The Den by Christina Ripley

THE DEN ECLECTIC HOME GOODS TO INSPIRE

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Table of Contents 05 INTRODUCTION 10 PRODUCTS & PRICES 14 COUNTRY ANALYSIS 16 SUPPLIER ANALYSIS 18 STRATEGY PUBLICATION & CONCLUSION 20 CONCLUSION 22 APPENDIX

Mission Statement:

We strive to provide our customers with uniquely crafted products to create a comfortable environment inviting one to be inspired.

Vision Statement:

At The Den we are passionate about changing the home goods industry to reflect the personal style and uniqueness of our customer while educating them about the environmental factors that are involved in creating these products.

Values:

We are passionate about quality, craftsmanship, sustainability & above all else style.

Welcome to The Den THE DEN is your source for ecclectic home decor, with products ranging from Art to Textiles to coffee table books & candles. THE DEN was established in Austin, Texas in 2015 as an E-Commerce store, making our products easily accessible to our customers. We strive to provide our customers with uniquely crafted products to create a comfortable environment inviting one to be inspired. At THE DEN we are passionate about changing the home goods industry to reflect the personal style and uniqueness of our customer while educating them about the environmental factors that are involved in creating these products. We are passionate about quality, craftsmanship, sustainability & above all else style.

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Corporate Social Responsibility Sustainability Sustainability is at the very core of who The Den is as a business. We want to focus not only on the environmental impact of our supply chain, but also the human impact. The standards we hold ourselves to in store is also reflected in the suppliers we chose to work with. At the Den we strive to perform at the highest standards when it comes to human rights, labor, environment and anticorruption and we do this through:

Quality Control, which means that our products are created in a way that is environmentally and socially sustainable.

Water management and wastewater treatment. We believe every drop of water should be used as efficiently as possible so we require wastewater to be treated to the requirements of local legislation before leaving our facilities or reused whenever possible.

Transparency Transparency is a necessity at The Den, not only do we feel it is important for our suppliers to be transparent with us, we feel that it is our responsibility to be open and honest with our customers. In complying with our commitment to transparency we provide all information regarding our factories, suppliers, as well as our code of conducts for the public to access on our website. The Den holds its suppliers and manufacturers to the highest standard, expecting quality and sustainability in our products, as well as expecting our suppliers and business partners to be completely transparent. To ensure we are being honest with our customers, we put in place a transparency policy that includes:

Expecting our suppliers and business partners to be transparent and not intentionally mislead our auditors.

Cooperating with our suppliers and other business partners to achieve sustainable solutions and to promote suppliers and other business partners who are in compliance.

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Culture Company culture is of the utmost importance here at The Den. We value people and our community, and are committed to making sure they have all the necessary means to succeed. We are focused on providing our workers with a fair, safe, and enjoyable working environment, equipping them with all the tools necessary to succeed at work. The Den is actively involved in the community through charitable organizations and environmental groups, as we feel it is important to give back. Some of the policies The Den enforces to promote a fair, safe, and enjoyable company are:

Discrimination policy, which states, No employee shall be discriminated against in employment or occupation on the grounds of sex, race, colour, age, pregnancy, sexual orientation, religion, political opinion, nationality, ethnic origin, disease or disability.

Child Labour, The Den does not accept child labour. No person shall be employed at an age younger than 15 (or 14 where the national law allows) or younger than the legal age for employment if this age is higher than 15.

Payment Policy, The Den minimum wage requirement is that employers shall pay at least the statutory minimum wage, the prevailing industry wage or the wage negotiated in a collective agreement, whichever is higher. All other types of legally mandated benefits and compensations shall be paid.

