

Edgestitch sides of Main Label only

COO/Size/Care Label Sew to main label at center left

Main Label

Cost Sheets SMITTEN COST SHEET

Apr-12

Date

Style # 100 Style Name Bridgitte Bra Classification Intimates

A/W

Season

FABRICS $/yard* Quantity Total $ 3.80 0.1 $ $ 15.00 0.2 $

Viscose/polyamide Chantilly lace TOTAL FABRIC COST *to include freight

$

0.38 3.00 3.38

**must include waste

Components Hooks Eye Closures Thread Front Strap Back strap Size tag Embroidered Label

$/unit Quantity** $ 0.01 2 $ 0.03 6 $ 0.15 1 $ 0.37 2 $ 0.30 2 $ 0.03 1

$Total

$ $ $ $

$0.02 $0.18 0.15 0.74 0.60 0.03

Care label Sliders

$ $ $

0.09 0.04 0.03

1 1 2

$

$0.04 0.06

Rings

$

0.02

2

$

0.04

Underwire

$

0.05

2

$

0.10

$

1.96

TOTAL COMPONENT COSTS

PACKAGING Hangtags Price Tkt tissue polybags

$/unit Quantity $ 0.44 1 $ 0.07 1 $ 0.03 2 $ 0.02 1

TOTAL PACKAGING COSTS

$Total $ $ $ $ $

0.44 0.07 0.06 0.02 0.59

PACKING Cartons Tape Labels

$/unit Quantity $ 0.06 1 $ 0.01 1 $ 0.05 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting

$Total $ $ $ $

Cost $ 0.05 $ 0.50

$Total

0.06 0.01 0.05 0.12

Sewing Hand Sewing Grading Admin

$ $ $ $

4.00 1.00 0.05 1.50

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker Insurance

Cost $ 0.002 $ 0.29 $ 0.02

$

7.10

$Total

TOTAL OTHER

$

0.31

GRAND TOTAL

$ 13.46

SMITTEN COST SHEET

Apr-12

Date

Style # 101 Style Name Bridgitte Panty Classification Intimates

A/W

Season

FABRICS $/yard* Quantity $ 3.80 0.1 $ 15.00 0.2 $ 2.00 0.1 $ 2.10 0.0625

Polyamide/cotton Chantilly lace Spandex Cotton TOTAL FABRIC COST *to include freight

Total $ $ $ $ $

0.38 3.00 0.20 0.13 3.71

**must include waste

Components

Thread Care label Embroidered Label

Waistband

$/unit Quantity** $ 0.15 1 $ 0.04 1 $ 0.09 $0.10/yd

1 0.635

TOTAL COMPONENT COSTS

$Total $

$0.15 0.04

$

0.09 0.07

$

0.35

PACKAGING Hangtags Price Ticket

$/unit Quantity $ 0.44 1 $ 0.07 1

Tissue Polybags

$ $

0.03 0.02

2 1

TOTAL PACKAGING COSTS

$Total $ 0.44 $ 0.07 $ $

0.06 0.02

$

0.59

PACKING $/unit Cartons Tape Labels

Quantity

$

0.06

$

0.01

$

0.05

1 1 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing Grading Admin

$Total $ 0.06 $ 0.01 $ 0.05 $

Cost $ $ $ $ $ $

$Total 0.05 0.50 4.00 1.00 0.05 1.50

0.12

Grading Admin

$ $

0.05 1.50

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker

Cost $ 0.002 $ 0.29 $ 0.02

$

7.10

$Total

Insurance TOTAL OTHER

$

0.312

GRAND TOTAL

$ 12.18

SMITTEN COST SHEET

Apr-12

Date

Style # 102 Style Name Colette Bodysuit Classification Intimates

Season

FABRICS $/yard* Yield** Total $ 2.50 0.3 $ 0.75 $ 3.00 0.5 $ 1.50 $ 2.75 0.0625 $ 0.17

Nylon/Spandex Viscose/polyamide Cotton TOTAL FABRIC COST *to include freight

$

2.42

**must include waste

Components

Thread Thread Front Straps Back straps Sliders Rings Care Label

$/unit Quantity** $ 0.10 $ 0.10 $ 0.30 2 $ 0.30 2 $ 0.02 2 $ 0.02 2 $ 0.01 1

Embroidered Label

$

0.03

1

TOTAL COMPONENT COSTS

$Total $0.15 $0.15 $ 0.60 $ 0.60 $ 0.04 $ 0.04 $ 0.01 $

0.03

$

1.62

PACKAGING

Hangtags Price Tkt tissue

polybags

$/unit Quantity $ 0.01 1 $ $ $

0.04 0.10 0.05

1 2 1

TOTAL PACKAGING COSTS

$Total $ 0.01 $ $ $

0.04 0.20 0.05

$

0.30

PACKING Cartons Tape Labels

$/unit Quantity $ 0.04 1 $ 0.01 1 $ 0.03 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing

