Bare Denim

GLOBAL SOURCING GUIDELINES AND STRATEGY Georgiana Knox, Erica Bevell, Maria Brady, Mindi Dowst, & Brynn McKinstry

vison

misson Promoting social responsibility and sustainability from seed to garment.

values

Expand into a lifestyle Personal Growth, Teamwork, Creativity, Communication, brand that offers sustainable fashion for the Health, Integrity, Aesthetic, Environment & Honesty whole family.

targetmarket

targetcustomer

NAME: CLARE AGE: 24-40

INCOME: $80,000-$120,000 EDUCATION: BACHELORS DEGREE OR HIGHER OCCUPATION: PROJECT MANAGER AT A REAL ESTATE FIRM LOCATION: AUSTIN, TEXAS INTEREST: YOGA, OUTDOOR ACTIVITIES & TRAVEL LIFESTYLE: ENVIRONMENTALLY CONCIOUS & HEALTHY LIVING DRIVES: TOYOTA PRIUS BRANDS SHE SHOPS: WHOLE FOODS, EVERLANE, STUDY NY, TRADER JOE’S, FARMERS MARKET

Productmix GEORGE

Erica

STYLE: boyfriend $160 - $180

STYLE: jogger $120 - $150

Organic Cotton & Lycra

Organic Cotton & Lycra

maria

brynn

STYLE: bootcut $190 - $210

STYLE: high-rise flare $180 - $200

Organic Cotton & Lycra

Organic Cotton & Lycra

mindi

grace

STYLE: skinny $200 - $230

STYLE: straight leg $190 - $220

Organic Cotton & Lycra

Organic Cotton & Lycra

CRS Highlights social

Environmental

community

- health care

-water use

- animal welfare

- womens rights

- air emissions

- involvement

- family sapport

- polution provention

- customer care

- engonomics

- water disposal

- education

mexico

Since NAFTA was implemented between the U.S., Mexico, and Canada in 1994 trade has nearly tripled. NAFTA promotes opportunities for U.S. fiber, textile, and clothing manufacturers to expand sales and increase production, to make full use of economies of scale and take advantage of complementary resources in the countries to enhance export potential. Mexico is the United States 3rd largest trade partner, and the proximity is as close as you can get to the US, since it borders the U.S. from California to Texas. This makes importing/exporting ideal because of the short lead time to anywhere within the states. In Mexico, micro and small businesses actually make up 85% of the sector. The federal government has intensively promoted the establishment of manufacturing operations for export and labor intensive industries, taking advantage of the relatively low wage costs and proximity to the U.S. market. extra insurance policy, take a convoy to insure security

colombia

Colombia is one of the countries chosen as a potential place for manufacturing due to many important factors. Colombia’s location is truly an advantage in terms of shipping/delivery because of its proximity to the United states this translates to decreased lead and delivery times but also to significantly reduced shipping costs. Another reason why Colombia is a good potential country for manufacturing is because its textile and apparel industry has been established and it is one of the most dynamic of its economy for almost a century. This experience has reflected in its quality and innovative textiles, but also in technologically driven and developed manufacturing processes, skilled labor and presence of more than 10,000 manufacturers in the entire territory. Colombia counts with more than 450 textiles mills, which allow for more diversity and options in regards to raw materials. Colombia’s relative political and economic stability, which includes a very stable currency and low unemployment rate are also factors that positively affect it as a location for manufacturing. Lastly, Colombia is very welcoming in terms of negotiations and doing business with foreign companies and more importantly has been able to establish a Free Trade Agreement with the United States that allows for 99% of products to enter the country free of duty.

guatemala

Guatemala is a growing apparel industry in Central America. It is part of the CAFTA trade agreement, which makes it possible to have close trading relations with the US with over 40% of their exports. They have strong investment ties and overall stability because of CAFTA. Over the past ten years their exports have increased drastically because of the proximity to the United States. Their apparel market has generated over 90,00 jobs for the people of Guatemala and accounts for around 80% of their total exports. The country is currently stable in their political environment and their GDP is expected to grow each year.

MEXICO Supplier: Aalfs Manufacturing Company

Benefits:

-US’s 3rd largest trade partner -Fight against child labor -Short lead time -Free trade agreements- NAFTA -Relatively low wage costs -Access to natural resources -NAFTA promotes the apparel industry -Low shipping costs to US through Texas

COLOMBIA Supplier: C.I Jeans

Benefits:

............

...............

Country highlights

....................

............................

-Very Socially Responsible and Sustainable -Outstanding quality sewing -Full package services -Highly skilled workers -Short lead time-28 days -Welcoming, laid back culture -High presence of woman in the workforce -Great banking and legal system -One of the most dynamic sectors of its economy

GUATEMALA Supplier: Textil Del Ville

Benefits:

...................................................................................................

-Focus and their sustainability efforts -Fight against child labor -Wide selection of suppliers -Low shipping costs -High quality manufacturing -Pima Cotton and Alpaca fiber textiles -United States-Peru Free Trade Agreement

top manufacturers Aalfs Manufacturing Company COUNTRY: Mexico WEBSITE : http://www.aalfs.com NOTABLE CLIENTS : Levi Strauss, JCPenny, Polo, Target KEY COMPONENTS : - Their expertise in the manufacturing industry since 1892 sets them at the top of the marketplace.

- Able them to produce large quantities of jeans in an infinite combination of styles and techniques.

- 1 pair of jeans is produced every 2.5 seconds, every day of the year at their factory.

- Replenishment program where you don’t own or manage inventory until they replenish it for you.

- Capabilities to turn replenishment orders within 72 hours.

- Water treatment facility

- Denim scraps are also recycled as other products.

