kate spade NEW YORK WOMEN’S HAND BAGS F/W 2015 Corinne Syquia & Christina Tai
THINK TRAVEL CELEBRATE CHARM DECORATE DRESS LIVE
colorfully.
TABLE CONTENTS table ofOF contents 1.
ABOUT KATE SPADE
4-11
2.
COMPETITORS ANALYSIS
12-27
3.
TREND REPORT
28-31
4.
6 MONTH PLAN
32-37
5.
ASSORTMENT PLAN
38-45
6.
STORE ANALYSIS
46-59
7.
REFERENCE LIST
60-61
1. ABOUT KATE SPADE
CUSTOMER PROFILE BASIC INFORMATION - Female - aged 25-40 - Working
MORE ABOUT HER
The Kate Spade lady is always on the run. She is a free-spirited individual with a penchant for color who embraces her quirkiness and lets her unique personality shine through her possessions. In spite of her outgoing personality, she is always the perfect blend between sophistication and playfulness.
she is QUICK and CURIOUS and PLAYFUL and STRONG
COMPANY OVERVIEW
Three things define Kate Spade New York: crisp color, graphic prints, and playful sophistication. Through its handbags, clothes, jewelry, accessories, fragrance, eyewear, shoes, swimwear, hoem decor, desk accessories, stationery tabletop and gifts, the brand aims to inspire with its charm and philosophy: live colorfully. Kate Spade New York have over 140 stores in the United States alone, and over 175 stores internationally. No matter where you go, whatever city you are in, each and every store aims to emulate the warmth and the charm that is so unique to the brand. This is Kate Spade New York.
HISTORY
Kate Spade was founded in 1993 when Kate Brosnan, former accessries editor for Mademoiselle, wanted to create the perfect handbag. And she did, combining bright colors and utilitarian shapes in a way that everyone fell in love with. With just 6 silhouettes, Kate Spade New York was born. Kate Spade’s first store opened in 1996, and the world soon recognized the brand for their graphic approach and wit. In 2007, Kate Spade was handed over to Kate Spade & Co. (formerly Liz Claiborne Inc.), and shortly after, Deborah took over as President and Chief Creative Officer to broaded Kate Spade’s offerings. With the help of CEO Craig Leavitt, the brand expanded into the lifestyle brand it is known for today, with jewelry, clothing, bedding and fragrance. All the while, Kate Spade never lost sight of who they are: their commitment to color, curiosity and wit, they continue even today to inspire everyone to live colorfully.WW
KATE SPADE IN HONG KONG Kate spade had four kinds of distribution channel in Hong Kong. They have five brand owned retail stores, including the flagship store in pacific place, IFC mall, ocean ceantre in harbour city, elements and new town plaza. Besides of this five stores, they also owned one outlet in Tung Chung. As for department store, they have sogo causeway bay, sogo tsim tsai tsu and DFS in airport. In addition to physical stores, Kate Spade also have thier own E-commerce system and other online retailers like Nordstrom, Shopbop and so on.
KATE SPADE PRODUCT LINE
KATE SPADE HANDBAG COLLECTIONS SPECIAL COLLECTION The special collection will be launched each season, besides four seasons, they will also be lauched with holidays, like Valentine's day and Chinese New Year. They are fun and atrractive, and have a strong theme. They share the same inspiration with apparel collection, and is the most special and delicate creation among all different collections of bags.
CEDAR STREET Cedar Street collection is iconic with its design of easy elegance and clean lines. The silhouette is in geometric but soft rounded edges. Always have detachable strap and can be carry in different ways. The handle design is clean and classical. One of the silhouette, Maise is the bestseller among all the products in Hong Kong
COBBLE HILL Cobble Hill collection is designed as a highly functional bag. They are roomy with duffle bag shape, and are full of compartments to hold every piece of little things. They come in different colors and sizes, and it suitable for both formal and casual occasions.
CLASIC NYLON
CHARLES STREET
CHELSEA SQUARE
Classic Nylon is the most iconic collection in Kate Spade. It had its history from the first collection which designer launched six different silhouette of nylon bags. Though the leather handbags are the dominant products for now, classic nylon still favored by customers who looks for durable and light-weight nylon bags.
Charles Street Collection have similar silhouette with Cedar Street. However, Charles Street is less feminine and designed with more space. It is practical handbag in pebbled leather, which comes in different color and pattern. It also has details like an adjustable strap.
Chelsea Square collection embraced geometric silhouette, which is unique among other Kate Spade bags. It normally designed with mixed colors. Chelsea Square is strong, fashionable and formal. It is perfect for powerful women to use in professional occasions. They comes in different sizes and have detachable strap to hold in different ways.
