Six Month Buying Plan
Objective
Kate Spade New York is a global lifestyle brand, which aims to inspire colorful living through handbags, clothing, jewelry, shoes, stationery, eyewear, baby, fragrance, tabletop, bedding and gifts. The objective of this book was to be and think like a Kate Spade buyer and effectively create three buying plans for different locations, which we chose Madison Ave, New York; Honolulu, Hawaii and Savannah, Georgia. This plan was created by utilizing target markets, customer personas with demographics and culture, competitive shopping analysis, trend forecasts, merchandise and financial planning.
Table of Contents History Mission Statement Identity Scope & Size Marketing Strategies Product Category Target Market Competitive Analysis i. Tory Burch 32-35 ii. Michael Kors 36-39 iii. Coach 40-43 Trend Report Master Plan Hawaii Store Plan New York Store Plan Georgia Store Plan Assortment Plan
04-05 06-07 08-09 10-11 12-17 18-19 20-29 30-43
44-49 50-53 54-57 58-61 62-65 66-69
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History
Now known as Kate Spade was actually born Katherine Noel Brosnahan in 1962 in Kansas City, Missouri. While studying journalism at Arizona State University in the early 1980s she met her husband Andy Spade. After college, Kate went to a temp agency in New York City and the next day was called into Code Nast, where she was assigned to the fashion department at Mademoiselle magazine. After the assignment was over she elected to stay on as assistant to the senior fashion editor, and eventually gained the position of Senior Fashion Editor/ Accessories. In 1992, she quit her job at Mademoiselle, and she began designing a handbag in her apartment, using tracing paper and scotch tape from a simple square shape. The shape was different from what was on the market, and it presented Kate with a blank canvas on which to explore fabrics, colors, and patterns. After she completed six prototypes, based off of vintage 50-60s styles, in 1993 she debuted the collection at a trade show in New York’s Jacob Javits Center. She combined these sleek, utilitarian shapes with an air of sophistication and style. In 1993 the company generated less than $100,000. Two years later that number grew to $1.5 million. The first boutique opened in New York City (SoHo district) in 1996 after her husband, Andy Spade, quit his job to devote his full energies to the company. After Nieman Marcus and Saks each ordered 3,000 bags that year, sales jumped to $6 million and Kate Spade was able to turn a profit for the first time. In 2006, Liz Claiborne, Inc acquired the company for $124 million, and the Spades left. Under creative director Deborah Lloyd a strategy was devised to bring out more collections each year and expand overseas, especially in China and Japan. Kate Spade & Company debuted on February 26, 2014, but the initial sparks formed far earlier in the minds of two imaginative and driven women. From just six simple handbags, the brand now offers the Kate Spade New York consumer to live colorfully, from handbags for any occasion to luggage, swimwear, perfume, shoes, legwear, jewelry, stationary, eyewear, tabletop, bedding, and gifts. Today, Kate Spade is three global lifestyle brands (Kate Spade New York, Kate Spade Saturday, and Jack Spade) with more than 200 shops in over 20 countries, and distribution in over 450 premiere department stores around the world. Under the management of Craig Leavitt and Deborah Lloyd Kate Spade has grown rapidly since it became a standalone public company in 2014. All the while, the brand has never lost sight of where it began, its exuberant approach, commitment to curiosity and passion for sharing its colorful world still shapes everything Kate Spade New York.
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Missi0n Statement
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Kate Spade encourages women to star in their own lives. She likes to mix timeless pieces with novelty items that make heads turn. She is knowledgeable and lives by her own rules. Kate Spade is a brand that helps women express their own style by taking risks and staying true to herself.
