Kate Spade Global Sourcing by Ashley Chan

COUNTRY PROFILE PROJECT FASM 420-Global Sourcing Ashley Chan & Nikia Hunt

Table of Contents Part I.

The Case Study Importer

Part II.

The Imported Products

Part III.

Sourcing Country and Steps 1.

Country Profile

Country Analysis

Business Etiquette

Importing Trade Agreements & Laws

Classify Imported Product

Cost Sheets

Shipping Route

Entry Process

About Kate Spade New York

Easily recognized by the brand name & spade logo on all of their products Over 140 retail shops & outlet stores across the United States & more than 175 shops internationally Product Mix: Womenâ&#x20AC;&#x2122;s clothing, jewelry, bedding, homewear, legwear, fragrance, footwear, stationery, eyewear, baby & gifts Menswear: Jack Spade, a fictional name, is the male complement to the Kate Spade brand with a more rugged style created with darker tones. Signature Style: Crisp color, graphic prints and playful sophistication is their exuberant approach to promoting personal style with an added irresistable charm

Kate Spade New York | The Case Study Importer

Company History 1993-Present

1993 Brand was created | first collection had only six silhouettes featuring a colorful palette in utilitarian shapes 1996 First brick-and-mortar store was opened in New York City 1999 Sold the brand to the Neiman Marcus Group 2007 Company handed control operations over to Liz Claiborne, which has since been renamed Kate Spade & Company | Deborah Lloyd became the president and chief creative officer | Kate Spade at Home is launched as the home collection 2013 Live Colorfully fragrance was crafted in-house to celebrate their 20th anniversary 2015 Launched kidsâ&#x20AC;&#x2122; clothing collection Today Recognized as a lifestyle brand throughout the world for colorful designs

Kate Spade New York | The Case Study Importer

The Imported Products Handbags and Small Goods

Classic Nylon: a lightweight, classic style made of tightly woven fibers for a water-resistant bag Fabric: each fabric used is carefully selected for its color, texture, durability & beauty Straw: a seasonal style made of delicate straws extracted from Thailand & Indonesia Leather: leathers used are specially chosen from the finest tanneries in Italy & Asia

All of the handbags and small goods including wallets and keychains are imported from countries such as China, Vietnam, Hong Kong, Singapore, Sri Lanka, Taiwan, Indonesia, Italy and India.

Kate Spade New York | The Imported Products

The Imported Products Made in the USA vs. Imported

Every single Kate Spade handbag is imported. Their nylon bags were produced in the United States until 2002 when they moved production overseas to countries like China and Indonesia to increase profit margins.

Top 5 Countries that Supply Leather Goods to Kate Spade are: 1. Hong Kong 2. China 3. Vietnam 4. Singapore 5. Sri Lanka

Though India is not one of the major suppliers for Kate Spadeâ&#x20AC;&#x2122;s leather goods, it is still a place that the company sources from, because India is known for their production of leather goods. Since Kate Spade no longer makes their goods within their own national borders, India supplies manufacturers for the company.

Kate Spade New York | The Imported Products

The Imported Products Made in the USA vs. Imported

Snapshot summary of all of the shipments imported into the USA for Kate Spade New York since March 2014 Data prior to that date may have been blocked by the company for privacy purposes Top commodity items are leather goods, polyester goods, leather & cowhide leather handbags

Top 3 Suppliers in India that Supply Goods to Kate Spade are: 1. Damco India Pvt., Ltd 2. PS Apparels 3. Sahu Exp.

Kate Spade New York | The Imported Products

Policy Statement

POLICY STATEMENT ON COMPLIANCE WITH IMPORT/EXPORT LAWS AND RELATED MATTERS

On Compliance with Import/Export Laws

As a contract manufacturer of apparel, jewelry and accessories both in the United States and abroad, the Company is committed to adhere strictly to all laws, rules and regulations which relate to all products imported/exported by our company. The Company must comply with all laws when importing and/or exporting it products as well as when instructing our vendors on how to label its products. We must ensure that the Company, our associates and our vendors do not engage in illegal activities which may result in violation of the law or lead to even the appearance of improper conduct. All associates must exercise the highest degree of care to satisfy these requirements. Violation of this Policy will result in disciplinary measures, which may include termination of employment.