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2. COMPETITORS ANALYSIS
ABOUT MARC BY MARC JACOBS THE HISTORY Marc by Marc Jacobs is the diffusion line of designer brand Marc Jacobs. It was introduced in 2001 to expand the brand's customer base to younger generation, and the price of merchandise is set lower to be affordable for more people. Its designer Marc Jacobs has won CFDA Accessory Designer of the Year for 1998, 1999, 2003 and 2005. And later handing over the head designer to Kate Hiller in 2013, who started her career as accessory designer.
BRAND STYLE The style of MBMJ is young, fun, quirky and full of New York energy. And it is known for the design with bold colour blocks, original prints and retro takes.
VISUAL MERCHANDISE •Large store space with more merchandise than Kate Spade •Shelves of bags placed in front of the window with racks of apparel •Bags on top of the apparel racks will match the pattern or design of garments
MARKDOWN •50% off with most nylon items and some off season items •On sale items are scattered in the store
5 MBMJ Owned Stores
4 MBMJ in Department Stores 1 MBMJ Outlet
ABOUT PRODUCT MATERIAL &SILHOUETTE The MBMJ handbags used both leather and synthetic fabrics, and have more variety of bags that use synthetic fabrics than Kate Spade. The silhouette of the bag is influenced by the material used. Compared to Kate Spade, their leather bags have softer lines as they mainly used soft cow leather. MBMJ also have very geometric design bags, and is usually made by synthetic fabric. The synthetic fabric includes polyurethane, polyester and PVC.
THECOLOR MBMJ bags are known for their use of bold colors and prints. They usually have different color choices for each bags, and mostly will comes in three different colors. Normally there will be one as neutral colors and the other ones in bright colors.
CHOICES OFBACKPACKS One major difference between Kate Spade and MBMJ is MBMJ have wide varieties of backpacks. They come in different material, colors or print and silhouette.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 25 •Occupation: Student
MORE ABOUT HER This is a girl who doesn’t take herself seriously – in fact, she hardly takes anything seriously at all. Her handbag reflects this – she is fun, playful and unafraid to set herself apart from everyone else. Because she is always on the move, her bag should\ be spacious and functional – without sacrificing the fact that it has to express who she is.
ABOUT MICHAEL KORS THE HISTORY Michael Kors launched the first runway collection in 1981. In addition to that, he introduced two lines Michael Michael Kors and Kors Michael Kors in 2004. The handbag department is included in Michael Michael Kors and the brand set its products as affordable luxury fashion.
BRAND STYLE Michael Kors is known for its innate sense of glamour and an unfailing eye for timeless chic. Its style is elegant, minimal, but strong with powerful feminism.
VISUAL MERCHANDISE •Have less merchandise than other competitors but nicely layout everything •One whole wall dedicated to Selma bag which is the same approach as what Kate Spade did with Maise bags. •Have racks with different colors of Jet Set Tote and Selma messenger
MARKDOWN •No markdowns. Will atmost have it once a year
1 Michael Kors Owned Stores
2 Michael Kors in Department Stores
ABOUT PRODUCT THEDESIGN
The design of Michael Kors bag is clean and elegant with sharp lines. It is strong and powerful that suitable for professional occasion.
THEMATERIAL
THECOLOR The colors of Michael Kors bags are earth tone, neutral and bright colors. However, the colors are less bold compared to MBMJ.
Michael Kors is the one used most leather among all the competitors. Their material ranged from different kind of animal skins, from the normal crosshatched leather to luxurious crocodile skin.
BESTSELLER SELMA The silhouette Selma is the top seller in Hong Kong. They come in different colors, sizes and materials. The one with the handle is called Selma Satchel and the one without handle is called Selma Messenger. And in each season they will remain the design but add new elements on it, for example, the stud, fur...etc.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 30 •Living area: Hong Kong Island •Occupation: Business Woman
MORE ABOUT HER The Michael Kors girl is one who looks for timelessness in her pieces. However, this does not mean she is boring. she will find ways to incorporate the latest trends and colors into her wardrobe without ever going out of style. Her favorite handbag is one that that is both attractive and functional, and roomy enough to put all her essentials and perfect for her day to night looks.
ABOUT TORY BURCH THE HISTORY Tory Burch was launch at 2004 in New York. The designer Tory Burch started her career in fashion industry as public relations and marketing. She has won CFDA Accessories Designer of the Year in 2008. The brand product lines line includes ready-to-wear, shoes, handbags, accessories, beauty, home and watches; which is quite similar to Kate Spade.
BRAND STYLE Tory Burch is known for its elegant and feminine style with relaxed feel. Their design is known for its saturated color, beautiful print and eclectic details.
VISUAL MERCHANDISE •Clearly separate apparel and handbags. The handbags are nicely layed out •Window display is simple with two or three items •Use gold color in the interiors to create premium image and match the brand's style •One whole shelf is dedicated to York Buckle Tote, which is the same way Kate Spade and Michae Kors did.