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Identity
MAKE AN ENTRANCE WHISTLE WHILE YOU WORK PLAY THE WILD CARD EAT CAKE FOR BREAKFAST RENT A TANDEM SMILE AT A STRANGER FIND THE SILVER LINING PAINT THE TOWN RED TAKE UP THE TRUMPET LEARN TO CHA-CHA CATCH A DOUBLE FEATURE PLAN AN ADVENTURE SPIKE THE PUNCH SHARE YOUR UMBRELLA BE DAZZLING ESCAPE THE ORDINARY LIVE colorfully
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Scope & Size
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Kate Spade New York has over 80 retail stops and outlet stores across the United States, and more than 100 shops internationally. Our colorful products are sold in more than 400 stores worldwide, in every time zone and on every continent. Whether in San Fransico, Sao Paolo or Shanghai, our shops are always warm and inviting. NET SALES FOR 2013: $1.2 BILLION
(including all brands: Kate Spade New York, Kate Spade Saturday, Jack Spade) FLAGSHIP STORE New York, New York (Madison Ave- Upper East Side) VENUES - Kate Spade stores - Kate Spade outlet stores - Department stores - Specialty stores - www.katespade.com
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Marketing Strategies
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Consumers like to share with—and feel connected to—brands, organizations and even governments that they like and trust. Unlike most brands social media, you know there is a real woman behind Kate Spade’s twitter/facebook/blog account. She literally lets you into her wardrobe and life…Kate Spade knows how to create a brand and become more than a storefront. Kate Spade and other fashion brands are radically changing the way fashion brands engage with their customers online. For example, rather than just tweeting for the sake of it, Kate Spade strategically mixes its content to ensure social stickiness. Kate’s use of special hashtags to gain consumer insight (#LiveColorfully, #thingswelove) lets customers discuss something they love on Twitter, and then Kate Spade can follow the hashtag to find more consumers’ tastes. This is a virtual space that Kate Spade calls “our gallery of inspirations, curiosities, and other fascinations.”
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FACEBOOK With over 1 million Facebook fans, Kate Spade mainly uses this social media platform to promote sales, new ad campaigns, and sneak peeks into future collaborations. With links to their latest videos, blog posts, and products, it’s your go-to site for everything regarding Kate Spade. The Kate Spade Facebook page is also used as a forum for customers to sound off about questions, concerns, or even reviews about the retail stores, website, etc.
TWITTER Kate Spade’s twitter is very similar to their facebook page. They provide followers with links to products, recent campaigns, and blog posts. Customers can tweet their outfits incorporating their Kate Spade products. If the Kate Spade social media team likes your post, they will retweet it for all of their followers to see.
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The Kate Spade Instagram page is anything but ordinary. Most competitors use their Instagram to feature their print advertisements and fashion shows. Although Kate does that too, they publish so much more. Fashion bloggers are a favorite on their Instagram. The brand loves showing real people using their products in everyday life. Short videos featuring sneak peeks of their upcoming collections is also a brand favorite.
Pinterest basically acts as the mood board for all of their collections. Even a glimpse into Deborah Lloyd’s inspiration, containing everything preppy and whimsical, you will not be able to stop repining. This platform allows their voice to be heard, not only through text and tweets, but through images and color, which is the DNA of the brand.
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YOUTUBE Kate Spade takes pride in their youtube channel. Besides featuring behind the scenes footage from their ad campaigns, the Kate Spade Social Media team also shoots videos covering topics every kate spade gal wants to know. Whether it’s a recipe for flan, one-on-one interviews with current employees, or even DIYs, you’re sure to be intrigued.
BLOG: BEHIND THE CURTAIN
Fashion blogs are such a major part of the industry today. Being the go-to place for inspiration, Behind the Curtain is basically a preppy-lifestyle blog. Obviously containing fashion, the blog features street style they love. The site also gives tips on how-to do basically everything. 10 Things to do in November, Playlists from the Retail Stores, and How to Prepify a pumpkin are just some of the recent topics the blog has covered.
SURPRISE SALE
INTERACTIVE SHOPPING
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6 times a year, Kate Spade features the surprise sale. Only offered via e-commerce, the store offers up to 80% off products. This is a perfect way for Kate Spade to sell through all of their last season products, before sending them to outlets, or discount retailers. Offering deals on products including handbags, dresses, shoes, and housewear, you’re bound to find something you’ll love.
In October 2014, Kate Spade went above and beyond any retailer. Waiting on the arrival of the store opening in Short Hills, New Jersey, the Kate Spade team decided to transform their under construction barricade into a virtual shopping experience. Complete with five touchscreens, this interactive shopping experience prompts you to take a short quiz to reveal your personality traits and style preferences. At the end, you’ll receive your personal style statement (which might read, “She adores pretty things and witty words”) and be asked to type in your phone number or email address to have that statement sent to you, so that you can share it on social media accounts. Based on your answers, you’ll also be shown a selection of products that you can tap to purchase with free next-day shipping. The entire katespade.com site is available to shop from the touchscreens as well.