Monitoring In order for The Den to ensure the compliance of our Code of Ethics, we regularly perform audits on all of our suppliers. The Den will perform scheduled audits based off previous compliance history to reduce the risk of exhausting manufacturers and will also execute surprise inspection from our own auditing system as well as third party auditors. During these audits we check performance standards on criteria such as hours and wages, health and safety, any discrimination or harassment claims and all other employment practices. The Den works together with suppliers and employees to update practices as the company and global textile industry changes. Some of our monitoring policies include:

In order for accurate audits, all business partners are required to present relevant documentation as to where each product is being produced, including any subcontractors.

The Den reserves the right to make unannounced visits to any manufacturer or subcontracting facility that produce our good. We also reserve the right to appoint a third party auditing leader to conduct our compliance reports. These audits allow the unrestricted access of each facility as well as company information and employee records. - THE DEN -

Target Market The Millennial At THE DEN our target customer is the “young professional”, while most of our products are gender neutral, our main consumers are women ranging in age from 23 - 38, they have a Bachelor’s Degree or higher and a salary of $80,000 a year and up. Our woman has a refined taste, and is very much influenced by art and culture but with a minimalist twist. She values high quality unique products that fit in with her eclectic lifestyle. Our products are curated towards the young professional, who is moving into their first apartment and is looking for something new and unique that they can’t find from the go-to stores like Anthropologie, Zara, and HomeGoods.

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Products & Prices At The Den we offer a wide assortment of eclectic home products, crafted with some of the highest quality materials, and manufactured in sustainable facilities. At The Den we are committed to bringing you products that fit your minimalist, ecclectic lifestyle, at a price range accessible to the â&#x20AC;&#x153;Young Professionalâ&#x20AC;?. You will find products that are a necessity when it comes to moving into your first home and apartment, mainly focused on the most important room, the Den, but also small pieces that transition into other areas of your house as well.

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Pillows The Grey Pillow Description: Acrylic, Polyester: Cotton Lining Style #: D001 Retail: $98 Cost: $44.11

Abstract Pillow Description: Cotton, Polyfill Style #: D002 Retail: $58 Cost: $26.10

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Throws Tassel Throw Description: Cotton, Viscose Style #: D003 Retail: $98 Cost: $44.11

Herringone Throw Description: Wool Style #: D004 Retail: $128 Cost: $57.60

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Country Analysis At The Den we hold sustainability to be of the utmost importance, when researching countries it was important to keep in mind not only sustainable manufacturing practices, but also sustainability within transportation and ethical behavior. A main point of interest within ethical behavior is ensuring the country has fair labor laws; it will facilitate the process of upholding our companyâ&#x20AC;&#x2122;s values in the factories. Our company will be manufacturing home goods, with a focus on soft good textiles, so it is imperative for the country to have the technology, infrastructure, and knowledge to manufacture these goods of the highest quality. We are also looking for each country to at least have good relations with the US, if not have trade agreements since our company is based in Austin, Texas. To ensure our company gets a profit we will take great consideration of wages, transportation costs, and tariffs.

Israel Israel is transitioning to a more sustainable way of production while focusing on transportation. This country has an extremely developed technology sector, which makes them excel at creating man made fibers, and has all the current machinery for home textile manufacturing. Israel will be the country to produce the higher end of The Denâ&#x20AC;&#x2122;s price range. This is due to the fact of the higher minimum wage, and highest quality textiles they are able to manufacture. Not only does the Israeli government set a fair minimum wage, but also fair working standards complete with full benefits. Israel also is the only country in the world that has a free trade agreement with both the US and the EU. This really speeds up the transportation time of the goods. Labor Costs: $6.62 Shipping costs (40 ft freight) : $1000-2000 Trade agreements: WTO, free trade with US/EU, GATT, duty free with mexico and Canada Transit Days: 17 Avg. 14

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India The government has a program “Make in India” which really aligns with The Dens values. “Make in India” promotes fair wages, promoting of building more infrastructure in a sustainable way, and really focuses on the individual talents, which enables creating high quality products. With this government initiative India is the up and coming world manufacturing power. India has innovative technological current machinery for apparel and textiles. India’s textile market is twenty percent of the country’s total exports, 40 percent of those textiles are hand woven. This really ensures that the textiles yielded from India are of the highest quality. The location is a prime area in the hub of Southeast Asia, which enables the country to have 14 major seaports. Although there are no official trade agreements with the US there is a commercial dialogue in place that facilitates trade. The minimum wages has stayed at a constant of $0.92 per hour for the past four years, which keeps labor to be under %30 of total cost of goods. Labor Costs: $0.92 Shipping costs: $3000-$5000 Trade agreements: India –US dialogue, SAFTA Transit Days: 28 avg.