The repercussion of non-compliance to importers and exporters includes but is not limited to fines, penalties, detentions and nationwide sanctions. GUIDELINES Customs Laws While every associate is not expected to know the intricacies of the Customs related laws, associates are expected to know when issues arise, and must know to seek guidance. There are three significant areas of import/export laws which the Company must satisfy. o

o o o

First, the Country of Origin must be accurately stated on all documents and on products. To this end, we must examine procedures and be sensitive to issues which affect Country of Origin determination. We must also follow the Company’s procedures on periodically verifying information supplied by others. Second, import/export documentation must reflect all true costs and charges, such as assists or selling commissions, if any. Third, we cannot engage in, or allow a third party to engage in, activities which wrongly circumvent quota, duty restrictions and or importing/exporting prohibitions. Lastly, international shipments (retail & distributors) must not have a final destination to any country identified on the U.S. Government’s list of “sanctioned countries”.

Labeling We must properly set forth the fiber content of each of our products and we must undertake appropriate testing to ensure the accuracy of our content labels. We must further comply with all rules and regulations which are designed to protect the ultimate consumer. Associates should refer to the manuals which have been prepared by the Corporate Compliance Department for details on import/export procedures. However, if an associate has a question as to what action needs to be taken, they should immediately contact Darlene Collova, V.P. Global Trade Compliance and/or anyone in the Corporate Compliance department as listed in the contact list provided herewith. We view compliance with the law, compliance with our Policies and maintenance of the highest level of ethical integrity as critical elements to a successful and healthy work environment. If an associate has reason to believe there has been a violation of this Policy or of the law (even if not set forth specifically), we urge you to report it to the Corporate Compliance or Legal Departments who will follow up on such matters. Associates will be afforded anonymity to the extent possible and shall in all events be protected from retaliatory actions relating to their reports.

Kate Spade New York | The Imported Products 1

India

Country Profile

Second most populous country in the world with a population of 1.2 billion people across 1.27 million square miles Tremendous diversity in geography, climate, culture, language & ethnicity Won independence from Great Britain in 1947 following protest led by Mohandas K. Gandhi Surrounded by 3 different bodies of water Arabian Sea in the west Bay of Bengal in the east Indian Ocean in the south Shares international borders with Pakistan on the west, Nepal, China, and Bhutan on the northeast

More than 1/3 of Indians live in cities More than 30% of all Indian women live in cities Indian youth population is the largest in the world Median age in India is 27.3 years old

Kate Spade New York | Country Profile

India

Social & Cultural Norms

Caste system is divided into 4 sectors: Brahmans, Kshatriyas, Vaisyas & Sudras Brahmans are priests, Kshatriyas are warriors, Vaisyas are business class, Sudras are merchants and rest of working class -With growing urbanization, caste system is diminishing Family is valued heavily; divorce is often unappreciated or uncommon Believes strongly in the nurture & well-being of children so divorces are scarce In many regions, women remain very submissive, but improved education levels are making women more assertive Patriarchal setup: eldest male member controls the matters within the household Marriage is an important social obligation Marriages are generally arranged but individuals living in urban areas tend to choose their partners ceremonies are often elaborate rituals & lots of money is spent on the occasion Birth of a child calls for a celebration, especially if it is a boy Death is also an important occasion in the Indian family system that call for a ceremony Annual rituals continue in remembrance of the deceased

Kate Spade New York | Country Profile

India Political

India operates under a federal parliamentary democratic republic Dual polity system: double government that consists of President of India (elected for 5-year terms) as head of state and Prime Minister as head of government Constitution defines organization, powers & limitations of both central and state governments Constitution provides for an independent Judiciary brand headed by Supreme Court to settle disputes between central government and the states while protecting the laws outlined in Constitution Terrorism, Naxalism, religious violence & caste-related violence affect political environment Terrorism supporters from Pakistan or internal guerrilla groups such as Naxalites Many elected legislators have criminal cases against them In July 2008, Washington Post reported Âź of 540 Parliament members faced criminal charges including human trafficking, immigration rackets, embezzlement, rape & even murder

Kate Spade New York | Country Profile

India

Economic Situation

The government under Narendra Modi has undertaken some necessary structural adjustments with a focus on improving the inefficient government sector, better managing public finance, and improving the business and investment environments. These reforms have shown some progress but more efforts need to be made, because the overall progress on implementing these changes has been limited and irregular. GDP: $7.4 trillion with a steady 7.2% growth $5,855 per capita 3.6% unemployment rate Top Concerns Corruption, regulatory efficiency, investment freedom Political corruption has negative effect on government efficiency and economic performance Uncertainty about land ownership, civil servants at all levels are known to accept bribes or other corruption activity