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Product Category
The original square handbag silhouette was different from what was on the market which presented Kate with a blank canvas on which to explore fabrics, colors, and patterns. After she completed six prototypes, based off of vintage 50-60s styles, she debuted the collection at a trade show in New York’s Jacob Javits Center. She combined sleek, utilitarian shapes with an air of sophistication and style. The colors shown to the left were her original swatches for the first collection out of her workbook. Since handbags is what initially launched the Kate Spade brand, and the company strives to gain 60% of all customer receipts from handbag sales we chose to focus on this product category.
Kate Spade Now...
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Target Market
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Based off Vals Framework
THINKERS
INNOVATORS
INNOVATORS
-Successful, sophisticated, take-charge people with a high self-esteem -Receptive to new ideas and technologies -Active consumers - Upscale, niche products and services -Image is important -Leaders in business and government -Seek challenges -Characterized by variety
Attracted to novelty items such as book clutches, kitschy pieces such as watering can handbag, and loud prints
www.strategicbusinessinsights.com
CUSTOMER PROFILE Name: Niykee Heaton Age: 30 Occupation: Writer Income: $80,000 Lifestyle: Niykee would be classified as an innovator. As someone who spends all of her extra money on clothes, shoes, and accessories, she hopes turn heads everywhere she goes‌especially since she’s single. Niykee loves to make an impression, and loves to express herself throughout crazy fashion. She is most likely to purchase the novelty items from Kate Spade. These items include watering can shaped handbags, outrageous prints, and gaudy jewelry.
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THINKERS
THINKERS
-Value Order, knowledge, and responsibility -Conservative and practice consumers -Open to new ideas -They look for durability and functions
Would purchase a piece from one of the classic collections: Cobble Hill (in neutral colors), or Cedar Street (virtually scratch/water resistant)
www.strategicbusinessinsights.com
CUSTOMER PROFILE Name: Olivia Pope Age: 35 Occupation: Crisis Manager Income: $150,000 Lifestyle: Olivia would be considered part of the thinkers category. As a single gal on the go, Olivia needs to portray a conservative, yet stylish look at all times. As a lover of coats and large handbags, she would most likely purchase pieces from The Classic Collection. Since Olivia’s top priority is work, she does not have time to treat her items with care. Thankfully The Classic Collection is scuff free and water resistant. Olivia’s style is very conservative, but loves to add a sleek bag or well-tailored jacket to every outfit.
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ACHIEVERS
ACHIEVERS INNOVA TORS
-Goal oriented -Commitment to career and family -Image is important -Busy lives -Interested in time-saving devices -Value material possessions
Would appreciate the newest collection and style and an invite to look at the newest collection before it’s put out on the sales floor; Similar to styles at Prada, Fendi, LV
www.strategicbusinessinsights.com
CUSTOMER PROFILE Name: Dorothy Dixon Age: 45 Occupation: Publicity Director Income: $95,000 Lifestyle: Dorothy would fall into the achiever category. As a married mother of twin girls, Dorothy always tries to maintain a professional appearance, with a hint of playfulness. Always needing the newest “it� item, Dorothy makes sure she sees the collections before they hit the sales floor by attending trunk shows. Her style consists of mixing high-end designers, with her favorite commercial brands.