MARKDOWN •30% markdown with very limited off-season items
4 Tory Burch Owned Stores
2 Tory Burch in Department Stores
ABOUT PRODUCT THEDESIGN
The design of Tory Burch bag is the most feminine and tender ones among all the competitors. The silhouette is usually geometric and clean. It is also known for its delicate details on the handbags.
THEMATERIAL
The main material of Tory Burch handbags are leather, however, they also have nylon handbags. The price of the bags will varied by the material used, for example, the Korean leather bag is cheaper than the Italian leather one.
THECOLOR The color used in Tory Burch bag is neutral, earth tone, feminine colors, and patterns. They are also colorful but the color they chose is softer than other competitors.
BESTSELLER YORK BUCKLE TOTE York Buckle Tote is one of the bestseller in Hong Kong. They come in three different sizes from small to large. They are all used crosshatched leather t o have a harder shape. There are also wide varieties of color that people can choose.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 25 •Living area: Hong Kong Island •Occupation: Businesswoman
MORE ABOUT HER The Tory Burch girl a professional woman who openly embraces her soft femininity. She is comfortable with pastels as well as bright, saturated colors; in a similar way she can effortlessly switch from seriousness to playfulness in an instant. She has a bag for every occasion and every ensemble in her closet. The Tory Burch girl also has an excellent eye for detail - she knows every stitch and every pocket makes all the difference.
PERCEPTUAL MAP AVERAGE PRICE / MARKDOWN This perceptual map is aim at finding out the pricing differences between the competitors. Tory Burch and Michael Kors have the highest average price as they their runway collections bags will set in higher price, also, some of the bags will use luxurious leather or special handcrafted thus make their bags more expensive. For Kade Spade and MBMJ they have lower price. This also shows their pricing affected by their brand position that Tory Burch and Michael Kors are affordable luxury brand while Kade Spade is premium brand and MBMJ is diffusion line for luxury brand. As for markdown, Michael Kors has least markdown. Tory Burch and Kate Spade have the same markdown; however, Tory Burch has more limited items for markdown. And MBMJ has most markdown on their products especially for their nylon bags This perceptual map shows the price relationship of the brands. We find out that the higher markdown normally links with lower price. And the price point is also affected by the brand image. This result will be our reference for pricing assortment.
STYLE / MATERIAL USED This perceptual map we compared the brand's handbag style and the material used. For the style part, MBMJ is the most casual one and is younger and more fun; Kate Spade in the middle that close to Tory Burch that they all have professional handbags and some casual items but Kate Spade has its classic nylon collection to make it more casual. Michael Kors has the most professional image between the competitors that the style of the bag is much more mature and sharper. As for material used, both Tory Burch and Michael Kors used expensive material like python skin or special made fabrics. Though Kate Spade used a lot of leather, it also has nylon and canvas bags that make it in the middle. As for MBMJ, it is the brand used most synthetic fabrics. By setting this perceptual map, we can find out the relationship with the handbag style and material. This is also a reference for us to determine the assortment plan for fabrication.
3. TREND REPORT
VINO dolce
the italian culture is defined by several things: energy, vivacity, the love of life. but, above all else, the italians love one thing: their wine.
MOOD BOARD
4. SIX-MONTH PLAN
SIX-MONTH PLAN FALL
JUL
AUG
SEP
SALES $
Last Year Plan % Inc/Dec % by Month Revised Actual
STOCK/SALES RATIO
Last Year Plan
BOM STOCK $ (Retail)
Last Year Plan Revised Actual
$ 55,091,991.95 $ 62,962,276.51
MARKDOWNS $
Last Year Plan % to Sales % by Month Revised Actual
$ 4,837,794.02 $ 1,814,172.76 $ $ 5,998,864.58 $ 2,249,574.22 $ 21.6% 10.0% 24.0% 9.0%
PURCHASES $ (Retail)
Last Year Plan Revised Actual
$ 20,467,631.41 $ 25,182,330.45
2.38 2.27
2.53 2.41 $ 47,607,924.61 $ 54,409,056.69
$ 21,911,847.31 $ 26,293,410.47
2.43 2.31 $ 48,891,955.77 $ 55,876,520.88
$ 28,608,496.48 $ 34,082,258.84
LAST YEAR
$134,383,167.1
$ 161,259,800.5 70%
Markdown %
15%
15.5%
63.75%
65%
Turnover
$ 55,236,319.5 2.43
2.36 2.25 $ 54,924,080.18 $ 62,770,377.35
$ 19,633,044.75 $ 24,059,962.24
PLAN
68%
Average Stock
DEC
$
2.48 2.36 $ 48,285,215.77 $ 55,183,103.73
2,418,897.01 $ 3,023,621.26 $ 1,612,598.01 2,999,432.29 $ 3,749,290.36 $ 1,999,621.53 10.8% 13.4% 8.6% 12.0% 15.0% 8.0%
Markup %
Gross Margin %
NOV
JAN
SEASON TOTAL
$ 23,113,904.74 $ 18,813,643.39 $ 20,157,475.06 $ 23,248,287.91 $ 19,485,559.23 $ 29,564,296.76 $ 30,236,212.60 $ $ 27,736,685.69 $ 22,576,372.07 $ 24,188,970.08 $ 27,897,945.49 $ 23,382,671.07 $ 35,477,156.11 $ 36,283,455.11 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 17.2% 14% 15.0% 17.3% 14.5% 22.0% 22.5%
SEASON TOT.