Ci Jeans

COUNTRY: COLOMBIA WEBSITE : http://www.cijeans.com.co/ NOTABLE CLIENTS : Levi’s, Tommy Hilfilger, Macy’s , Polo Ralph Lauren KEY COMPONENTS - The the ability to manufacture 30,000 units daily.

- 300,000 Square foot facility with 3,000 employees

- Is located in Medellin which is 3 days away (marine transport) from Miami.

- C.I Jeans values, mission and environmental responsibility align with our company

- Implementing safety and health programs to promote the safety and well-being of employees and visitors.

- Strive for product quality (WRAP and BASC certified

- Decreasing their environmental footprint

Modas Kotop COUNTRY: GUATEMALA WEBSITE : http://directorio.vestex.com.gt/index.php/1264-modas-kotop NOTABLE CLIENTS : Kohs, J.C Penny’s, Wal-Mart KEY COMPONENTS - One of the worlds most admired apparel and textile companies.

- They focus on quality assurance and customer satisfaction

- Wastewater treatment system, energy efficient equipment, and water cooling systems.

- They have a a positive reputation.

- Working towards towards becoming a part of WBO (Worlds Best Organization). .

COmparing sourcing options location cost risks trade work force transport

COLOMBIA

GUATEMALA

MEXICO

..... ..... ..... ..... ..... .....

..... ..... ..... ..... ..... .....

..... ..... ..... ..... ..... .....

suppliers

abilities quality customers guidelines services Forward Thinking

AALFS

CI JEANS

MODAS

..... ..... ..... ..... ..... .....

..... ..... ..... ..... ..... .....

..... ..... ..... ..... ..... .....

350000 200000 200000 130000 120000 TOTAL

Average Cost

Avg Margins Average Margin %

Avg Retail (all) Avg Purchase

Total Purchase

Total Retail

Retail Purchase Margin

Total Units

Bare Denim

1,000,000

$ 179,100,000.00 $ 10,424,200.00

Final Placement

Style #6

Style #4

Style #3

Style #2

200,000

Boyfriend

25000 15000 15000 8000 8000 63000

Jogger

Bootcut

Mexico

30000 20000 20000 10000 6000 80000

Quantities

Straight

25000 20000 20000 8000 8000 73000

Quantities

SUMMER MAR APR

Skinny

Aalfs

40000 25000 25000 12000 8000 102000

Quantities

MAY

Jogger

20000 10000 10000 5000 5000 45000

Quantities

Boyfriend

35000 20000 20000 5000 5000 80000

Quantities

JUN

Fall/ Winter JUL

Straight

20000 10000 10000 5000 6000 45000

Quantities

AUG

Bootcut

Skinny

Boyfriend

35000 25000 25000 20000 15000 105000

Quantities

HOLIDAY NOV

Modas Kotop

30000 15000 15000 10000 19000 70000

Quantities

OCT

Guatemala

20000 10000 10000 7000 10000 47000

Quantities

SEP

DEC

Jogger

40000 20000 20000 35000 25000 115000

Quantities

Straight

350000 200000 200000 130000 120000 1000000

TOTAL

$ 10.42

$ 179.10 $ 10.42 $ 168.68 94%

$ 38,000,000.00

$ 30,000,000.00 $ 24,000,000.00 $ -­‐ $ 2,068,000.00 $ 1,489,500.00

$ 1,543,500.00 $ -­‐

$ -­‐ $ -­‐

$ -­‐ $ -­‐

$ 30,000,000.00 $ 8,000,000.00 $ -­‐ $ 1,503,000.00

$ 518,500.00

$ -­‐

$ 24,700,000.00 $ -­‐ $ 1,348,100.00

$ -­‐

$ 10,000,000.00 $ -­‐ $ 498,000.00 $ -­‐

$ 14,400,000.00 $ -­‐ $ 1,455,600.00

$ -­‐

150000 150000 0 150000 50000 0 130000 50000 120000 0 200000 $ 190.00 $ 200.00

$ 160.00 $ 120.00 $ 190.00

$ 190.00 $ 200.00 $ 160.00 $ 120.00 $ 190.00

$ 190.00 $ 200.00

$ 160.00 $ 120.00

$ 190.00

$ 10.34 $ 9.93 $ 10.29

$ 12.13 $ 10.29 $ 10.43 $ 10.02 $ 10.37

$ 12.22 $ 10.37 $ 10.37

$ 9.96 $ 10.32

$ 12.13 $ 10.32 $ 179.66 $ 179.57

C.I Jeans

Skinny

Colombia

Bootcut

30000 10000 10000 5000 5000 55000

Quantities

Quantities

Skinny Boyfriend Bootcut Straight Jogger

FEB

SP/SU JAN

STYLE # NAME

Style #1

Fall 2016

SEASON

LINE PLAN

Bare Denim

Line Plan andfinal placement

Country PlacementJustification As a company, Bare Denim will be having 1,000,000 units manufactured in three different countries that have been previously ranked and assessed for feasibility and risk factors. The countries we selected were based on their expertise in the industry, capability, and their alignment with our company’s core principles and values.

The suppliers chosen within each country were selected upon a ranking that evaluated them in terms of capabilities, lead time, finishings, washes, water treatment facilities and social responsibility towards workers and the community.

These suppliers are: C.I Jeans (Colombia), Aalfs (Mexico) and Modas Kotop (Guatemala) After multiple preliminary placements we have reached a final allocation that best meets our requirements while also minimizing the risks. We have decided to place the most amount of units in Colombia given that the suppliers possesses the most qualities in terms of competences, quality, finishes and ability to manufacture the most units within a short period of time. Also, Colombia is able to provide shorter lead-time and cost efficient solutions for manufacturing and shipping.