China China constantly is looking to improve itself to strengthen the manufacturing business, so as a country it is heavily investing in the roads, ports, and power networks. This is very important to us, knowing that the government is always streamlining the facilities and transportation The Den potentially may use. China has amazing relationship with the US for trading, and has multiple free trade agreements with surrounding countries, which will help with imports and exporting. Apart from logistics, China also produces over 90 million yards of high quality cotton yearly, and accounts for nearly 54% of the world’s’ total textile production. This ensures they have the knowledge to produce our high quality goods. One point The Den needs to be wary of is the Chinese textile industry is the top 3 water-wasting industries, which produces 2.4 billion tons of wastewater every year. This may add to our total cost, by having to help invest in proper waste management within whichever supplier we chose. Another thing that will add to total cost is the labor wage; it is considerably higher than India. Labor Costs: $3.25 Shipping costs: $2000-$3000 Trade agreements: China-ASEAN FTA, China-Peru FTA, China-Korea FTA, China-Australia FTA, and trade agreements with South America, including Argentina, Brazil, Chile, Costa Rica, and Peru Transit Days: 17- 21 avg - THE DEN -

Supplier Analysis Janipur Rugs Inc. Janipur, India

Jaipur Rugs Inc has a large variety of home textiles including rugs, throws, pillows and poufs with a variety of colors and patterns made with incredible quality and craftsmanship. An important reason for choosing Jaipur Rugs is that they are an American brand however, the owners are born and raised in India so they have many solid connections and a deep understanding of how to conduct business in India. Not only that but Jaipur Rugs is a vertically integrated business so they have complete control of all the processes which can help manage costs more effectively. A major reason for this choice of supplier is their continued emphasis on sustainability and ethical awareness. They have personally met and gotten to know all of their employees. They pay a fair living wage and offer educational opportunities for their employees and their children to help fight poverty. The work they do also assists their employees to be in control of their future, teaching them entrepreneurial skills and assets. The quality of the goods coupled with the ethical nature of their business model are the perfect factors to build a great business relationship with The Den. 16

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Offis Textile LTD Azor, Israel

Offis Textile is a comprehensive high quality one-stop-shop for textile development and finishing that has four decades of manufacturing experience. They have the most experience creating bedding textiles, curtains, upholstery fabrics and tablecloths, all items that will be part of The Den’s product assortment. For this project especially we are focusing on bedding textiles such as blankets and pillows. They offer customers direct access to their in-house design and development teams and innovative processing techniques. They are constantly updating their technological processes for the most innovative and cost effective practices. Something that is also very important to The Den is their commitment to social and environmental responsibility. They also focus on the communities they operate in as well as investment in their employees. They follow a ”Meticulous Management Policy” which the customer is at the head of. As far as their employees in the management process they consider those that work in manufacturing and sales the most important because they supply the first and final product services to the customer. Each year they participate in programs that assist people with special needs and help newly relocated immigrants adjust to life in Israel. They use renewable biogas to produce steam and heat thermal oil which improves plant emissions and air quality in the surrounding area. They also meet oeko-tex and global organic textile standards and use recycled materials and environmentally friendly chemicals and dyes. Offis Textiles has the most comprehensive sustainability procedures which will help The Den be socially responcible as well.