$Total $ 0.04 $ 0.01 $ 0.03 $

% (ERASE!)Cost 35% 10% 15% 25%

0.08

$Total

A/W

Grading Admin

10% 5% 100%

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker

Cost $ 0.140 $ $ -

$

2.90

$Total $ 0.140 $ $ -

Insurance TOTAL OTHER

$

0.14

GRAND TOTAL

$ 7.46

Hand Sewing Grading Admin

25% 10% 5% 100%

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker

Cost $ 1.69 $ $ -

$

2.74

$Total $ 1.69 $ $ -

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 9.62

Hand Sewing Grading Admin

25% 10% 5% 100%

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker

Cost $ 1.69 $ $ -

$

2.74

$Total $ 1.69 $ $ -

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 9.62

SMITTEN COST SHEET

Apr-12

Date

Style # 104 Style Name Geneveive Thong Classification Intimates

Season

FABRICS $/yard* Quantity Total $ 2.50 0.25 $ 0.63 $ 2.00 0.0625 $ 0.13

Nylon/Spandex Cotton TOTAL FABRIC COST *to include freight

$

0.75

**must include waste

Components

Thread Waistband Care Label

$/unit Quantity** $ 0.10 $0.08/yd 0.635 $ 0.01 1

Embroidered Label

$

0.03

1

TOTAL COMPONENT COSTS

$Total $0.15 $ 0.07 $ 0.01 $

0.04

$

0.27

PACKAGING

Hangtags

$/unit Quantity $ 0.02 1

$Total $ 0.02

tissue

$ $

0.05 0.10

1 2

$ $

0.05 0.20

polybags

$

0.05

1

$

0.05

$

0.32

Price Tkt

TOTAL PACKAGING COSTS

PACKING Cartons Tape Labels

$/unit Quantity $ 0.04 1 $ 0.01 1 $ 0.03 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing Grading Admin

$Total $ 0.04 $ 0.01 $ 0.03 $

% (ERASE!)Cost 35% 10% 15% 25% 10% 5% 100%

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

0.08

$Total

$1.09

A/W

OTHER Freight Duty Broker

Cost $ 0.140 $ $ -

$Total $ 0.140 $ $ -

Insurance TOTAL OTHER

$

0.14

GRAND TOTAL

$ 2.65

XYC COMPANY COST SHEET Style # Style Name Description

4/30/12

Date

105 Madeline French Knicker

Fall 2013

Season

FABRICS $/yard* Yield** Total $ 15.00 0.75 $ 11.25

Chantilly Lace

TOTAL FABRIC COST *to include freight

$

11.25

**must include waste

Components

$/unit

Quantity**

$Total $ 0.15 $ 0.04

Thread Care label

$

0.150

$

0.040

1 1

Embroidered label

$

0.090

1

$

0.09

Waistband

$

0.010

0.635

$

0.01

$

0.29

TOTAL COMPONENT COSTS

PACKAGING

$/unit

Quantity

Hangtags

$

0.440

Size/Price Tkts

$

0.070

Polybags Tissue

$

0.020

$

0.030

1 1 1 2

TOTAL PACKAGING COSTS

$Total $ $ $ $

$

0.44 0.07 0.02 0.06

0.59

PACKING $/unit Cartons Tape Labels

Quantity

$

0.060

$

0.120

$

0.050

1 0.4 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing Grading Admin

$Total $ 0.06 $ 0.05 $ 0.05

$

Cost $ 0.050 $ 0.500 $ 4.000 $ 1.000 $ 0.500 $ 1.500

$Total

0.16

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker Insurance

Cost $ 0.002 $ 0.290 $ 0.018

$

8.71

$Total

TOTAL OTHER

$

0.310

GRAND TOTAL

$ 21.30

SMITTEN COST SHEET

Apr-12

Date

Style # 106 Style Name Sophie Robe Classification Intimates

Season

FABRICS $/yard* Yield** Total $ 8.00 1.5 $ 12.00

Silk Chiffon TOTAL FABRIC COST *to include freight

$

12.00

**must include waste

Components

Thread Belt Care Label

$/unit Quantity** $ 0.15 $8.00/yd 0.5 $ 0.01 1

Embroidered Label

$

0.04

$Total $0.15 $4.00 $0.01

1

TOTAL COMPONENT COSTS

$0.04 $

4.20

PACKAGING

Hangtags Price Tkt tissue

polybags

$/unit Quantity $ 0.02 1 $ 0.05 1 $ $

0.10 0.06

2 1

TOTAL PACKAGING COSTS

$Total $ 0.02 $ 0.05 $ $

0.20 0.06

$

0.33

PACKING Cartons Tape Labels

$/unit Quantity $ 0.06 1 $ 0.01 1 $ 0.05 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing Grading Admin

