FASM 245
JANET OLMEDO
PROFESSOR
CLAUDIA LEIVA
MICHAEL COHEN
SHELBY MOORE
TABLE OF CONTENTS About Francesca’s Sales and Market Analysis Key Competitors 6-Month plan and Assortment
COMPANY OVERVIEW
“Surprise and Delight Every Guest, Every Time� Business - to - consumer Female targeted fashion boutique that specializes in trendy clothing, accessories and home for older teens and young professionals. Assortment of eclectic mix of carefully-curated clothing, bold accessories, and gifts. New arrivals weekly, allowing shopper to always discovers something special in every visit. We only carry a few of each item, so everything you buy is exclusively yours.
TREASURE HUNT
Diverse merchandise that reflects a “treasure hunt� atmosphere in the store. Broad selection but limited quantities encourages consumer to search around the store for one of a kind item that gives the customer a sense of exclusivity. Increases customer store visit as they want to continue searching for different styles. Provide each guest a sense of discovery, reasons to return, and something worth sharing with her friends.
HISTORY
We started in 1999 and opened our first boutique in Houston, Texas, filling it with a collection of hand-picked merchandise. Initially we focused on selling fashion jewelry, accessories and home dĂŠcor, we grew to expand merchandise to include apparel.
Michael W. Barned resigned from his positions as chairman, president and Chief Executive officer of the Company on May 15, 2016. In September 2016, Steven P. Lawrence was appointed as the company’s president and CEO.
BRAND IDENTITY
We are known for offering our customers a wide range eclectic and sophisticated merchandise. We show interest and value towards our customer by providing a personalized service to build a strong connection between the customer and the brand.
TARGET MARKET: DEMOGRAPHICS -Age: 14-35 y/o -Gender: Female fashion conscious consumers -Income: Moderate to High -Education: High school and college degree -Race: majority of customers are Caucasian
TARGET MARKET: PSYCHOGRAPHICS -Personality: Outgoing women who aren't afraid of wearing bright colors, patterns, and bold accessories in their everyday life. -Behavior: Loyal customer with adequate disposable income; keeps up with current trends and fashion; stops by every two weeks to see what is new. Spends around $300 every month on fashion related items. Has a positive relationship with store employees by being a frequent customer.
SCOPE AND SIZE
• 671 boutiques, 48 states, 5.3K employees • Net income 38.2 mil 2015, 32.1 mil 2014. • Opened 83 new stores in 2015 & closed 6 underperforming ones in 2015.
• Between fiscal yr. 2014-2016 net sales increased from $377.5 million to $487.2 million which represents an annual growth of 13.6 % • Between the fiscal year 2014-2016 e-commerce sales increased from $14.4 million to $24.1 million which represents an annual growth of 29.3%
LOCATION STRATEGY
We relay on heavily visited unique locations like upscale shopping centers & outlet malls to bring in customer traffic. Boutiques are located about 50/50 mall and non-mall sites.
Number of Boutiques (U.S.) 700 600 500 400 616
300
539 451
200
360 283
100 76
77
91
88
83
2011
2012
2013
2014
2015
0
Total Number of Boutiques
Boutiques Opened
YEARLY SALES BY DEPARTMENTS
49% apparel (Dresses, Fashion Tops, Sweaters, Cardigans and Wraps, Bottoms, Outerwear and Jackets, Tees and Tanks, Intimates) 22% jewelry 16% accessories 13% gifts
TYPE OF RETAILING
• Specialty Store (Concentrates on Fashion; 50% of store merchandise is apparel, other 50% is a accessories and gifts). • Brick and Mortar. • E-commerce: pictures of their sites
•
Strong Social media presence
•
Francesca’s advertising strategy seems to be focused on in-store marketing and directed at repeat customers.
SWOT ANALYSIS
Strengths: • Introducing new merchandise every week, high inventory turnover. • Broad and Shallow assortment • Offer high quality merchandise at affordable price point. • Differentiated shopping experience, store displays change frequently. • Limited store space- Boutiques range from 1,000 to 2,000 sq. ft.- Smaller store more control
Weaknesses: • Limited Marketing Budget- they stick to email and social media- no print ads. • Does not offer a loyalty program- they have an emailing list but nothing more. • Too much merchandise can overwhelm customers and come out as cluttered and disorganized.
Threats: •
Highly competitive market, competing with brands that have locations worldwide and larger retail space.