To lower the risk of drug traffic/smuggling we will add supplementary insurance and we will provide an inspection before the trucks leave from the facilities. Moreover, another key deciding factor was the Free Trade Agreement with the U.S. that allows for 99% of apparel and textile products to enter the United States free of duty.

Mexico was allocated the second highest amount of units due to their proximity to the United States and their long expertise in the Denim field. Given that Aalfs is part of the C-TPAT, this ensures the safeguard of their shipments, therefore, reducing the risks of hijacking of trucks. In 1994, when NAFTA was enacted Mexico and the U.S. entered a FTA that lifted duties and tariffs on apparel and textile products, this is also a factor that influenced our placement decision.

Since Guatemala is the least experienced in the Denim industry and lacks certain capabilities in regards to techniques, facilities and infrastructure, we have decided to place the most basic and simple style (jogger) along with the least amount of units. This allows us to reduce risk in regards to quality and delivery time.

....................................................

All of these decisions will allow us to maximize margins while also minimizing the risks of this global sourcing venture

.

conclusion Bare Denim strives to set a positive example for all fashion companies, spreading the word on sustainability and its possibilities. Our product line is based on denim made sustainable, fashionable, luxurious, transparent and innovative, with each stage of the garment life cycle best suited for environmental sustainability. Our collection will make the industry aware of the benefits and capabilities of social responsibility and sustainability from seed to garment. To do this we have partnered up with incredible denim manufacturers in Guatemala, Colombia, and Mexico. At Bare Denim we believe that everything that goes into making a pair of jeans should reflect on our company and for that reason we base everything we do off of our core values; those being personal growth, teamwork, creativity, communication, health, integrity, aesthetic environment, and last but not least honesty.

In order to maintain our mission, vision, and values at Bare Denim we distinctively delved into the country suppliers that were chosen for manufacturing of our product line. Guatemala is a growing apparel industry in Central America.

The country of Guatemala is apart of the CAFTA trade agreement and is working extremely hard toward high-tech sustainable processes and the fight against child labor that align to our sourcing guidelines. The three suppliers we’ve chosen to manufacture at in Guatemala are Denimatrix, S. A., Modas Kotop, and Hansae Guatemala. Colombia is a great country for manufacturing because its textile and apparel industry has been established and it is one of the most dynamic of its economy for almost a century. The country has established a free trade agreement with the U.S. that allows for 99% of products to enter the country free of duty. In regards to sustainability and our sourcing guidelines, the country of Colombia has become very socially responsible and sustainable with outstanding sewing qualities and a great presence of woman in the workforce. The three suppliers we’ve chosen to manufacture at in Colombia are C.I Jeans, C.I El Globo, and Expofaro. Mexico’s textile industry plays an important role on both the USA and the domestic market. The country of Mexico is apart of the NAFTA trade agreement and the country is in a strategic location. The three suppliers we’ve chosen to manufacture at in Mexico are Aalfs Manufacturing Company, Grupo Kaltex SA de CV, and Ropa Siete Leguas. For these reasons, Bare Denim is exceptionally proud to talk openly about the countries and the suppliers we have decided to produce our products in.

The goal at Bare Denim is to provide sustainable, luxurious denim product styles ranging from the boyfriend jean, the boot cut jean, the jogger, the skinny jean, the straight leg, and the high rise flare jean. We foresee ourselves expanding into international markets with hopes of being recognized as a lifestyle brand. At Bare Denim, anything is possible.

.....................................................

APPENDIX Mexico Since NAFTA was implemented between the U.S., Mexico, and Canada in 1994 trade has nearly tripled.

NAFTA promotes opportunities for U.S. fiber, textile, and clothing manufacturers to expand sales and increase production, to make full use of economies of scale and take advantage of complementary resources in the countries to enhance export potential. Mexico is the United States 3rd largest trade partner, and the proximity is as close as you can get to the US, since it borders the U.S. from California to Texas. This makes importing/exporting ideal because of the short lead time to anywhere within the states. In Mexico, micro and small businesses actually make up 85% of the sector. The federal government has intensively promoted the establishment of manufacturing operations for export and labor intensive industries, taking advantage of the relatively low wage costs and proximity to the U.S. market. extra insurance policy, take a convoy to insure security Aalfs Manufacturing Company (est. 1892) With over a century of experience a solid reputation and standard that delivers the highest quality denim and twill has been specialized and perfected. Their expertise and experience in the manufacturing industry since 1892 sets them at the top of the marketplace. This skill and knowledge built over time also enables them to produce large quantities of jeans in an infinite combination of styles and techniques. They also have formed lasting relationships with the mills, which strengthens their competitive edge even further in the denim category. 1 pair of jeans is produced every 2.5 seconds, every day of the year at their factory. Aalfs offers an exclusive replenishment program where you don’t own or manage inventory until they replenish it for you, which is beneficial with a startup brand.. They are able to fulfill 50,000 pairs in a single shipment or even bulk shipments up to 500,000 for floor or seasonal sets. Capabilities to turn replenishment orders within 72 hours.

Aalfs has an extensive plan set out to reduce their environmental impact. They have set up a water treatment facility that exceeds quality measurements where the water is actually cleaner than when it was taken out of the ground. 98% of the water used is then recycled back to the environment, and their denim scraps are also recycled back into system as other products. At one of our Mexico locations, most of our employees reside some distance away from the plant. So a fleet bus allows transportation to their employees to and from work each day.