Sales
OCT
63,127,222.2 2.55
$ 38,312,640.94 $ 45,055,988.26
2.22 2.11 $ 65,499,699.47 $ 74,856,799.40
2.19 2.09 $ 66,353,368.54 $ 75,832,421.19
134,383,167.09 $161,259,800.5 20.0% 100.0%
2.40 2.29 $ $
55,236,319.47 63,127,222.25
$ 6,450,392.02 $ 7,998,486.11 22.5% 32.0%
$ $
20,157,475.06 24,995,269.08 15.5% 100.0%
$ 36,868,357.85 $ 44,451,264.01
$ $
ACTUAL
165,802,018.75 199,125,214.27
PLANNED ANNUAL SALES To find out the percentage change form 2014 sales to 2015 sales, as we haven't had the access of the 2014 financial report, we speculate it by using the past time figures. However, Kate Spade has gone through a hard time from 2009 to 2012, that the company is trying hard to shifting its business, so the figure is not that reasonable to be our reference. Thus, we use the percentage change from 2012 to 2013, which is 20%. And by comparing the quarterly changing percentage of first three quarters of 2013 to 2014, which is up to 35 percent, we reasonably believe the growth from 2014 to 2015 will be 20%. As the financial report of Kate Spade company contains several brands like Kate Spade, Jack Spade, Juicy Couture and so on. We find out the Kate Spade segment had 59% sales from the whole company in the financial report. As recently Kade Spade company is shifting its business to focus on Kate Spade and predict it will have more growth especially in the greater China area, we predict there will be 63% of sales dedicated by Kate Spade in 2015. As for the Hong Kong sales number, we got the numbers from Globalluxe who used to distribute Kade Spade products for KS company in Hong Kong and ended their partnership in 2013, the number shows Hong Kong's sales are 3% from the total sales in 2012. As a result, we speculate for 2015, it will grow to 4.8%. Then we found out the handbag department sales based on the interview of KS's director who indicate that more than 70% of sales in KS is dedicated by the accessories which handbags is the main driven force. By considering the handbag price is the much higher than other small leather goods and small accessories, also the market trend that affordable luxury bags is growing quickly in greater China area, we decided the handbag department will contribute 67% of net sales. As for the monthly breakdown, we consider the factors like holiday, on sale season and so on. And we also use the 2013 quarterly sales number to make it more precisely.
PLANNED MARKDOWN We find out the markdown percent by calculating it from the sales number. We break down each month and then multiply it with the markup percent, which in on-sale season will be 30% off and the other will only have 10% to 15%. Then we speculate the percentage of the on-sale items from all the merchandise sold, and multiply the percentage with the number we previously got. The final percentage is 13% and we add 1% for employee discount and 1.5% for shortage. As for the monthly percent, the on-sale season December and July will have the highest percentage, while August and November have the lowest number.
BOM/EOM STOCK We got the BOM and EOM stock number based on the planned sales and stock-sales ratio. We speculate the stock-sales ratio from the information of U.S department of commerce. The average of the apparel / accessories stock to sales ratio is 2.27. As handbags sells slower compared to apparel, we set our average stock-sales ratio around 3. Then we planned the stock to sales ratio each month with the lowest in December, which is the most important on-sale season and also the holidays like Christmas. The following lowest ratio will be at July which is also the major on-sale season which will attract lots of tourists every year, and October when the China national day falls at and will usually have special sales for the golden week to attract Chinese tourists. As for November and August as they don't have much sales and holidays happened in these months, they will have the highest ratio.
GROSS MARGIN The gross margin of 2014 is speculated from the first three quarter's profit and loss statement that shows an average of 62%, as the forth quarter has the most important Christmas season so we higher up the average into 63.75%. As there's a lot of research shows in 2015, Kate Spade's handbag department will have higher profit than before, we based on these number and information, set our planned gross margin 65%.
PLANNED MARKUP For the planned markup we used the planned gross margin percent and the planned deduction percentage. The calculation is (0.65+0.155)/(1+0.155) which 0.65 stands for gross margin and 0.155 stands for sales deduction. The final number we got is 70%. And with the same calculation method, we got the 2014 markup percent of 68%.