Kate Spade New York | Country Profile

India Labor

Labor force is growing quickly Expected to add 110 million people to its labor force within the next 10 years while over the next 40 years, expected to add 424 million working age adults to work force If India can increase womenâ&#x20AC;&#x2122;s labor force participation by 10%, equivalent to 68 million women, Indiaâ&#x20AC;&#x2122;s GDP could increase 16% More women work in rural India than in cities 13.4% of working women have a regular salaried job compared to 21.2% of men Home to the largest number of child laborers in the world, caused by poverty and lack of social security & the increasing gap between rich and the poor

Kate Spade New York | Country Profile

India

Natural Inputs

Though amount of natural resources does not correlate with the economic development of a country, India has a considerable amount of resource wealth including coal, iron, and petroleum reserves. Iron Ore India possesses high quality iron-ore in abundance. The total reserves of iron-ore in the country are about 14.6 million tons of haematite and 10,619 million ton of magnetite. Haematite iron is mainly found in Chbattisgarh, Jharkhand, Odisha, Goa and Karnataka. Coal & Lignite Coal is the largest available mineral resource. India ranks third in the world after China and USA in the realm of coal production. The main centres of coal in India arc the West Bengal Bihar region. Madhya Pradesh. Maharashtra, Odisha and Andhra Pradesh. Bulk of the coal production comes from Bengal-Jharkhand coalfields. Bauxite The total resources of bauxite as per United Nations Framework Classification (UNFC) in the country were placed at 3,290 million tons as on April 1, 2005. Crude Oil Oil is being explored in India at many places of Assam and Gujarat. Digboi, liadarpur, Naharkatia, Kasimpur, Palliaria, Rudrapur, Shivsagar, Mourn and Hay of Khambhat, Ankaleshwar and Kalol are the important places of oil exploration in India. Gold India possesses only a limited gold reserve. There are only three main gold mine regionsâ&#x20AC;&#x201D;Kolar Goldfield, Kolar district and Hutti Goldfield in Raichur district. 26

Kate Spade New York | Country Profile

Limestone This is available almost in all the slates of the country and every state contributes in its production. Manganese Manganese ore in the country is placed at 379 million ton and it is used in the production of steel. Copper As per United Nations Framework Classification (UNFC), the total resources of copper ore are placed at 1.3 billion tons with a metal content of 11,418 thousand tons. Chromite It is a mineral of brown black shade with which chromium and itâ&#x20AC;&#x2122;s other compounds are prepared. As per IJNFC, the total resources of chromite as on 1st April, 2005 were 213 million tons. Graphite It is a crystalline form of carbon which is used in making pencils and electrodes. Graphite is also used as a lubricant and moderator in atomic reactors. India is estimated to harbor about 168.7 million tons. Magnesite India possesses abundant reserves of magnesite. Magnesite is an important refractory metal which is used in making fire bricks. It contains magnesium carbonate.

http://www.yourarticlelibrary.com/economics/what-are-the-different-types-of-natural-resources-produced-in-india/2683/ Kate Spade New York | Country Profile

India Products

The major export products of India include leather, medical appliances, equipments and textiles. Leather Goods Over the years, India has become one of the leaders in leather exports and it has become a key export for them as a nation. Leather goods such as handbags, wallets, belts, keyholders, pouches and gift items such as leather notebooks and key rings. Medical Supplies Medical supplies produced in India are known around the world for their excellent quality. Supplies exported include absorbent gauze, sterile gloves, crepe bandages, gauze sponge, surgical face masks, surgical caps, surgical disposables. Even larger appliances such as baby incubator and digital imaging softwares have made themselves a reputation. Textile Goods Indiaâ&#x20AC;&#x2122;s textiles are recognized internationally for being beautiful and are often used to produce designs in international design houses. Garments exported include knitted tops, embroidered salwar, sequin work blouses, sarongs, floral t-shirts, beaded garments, poplin embroidered kurta, viscose crape printed skirt.

In 2015, Indiaâ&#x20AC;&#x2122;s total exports to the US amounted to $40.4 billion. Among the top exports of India to the US are gems and precious metals, pharmaceuticals, textiles, oil, machinery, vehicles and iron or steel products.

Kate Spade New York | Country Profile

India

Transportation

India’s transportation sector consists of a large & diverse system that caters to the needs of 1.2 billion people. In 2007, the transport sector contributed 5.5% to India’s GDP. Economic liberalization in the 90’s caused a rise in demand for better, more efficient transport infrastructure. Public transportation is the primary mode of transport for most of the population & it’s among the most heavily used in the world Indian Railways is one of the largest railways under single management; 4th longest & most heavily used system in the world transporting 8,224 million passengers & 969 million tons of freight in 2012 Only 10.3 million cars on the roads despite one of the highest number of deaths caused by traffic Automobile industry is growing with annual production of over 4.6 million vehicles 12 major & 187 minor and intermediate ports along the coastline that serve the country’s foreign trade in petroleum products, iron ore, coal, and movement of containers Inland water transportation remains undeveloped even though they have an abundance of navigable rivers and canals 125 airports including 11 international airports that handled 96 million passengers and 1.5 million tons of cargo in 2006 Challenges facing the transportation sector are: Roads are congested and poor quality & lane capacity is low; road maintenance remains under funded Rural areas have poor access & in need of development since its home to 70% of India’s population 30