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THINKERS
EXPERIENCERS
EXPERIENCERS
-Motivated by self-expression -Young, enthusiastic, impulsive customer -Seek variety in excitement, new, offbeat, and risky products -Spend high income on fashion, entertainment, and socializing
Attracted to novelty items such as book clutches, kitschy pieces such as watering can handbag, and loud prints
www.strategicbusinessinsights.com
CUSTOMER PROFILE
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Name: Tenisha Clarke Age: 21 Occupation: freelance blogger and fashion student at Savannah College of Art and Design Income: $20,000 Lifestyle: Tenisha would fall into the experiencer category. She is very involved within her community, including going to local and school events. Tenisha enjoys shopping with her friends when she has down time in her busy schedule. She looks for new outfits that she can seamlessly style from school, to work, to innovative looks for her blog. Her style is classic, but she likes to spice things up with bright colors, standout pieces, and a youthful twist. https://establishthenewblack.wordpress.com
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Competitive Analysis
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Tory Burch
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HISTORY Tory Burch is an American lifestyle brand that embodies the personal style and sensibility known for color, print and eclectic details, includes ready-to-wear, shoes, handbags, accessories, beauty, home and watches. The company originally launched in February 2004 with a small boutique in Manhattan’s Nolita neighborhood. Tory Burch has grown to become a global business with more than 125 freestanding boutiques and a presence in more than 3,000 department and specialty stores. VENUES - Tory Burch stores - Tory Burch outlet stores - Department stores - Authorized specialty stores - www.toryburch.com “Even if you’re not yet an entrepreneur, you can be entrepreneurial in everything you do. If you view each stop as an opportunity to learn something, there is always something you will take away from that experience.” -Tory Burch
TARGET MARKET Baby Boomers (Women 35+): Tory Burch strives to satisfy the needs of each individuals unique attitudes, tastes, lifestyles, and body type “New Luxury”: Mixing contemporary and bridge together by targeting to a younger crowd by still providing the luxury experience
Swot Analysis
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STRENGTHS - E-commerce sites in seven languages - Fitbit Flex activity-tracking device - Used Google’s Lightbox (live streaming) for runway shows - Mobile App/ multi-channel presence - Nationally known brand/logo - Focus on the customer experience - Increasing profits in the last year
WEAKNESSES - Relatively new to fashion industry - Hasn’t established a legacy - Lack of brick-and-mortar stores and in-store presence other than wholesale
OPPORTUNITIES - Establish a larger presence on runway - Collaborations with other technology brands (similar to the Fitbit collaboration)
THREATS - Could come off over zealous with large logos - Substitute products - Rivalry with C. Wonder
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Michael Kors
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HISTORY Michael Kors is a global luxury lifestyle brand with a jet-set aesthetic that combines elements of style, elegance, and sport. The company was established in 1981 and is led by Michael Kors, a prominent fashion designer based in New York City. The company consists of two labels: Michael Kors Collection and MICHAEL Michael Kors. The business operates in three different segemens: retail, wholesale, and licensing. Their goods are sold in company operated retail stores, department stores, specialty stores and select licensing partners.
VENUES - Michael Kors stores - Michael Kors outlet stores - Department stores - Authorized specialty stores - Licensing partners - www.michaelkors.com
TARGET MARKET Generation X (1961-1981): Highly educated, active, balanced, and family oriented Generation Y (1980- early 2000s): Pressured, confident, achieving, team oriented, “Millenials” “It calls to mind a wide demographic, from continental socialites to hardcharging business professionals, to trust-fund twenty-somethings on a grand tour” -Bloomberg Businessweek
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Swot Analysis
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STRENGTHS - Resilient brand - Segmented brand (2 different lines) - Philanthropy: God’s Love We Deliver - High quality/ good suppliers - Michael Kors personifies brand
WEAKNESSES - Brand gets diluted in bargain stores - MK is the face of the brand- no successor - Not as well known globally - Jet-set not a priority for people in low-economy
OPPORTUNITIES - Global expansion - Improve technology (app, blog, etc.) - Create an even more accessible sub brand - Further develop men’s line
THREATS - Brand linked to generations - Licencees can cancel
Coach
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HISTORY Founded under the name Manhattan Leather Bags in 1941. The company founder was impressed by the design of a baseball glove and it inspired him to create a handbag with similar attributes. A collection was created consisting of 12 handbags, which were made from tan, supple, high quality leather and featured excellent stitch work and craftsmanship. In 1993, the company hired Reed Krakoff, where he is credited with changing the image of Coach from a sturdy, basic collection of tan, burgundy, black and navy briefcases, to a more hip, stylish collection with new colors and styles every season. Krakoff added interesting new accessories including watch straps, wallets, wristlets and cell phone cases. In 2001, the company launched what has become an iconic look, the Coach Signature collection. This collection features a bold double C design. The collection was timed to capitalize on a logo mania sweeping the fashion industry. The signature collection was done in a wide variety of styles and colors. VENUES - Coach stores (coach.com) - Coach outlet stores - Department stores - Authorized specialty stores - Limited duty-free locations - www.coach.com
CUSTOMER PROFILE Coach’s primary target market is men and women aged between 20s- 40s who possess mid to high levels of disposable income, seeking distinctive, easily recognizable, accessible luxury products that are relevant, well made, and provide excellent value.