5. ASSORTMENT PLAN
ASSORTMENT BY CLASSIFICATION We categorize the product into four different classifications. The first one is the satchels that is the most important type of handbags in Kate Spade. We count all the handbags that has handle and attachable strap into this categories. And as this is the most important silhouette, we speculate it will have 47% of the total sales. The second category is shoulder bags, which includes Kate Spade's signature nylon tote. As our research on trend show functionality of bags will be on trend for 2015, we think the large volume shoulder bags will have 27% in the assortment. The cross body category has less models compared to the previous two categories. However, the envelope cross body bag can attract both teenagers and women in their 30s with its colorful choices and affordable price, so we plan this section 20%. The last one is minibags, which are the miniature satchels. They are not that practical and have less variety, so we plan it at 6 %.
47%
SATCHELS
27%
SHOULDER BAGS
20%
CROSS BODY
6%
MINI BAGS
ASSORTMENT BY FABRICATION Based on the trend research, besides leather Kate Spade always has, we will introduce suede, shearling and fur as the highlight of fall and winter. And among these three fabrics, the percentage of the faux fur will be slightly higher than the other ones as it has more luxurious feel. For Synthetic fabrics, we will have nylon and canvas. Nylon used to be Kade Spade's signature looks, so we predict it will remain 9% of the sales. As for Canvas, which is used in shopping bags and tote bags will have 5%. For the leather category, the highest is definitely their signature crosshatched leather, which is also the main leather used for the bestseller Maise. Another main leather used will be pebbled leather based on our in-store research. And goat leather will only has 4% as it is only used in some small crossbody bags. The special textured leather we're going to use in this season is quilted leather, ostrich embossed cowhide, python embossed cowhide and crocodile embossed cowhide. Quilting is the trend that shows in our research, however, as it is somehow casual compared to Kate Spades bags so we only plan it 4%. For the embossed cowhide we expect this luxury texture will attract our customers. As Ostrich embossed cowhide has already been used before, so we plan it lower compared to the other ones.
16% 19% Crosshatched Leather Quilted Leather 4% Ostrich Embossed Cowhide 3% Python Embossed Cowhide 5% Crocodile Embossed Cowhide 5% 11% Smooth Cowhide 4% Goat Leather Nylon 9% Canvas 5% 6% Suede Pebbled Leather
Shearling Fur
6% 7%
ASSORTMENT BY COLOR When deciding how to plan our color assortment, we knew immediately that the neutral colors - white, black and pebble - would get the highest assortment because they are the easiest colors to wear. We also attributed a considerable amount to the Peach Pink and Navy Blue assortments, as Pink is a signature Kate Spade color, and Navy Blue works almost like a neutral. The Wine and Berry shades, despite being our signature colors for the season, would be slightly lower because they are “edgier” colors. Thus, it would make sense us to buy less of these colors to see how well the customer responds to them first. This is also the same reasoning behind putting Tan and Deep Green shades as the lowest assortments - these two colors aren’t neutrals that people would normally choose to wear, so we’ll buy the lowest assortment for these colors and see how the consumer would react.
9%
MINI
25%
SMALL
47% MEDIUM
19%
LARGE
ASSORTMENT BY SIZE In the size assortment, we plan the highest percentage for the medium bag which most of the satchel bags falls at. The medium size satchel that have most variety of silhouette and has been the iconic piece of Kate Spade as it combines feminine style and practicality. Also, the bestseller Maise also falls in this category, and some new similar silhouette which we believe is going to sell also included is this area. For the lowest percentage we give to the mini bags, as it has limited silhouette that only some miniature satchels and small clutches. Also, the size is too small to be practical to hold stuff so we only plan it 9 %. As for the small handbags, they have 25% among all the bags . This category includes most crossbody bags and the small size satchels. Thus we think it will be the second important category in our assortment plan for size. For the large bags, it includes traveling bags and the big tote bags. The travel bags will have less percentage as Kate Spade launched really limited travel bags. However, the tote bag is functional and has different choices from leather to synthetic fabrics. Also, based on our trend research, functionality will be in trend for 2015. Thus, we plan it 19%.
ASSORTMENT BY PRICE The pricing strategy of Kate Spade in Hong Kong is they tend to control the price in certain price range, which is from 3000 to 3800. We use the U.S price on their E-commerce website and find out they markup the lower price items more than the higher price item, which range from 17% to 40%. Thus, most of the bag price falls at 3000 to 3800. However, as bestseller Maise falls at the price range 3000 to 3400, we higher up the percentage a little bit up than 2400 - 3800. As for the lower price bags, 1800 to 2500 have higher percent as Kate Spade remain those mini bags and cross body small bags in this price zone. The younger customer tend to buy more of this bags compared to other satchels, thus Kate Spade HK set its price at 1800 to make it affordable. For the items that more than 3800, there are big satchels or other kind of bags that use special materials; however, they have really small amount in all the handbags, thus we only plan the bags that more than 3800 at 6%.