$Total $ 0.06 $ 0.01 $ 0.05 $

% (ERASE!)Cost 35% 10% 15% 25% 10% 5% 100%

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

0.12

$Total

$

8.82

A/W

OTHER Freight Duty Broker

Cost $ 1.69 $ $ -

$Total $ 1.69 $ $ -

Insurance TOTAL OTHER

$

1.69

GRAND TOTAL

$ 27.16

XYC COMPANY COST SHEET Style # Style Name Description

4/30/12

Date

107 Clementine Bra

Fall 2013

Season

FABRICS $/yard* Yield** Total $ 8.00 0.06 $ $ 15.00 0.125 $

Silk Satin Chantilly Lace

TOTAL FABRIC COST *to include freight

$

0.50 1.88

2.38

**must include waste

Components

$/unit Thread Care label

Quantity**

$

0.150

Underband

$ $ $

0.040 0.090 0.010

Front strap

$

0.370

Embroidered label

1 1 1 0.81 2

TOTAL COMPONENT COSTS

$Total $ $ $ $ $ $

0.15 0.04 0.09 0.01 0.74 1.03

PACKAGING

$/unit

Quantity

Hangtags

$

0.440

Size/Price Tkts

$

0.070

Polybags Tissue

$

0.002

$

0.030

1 1 1 2

TOTAL PACKAGING COSTS

$Total $ $ $ $

$

0.44 0.07 0.00 0.06

0.57

PACKING $/unit Cartons Tape Labels

Quantity

$

0.060

$

0.010

$

0.050

1 0.4 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Hand Sewing

$Total $ 0.06 $ 0.00 $ 0.05

$

Cost $ 0.050 $ 0.500 $ 4.000 $ 1.000

$Total

0.11

Grading Admin

$ $

0.050 1.500

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker Insurance

Cost $ 0.002 $ 0.290 $ 0.018

$

2.17

$Total

TOTAL OTHER

$

0.310

GRAND TOTAL

$

6.57

XYC COMPANY COST SHEET Style # Style Name Description

4/30/12

Date

108 Penelope Bra

Fall 2013

Season

FABRICS $/yard* Yield** Total $ 3.80 0.50 $ $ 15.00 0.25 $

Viscose Polyamide

Chantilly Lace

TOTAL FABRIC COST *to include freight

$

1.90 3.75 5.65

**must include waste

Components

$/unit Thread Care label

Quantity**

$

0.150

$ $ $

0.040 0.090 0.010

$

0.370

$

0.300

$

0.030

$

0.020

$

0.010

$

0.030

Corset Boning

$

0.020

Underwire

$

0.050

Embroidered label

Lining Front strap Back strap Slider Rings Hook Eye

1 1 1 0.81 2 2 2 2 1 3 2 2

TOTAL COMPONENT COSTS

$Total $ $ $ $ $ $ $ $ $ $ $ $ $

0.15 0.04 0.09 0.01 0.74 0.60 0.06 0.04 0.01 0.09 0.04 0.10 1.97

PACKAGING

$/unit

Quantity

Hangtags

$

0.440

Size/Price Tkts

$

0.070

Polybags Tissue

$

0.020

$

0.030

1 1 1 2

TOTAL PACKAGING COSTS

$Total $ $ $ $ $

0.44 0.07 0.02 0.06 0.59

PACKING $/unit Cartons Tape Labels

Quantity

$

0.060

$

0.010

$

0.050

1 0.4 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Handsewing

$Total $ 0.06 $ 0.00 $ 0.05 $

Cost $ 0.050 $ 0.500 $ 4.000 $ 1.000

$Total

0.11

Grading Admin

$ $

0.050 1.500

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker Insurance

Cost $ 0.002 $ 0.290 $ 0.018

$

4.44

$Total

TOTAL OTHER

$

0.310

GRAND TOTAL

$ 13.07

XYC COMPANY COST SHEET Style # Style Name Description

4/30/12

Date

109 Penelope Panty

Fall 2013

Season

FABRICS $/yard* Yield** Total $ 3.80 0.33 $ $ 15.00 0.5 $ $ 2.00 0.0625 $

Viscose Polyamide

Chantilly Lace

Cotton

TOTAL FABRIC COST *to include freight

$

1.25 7.50 0.13

8.75

**must include waste

Components

$/unit Thread Care label

Quantity**

$

0.150

Embroidered label

$ $

0.040 0.090

Waistband

$

0.010

1 1 1 0.635

TOTAL COMPONENT COSTS

$Total $ $ $ $ $

0.15 0.04 0.09 0.01 0.29

PACKAGING

$/unit

Quantity

Hangtags

$

0.440

Size/Price Tkts

$

0.070

Polybags Tissue

$

0.020

$

0.030

1 1 1 2

TOTAL PACKAGING COSTS

$Total $ $ $ $

$

0.44 0.07 0.02 0.06

0.59

PACKING $/unit Cartons Tape Labels

Quantity

$

0.060

$

0.010

$

0.050

1 0.4 1

TOTAL PACKING COSTS

LABOR Patternmaking Cutting Sewing Handsewing Grading Admin

$Total $ 0.06 $ 0.00 $ 0.05

$

Cost $ 0.050 $ 0.500 $ 4.000 $ 1.000 $ 0.050 $ 1.500

$Total

0.11

TOTAL LABOR *Includes pressing & packing unless otherwise noted.

OTHER Freight Duty Broker Insurance

Cost $ 0.002 $ 0.290 $ 0.018

$

1.26

$Total

TOTAL OTHER

$

0.310

GRAND TOTAL

$ 11.31