•
Rapid changing fashion trend; merchandisers
•
Increase number and size of stores
have to keep up with the latest trends- and
•
Cut Down on social media platforms.
•
Increase Brand Awareness- Magazine
customer taste. •
Opportunities:
Profits are subject to consumer spending and economic conditions.
Advertisements can attract new customers.
VISION 2020
Purpose: To drive long-term, sustainable and profitable growth. Plan: To fulfill “Vision 2020 Plan� of opening 900 stores by 2020 as stated in our 2015 yearly analysis.
VISION 2020 PLAN 1. Invigorate Merchandising Fill boutiques with a fresh, innovative and value- oriented mix of merchandise Partner with vendors to create and deliver a unique assortment that meet the needs of our guest 2. Optimize Real Estate Open and operate 900 boutiques by 2020 Make any improvements on existing boutiques- remodeling and possible closures Beginning of fiscal year 2016, number of boutiques was 616 by January 2017 there were 671. We are expected to open about 60-65 new boutiques and close about 10-15 boutiques in fiscal year 2017
3. Differentiate and Personalize In-Boutique Guest Experience: provide in-boutique experience that gives each guest a sense of discovery, reason to return and something worth sharing with her friends. 4. Cultivate and Expand Branding and Marketing : Develop an emotional connection between our brand and our guests. 5. Develop and Integrate The Digital Ecosystem: E-commerce business represents less than 4% of their total sale. 6. Focus and Drive Outlets Opportunities available in the outlet channel- increase growth by optimizing our merchandise and marketing initiatives.
CORE STRAGTEGIES & TACTICS
Offers limited quantities of merchandise that feel unique and one of a kind at affordable prices.
Differentiated shopping experiences.
Trend and current inventory updated
Not one Francesca’s stores are alike, layout made to feel unique to location and a sense of independently owned & upscale experience.
weekly. Broad and shallow assortments.
Provides personal customer service, although we are a chain store.
In the Market: As of 2015 Francesca’s Holding Corp. makes up .44 billion ($440,000,000 million) of the top 25 fastest growing retail businesses in North America. US apparel market is a 225-billion-dollar market, with Women’s apparel making up 110,826,000,000 of this number.
Francesca’s makes up .4% of the total apparel market in North America
PERCEPTUAL MAP
High Accessibility
High Price
Low Price
Low Accessibility
COMPETITORS
• 5th largest specialty retailer in the US, worth $8 billion. • Focus in clothing, accessories, shoes and beauty
• Women’s lifestyle brand
• Customer: men and women from 14-30 y/o
• Geared towards women ages 25-45, who typically have a hard time finding clothing that suits their age group
• Operates in the U.S. and internationally • Private Labels: 21 Men, Love 21, Forever21+, Forever21 Girls and Love & Beauty • Strong Social Media presence • Weakness: countless lawsuits, fast fashion retailer.
• Customer Profile: well traveled, well read, appreciate innovation, artfulness and good design • Average store is around 7,000 sq/ft • Rely on website, apps, email campaigns, social media, blogs, and storefront displays to reach customers
• Based in Houston, TX, • Retailer of trendy value-priced fashion jewelry and accessories • 357 stores worldwide • Targeting women between ages 22 to 54 • Advertising: print, television and digital , “Charm Club” loyalty program • Online blog & strong social media presence • Seasonal promos & sales
• Charming Charlie’s makes up .55 billion ($550,000,000 million) of the top 25
• Forever 21 makes up 2.37
fastest growing retail businesses in North
($2,370,000,000,000) of the top 25
America.
fastest growing retail businesses in NA.
• 550,000,000 / 110,826,000,000 = 0.00496 à .5%
of total apparel
market in North America.
• 2,370,000,000 / 110,826,000,000 = 0.0213 à
2.1% of total apparel
market in NA • Anthropologie: N/A
COPORATE PLAN
•
Company continues to grow sales, even though stock is lower, due to focus on ecommerce.
•
We have a high turn because of broad and shallow assortment.
•
Our growth is coming from new stores.