1800-2500
18%
10%
2500-3000
35%
3000-3400
31%
3400-3800
>3800
6%
6. STORE ANALYSIS
PACIFIC PLACE ABOUT THE AREA Admiralty, located in Hong Kong Island, is the eastern extension of the central business district. The area consists of office buildings, government buildings, shopping malls, parks and hotels. While there are tourists who visit the area, the main customers of the high class Pacific Place mall are local and foreign business people. They are of the older crowd, in their 30s to 50s, and all earn a steady income.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 37 •Living area: Hong Kong Island •Occupation: Businesswoman
MORE ABOUT HER The Pacific Place customer is a business woman who is the perfect balance between work and play. Classic and sophisticated, she dresses herself in stylish ensembles and prefers to invest in pieces that a timeless and can be worn with most of her work clothes. When it comes to bags and accessories, she believes neutrals are the way to go, and would choose safer color options, if she chooses to incorporate color into her wardrobe at all. Her favorite choice of bag is also not too big and not too small - just big enough to carry her essentials from the time she goes to work to the time she leaves.
Assortment by Classification
PACIFIC HK / PLACE / Percent to Percent to Total Total
SATCHELS
46%
47%
SHOULDER BAGS
35%
27%
2%
6%
17%
20%
MINI BAGS CROSS BODY
Assortment by Fabrication
PACIFIC PLACE / Percent to Total
HK / Percent to Total
Pebbled Leather
20%
16%
Crosshatched Leather
25%
19%
Quilted Leather
3%
4%
Ostrich Embossed Cowhide
4%
3%
Python embossed leather
3%
5%
Crocodile embossed leather
4%
5%
12%
11%
Goat leather
3%
4%
Nylon
8%
9%
Canvas
5%
5%
Suede
6%
6%
Shearling
4%
6%
Faux Fur
3%
7%
Smooth Cowhide
ASSORTMENT PLAN Justification for Classification The Pacific Place customer would most likely gravitate towards the medium-sized bags with utilitarian design. For this reason, medium sized bags like Maise - with its spacious interior and multiple pockets - will be ideal.
Justification for Fabrication As a business woman, the Pacific Place customer would stick to buying the classic materials like the crosshatched leather.
Justification for Size As mentioned earlier, the Pacific Place customer is a business woman who needs a bag that is just the right size. Because of this, we believe that she is more likely to buy the medium sized bags.
Justification for Color Since Admiralty is a business district, we believe that the best selling colors would be the neutrals, like white, black, and pebble. If the Pacific Place customer needs color, she would either go with the mixed colors (since Kate Spade mixes the color of the season with a neutral) or a more wearable color, like dark blue.
Justification for Price As the Pacific Place customer is a businesswoman who earns an income for herself, we believe that she would be more likely to buy a more expensive bag as she has no other family to spend on.
Assortment by Size
PACIFIC HK / PLACE / Percent to Percent to Total Total
5%
14%
SMALL
34%
34%
MEDIUM
55%
45%
6%
7%
MINI
LARGE Assortment by Color
PACIFIC PLACE / Percent to Total
HK / Percent to Total
WHITE
12%
9%
BLACK
19%
12%
OFF WHITE
17%
19%
BROWN
10%
7%
WINE RED
5%
8%
PEACH PINK
3%
10%
DEEP GREEN
9%
6%
BERRY
4%
8%
10%
9%
PATTERN
2%
3%
COLOR MIX
9%
9%
DARK BLUE
Assortment by Price
PACIFIC PLACE / HK / Percent to Total Percent to Total
1800-2500
20%
18%
2500-3000
15%
10%
3000-3400
25%
35%
3400-3800
30%
31%
>3800
10%
6%
ELEMENT
ABOUT THE AREA Kowloon, where the mall Elements located at, had a population of 2,019,533 and a population density of 43,033/ km2. Kowloon is located north of Hong Kong Island and south of the mainland part of the New Territories. Element is located above the Kowloon MTR station and near the residential complex Union Square and the Western Harbour Tunnel. It's near several business buildings including the tallest commercial building in Hong Kong, which is the International Commerce Centre. The customers in the mall are composed with high percentage of business people, especially during the lunch time and time just after works. It has fewer tourists compared to other location. Other kinds of customers are local Hong Kong people, especially women. The age range is from 25 to 55. A lot of housewives will come shopping here, as the mall is less crowded and full of different kinds of shops.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 34 •Living area: West Kowloon •Occupation: Housewife •Household number: 4
MORE ABOUT HER She is a professional housewife and mother who lives in Kowloon. As she can't drive, she usually brings her 3 years old daughter to the Element, which is the most convenient mall that around her house. They can spend their afternoon there by shopping and walking around in the mall, and later go buy groceries in the supermarket down the mall. She always likes to buy colorful bags and clothes that suits her bright personality. Though she is already a mom, she has her insist about fashion to show her taste. She loves Kate Spade's bag that they have their beautiful and girly outlooks but also lots of compartments and space to hold all the stuff she need to bring when she goes out with her daughter. She also buys elegant satchels from Kate Spade that she can use when going to formal occasion with her husband. And she is considering buying a minature Maise bag to her daughter to match her own pink Maise. There is no other thing better than shopping colorful bags with her daughter in Elements to spend their afternoon.