Swot Analysis
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STRENGTHS - Long term legacy known for quality leather - Largest U.S. luxury handbag maker - Located in 730 cities/ Expanding into China - Product innovation
WEAKNESSES - Brand recognition - Closing 1/5 of U.S. stores (cut 150 jobs) - Heavy outlet presence and overly promoted - New to ready to wear - Lost the consumers sense of exclusivity - Haven’t been able to tap the growing economies which are a huge potential market - Decrease in profits
OPPORTUNITIES - Establishing a new target market - Evolving and transition of brand identity - Opening of new locations or remodel their main stores as part of their rebranding
THREATS - Losing customers because of rebranding and new price points - Counterfeit merchandise - New creative director, Stuart Vevers, in 2013 could lose trust in past loyal customers - Large amount of competition in segment
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Trend Report
Miniature Handbags: Shrunken bags have been a standout trend both on the
runway and off. We’ve seen a surge of mini bags, with larger silhouettes shrunken down into petite handheld styles. Again, the tiny proportions echo a return to ladylike styling.
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Eccentric Charm: A grown-up version of the humorous bag that has evoled into a
simple, pared-back yet playful style. Vintage graphics and exaggerated, surreal details bring a touch of fun to your accessory game.
1950s Revival: Tailored, ladylike compact handbags bring an air of elegance to the streets during Fashion Week. Minimalist details and classic hardware define this style.
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That’s Clutch: The clutch bag is an increasingly popular item within bag collections for
daytime use as well as party and occasionwear. For the new season, bags are otfen oversized with texture and pattern increasingly elaborate.
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The trends that have been reported for Spring/Summer 2015 handbags include miniature, eccentric charm, 1950’s revival, and clutch bags. The miniature handbags are just as they sound. Kate Spade has taken classic styles of bags and have shrunk them to create their own version of the miniature handbag. Eccentric charm includes the enthralling part of Kate Spade’s collection. These handbags include those which make a bold statement and start a conversation. The 1950’s revival takes on a ladylike feel with a structured style mirroring the classic silhouettes that originally launched the brand. That’s clutch consists of both evening bags, and even simple, hand accessories in a casual envelope shape. These four handbags trends reflect Kate Spades brand because of the structured, clean look mixed with a touch of kitschy pieces that make a statement. When creating the assortment brand for this company, we took into account the brands classic aesthetic along with the trends that are becoming more apparent in the fashion industry.
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Master Plan
Project Model
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FASM 245 Retail Buying Simulation 6 Month Buying Plan: Kate Spade Spring 2015 Focus Product Category: (000's)
Spring 2015 Plan Net Sales, Spring 2015 Est. Net Sales, Spring 2014 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's)
Net Sales % Spring Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Spring Purchases, Retail Purchases, Cost
February 18600.0 15.00% 52080 2.8 55800 3819.2 14.00% 26139.2 10455.68
Women's Handbags (55% of total net sales) 124000.0 99500.0 24.62% 55919.429 2.22 27280 22.00% 60.00% March 22320.0 18.00% 55800 2.5 54808 4364.8 16.00% 25692.8 10277.12
Spring 2015 6 Month Buying Plan April May June 21080.0 21080.0 22320.0 17.00% 17.00% 18.00% 54808 56916 58032 2.6 2.7 2.6 56916 58032 55800 4092.0 5456.0 5456.0 15.00% 20.00% 20.00% 27280.0 27652.0 25544.0 10912 11060.8 10217.6
FASM 245 Retail Buying Simulation Page 1
July Spring 2015 18600.0 124000.0 15.00% 100.00% 55800 55919.4 3.0 58000 4092.0 27280 15.00% 100.00% 24892.0 157200.0 9956.8 62880
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Master Plan
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Why plan so aggressively? We planned almost 25% up from Spring 2013 because Kate Spade is an evolving brand that is planning on opening 80 full priced and 80 outlet stores in the next two years. Also, the highly competitive nature of the handbag industry drove us to unusually high increases in order for Kate Spade to keep up with the competition in the marketplace. Risk/Opportunity: We are taking a risk by planning sales up to such a high percentage, but with Kate Spade becoming such a well-known, global brand that is in high demand we believe this plan is achieveable. The risk in estimating sales up almost 25% from last year brings the burden of an inventory overage if for some reason the inventory does not sell. As a merchant, however, our goal is to generate a viable 6 month buying plan, so Kate Spade projects these sales will be achievable for the Spring 2015 buying months.