Kate Spade New York | Country Profile

Weaknesses Freight transportation costs by rail are some of the highest in the world because freight tariffs are kept high to subsidize passenger traffic Port traffic doubled during the 1990s & their portsâ&#x20AC;&#x2122; capacity and efficiency need to be improved to support increased traffic

Kate Spade New York | Country Profile

India

Business Climate

India is a very large country with plenty of economic potential. As one of the worldâ&#x20AC;&#x2122;s fastest growing countries, it is going through unprecedented economic freedom that allows foreign investors to access their vast market for the first time. Foreign direct investment reforms are currently underway to open up Indiaâ&#x20AC;&#x2122;s manufacturing sector to the world as opposed to stricter protectionist measures in the past that forced foreign companies to form partnerships with Indian companies. On the Indian border, there is a large youth population and a strong export sector anticipating expansion for their businesses. The availability of both skilled and unskilled labor at relatively low costs are also very attractive to foreign investors. However, anyone considering expansion into India needs to be very patient to learn the culture and acquire a localâ&#x20AC;&#x2122;s help when traversing the country as it is known to be a difficult place to do business. Due to the vastness of the country and diversity of the corporate landscape, it is best to include the help of a local to better acquaint your business endeavors with those more commonly practiced in India. It is a place that values relationships more so than crunching numbers and sums, so a diligent amount of knowledge is necessary before traveling. The boss is seen as the source of ultimate responsibility in business. Every relationship has a clear-cut hierarchy that must be observed for the social order to be maintained.

Kate Spade New York | Country Profile

India

Effects of Quota Removal

The removal of quotas on textiles and clothing in 2005, under the Agreement on Textiles and Clothing (ATC) is expected to have a substantial, but positive impact on major exporting countries like India. India is a country with vast economic potential that was hindered by quotas prior to the trade liberalization, so this removal is a great opportunity for India to exercise itâ&#x20AC;&#x2122;s full potential as a world trade leader, specifically in the textile and apparel industry. A challenge that may threaten India is the increased competition as other countries gain liberalization as well and no guaranteed markets. However, Indiaâ&#x20AC;&#x2122;s competitive advantage has always lied within its extremely large, readily available and relatively lowcost labor force combined with a large domestic supply of fabrics and the countryâ&#x20AC;&#x2122;s ability to manufacture a wide array of products. The country is rich with raw materials that are essential for manufacturing natural and artificial fibers. India also has an advantage in providing textiles and spinning while being able to offer a full package supply chain.

https://www.imf.org/external/pubs/ft/wp/2005/wp05214.pdf http://yaleglobal.yale.edu/content/end-textile-quotas-will-redistribute-pain-and-gain Kate Spade New York | Country Profile

Kate Spade & Company Code of Conduct

Kate Spade & Company is committed to responsible corporate citizenship and giving back to the communities in which we work and live. Kate Spade & Company’s Standards of Engagement include the prohibition of forced labor and child labor. 1. Verification - Factories that are added to Kate Spade’s sourcing base must pass a human rights factory evaluation performed by our internal audit team, our agents audit team or third party auditors. Existing factories are then audited based on the amount of business with the company and perceived risk based on previous audit findings and internal risk ratings for the country of manufacture, taking guidance from information provided by the U.S. State Department and U.S. Department of Labor on the topics of forced labor and human trafficking. 2. Supplier Audits - Since 1994, the Company has distributed its Workplace Standards of Engagement to direct suppliers. Direct suppliers are required to post these standards in the workers’ native language at their factory sites. Factory audits are conducted using internal and independent monitors. In most cases, unannounced audits are also conducted to evaluate our supplier’s compliance with the Company’s forced labor and child labor standards. 3. Certification - The Company’s Supplier Agreements require suppliers to comply with applicable laws within the country of manufacture which includes laws on slavery and human trafficking. To highlight the concern for forced labor and human trafficking, Kate Spade attest suppliers will 1) review the laws related to the topic for all jurisdictions where our product are manufactured 2) routinely assess the risks within their supply chain 3) remediate any instances that may be found and take steps to prevent a reoccurrence 4) be prepared to demonstrate to our auditors that they have taken these steps. In addition, our suppliers must provide records that are sufficiently detailed to demonstrate that production is in compliance with the anti-slavery and human trafficking laws of the country, where they are manufacturing, to our company auditors upon request. Such records may include a) all employee personnel files, including registration forms, photocopies of ID cards and training records b) all employee time cards and payroll records c) all employee employment contracts d) health & safety policies and procedures e) child labor policy and procedure f) grievance policy, procedures, records, etc. 36