ASSORTMENT PLAN Assortment by Classification
ELEMENT / Percent HK / Percent to to Total Total
SATCHELS
46%
47%
Justification for Classification
SHOULDER BAGS
34%
27%
3%
6%
Based on the area research and customer profile, we speculate there will be higher percentage of shoulder bags as there will be more housewives and mothers shopping in here, and shoulder bag especially tote bags are ideal items for them. Also there are lots of business women that age around 25 to 35, so they are also the customers that will buy satchels and shoulder bags. As mini bags and cross body are more casual silhouette, we lower down their percentage.
CROSS BODY
17%
20%
Justification for Fabrication Based on our in-store research and area research, Kowloon's customers are less fashion forward compared to TST and admiralty. And the business women in this area tend to be more conservative that most of them hold black bags without too much texture. Thus, we will higher the percentage of peblbled leather and crosshatched leather that they are more likely to be the texture they would purchase. As for the embossed cowhide, because the age range of the business women here is around 25-35 which this luxury style might be inappropriate for them. As for the fashionable texture of shearling and faux fur, we also plan it a little bit lower as the customer here tend to accept the trend slower. However, the suede will remain as it is texture that we think is more acceptable. For nylon and suede we higher up the percentage a little bit because those tote bags are useful for both customer types, which are the housewives and young business women.
MINI BAGS
Assortment by Fabrication
ELEMENT / Percent HK / Percent to to Total Total
Pebbled Leather
17%
16%
Crosshatched Leather
20%
19%
Quilted Leather
4%
4%
Ostrich Embossed Cowhide
3%
3%
Python embossed leather
4%
5%
Crocodile embossed leather
4%
5%
11%
11%
3%
4%
10%
9%
Canvas
7%
5%
Suede
6%
6%
Shearling
5%
6%
Faux Fur
6%
7%
Smooth Cowhide Goat leather Nylon
Assortment by Size
6%
9%
SMALL
23%
25%
MEDIUM
49%
47%
LARGE
22%
19%
MINI
Justification for Size For size, we lower down the mini size and small size as it is not practical for both customer types in this location. We put emphasis on medium size which is the most approriate size for both housewives who is looking for functional bags and business women who need a satchels for work. As for large size, though the travel bag will be purchased less in this location, the big tote bags is suitable for both customer types in this area, thus we higher up the percentage of large bags.
ELEMENT / Percent HK / Percent to to Total Total
Assortment by Color
ELEMENT / Percent HK / Percent to to Total Total
WHITE
9%
9%
BLACK
19%
12%
OFF WHITE
19%
19%
BROWN
7%
7%
Based on our in-store research, the customer here are mostly holding black color bags or safe colors. Thus, we higher the percentage of black. Also, the customer here are less fashion forward so we will also lower down the percent of patter, and edgy color like green.
WINE RED
7%
8%
PEACH PINK
9%
10%
DEEP GREEN
4%
6%
BERRY
7%
8%
Justification for Price
DARK BLUE
9%
9%
PATTERN
2%
3%
COLOR MIX
8%
9%
Justification for Color
In the element, the highest percentage of the price zone will be 3000-3400, and we higher up it because this is the price zone that medium satchels and nylon big bags falls at. And we will lower down the percentage of low price items as the small cross body bags are too casual for cusiness womes and not practical for housewives. Also as the items that price higher than 3800 are usually travel bags or luxury material made products, they won't sell that well in this area because the customers are less fashion forward also have less needs for travel bags.
Assortment by Price
ELEMENT / Percent HK / Percent to to Total Total
1800-2500
16%
18%
2500-3000
10%
10%
3000-3400
39%
35%
3400-3800
32%
31%
3%
6%
>3800
OCEAN CENTRE ABOUT THE AREA Harbor City lies in Southern Kowloon, particularly in the prosperous and fashion forward Tsim Sha Tsui area, which is a popular shopping and tourist district. The area is know to be constantly crowded with people and lined with numerous shops and restaurants. Harbor City is a big mall located along Nathan Road, which is popular for being the main shopping area in the district. Customers who flock to Harbor City range from young individuals aged 25 years old, to the older crowd, aged at around 55. Tourists are also the main customers in this area.