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Honolulu, Hawaii
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FASM 245 Retail Buying Simulation 6 Month Buying Plan: Kate Spade Hawaii Spring 2015 (Annual Sales $7,560,000/ $3,024,000 this period)
Focus Product Category: Women's Handbags (55% of total net sales) (000's)
Spring 2015 Plan Net Sales, Spring 2015 Est. Net Sales, Spring 2014 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's)
February Net Sales 331.2 % Spring 16.00% Plan BOM Stock 761.8 Stock / Sales Ratio 2.3 Plan EOM Stock 819.7 Plan Reductions 63.8 % Spring 14.00% Purchases, Retail 452.9 Purchases, Cost 181.2
2070.0 1663.2 24.46% 785.8 2.63 455.4 22.00% 60.00% March 372.6 18.00% 819.7 2.2 809.4 72.9 16.00% 435.1 174.0
Spring 2015 6 Month Buying Plan April May June July 351.9 331.2 372.6 310.5 17.00% 16.00% 18.00% 15.00% 809.4 794.9 819.7 745.2 2.3 2.4 2.2 2.4 794.9 819.7 745.2 750 68.3 91.1 91.1 68.3 15.00% 20.00% 20.00% 15.00% 405.7 447.1 389.2 383.6 162.3 178.8 155.7 153.4
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Spring 2015 2070.0 100.00% 785.8 455.4 100.00% 2513.6 1005.5
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Honolulu, Hawaii
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Why Hawaii? Hawaii is the highest volume Kate Spade store in the company. The store does a significantly higher volume than any other store across the country. For this reason we chose to include Honolulu’s sales projection in our buying plan. The drastic change in volume skews the average net sales for the company as a whole. Risk/Opportunity: The inventory turnover is the highest for this store compared to Savannah and Madison Ave. because the rate that they go through their merchandise is much quicker. The percentage of sales is higher at the beginning of the season because of tourists coming in town and tappers off towards the end of the season. There isn’t much risk involved in the Hawaii plan considering they are an established store with consistent numbers.
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Madison Ave., New York
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FASM 245 Retail Buying Simulation 6 Month Buying Plan: Kate Spade Madison Ave. Spring 2015 (Annual Sales $3,960,000 $1,584,00 this period)
Focus Product Category:Women's Handbags (55% of total net sales) (000's)
Spring 2015 Plan Net Sales, Spring 2015 1085.0 Est. Net Sales, Spring 2014 871.2 Plan % Last Year: 24.54% Average Stock, Retail: 441.4 Inventory Turnover: 2.46 Planned Reductions, $: 238.7 Reductions % Sales: 22.00% Plan IMU %: 60.00% (000's) Net Sales % Spring Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Spring Purchases, Retail Purchases, Cost
February March 162.9 195.4 15.00% 17.00% 423.5 449.4 2.6 2.3 449.4 443.0 33.4 38.2 14.00% 16.00% 222.2 227.2 88.9 90.9
Spring 2015 6 Month Buying Plan April May June July Spring 2015 184.6 184.6 195.4 162.9 1085.0 18.00% 18.00% 17.00% 15.00% 100.00% 443.0 461.5 469.0 423.5 441.4 2.4 2.5 2.4 2.6 461.5 469.0 423.5 420 35.8 47.7 47.7 35.8 238.7 15.00% 20.00% 20.00% 15.00% 100.00% 238.9 239.8 197.7 195.2 1321.0 95.5 95.9 79.1 78.1 528.4
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Madison Ave., New York
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Why Madison Ave, NY? The Kate Spade Madison Ave, NY location became the flagship store in May of 2013. The store provides customers with an experience beyond shopping for clothes and handbags. The four-floor store is inviting but also gives customers a luxury experience. The flagship store houses exclusive merchandise that is only sold in the Madison Ave. location or online. They also sell their entire bridal collection. Since Madison Ave is a much higher volume store, based off their annual sales we kept the handbag percentage at 55% but planned the individual handbag sales for each month differently. Our highest planned months are between March and June because it is the season that New York starts to get a little warmer and people are starting to visit again. As July comes, our planned sales are lower at 15% because of the heat and most local New Yorkers go out of town for the summer. Risk/Opportunity: Our inventory turnover for Madison Ave. is a little higher than an average turnover because the store tends to move through product quicker. People go to New York specifically to purchase, therefore, the store needs to carry more stock because they move through it quicker. We planned this store’s net sales up 25% from last year also because it is a fairly new store to the company and there is room for growth. This is a risk for the company especially because this store only has one years-worth of sales to compare too.