Corporate Buying Plan / SS '18 Net Sales % Change Total growth New Store Planned Sales Total Plan for Preexisting Stores Com Growth Total growth Total Inventor y Turnover Total Reductions ($) Total Reductions (%) Total Average Stock Calculated Average BOM Dresses retail receipts Dresses cost receipts
2017
2018
$221,400,000
$230,256,000 4%
$2,656,800
3.7
$8,856,000 $5,313,600 $885,600 $8,856,000
3.9
$53,136,000
$52,958,880
$59,837,838
$59,040,000 $19,623,824 $87,728,392 $28,950,369
24%
23%
APPAREL PLAN
• 49% of our net sales represents apparel • 60% of sales growth comes from new stores because we plan on opening 60-67 stores to reach our 2020 Vision Goal.
Apparel Buying Plan / SS '18 SS 17 Net Sales SS 18 Estimated Net Sales % Change Total Growth New Store Planned Sales Total Preexisting Stores
$248,277,120 $258,208,205 4% $9,931,085 $5,958,651 $3,972,434
SIX MONTH BUYING PLAN
•
30 % of our total apparel net sales represents women's dresses
6 Month Buying Plan: Women's Dresses Planned Sales for Period
$77,462,461
Sales (LY)
$74,483,136
Planned Increase
•
whereas Quarter 2 produced 55% of total dress sells
4%
Initial Markup
within spring summer 2018
67%
% to TOTAL APPAREL for SS 18
•
33.64%
TOTAL REDUCTION
Quarter one produced 45% of total dress sales
Sells peaked in May due to Holiday season
$17,816,366 FEB
MAR
APR
MAY
JUNE
JULY
TOTAL
Sales Distribution/ Penetration
20%
15%
10%
24%
16%
15%
100%
Stock-Sales Ratio
1.52
1.52
1.52
1.52
1.52
1.52
Reductions Distribution
18%
17%
10%
25%
18%
12%
PLANNED MONTHLY SALES
$15,492,492
$11,619,369
$7,746,246
$18,590,991 $12,393,994 $11,619,369
$77,462,461
PLANNED MONTHLY BOM
$23,548,588
$17,661,441
$11,774,294
$28,258,306 $18,838,871 $17,661,441
$19,623,824
PLANNED MONTHLY EOM
$17,661,441
$11,774,294
$28,258,306
$18,838,871 $17,661,441 $16,000,000
$18,365,726
PLANNED MONTHLY REDUCTIONS
$3,206,946
$3,028,782
$1,781,637
$4,454,092
$17,816,366
PLANNED PURCHASES AT RETAIL
$12,812,291
$8,761,004
$26,011,895
$13,625,647 $14,423,510 $12,094,045
$87,728,392
PLANNED PURCHASES AT COST
$4,228,056
$2,891,131
$8,583,925
$4,496,463
$28,950,369
$3,206,946
$4,759,758
$2,137,964
$3,991,035
100%
BIG STORE VS. SMALL STORE PLAN
SALES
REC
Dress Plan BIG STORE
77462461 345509 76756
SMALL STORE
CORPORATE
All Doors
391299 86928
Mid Doors
Top Doors
TOTAL
casual
dressy
maxi
casual
dressy
maxi
casual
dressy
maxi
55% Price $44 Dresses
18,068,688
12,104,840
9,034,344
3,009,600
3,366,000
1,848,000
158,400
543,400
286,000
48,419,272
38% Price 48 dresses
15,653,088
7,729,920
3,864,960
2,592,000
2,073,600
972,000
324,000
182,400
134,400
33,526,368
7% Price 54 dresses
2,536,380
1,449,360
652,212
623,700
259,200
121,500
113,400
16,200
10,800
5,782,752 87,728,392
BIG STORE
All Doors
Mid Doors
Top Doors
TOTAL
casual
dressy
maxi
casual
dressy
maxi
casual
dressy
maxi
55% Price $44 Dresses
63,360
32,120
27,720
23,760
18,480
11,000
8,316
18,810
11,154
214,720
38% Price 48 dresses
50,544
21,888
12,096
20,736
12,960
5,616
12,000
9,792
4,608
150,240
7% Price 54 dresses
8,640
3,780
2,430
4,536
2,484
1,094
1,458
1,539
378
26,339 391,299
SMALL STORE
All Doors
Mid Doors
Top Doors
TOTAL
casual
dressy
maxi
casual
dressy
maxi
casual
dressy
maxi
55% Price $44 Dresses
13,200
9,196
7,920
8,228
6,336
3,300
0
0
0
48,180
38% Price 48 dresses
10,560
7,296
3,456
7,680
2,496
1,536
0
0
0
33,024
7% Price 54 dresses
2,592
1,512
648
540
324
108
0
0
0
5,724 86,928
Assortment Plan Average Purchase at Retail ($) PRICE/ STYLE ($)
87,730,239 Sales Plan Per price category ($)
44 A. CASUAL SHORT
$48,419,272
21,379,184 Number of doors
55% 44% Depth per style