Kate Spade New York | Country Analysis

4. Accountability to Standards - We are aware that suppliers may not fully comply with our Standards at all times. However management must be willing to commit to improving in areas where we have found non compliance. If we see that improvements are being made, we generally continue to work with the supplier. If suppliers are not responsive, we will deactivate the supplier code, thereby restricting future business. 5. Training â&#x20AC;&#x201C; Training on the Companyâ&#x20AC;&#x2122;s Global Code of Conduct has been provided to our agent, sourcing teams and suppliers throughout the year with the objective of raising awareness on forced labor, child labor and mitigating risk within the supply chain. In addition, training focusing specifically on the signs of forced labor and human trafficking has been provided to all internal sourcing managers and quality field managers as well as sourcing agentâ&#x20AC;&#x2122;s staff.

Kate Spade New York | Country Analysis

Sourcing Decision SWOT Analysis

Strengths India has a high self sufficiency for raw material, specifically natural fibers. India also supplies the third largest cotton crop in the world. Having cheap labor and strong entrepreneurial skills has served as being a backbone of the Indian Apparel and textile Industry. India has a greater flexibilty to service smaller and specialized orders due to the small size of manufacturing. The increasing rate of urbanization and growth of the purchasing population are driving domestic demand up. Weaknesses High power costs and long export lead times are eroding Indiaâ&#x20AC;&#x2122;s export competitiveness across the textile chain. Productivity levels for manufacturing various apparel items are far lower in India in comparison with its competitors. Opportunities Bilateral agreements between participation countries are causing trade to increase between regional trade blocs. India could increase itâ&#x20AC;&#x2122;s Unit Value Realization by producing more and more technologically superior products. By doing this they will move up in the value chain. Threats An increase in seasons per year has resulted in shortening the fashion cycle. NAFTA and SAPTA are trading blocs that have caused a change in world trade. The existence of bilateral agreements leave India at a disadvantage for Indian exports. India will have to open its protected domestic market for foreign players thus domestic market will suffer.

Kate Spade New York | Country Analysis

Sourcing Decision SWOT Analysis

Advantages As the second most populous country in the world, there is a lot of economic potential in India for both foreign and domestic investors. The government has been trying to liberalize the economy and open more and more sectors of their industry to foreign direct investment. Their retail industry is included in the liberalization which will create immense opportunities for fashion companies everywhere. Domestic demand is expected to grow at a compound rate of 9.2% per year between 2010 and 2030, creating opportunities for many industries. Their middle class is expected to add a significant amount of people to it, which will have a tremendous impact on the amount of disposable income. India is known for its highly skilled labor force which speaks English and is well informed about western culture and society. Which is why many western companies transfer parts of their activities to India and more and more western multinational companies are setting up their R&D facilities in India to benefit from the abundance of young and highly educated professionals. Being centrally located in South Asia, India enjoys an advantageous position for doing trade with other South Asian countries, Australia and the countries of Africa, the Middle East and the Far East. Combined with the huge domestic market and the pool of well-educated young people, India might very well function as a hub for business activities all around the region. http://india.nlambassade.org/binaries/content/assets/postenweb/i/india/doing-business-in-india/opportunities--challenges-in-the-indian-market

Kate Spade New York | Country Analysis

Business Etiquette Type of Culture

Indiaâ&#x20AC;&#x2122;s culture is among the worldâ&#x20AC;&#x2122;s oldest. Civilization began over 4,500 years in India. It is culturally diverse and also complex as a country. The uniqueness of Indian culture lies in the countryâ&#x20AC;&#x2122;s strong social system along with their core family values. The unity that they express shows their tolerance and respect for others. Hindi is the official language of the country but English is popular in business meetings. In the Indian culture, a namaste (pressing the palms together in a bowing gesture) is typically used. However, a handshake is acceptable for meetings. A handshake can only be done between men, men are not allowed to shake hands with women.

Masculine The influences of Hinduism and the tradition of the caste system have instilled hierarchal beliefs in the Indian culture. The birth of a son is highly valued and celebrated. Indians are very conscious of social order and their status relative to others. The patriarch (the father), is considered the leader of the family. The boss (typically male), is seen as the source of ultimate responsibility in business.