Customers: Levi Strauss, JCPenny, Polo, Target http://www.aalfs.com Grupo Kaltex SA de CV Grupo Kaltex manufactures and commercializes textile products for clients, and with 75 years of experience in the industry they can provide a full package service all in-house. Producing a variety of textiles and garments offers a wide range of abilities and future capabilities if our business does decide to expand into other categories besides denim. They manufacture products such as woven garments, bags, uniforms, bed linens, and a variety of other goods.

Kaltex has earned an ISO 9000 Certification assuring their commitment to quality management. Their water treatment facility also reflects their awareness of waste, pollution, depletion of natural resources, and water management. By recycling leftovers during the manufacturing process and substituting chemicals that do not comply with environmental regulations they assure quality and a conscious awareness.

Customers: Levi Strauss Export 30% of production http://www.kaltex.com.mx helps increase productivity.

Ropa Siete Leguas (est. 1966) Ropa Siete Leguas specializes in manufacturing denim garments for a diversified market following the strictest quality rules and under the terms our customers require. Equipped with sophisticated machinery to provide customers with the utmost quality and shortest possible lead-time. Infrastructure is set in place to complete all needs: design, cutting, assembly, laundry, inspection, labeling and product distribution. Located in Lerdo, Durango and apart of La Comarca Lagunera, which is one of the primary industrial centers in Mexico. They have a Product Development Center, which investigates new technologies and treatments to better improve their garments. Ropa Siete Leguas has a permanent commitment to the community and certified in the fulfillment of working, security and environmental laws. They have their own water treatment plant, which recycles a high percentage of the water used at the facility and optimizes their resources. Their capacity of processing is up to 250,000 units a week, and offer great flexibility and adaptation for each requirement type and full package and CMT integrated services are constantly available.They also have a Customs-Trade Partnership against Terrorism (C-TPAT) certification, which ensure the safeguards the shipment.

Customers: Polo Ralph Lauren http://www.sieteleguas.com.mx Columbia Colombia is one of the countries chosen as a potential place for manufacturing due to many important factors. Colombia’s location is truly an advantage in terms of shipping/delivery because of its proximity to the United states this translates to decreased lead and delivery times but also to significantly reduced shipping costs. Another reason why Colombia is a good potential country for manufacturing is because its textile and apparel industry has been established and it is one of the most dynamic of its economy for almost a century. This experience has reflected in its quality and innovative textiles, but also in technologically driven and developed manufacturing processes, skilled labor and presence of more than 10,000 manufacturers in the entire territory. Colombia counts with more than 450 textiles mills, which allow for more diversity and options in regards to raw materials. Colombia’s relative political and economic stability, which includes a very stable currency and low unemployment rate are also factors that positively affect it as a location for manufacturing.

Lastly, Colombia is very welcoming in terms of negotiations and doing business with foreign companies and more importantly has been able to establish a Free Trade Agreement with the United States that allows for 99% of products to enter the country free of duty.

C.I Jeans: C.I Jeans, who specializes in Denim bottoms is located in Medellin which is 3 days away (marine transport) from Miami and a total lead time of 45 days. With the ability to manufacture 30,000 units daily the facilities count with 300,000 Sq.-Ft facility that houses 3000 employees in cutting, sewing, washing and finishing making them able to provide a full package service to our convenience. C.I Jeans values, mission and environmental responsibility align with our company’: They strive for product quality (WRAP and BASC certified) while trying to decrease their footprint in the environment as much as possible by improved processes and raw materials. They also align with our views in regards to social responsibility by implementing safety and health programs to promote the safety and well-being of employees and visitors and to prevent industrial accidents. C.I Jeans also has the credibility provided by its customers such as Levi’s, Tommy Hilfilger, Macy’s , Polo Ralph Lauren and many more.

C.I El Globo: is located in Medellin has developed its expertise in denim bottoms, currently employs 500 workers with a capacity of 250,000 units a month. The suppliers offer a full package service and complies to the UN Global Compact principles. They are able to facilitate the U.S custom clearance and provide for shipment tracking numbers. On the other hand, it takes an average of 60 to 90 days to produce and ship the

orders plus. Moreover, they are able to ship directly to their clients warehouses. C.I. El Globo is also BASC and WRAP certified. The company does not really establish or publish what its efforts towards social and environmental responsibility are. Lastly, its customers are Vanity Fair, Levi’s, Abercrombie & Fitch and others Expofaro: Located in Medellín Colombia, its commercial location is strategically favorable in the textile sector; and geographically in a region with easy access to both oceans, guaranteeing short transportation times. They produce clothing items in Denim such as jeans, pants, jackets among others; and have produced clothing items for companies such as Levi’s, Gap Inc and Abercrombie & Fitch. The Company employs 2,500 employees is able to produce 20, 000 units daily. They are able to provide full package services with an estimated lead time of 49 days. The supplier is BASC certified and supplies Lean and TOC systems to guarantee flexibility. In regards to environmental responsibility they do not publish their guidelines and practices, however, they have very strong social responsibility programs to empower and educate employees that helps increase productivity.

Guatemala Suppliers

Guatemala is a growing apparel industry in Central America. It is part of the CAFTA trade agreement, which makes it possible to have close trading relations with the US with over 40% of their exports. They have strong investment ties and overall stability because of CAFTA. Over the past ten years their exports have increased drastically because of the proximity to the United States. Their apparel market has generated over 90,00 jobs for the people of Guatemala and accounts for around 80% of their total exports. The country is currently stable in their political environment and their GDP is expected to grow each year.