Zhejiang Alright Home Textiles Co. Hangzhou, China

Although we could not find much information on Zhejiang itself we found many well-known high quality brands that manufacture their products through Zhejiang Alright Home Textiles. Wholesalers like Hollander Sleep Products which focuses on bedding and soft textile goods works with brands such as Lauren Ralph Lauren, Nautica and Laura Ashley. Hudson Bay Company also supplies from Zhejiang and works with high end brands like Lord & Taylor, Saks Fifth Avenue and Home Outfitters. Both companies are committed to social responsibility and sustainability throughout the supply chain processes. Hollander Sleep Products is committed to sustainable practices and design and work with suppliers that have the same mindset. They give preference to suppliers and manufacturers that qualify for their Sustainable Supplier Certification Program. HBC also has stringent corporate social responsibility guidelines. All of their suppliers, vendors and subcontractors must abide by the Supplier Code of Conduct. They conduct their own as well as third party audits and implement Corrective Action Plans for high risk suppliers. Based on this information, we believe Zhejiang Alright Home Textiles will be an acceptable supplier for our home textile products. Zhejiang has the capacity to create soft good textiles and has the experience working with high quality materials and following strict ethical manufacturing guidelines. - THE DEN -

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Strategy Publication & Strategy Conclusion The final chosen countries are China, India, and Israel. These countries were chosen based on the low costs they offer, as well as access to materials and transportation. The chosen suppliers are Zhejiang Alright Home Textiles Co., Offis Textiles and Jaipur Rugs Inc. The combination of costs of labor in each of these countries plus capability and cost of manufacturing from the supplier makes each of these countries and suppliers great options to consider when sourcing. The chosen countries and suppliers all align perfectly with the cost, quality, and accessibility standards The Den holds all its merchandise to. Each of the chosen suppliers have a lot of experience with manufacturing home textiles and have worked with many high value brands that expect pristine quality for their products, making them a great fit with The Den’s quality standards. The availability of resources and the use of top of the line machinery to produce home textiles are what truly excites us at The Den.

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Conclusion Throughout the sourcing process to the final selection of countries and suppliers, The Den has kept consistent in choosing ones that best fit our key values of quality, craftsmanship, and sustainability, while being able to offer products at an affordable price point for our consumer. After our sourcing trip, The Den decided to source from the following countries: India, China, and Israel. We believe that these countries align perfectly with the cost, quality, and accessibility standards The Den holds all its merchandise to. These countries provide us access to suppliers, who we feel best meet our needs of production regarding our pillow and throw, as they have experience within the home textile industry and have the necessary machinery and equipment to fulfill our requests. The deciding factor on each of our suppliers was based on their compliance with our Corporate Social Responsibility factors. All of our suppliers chosen work hard to ensure quality and sustainability within their products. They each meet our the requirements of our transparency policy, by being completely open and honest with us about where their materials and labor are coming from, and how they are affecting the environment. One of the things we really pride in these selected suppliers is their company culture, they each work hard to uphold strong ethical standards ensuring their employees are earning a fair living wage, as well as one supplier, who is offering educational opportunities for employees and their families to fight poverty. Based on the values these companies share in regards to our Corporate Social Responsibility factors, we feel these are the best suppliers to meet our production needs. The investment they make in their culture and community is something we value, as well as their sustainability and environmental efforts. We are excited about the opportunity to source from and build relationships with each of these countries and suppliers, and are ready to inspire the consumer with our quality crafted, sustainable products.

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Appendix

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Line Plan This is based on starting with 2,000 units over a course of six months. Which means 333 units each individual month.

Planned Purchases, Retail:

$28,150

Average Retail Price:

$96

Classification

Unit

Avg.

Total

Purchases

Retail

Cost

Solid Throw Blanket

20%

$5,630

$98

$44.11

Solid Pillow

30%

$8,445

146

$58

$26.10

Texture Throw Blanket

20%

$5,630

$128

$57.60

Texture Pillow

30%

$8,445

$98

$44.11

100%

$28,150

333

TOTAL

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Planned Purchases, Retail:

$169,000

Average Retail Price: Classification

$96 %

Unit

Avg.