SKUS (style varitaion)
TTL retail value ($)
All Door Styles
671
17
36
18,068,688
Mid Door Styles
300
12
19
3,009,600
Top Door Style
50
8
9
158,400
Total
$21,236,688
B. DRESSY SHORT
16,034,388 Number of doors
33% Depth per style
SKUS (style variation)
TTL retail value ($)
All Door Styles
671
20.5
20
12,104,840
Mid Door Styles
300
17
15
3,366,000
Top Door Style
50
13
19
543,400
Total
$16,014,240
C. CASUAL MAXI
11,175,483 Number of doors
23% Depth per style
SKUS (style variation)
TTL retail value ($)
All Door Styles
671
17
18
9,034,344
Mid Door Styles
300
14
10
1,848,000
Top Door Style
50
10
13
286,000
Total
$11,168,344
INTERVIEW WITH JESSICA WEBB Senior Inventory Analyst at Francesca’s
What made you decide to work at Francesca’s? How did you start out? “I wanted to work at Francesca’s throughout my adult life. I was in college when I first discovered Francesca’s (around 2000. Francesca’s started in 1999). I thought it was an independent boutique (we want to stay that little secret). I didn’t start working at Fran until 2012. It still had a very entrepreneurial spirit which I loved. I began as an accessories allocator. Our Chief Merchandising Officer really instilled a sense of empowerment within the company and your role within the organization.”
What are Francesca’s Company Values? “Surprise and delight every guest every time” “We like to give customers great service and offer unique products. In the home office we are very focused on team work, family values, work/ life balance, and career advancement.”
How would you describe the customer of Francesca’s? “We used to think she was younger although recent demographic info says she’s in her late 20’s/ early 30’s.”
SOURCES
•
Francescas
•
http://files.shareholder.com/downloads/ABEA-67ZODQ/4185320946x0x887662/31F0C1A4-D5F5-4CDC-8935 -FD365D958CA6/FRAN_2015_Annual_Report.pdf
•
https://www.francescas.com/category/guest-services/about-us.do
•
http://investors.francescas.com/stockquote.cfm
•
http://investors.francescas.com/governance.cfm
•
https://www.slideshare.net/AkankshaJain20/managing-marketing-communications-for-francescas
•
https://app.avention.com/article/5a35b050-b11b-3d45-9207-2d8f7f846 f0d
•
https://www.facebook.com/francescascollectionsboutique
•
https://www.pinterest.com/shopfrancescas/
•
https://0-www.statista.com.library.scad.edu/statistics/240372/sales-of-the-fastest-growing-softgoods-retailers-in-the-us/
•
https://www.statista.com/statistics/243072/sales-of-the-us-apparel-market-by-segment/
•
Forever 21
•
http://www.forever21.com/Company/About.aspx?br=f21
•
http://martinroll.com/resources/articles/branding/forever21-fast-fashion-with-an-edge/
•
http://www.forever21.com/Company/About.aspx?br=f21
•
Forever 21 Looking To Double Business. (2014). WWD: Women's Wear Daily, 207(131)
•
Anthropologie
•
https://www.anthropologie.com
•
http://effortlessanthropologie.blogspot.com/2016/04/discovering-portland-anthropologie.html
•
Charming Charlie
•
https://www.moodys.com/research/Moodys-Downgrades-Charming-Charlies-CFR-an d-Term-Loan -to-B3--PR_341827
•
http://www.charmingcharlie.com/about/chic-charity-events
•
http://wwd.com/business-news/media/charlies-charm-offe nsive-6377868/
•
http://www.charmingcharlie.com/about/about-us/
•
http://www.prnewswire.com/news-releases/charming-charlie-unveils-first-ever-advertising-campaign-find-your-fabulou s-this-holiday-season-172452331.html
•
http://www.cnbc.com/2016/11/23/reuters-america-update-1-jewelry-chain-charming -charlie-e xplores-debt-restructuring-sour ces.html
•
http://companies.bizjournals.com/profile/charming-charlie/380349/