Kate Spade New York | Business Etiquette

Business Etiquette Negotiation Styles & Etiquettes

If one is doing a business deal in India that involves negotiations, they will have to keep in mind that the process can be slow. Trust has to be established, if not, there has to be concentration on building a rapport. It’s best to avoid high pressure tactics when negotiating. Confrontation and forcefulness should be used. Criticisms and disagreements should be expressed only with the most diplomatic language. Indian society has an aversion to saying “no.” It’s considered rude due to the possibility of causing disappointment or offense. If one listens carefully to an Indians’ response to their question, it will tell you what conclusion to come to. If terms like “We’ll see”, “I will try” or “possibly” are used, that could be their way of saying ‘no’. In negotiating, once terms have been agreed, you will be expected to honor them. The relationship building process continues from that point on.

Kate Spade New York | Business Etiquette

Business Etiquette Negotiation Styles & Etiquettes

Five tips for doing business in India: 1. Be punctual Greet the senior people first and expect to start with some small talk. 2. Be patient It can take a long time to complete negotiations as final business decisions are made at the highest level, so and pressure tactics and hard sales techniques are not appreciated. 3. Take tea The Indian alternative to black coffee is a sugary, milky tea or coffee beverage that you shouldn’t refuse. Don’t be fooled into thinking you can down the drink and get it over with, because your glass will be refilled as soon as it’s finished. 4. Don’t be too direct “No” is considered impolite and is replaced with “I will try”, or “let me consider and come back to you”. 5. Check the local calendar With seven major religions and many minor ones, plus six main ethnic groups, India enjoys countless holidays which change depending on the year. Arriving in India expecting to arrange business meetings during one of these festivals will probably leave you coming home empty handed.

http://www.telegraph.co.uk/sponsored/business/delivering-business/10878290/cultural-etiquette-india-business.html Kate Spade New York | Business Etiquette

Business Etiquette Social and Cultural Elements

Business Attire In India, business attire is very conservative as men should wear dark colored business suits. Women should dress conservatively as well in pantsuits or dresses. Weather dictates the type of clothing worn to a business meeting. In the hotter parts of the country, dress is less formal. However, dressing conservatively indicates a sign of respect and is highly recommended. Greetings Doing business in India requires a handshake upon meeting. Namaste is the name of the bowing gesture that Indians typically use and if a foreigner performs it, it is an indicative sign of understanding Indian etiquette. When addressing an Indian whom you do not know personally, you should use the appropriate formal tityle of Professor, Mr., Mrs., etc. If you do not know their names, then a simple “Sir” or “Madam” will suffice. Business Cards As a general rule, business cards should be exchanged at the first meeting. It is a good idea to have it translated on one side into Hindi as a sign of awareness and respect of their culture. Be sure to receive and give with your right hand. You should look at the card and put it away respectfully and not simply push it into a trouser pocket. First Name or Title Indians prefer to use titles such as Professor and Doctor. Status is determined by age, university degree, caste and profession so the appropriate title should be used. And if they don’t have a professional title, then “Sir” and “Madam” are used in their place. Titles are used with the person’s name or surname and you must wait to be invited before using someone’s name without the title. Gestures As a conservative country, kissing and embracing are regarded as part of sex and should not be practiced in public. Couples 48

Kate Spade New York | Business Etiquette

rarely hold hands though Indian men may do it as a sign of brotherly love. Shoes should be taken off before entering the home. It is considered rude to point the soles of feet at anyone while sitting. Contact with oneâ&#x20AC;&#x2122;s foot is always followed by an apology. Colors, Numbers and Their Meanings Green, red and yellow are seen as lucky colors and they are appreciated when used in gift wrapping. Gift Giving Indians believe that giving gifts eases the transition into the next life. Cash is often given as a gift to friends and members of the extended family. The value of the gift is not quite as important as the sincerity with which it is given. A gift from a man should be said to come from both he and his wife/mother/sister or some other female relative. When it comes to specific gifts, Hindus do not get gifts made of leather and Muslims do not get gifts made of pigskin or alcoholic products. Gifts should not be opened upon receiving. Time Clocks are not watched. Indians value the outcome of a task rather than the time it took to do the task. One does, as itâ&#x20AC;&#x2122;s needed to be done. For example, a meeting can start at 3pm and people will show up at a variation of that time. If the meeting starts an hour or two later, it bothers no one. Joke Telling Although joke telling at an Indian dinner party is appropriate, itâ&#x20AC;&#x2122;s not acceptable at a business meeting or arrangement dinner. Indian meetings and negotiations are kept a hundred percent focused on business.