CUSTOMER PROFILE HER BASIC INFORMATION •Age: 40 •Living area: Kowloon •Occupation: Mother
MORE ABOUT HER The Harbor City customer is a married woman with teenaged kids and a lot of time on her hands. The wife of a successful expat, she buys a new bag to add to her collection twice a season, and comes back every month to see if there are any new arrivals. She is a bright woman, young at heart, and is always on the go. The bag she looks for is one that is bigger, with many compartments, that could take her from picking her kids up from soccer practice in the afternoon to having dinner with her girl friends later that night.
Assortment by Classification
HARBOR CITY / HK / Percent to Total Percent to Total
SATCHELS
45%
47%
SHOULDER BAGS
42%
27%
3%
6%
10%
20%
MINI BAGS CROSS BODY
Assortment by Fabrication
HARBOR CITY / Percent to Total
HK / Percent to Total
Pebbled Leather
19%
16%
Crosshatched Leather
19%
19%
Quilted Leather
4%
4%
Ostrich Embossed Cowhide
5%
3%
Python embossed leather
3%
5%
Crocodile embossed leather
3%
5%
10%
11%
4%
4%
10%
9%
Canvas
5%
5%
Suede
6%
6%
Shearling
5%
6%
Faux Fur
7%
7%
Smooth Cowhide Goat leather Nylon
ASSORTMENT PLAN Justification for Classification Since majority of the consumers in this area are mothers and they have a lot to carry, the assortment would lean more on the medium large bags, like the tote bags. The sturdy nylon bags would also be a viable option for this customer as they fulfill the size and functional aspects
Justification for Fabrication The Tsim Sha Tsui customer maybe a little more outrageous with their purchases. They are more likely to buy the furs, or the leathers with more surface texture, like the ostrich leather.
Justification for Size Since the Harbor City customer is a mom, she is most likely going to carry many other things besides her essentials (perhaps even her children’s essentials). Because of this, she is more likely to buy a bigger bag, like a tote.
Justification for Color Tsim Sha Tsui is more of a shopping/tourist district, so we believe that the Harbor City customer would more easily gravitate towards the key colors of the season wine and berry.
Justification for Price Since the Harbor City customer is a mom, we believe that she would still rely on her husband for some income. That being said, she is less likely to spend on a bag with the highest price tag. The 3,000-3400 price range is the perfect range for this customer as there are plenty of decent sized bags for her to choose from that she is willing to spend on.
Assortment by Size
HARBOR CITY / Percent to Total
HK / Percent to Total
MINI
10%
14%
SMALL
15%
34%
MEDIUM
65%
45%
LARGE
10%
7%
Assortment by Color
HARBOR CITY / Percent to Total
HK / Percent to Total
WHITE
9%
9%
BLACK
19%
12%
OFF WHITE
13%
19%
BROWN
10%
7%
WINE RED
9%
8%
PEACH PINK
4%
10%
DEEP GREEN
7%
6%
BERRY
9%
8%
DARK BLUE
9%
9%
PATTERN
4%
3%
COLOR MIX
7%
9%
Assortment by Price
HARBOUR CITY / HK / Percent to Total Percent to Total
1800-2500
13%
18%
2500-3000
19%
10%
3000-3400
34%
35%
3400-3800
31%
31%
3%
6%
>3800
7. REFERENCE LIST
REFERENCES (2014). Kate Spade Quarterly Sales Jump 30%. Fox Business. Retrieved 9 March 2015, from http://www.foxbusiness.com/ industries/2014/11/06/kate-spade-quarterly-sales-jump-30/ (2015). Retrieved 9 March 2015, from http://www.census.gov/mtis/ www/data/pdf/mtis_current.pdf (2015). Retrieved 9 March 2015, from http://globalbb.onesource.com/ LogonPreferences.aspx Katespade.com,. (2015). kate spade new york - designer handbags, women's clothing, jewelry, and more!. Retrieved 9 March 2015, from http://www.katespade.com Katespadeandcompany.com,. (2015). Kate Spade & Company. Retrieved 9 March 2015, from http://www.katespadeandcompany. com/web/guest/home Katespadeandcompany.com,. (2015). Kate Spade Gears Up for Growth. Retrieved 9 March 2015, from http://www. katespadeandcompany.com/c/journal/view_article_content?groupId =10123&articleId=19942672&version=1.5 Reuters,. (2015). Kate Spade 2014 sales jump on high demand for luxury handbags. Retrieved 9 March 2015, from http:// www.reuters.com/article/2015/01/29/kate-spade-co-resultsidUSL4N0V86GD20150129 WGSN Fashion Trend Forecasting and Analysis,. (2015). WGSN Fashion Trend Forecasting & Analysis. Retrieved 9 March 2015, from http://www.wgsn.com/en/