Total

Purchases

Retail

Cost

Solid Blanket

20%

$33,800

345

$98

$44.11

Solid Pillow

30%

$50,700

874

$58

$26.10

Texture Blanket

20%

$33,800

264

$128

$57.60

Texture Pillow

30%

$50,700

517

$98

$44.11

100%

$169,000

2000

TOTAL

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Country Rankings Scale of 1-10 with 1being the worst and 10 being the best

China

India

Business Climate

Costs

Government

Location

Risks

Social Stability

Sourcing Guidelines

Textile Industry

Trade Agreements

Trained Workforce

Socio-Eco-Political

Total Points

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Israel

Supplier Rankings Scale of 1-10 with 1being the worst and 10 being the best

Zhejiang Alright Home Textiles

Janipur Rugs

China

India

Abilities

Capacity

Lead Time

Quality

Customers

Sourcing Guidelines

Services Offered

Strategic Outlook

Average Score

5 7.4

8.9

Total Points

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Offis Textiles

Israel

Works Cited

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“BREAKING TRADITION.” JAIPUR RUGS: Impact. N.p., n.d. Web. 14 Nov. 2015. “Business Culture in India.” Doing Business in India. N.p., n.d. Web. 14 Nov. 2015. “Can China’s Textile Industry Clean up Its Supply Chain?” GreenBiz. N.p., n.d. Web. 14 Nov. 2015. Central Intelligence Agency. Central Intelligence Agency, n.d. Web. 14 Nov. 2015. “China’s Role in Global Economic Recovery.” (2011): n. pag. Web. “China Textile Factories Recruit US Workers.” CNBC. N.p., 02 Aug. 2015. Web. 14 Nov. 2015. “Code of Conduct.” Encyclopedia of Public Health (2008): 130. Web. Forbes. Forbes Magazine, n.d. Web. 14 Nov. 2015. “India vs. China: The Battle for Global Manufacturing.” Bloomberg.com. Bloomberg, n.d. Web. 14 Nov. 2015. “India’s Manufacturing Cost Competitiveness: Holding Steady.” Www.bcgperspectives.com. N.p., n.d. Web. 14 Nov. 2015. “Login.” Cotton Textile Industry In India, Indian Textile Industry, Apparel, IBEF. N.p., n.d. Web. 14 Nov. 2015. “Login.” Make in India. N.p., n.d. Web. 14 Nov. 2015. “Login.” Textile Industry in India, Indian Textile Industry, Garment Industry. N.p., n.d. Web. 14 Nov. 2015. “New Import Duty & Taxes Calculation | DutyCalculator.” DutyCalculator. N.p., n.d. Web. 14 Nov. 2015. “Offis Textile.”Offis Textile. N.p., n.d. Web. 14 Nov. 2015. “Social Responsibility.” Hollander. N.p., n.d. Web. 14 Nov. 2015. “Textile Industry Services - Israel Exporter.” Textile Industry Services - Israel Exporter. N.p., n.d. Web. 14 Nov. 2015. “The Future of Israel’s Fashion Industry Lies in the West Bank - Arts & Leisure.” Haaretz.com. N.p., n.d. Web. 14 Nov. 2015. “Working With Factories.” Patagonia. N.p., n.d. Web. 16 Nov. 2015. “Zhejiang Alright Home Textiles Co., Banlitong Xintang St Xiaoshan Zone Hangzhou Zhejiang 311201 Cn | Supplier Report — Panjiva.” Zhejiang Alright Home Textiles Co., Banlitong Xintang St Xiaoshan Zone Hangzhou Zhejiang 311201 Cn | Supplier Report — Panjiva. N.p., n.d. Web. 14 Nov. 2015.

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FASM 420 / PROFESSOR LEVY / FALL 2015 SARENA FOSTER ERIN KELLEY CHRISTINA RIPLEY