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Savannah, Georgia
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FASM 245 Retail Buying Simulation 6 Month Buying Plan: Kate Spade Savannah Spring 2015 (Annual Sales $1 million/ $400,000 for this period)
Focus Product Category: Women's Handbags (55% of total net sales) (000's)
Spring 2015 Plan Net Sales, Spring 2015 Est. Net Sales, Spring 2014 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's)
February Net Sales 46.8 % Spring 17.00% Plan BOM Stock 144.9 Stock / Sales Ratio 3.1 Plan EOM Stock 148.5 Plan Reductions 8.5 % Spring 14.00% Purchases, Retail 58.8 Purchases, Cost 23.5
275.0 220.0 25.00% 137.1 2.01 60.5 22.00% 60.00% March 49.5 18.00% 148.5 3 144.9 9.7 16.00% 55.6 22.2
Spring 2015 6 Month Buying Plan April May June July 46.8 49.5 41.3 41.3 17.00% 18.00% 15.00% 15.00% 144.9 148.5 132.0 123.8 3.1 3.0 3.2 3.0 148.5 132.0 123.8 117 9.1 12.1 12.1 9.1 15.00% 20.00% 20.00% 15.00% 59.4 45.1 45.1 43.6 23.8 18.0 18.0 17.4
Spring 2015 275.0 100.00% 137.1 60.5 100.00% 307.6 123.0
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Savannah, Georgia
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Why Savannah, GA? Kate Spade opened in Savannah, GA in July 2013. It is a fairly new store in an area that has very little luxury stores. The reason why we planned a higher percentage of sales to happen between February to May has to do with the weather and the customer base that lives or visits Savannah. Specifically the higher months are March and May because March is spring break and May is a big wedding season in Savannah (for destination weddings or local wedding). It is also the last month SCAD students are in town, so a lot of parents will visit for graduation and shop. June and July account for a lower percentage of sales because the summer marks the end of tourist season because of the higher temperatures and because students have gone home for summer break. Risk/Opportunity: The inventory turnover we planned for Savannah is much lower than the other two stores because of the buying behaviors of the customers in that store. The store isn’t able to hold as much physical inventory as others and the traffic rate is also significantly lower. Because we planned the Savannah store up 25% (same as overall company plan), we are taking a risk but considering that this store has only been open for just over a year, there is room for growth and a store awareness in the area.
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Assortment Plan
Assortment Plans
FASM 245 Retail Buying Simulation Assortment Plans Spring 2015 Focus Product Category: Handbags Planned Purchases, Retail: Average Retail Price:
price range 50-199 200-299 300-399 400-499 >500 total
% 10% 25% 30% 20% 15% 100%
silhouettes top handles totes mini bags cross body clutches total
%
30% 20% 25% 15% 10% 100%
$157,200,000 $298
purchases at retail $15,720,000 $39,300,000 $47,160,000 $31,440,000 $23,580,000 $157,200,000
$ $ $ $ $ $
purchases at retail 47,160,000.00 31,440,000.00 39,300,000.00 23,580,000.00 15,720,000.00 157,200,000.00
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Assortment Plan
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Since our product category is handbags, we decided to provide an assortment plan for different kinds of handbag silhouettes as well as price range. Top handles and totes the Kate Spade signature shapes, which are always in stock in different materials and colors. The average price point of these types of silhouettes is around $398, which is reflected with a higher percentage in the assortment plan. With these two categories composing 50% of the planned purchases, the rest is divided up between mini bags, cross body bags, and clutches. We want to invest the most of the three remaining types into mini bags because of the strong presence seen on the runway and in forecasting for the Spring 2015 season. These shrunken versions of classic silhouettes we feel will be all the rage for Spring season. Next follows with cross body at 15% and finally clutches at 10%. Within the price breakdown we decided to start at the $50 for the starting price point and range to $199, for a starter or mini handbag. The next range was from $200-99, composed of 25% of sales, consists of a large portion of handbags sales (nylon, vinyl, canvas totes). From $300-99 and $400-99, we believe will be the largest sellers in the company because these handbags are made of quality leather and cowhide. The handbags over $500 are ususally the exclusive bags only sold in flagship stores or online. These are made of the finest materials such as calfhair, suede, and shearling. For this reason we predicted 15% of all sales to come from bags retailed at over $500 because even though they are the pricest of the bunch it would take a lesser quantity of bags to recoup the cost.
Brynn McKinstry Kyleigh Thornton Angela Kastrunes