Denimatrix, S.A. This supplier is focused on denim manufacturing that offers vertically integrated solutions. They can satisfy up to 50,000 kg shipments or more. The lead-time is relatively short since it is close to the US. In addition the manufacture is only 1 hr and 43 minutes to the port of San Jose. The quality will be high since they focus solely on denim fit and construction. They also offer wet and dry processing capabilities. They supply for well-known brands such as True Religion, Michael Kors, Ann Taylor/Loft, A Pea in the Pod, Jessica Simpson, Kohls, DC Shoes, Quicklsilver, True Religion, and Spanx. As far as their sourcing guidelines go they are committed to treating their employees fairly and they have a water treatment facility in place. They offer to help customers merchandise their lines and try to help them through every step of the way. For the future they are looking to completely migrate from importing from Asia to the Americas. They strive to be the most efficient supply chain in the industry.

Modas Kotop This manufacturer focuses mainly on knits but as the ability to produce denim. It is one of the worlds most admired apparel and textile companies. They focus on quality assurance and on a right the first time mentality to make sure every company they supply for is satisfied. Their customers include Kohs, J.C Penny’s, Wal-Mart, therefore they have a positive reputation. The company is completely dedicated on sustainable efforts. They have multiple systems set in place to make sure they are being very environmentally friendly, such as wastewater treatment system, energy efficient equipment, and water cooling systems. They are consistently working towards more sustainable efforts and leading towards becoming a part of WBO (Worlds Best Organization).

Guatemala Suppliers

Guatemala is a growing apparel industry in Central America. It is part of the CAFTA trade agreement, which makes it possible to have close trading relations with the US with over 40% of their exports. They have strong investment ties and overall stability because of CAFTA. Over the past ten years their exports have increased drastically because of the proximity to the United States. Their apparel market has generated over 90,00 jobs for the people of Guatemala and accounts for around 80% of their total exports. The country is currently stable in their political environment and their GDP is expected to grow each year.

Denimatrix, S.A. This supplier is focused on denim manufacturing that offers vertically integrated solutions. They can satisfy up to 50,000 kg shipments or more. The lead-time is relatively short since it is close to the US. In addition the manufacture is only 1 hr and 43 minutes to the port of San Jose. The quality will be high since they focus solely on denim fit and construction. They also offer wet and dry processing capabilities. They supply for well-known brands such as True Religion, Michael Kors, Ann Taylor/Loft, A Pea in the Pod, Jessica Simpson, Kohls, DC Shoes, Quicklsilver, True Religion, and Spanx. As far as their sourcing guidelines go they are committed to treating their employees fairly and they have a water treatment facility in place. They offer to help customers merchandise their lines and try to help them through every step of the way. For the future they are looking to completely migrate from importing from Asia to the Americas. They strive to be the most efficient supply chain in the industry.

Modas Kotop This manufacturer focuses mainly on knits but as the ability to produce denim. It is one of the worlds most admired apparel and textile companies. They focus on quality assurance and on a right the first time mentality to make sure every company they supply for is satisfied. Their customers include Kohs, J.C Penny’s, Wal-Mart, therefore they have a positive reputation. The company is completely dedicated on sustainable efforts. They have multiple systems set in place to make sure they are being very environmentally friendly, such as wastewater treatment system, energy efficient equipment, and water cooling systems. They are consistently working towards more sustainable efforts and leading towards becoming a part of WBO (Worlds Best Organization).

Hansae Guatemala This manufacture focuses on knit, woven, and denim tops. Their customers include Kohl’s and Old Navy. Supplying for large companies such as Kohl’s and Old Navy make it possible for them to supply in high capacities. They are only two hours away from the main port in Guatemala and have a relatively short lead-time.

The quality for tops is sufficient but as far as denim goes it is not their specialty so the quality may not be as high as other suppliers. Their employees are important to them and they make sure to offer them paid leave vacation days as well as training opportunities and maternal care for women. They are certified under WRAP (Worldwide Responsible Accredited Production). They are committed to investing in their people and facilities to become one of the leaders in the apparel industry.

COUNTRY RANKING Scale of 1 to 10 with 1 being the worst and 10 the best Columbia Business Climate Costs

Mexico

Explanation

8

Welcomes

9

similar to US, welcoming

9

Cheap shipping costs.

Cheap labor, lead time.

7

Leveled. Still a good value

8

cheap labor and shipping

7

New gov't friendly to the US. Promises to fight

8

stable.

Couldn't get any closer

9

access to east/west of US

7

Corruption. Para-military

Location

9

East/West coast accessible

10

Risks

6

Weak infrastructure (road network), Para-military groups, hijackings

8

Social Stability

8

Sourcing Guidelines

10

Textile Industry

9

Trade Agreements

10

Socio-eco-political

Explanation

8

Government

Trained Work-force

Guatemala

Explanation

Welcome business. No conflicts. Part of Andean

Inequality in class hierarchy.

Sustainability and Social Responsibility, Innovation in processes Vertically Integrated, Mills, Quality/Innovative Textiles, Highly skilled FTA with the US (99% of the textile/apparel products are duty free)

Hijackings

7

weak infrastucture

8

Mexico city manifestations

9

large working class

8

Well in place. Need to be on the lookout for violations

9

good car and environmental plans

8

Well developed particularly for denim sector

8

Well developed and growing and sustainable

10

NAFTA (the most important for the USA)

10

CAFTA

9

High Skilled Workers, 100+ Year Industry, Quality/ Innovative Suppliers

8

Plenty, Skilled Workforce

7

smaller, skilled workforce

7

Fairly Stable. Para-military groups serve as a threat.