Kate Spade New York | Business Etiquette

Business Entertaining Proper Use of Utensils Main rule for eating: eat with your right hand only. In India, the left hand is used for wiping the bottom, cleaning the feet and other functions such as putting on and taking off shoes. The right hand is for eating, shaking hands etc. In Indian culture, the spoon is more important than the fork. Right handed people keep their spoon in their right hand and put it down to switch to the fork it is needed. The left hand is never used for eating. Table Manners You can hold a cup or eating utensil in your left hand but you cannot eat, wipe your mouth, or pass food with your left. Overall, Its important to know that there’s a couple of actions you shouldn’t do with your left hand. Do not pass anything to anyone or point at anyone with your left hand. You should always accept things with your right hand but using both hands is a sign of respect. Alcoholic Beverages Alcohol is not had with a traditional meal but if served, it is served in a mug or glass. Too much alcohol consumption is looked down upon. Drink Responsibly. Appropriate Conversation Subjects When bringing up a conversation, make sure it’s one that you can speak on with clarity, sincerity, and intelligence of the topic being talked about. When other people at the table are speaking - pay attention to their words, their movement, and body language. Make it known you are paying attention. Topics to Avoid Topics to avoid include religion because there is so much diversity on this subject and don’t complain about work.

Kate Spade New York | Business Etiquette

Importing Trade Agreements, Laws & Policies Trade Agreements between USA & India

Trade Policy Forum The Trade Policy Forum (TPF) enables the United States and India to engage on policy issues impacting bilateral trade and investment. Beginning on November 2014, both governments discussed trade and investment policy issues of the two countries. Topics included intellectual property, services offered, manufacturing, and agriculture. Trade Facilitation Agreement India agreed to ratify the WTOâ&#x20AC;&#x2122;s Trade Facilitation Agreement. They have also acknowledged the benefits its provisions would have for not only Indian exporters, but for importers as well. The United States and India continue to communicate on specific matters related to international trade to better understand respective policies and procedures. Bilateral Investment Treaty The United States and India held a discussion going toward a high-standard bilateral investment treaty. A high-standard BIT would deepen the bilateral economic relationship and support economic growth all while creating jobs in both countries.

Kate Spade New York | Importing Trade Agreements & Laws

Importing Trade Agreements, Laws & Policies US Laws that Affect Importation of Products

Import Requirements Merchandise coming into the US must clear customs. Arrival of Goods Imported goods cannot legally enter the U.S. until the shipment has arrived within the limits of the port of entry. The delivery then has to be authorized by Customs. Imported merchandise will be sent to a general order warehouse as “unclaimed” if it has not entered Customs in a timely manner (up to 30 days). Entry of Goods A commercial invoice, obtained from the seller, shows the value and description of the merchandise. Customs Examination of Goods Small shipments of goods require examination that may usually be made on the docks, at container stations, cargo terminals, or the importer’s premises. Mail Shipments Once the Postal Service submits the package for customs, the shipment, whether commercial or noncommercial importations are entered under a mail entry prepared by a Customs. Restricted Merchandise A license or permit from the responsible agency is necessary to import: alcoholic beverages, animals, firearms and ammunition, fruits, nuts, meat, milk, dairy, plants, poultry and petroleum.

Kate Spade New York | Importing Trade Agreements & Laws

Foreign Asset Control The Office of Foreign Assets Control (FAC) prohibits unlicensed importation of merchandise. Goods may not be imported from or through commercial entities owned or controlled by the governments of Cuba, Iran, Iraq, Libya, or North Korea, or owned or controlled by any commercial entity in those areas, regardless of the location of the entity.

Kate Spade New York | Importing Trade Agreements & Laws

Classifying the Import The Harmonized Tariff Schedule (HTS)

The Harmonized Tariff Schedule of the United States (HTSUS), also referred to as the Harmonized Tariff Schedule of the United States Annotated (HTSA), is the primary resource for determining tariffs and classifications for goods imported into the United States. The Harmonized Tariff Schedule classifies a good based on its name, use, and/or the material used in its construction and assigns it a ten-digit classification code number, and there are over 17,000 unique classification code numbers. The Schedule is based on the international Harmonized System, the global system of nomenclature that is used to describe most world trade in goods, maintained by the World Customs Organization. Chapter 42 Heading 4202 Subheading 4202.11.00 Tariff Item 4201.11.0000

Kate Spade New York | Classify Imported Product

Cost Sheets COMPONENT COSTS:

Yds/Qty

Unit Price

$ Amount

Fabrics: Quilted cow leather

Emerson Place Olivera Style #: PXRU6525 Color: Black/Cement

Cow leather Lining: Jacquard lining

1.25 $ 17.50

$ 21.88

0.5 $ 14.00

$ 7.00

1 $ 1.40

$ 1.40

(TOTAL FABRICS)

$ 30.28

Trims: Kate Spade New York Logo

1 $ 1.50

$ 1.50

Crossbody strap

1 $ 5.00

$ 5.00

Gold zipper

1 $ 3.00

$ 3.00

Gold hardware (handles & luggage tag) Handles

5 $ 2.50 2 $ 2.00

$ 12.50 $ 4.00

Inner zipper

1 $ 1.00

$ 1.00

(TOTAL TRIMS)

$ 27.00

CMT COSTS: Grading:

$ 0.75

Marking:

$ 0.75

Cutting:

$ 2.00

Make Charges: Thread

$ 0.85

Sewing

$ 2.00

Top-‐Stitching

$ 1.00

Labor

$ 5.00

Wash/Type QE/Bag & Tag

$ 2.00

(TOTAL LABOR)

14.35

PACKING MATERIALS: Tissue

3 $ 0.03

$ 0.09

Polybag

1 $ 0.15

$ 0.15

Dust bag

1 $ 1.00

$ 1.00

Inner Box Outer Box

1 $ 0.75 1 $ 1.00

$ 0.75 $ 1.00

(TOTAL PACKING) (TOTAL COST): WHOLESALE PRICE WHOLESALE MARGIN RETAIL PRICE RETAIL MARGIN

Kate Spade New York | Cost Sheets

$ 2.99 $ 74.62 $ 124.36 $ 49.74 $ 448.00 $ 323.64

COMPONENT COSTS: Fabrics: Pebbled cowhide leather

Orchard Street Penelope Style #: PXRU6391 Color: Tulip Pink

Yds/Qty

Unit Price

$ Amount

0.75 $ 18.00 $ 13.50

Lining: Poly-‐twill lining

1 $ 3.00 $ 3.00

(TOTAL FABRICS) Trims: Kate Spade New York Logo Crossbody strap Magnetic closure Gold hardware Inner zipper Tassel (TOTAL TRIMS) CMT COSTS: Grading: Marking: Cutting: Make Charges: Thread Sewing Top-‐Stitching Labor

$ 16.50 1 1 1 1 1 1

$ 1.50 $ 3.00 $ 0.75 $ 4.00 $ 1.00 $ 3.00

$ 0.75 $ 0.75 $ 2.00 $ 0.85 $ 2.00 $ 1.00 $ 5.00

Wash/Type QE/Bag & Tag (TOTAL LABOR) PACKING MATERIALS: Tissue Polybag Dust bag Inner Box Outer Box (TOTAL PACKING) (TOTAL COST): WHOLESALE PRICE WHOLESALE MARGIN RETAIL PRICE RETAIL MARGIN

$ 1.50 $ 3.00 $ 0.75 $ 4.00 $ 1.00 $ 3.00 $ 13.25

$ 2.00 $ 14.35 3 1 1 1 1

$ 0.03 $ 0.15 $ 1.75 $ 0.75 $ 1.00

Kate Spade New York | Cost Sheets

$ 0.09 $ 0.15 $ 1.75 $ 0.75 $ 0.50 $ 3.24 $ 47.34 $ 78.90 $ 31.56 $ 348.00 $ 269.10

New York, USA

Mumbai, India

Shipping Route Ocean Freight

Type of Box 5-ply carton cardboard box measuring 14in x 14in x 12in Each handbag will already be prepacked in a Kate Spade box with a plastic bag and a dust bag Number of Boxes 500 cartons containing 1,000 pieces of the Orchard Street Penelope bag 364 cartons containing 728 pieces of the Emerson Place Olivera bag Type of Container 20 foot container; capable of holding 864 cartons at full capacity Shipping Timelines Distance to travel: 7,482 miles Speed at sea: 23 knots Delivery Time: 36-38 days Production, packaging, preparing for shipment: 18 days Shipment taken to port via roadway: 1 day Traveling from Mumbai to New York: 14-15 days Unloading shipment: 1 day Distributed to stores: 2-3 days Kate Spade New York | Shipping Route

Entry Process of Imported Item Power of Attorney

Bill of entry is one of the major import documents for import customs clearance. A Bill of Entry is the legal document to be filed by CHA or Importer duly signed. Bill of Entry is one of the indicators of â&#x20AC;&#x2DC;total outward remittance of countryâ&#x20AC;&#x2122; regulated by Reserve Bank and Customs department. Bill of entry must be filed within thirty days of arrival of goods at a customs location.