8

Stable

8

stable environment

Total

92

90

92

Average

8.4

8.2

8.4

SUPPLIER RANKING Scale of 1 to 10 with 1 being the worst and 10 the best

Country 1 Guatemala Denimatrix

Modas Kotop

Country 2 Mexico

Hansae Guatemala Aalfs

Kaltex

Country 3 Colombia

Ropa Siete

C.I Jeans

C.I El Globo

Expofaro

Abilities

7

7

6

7

10

5

5

5

7

Capacity

9

8

6

10

9

9

10

7

5

Lead-time

9

9

8

10

8

10

10

7

9

Quality

10

9

7

10

8

10

10

8

9

Customers

10

9

8

9

10

10

10

7

9

Sourcing Guidelines

8

10

6

8

9

8

10

6

7

Services Offered

9

10

6

7

10

8

10

10

10

9

10

6

8

9

8

9

7

8

71

72

53

69

73

68

74

57

64

Strategic Outlook

Total Average Criteria definition for ranking o Abilities

How many types of products a supplier can manufacture

o Lead-time

Amount of time it takes to produce product from P.O. issuance to delivery

o Quality

Excellent, good, average, poor (can evaluate by certifications and customers)

o Customers

Who are they?

o Sourcing Guidelines

Published? (can tell by customers)

o Capacity

How much can the manufacturer produce on a weekly/monthly basis?

o Strategic/Forward Thinking

Are they looking to grow, develop…?

o Value Added Services

Do they provide pattern making, design, inventory management, freight…?

COLOMBIA Bare Denim

COST SHEET

Date

Style #

TB-0001

Season

Style Name

The Bootcut

Wash

5-­‐May-­‐15 Fall 2015 Stone Wash

Description Form fitted with small flare at the bottom FABRICS Mill

Style #

$/yard*

Description

Yield**

Fabric 1

ChangZhou JingFa JF-V1572

Pocketing

Dezhou Yingxiang Textile Co Organic Cotton Muslin Fabric 0.8

98% organic cotton,

3.5

Total 1.4

4.95

0.25

0.20

TOTAL FABRIC COST

5.15

*to include freight

**must include waste

Components

Vendor Buttons Zippers Rivets Thread

Style #

$/unit 0.05

1

0.05

Shenz Yiyixing ZF-247 Zipper 0.015 Jiashan LiCheng JSZD0029 Garment & button 0.03

8 4

0.12 0.12

0.0026

223

0.58

0.05

1

0.05

0.15

1

0.15 1.07

Care label Other

$Total

Quantity**

YAMING Trading JB007 Co

embroidered label

TOTAL COMPONENT COSTS

PACKAGING

Vendor

Style #

$/unit

Hangtags

Quantity

$Total 1

0.05

0.05 0.05

TOTAL PACKAGING COSTS

PACKING Vendor

Style #

$/unit

Cartons

Quantity

$Total

Tape

0.10 0.01

Labels TOTAL PACKING COSTS

0.06 0.17

1.98

20

Grading Marking LABOR Cutting

0.02 0.02 $Total 0.20

Sewing Patternmaking Washing* Regular rinse

0.14 1.1

14 1

1.96 0.02 1.10

Admin

0.50

TOTAL LABOR

3.81

*Includes pressing & packing unless otherwise noted.

OTHER

$Total

Freight

Per container

948 Duty Free Trade Agreement with U.S 0 Total cost of Product + insurance + freight

18960 0

Broker

per container

18960

TOTAL OTHER

GRAND TOTAL

600

0.05 0.00 10.26 0.03

10.34

10.34

Bare Denim

COST SHEET

Date

Style #

Season

TBF-0001

Style Name The Boyfriend Description Relaxed fit, stright leg

5-­‐May-­‐15 Fall 2015 Stone Wash

Wash

FABRICS Mill

Style #

$/yard*

Description

Yield**

Fabric 1

ChangZhou JingFa JF-V1572

Pocketing

Dezhou Yingxiang Textile Co Organic Cotton Muslin Fabric 0.8

98% organic cotton,

3.5

Total 1.3

4.60

0.25

0.20

TOTAL FABRIC COST

4.80

*to include freight

**must include waste

Components

Vendor Buttons Zippers Rivets Thread

Style #

$/unit 0.05

1

0.05

Shenz Yiyixing ZF-247 Zipper 0.015 Jiashan LiCheng JSZD0029 Garment & button 0.03

8 4

0.12 0.12

0.0026

223

0.58

0.05

1

0.05

0.15

1

Care label Other

$Total

Quantity**

YAMING Trading JB007 Co

embroidered label

0.15

TOTAL COMPONENT COSTS

1.07

PACKAGING

Vendor

Style #

$/unit

Hangtags

Quantity

$Total 1

0.05

0.0505 0.0505

TOTAL PACKAGING COSTS

PACKING Vendor

Style #

$/unit

Cartons

Quantity

$Total

Tape

0.099 0.01

Labels TOTAL PACKING COSTS

0.06 0.169

1.98

20

Grading Marking LABOR Cutting

0.0196 0.0196 $Total 0.196

Sewing Patternmaking Washing* Stone Wash

0.14

14

1.4

1

1.96 0.0196 1.4

Admin

0.5

TOTAL LABOR

4.1148

*Includes pressing & packing unless otherwise noted.

OTHER Freight

$Total 948

18960

0.05

Duty Free Trade Agreement with U.S 0 Total cost of Product + insurance + freight

0

0.00 10.21

Broker TOTAL OTHER

GRAND TOTAL

Per container

per container

600

18960

0.03

10.29

10.29

Bare Denim

COST SHEET

Date

Style # Style Name

Season Wash

Fall 2015 Stone Wash

$/yard*

Yield** How many Totalyards

TS-0001 The Skinny

5-­‐May-­‐15

Description Form fitted, Tight ankle FABRICS Mill Fabric 1

Style #

Description

ChangZhou JingFa JF-V1572 98% organic cotton, 3.5 Dezhou Yingxiang Textile Co Organic Cotton Muslin Fabric 0.8

Pocketing TOTAL FABRIC COST

1.2 0

4.242 0.202 4.444

*to include freight

**must include waste

Components

Vendor Buttons Zippers Rivets Thread Care label Other

Style #

$/unit

$Total

Quantity**

YAMING Trading JB007 Co 0.05 Shenz Yiyixing ZF-247 Zipper 0.015 Jiashan LiCheng JSZD0029 Garment & button 0.03

1 8 4 223 1 1

0.0026 0.05

embroidered label

0.15

0.0505 0.1212 0.1212 0.5798 0.0505 0.15 1.0732

TOTAL COMPONENT COSTS

PACKAGING

Vendor

Style #

$/unit

Hangtags

Quantity

$Total 1

0.05

0.0505 0.0505

TOTAL PACKAGING COSTS

PACKING Vendor

Style #

$/unit

Cartons

Quantity 1.98

$Total 20

0.099 0.01 0.06 0.169

Tape Labels TOTAL PACKING COSTS

Grading LABOR Marking Patternmaking Cutting Sewing Washing* Admin

$Total

0.14

Stone Wash

1.4

14 1

0.0196 0.0196 0.0196 0.196 1.96 1.4 0.5

TOTAL LABOR

4.1148

*Includes pressing & packing unless otherwise noted.

OTHER Freight

$Total

948 Free Trade Agreement with U.S 0 Duty Total cost of Product + insurance + freight per container 600 Broker TOTAL OTHER

GRAND TOTAL

Per container

18960 0 18960

0.05 0 9.8515 0.03164557

9.93314557

9.93

MEXICO

Bare Denim

COST SHEET

Date

Style # Style Name

Season Wash

TSL-0001 The Straight Leg

5-­‐May-­‐15 Fall 2015 Stone Wash

Description Straight leg, form fitted FABRICS Mill

Style #

$/yard*

Description

Yield** How many Totalyards

Fabric 1

ChangZhou JingFa JF-V1572

Pocketing

Dezhou Yingxiang Textile Co Organic Cotton Muslin Fabric 0.8

3.5

98% organic cotton,

1.3

4.60

0.25

0.20

TOTAL FABRIC COST

4.80

*to include freight

**must include waste

Components

Vendor

Style #

$/unit

$Total

Quantity**

Buttons Zippers Rivets Thread Care label

YAMING Trading JB007 Co 0.05 Shenz Yiyixing ZF-247 Zipper 0.015 Jiashan LiCheng JSZD0029 Garment & button 0.03

Other

embroidered label

1 8 4 223 1 1

0.0026 0.05 0.15

0.05 0.12 0.12 0.58 0.05 0.15 1.07

TOTAL COMPONENT COSTS

PACKAGING

Vendor

Style #

$/unit

Quantity

Hangtags

$Total 1

0.05

0.05 0.05

TOTAL PACKAGING COSTS

PACKING Vendor

Style #

$/unit

Quantity

Cartons

$Total 20

1.98

0.099 0.01 0.06 0.169

Tape Labels TOTAL PACKING COSTS

Grading LABOR Marking

0.0196 $Total0.0196 0.0196 0.196

Patternmaking Cutting

Sewing Washing* Admin

0.14

14

1.96

1.4

1

1.4 0.5

Stone Wash

TOTAL LABOR

4.1148

*Includes pressing & packing unless otherwise noted.

OTHER

$Total

Freight

Per container

Duty

Free Trade Agreement with U.S

Total cost of Product + insurance + freight Broker per container TOTAL OTHER

GRAND TOTAL

2573

18960

0.14

0

0

600

18960

0.00 10.21 0.03

10.37

10.37

GUATEMALA

Bare Denim

COST SHEET

Date

Style # Style Name

Season Wash

TJ-0001 The Jogger

5-­‐May-­‐15 Fall 2015 Stone Wash

Description Relaxed Fit Jogger style FABRICS Mill

Style #

$/yard*

Description

Yield** How many Totalyards

Fabric 1

ChangZhou JingFa JF-V1572

98% cotton/ 2% Lycra

3.5

1.5

5.30

Pocketing

Dezhou Yingxiang Textile Co

Organic Cotton Muslin Fabric 0.8

0.15

0.12

TOTAL FABRIC COST

5.42

*to include freight

**must include waste

Components

Vendor Elastic Thread Care label Other

Style #

$/unit

Jiashan LiChengLD0027 Garment & button

30 223 1 1

0.0026 0.05

embroidered label

$Total

Quantity** 0.05

0.15

1.52 0.58 0.05 0.15 2.30

TOTAL COMPONENT COSTS

PACKAGING

Vendor

Style #

$/unit

Hangtags

Quantity

$Total 1

0.05

0.05 0.05

TOTAL PACKAGING COSTS

PACKING Vendor

Style #

$/unit

Cartons

Quantity 1.98

$Total 20

0.10 0.01 0.06 0.17

Tape Labels TOTAL PACKING COSTS

LABOR

$Total

Patternmaking Grading Cutting Marking

Sewing

Washing*

Stone Wash

0.14

14

1.4

1

0.0196 0.0196 0.196 0.0196

1.960

1.400

Admin

0.500

TOTAL LABOR

4.11

*Includes pressing & packing unless otherwise noted.

OTHER

$Total

Freight

Per container

Duty

Free Trade Agreement with U.S

Total cost of Product + insurance + freight Broker

per container

TOTAL OTHER

GRAND TOTAL

1546

18960

0.05

0

0

0.00

600

18960

12.05 0.03

12.13

12.13

$ 179,100,000.00 $ 10,438,600.00

$ 179,100,000.00 $ 10,438,600.00

1,000,000

Straight

Mexico Bootcut

Supplier Skinny

Boyfriend

Jogger

Straight

Skinny

Guatemala Supplier Bootcut

Boyfriend

Jogger

Straight

Boyfriend

Jogger

Straight

$ -­‐ $ -­‐

Bootcut

Mexico Skinny

Supplier Boyfriend

Jogger

Straight

Bootcut

Skinny

Boyfriend

$ 10,000,000.00 $ -­‐ $ 498,000.00 $ -­‐

Guatemala Supplier

$ 19,000,000.00

$ 30,000,000.00 $ 8,000,000.00 $ 7,200,000.00

$ 24,700,000.00 $ -­‐ $ 1,043,000.00

$ 1,503,000.00

$ 518,500.00

$ 733,200.00 $ 1,348,100.00

$ -­‐

Jogger

Straight

$ 7,200,000.00

$ -­‐ $ 727,800.00 $ -­‐

100000

Skinny

C. I Jeans 100000

Boyfriend

$ 10.43

$ 19,000,000.00

$ 20,000,000.00 $ 16,000,000.00

$ 1,034,000.00 $ 993,000.00 $ 1,029,000.00

$ 190.00 $ 200.00

$ 160.00 -­‐ $ 10.34 $ 9.93 $ 10.29 -­‐ $ 179.66

100,000

Bootcut

Colombia

$ 10.44

$ 179.10 $ 10.44 $ 168.66 94%

Jogger

$ 19,000,000.00

$ 30,000,000.00 $ 24,000,000.00 $ -­‐ $ 1,034,000.00 $ 1,489,500.00

$ 1,543,500.00 $ -­‐

-­‐ -­‐

100000

Skinny

Aalfs 100000

Boyfriend

$ 19,000,000.00

$ 20,000,000.00

$ 16,000,000.00 $ 1,043,000.00

$ 1,002,000.00 $ 1,037,000.00

$ 190.00 $ 200.00 $ 160.00 -­‐ $ 10.43 $ 10.02 $ 10.37

-­‐ $ 179.57

100,000

Bootcut

Mexico

Jogger

$ 19,000,000.00 $ 1,037,000.00

Bootcut

$ 30,000,000.00 $ 1,494,000.00

$ 200.00

-­‐ $ 9.96 -­‐

150000

Skinny

Boyfriend

$ 10,000,000.00 $ -­‐ $ 498,000.00 $ -­‐

Guatemala Modas Kotop

$ 190.00

-­‐ $ 10.37 -­‐

100000

Straight

$ 19,000,000.00

$ 30,000,000.00 $ 8,000,000.00 $ 7,200,000.00

$ 24,700,000.00 $ -­‐ $ 1,043,000.00

$ 1,503,000.00

$ 518,500.00

$ 733,200.00 $ 1,348,100.00

$ -­‐

Straight

$ -­‐ $ -­‐

30000

Straight

$ 14,400,000.00

$ 5,700,000.00

$ 1,455,600.00 $ 309,600.00

$ 120.00 $ 190.00

$ 12.13 $ 10.32

120000

Jogger

$ 7,200,000.00

$ -­‐ $ 727,800.00 $ -­‐

150000 150000 100,000 150000 50000 60000 130000 50000 60000 0 200000 $ 190.00 $ 200.00

$ 160.00 $ 120.00 $ 190.00

$ 190.00 $ 200.00 $ 160.00 $ 120.00 $ 190.00

$ 190.00

$ 200.00

$ 160.00 $ 120.00

$ 190.00

$ 10.34 $ 9.93 $ 10.29

$ 12.13 $ 10.29 $ 10.43 $ 10.02 $ 10.37

$ 12.22 $ 10.37 $ 10.37 $ 9.96 $ 10.32

$ 12.13 $ 10.32 $ 179.66 $ 179.57

Supplier

Skinny

Colombia

Bootcut

100,000

$ 11.10

$ 190.53 $ 11.10 $ 179.43 94%

Average Cost

Avg Retail (all) Avg Purchase

Jogger

$ 19,000,000.00

$ 30,000,000.00 $ 24,000,000.00 $ -­‐ $ 1,034,000.00 $ 1,489,500.00

$ 1,543,500.00 $ -­‐

$ 179.10 $ 10.43 $ 168.67 94%

$ 179,100,000.00

$ 10,434,200.00

1,000,000

Boyfriend

150000 150000 100,000 150000 50000 60000 130000 50000 60000 0 200000 $ 190.00 $ 200.00

$ 160.00 $ 120.00 $ 190.00

$ 190.00 $ 200.00 $ 160.00 $ 120.00 $ 190.00

$ 190.00

$ 200.00

$ 160.00 $ 120.00

$ 190.00

$ 10.34 $ 9.93 $ 10.29

$ 12.13 $ 10.29 $ 10.43 $ 10.02 $ 10.37

$ 12.22 $ 10.37 $ 10.37 $ 9.96 $ 10.32

$ 12.13 $ 10.32 $ 179.66 $ 179.57

Avg Margins Average Margin %

Total Purchase

Total Retail

Retail Purchase Margin

Total Units

Bare Denim

100,000

Supplier

Skinny

Colombia

Bootcut

Preliminary Placement

Average Cost

Avg Margins Average Margin %

Avg Retail (all) Avg Purchase

Total Purchase

Total Retail

Retail Purchase Margin

Total Units

Bare Denim

Preliminary Placement

Average Cost

Avg Margins Average Margin %

Avg Retail (all) Avg Purchase

Total Purchase

Total Retail

Retail Purchase Margin

Total Units

940,000

Preliminary Placement

Bare Denim

PRELIMINARY PLACEMENTS