5
7
9
11
15
Environmental Internship Program Patagonia offers employees the ability to take off from their regular roles for up to two months, to work for the environmental group of their choice while continuing to earn their paycheck and benefits. This is so beneficial to both the Patagonia and the grassroots company that is gaining a free intern. And when interns return, they bring back stories, inspiration and a new commitment to Patagonia’s environmental mission.
17
19
21
23
25
27
31
33
TARGET CUSTOMER PROFILES
H an n ah Ke ll e y, 2 1 Single
Charlotte, NC Student
Financially dependent on parents Achiever
Active, Greek Life
Style: Current and preppy
36 Target Customer Profiles
M ike S t a n t o n , 2 7 Single
Maui, HI
Physical Education Teacher Income: $52,000
Innovator
Outdoor Enthusiast, Surfer, Hiker
Style: Comfort over style
Target Customer Profiles 37
E r in Murph y, 35 Mother
Denver, CO
Physical Therapist
Household Income: $110,000 Experiencer
Skier, Nature Lover
Style: Quality before fashion
38 Target Customer Profiles
D a ve Wi l l i a m s , 6 4 Married
Cape Cod, MA Retired
Thinker
Active, Fisherman, Golfer
Style: Comfort and functional
Target Customer Profiles 39
STR EN GTHS Employee Committment Environmental Involvement Quality Products Customer Service Transparent Manufacturing Innovative Marketing
Strengths 41
S TRATEGI ES FOR GR OW T H Expansion
New Markets
Technology
Patagonia has the opportunity to expand into a multitude of different locations worldwide. Even though they are a hugely successful company, they only have roughly 50 stores globally (this, however, does not include the number of vendors who sell Patagonia merchandise.) The most shocking statistic is that there are only two Patagonia stores in Canada. With the cold climate and a bustling ski industry, Canada is a profitable market for Patagonia, and it seems a waste of resources to not have more than two stores in the country. Patagonia has the opportunity to expand into new marketplaces.
Yvon Chouinard was recently a speaker at a responsible fishing convention, where he discussed sustainable ways to harvest salmon and why understanding your supply chain, regardless of what industry you’re in, is important. He left that convention incredibly frustrated because nobody understood what he was talking about. So, at 75 years old, Chouinard decided to branch out into the fishing industry and create Patagonia Provisions. He is setting up sustainable fishing farms and proving to everyone that caring for the environment is the most effective way to run a business. With initiative like this, Patagonia has the ability to branch out into a variety of new markets.
Patagonia has developed and integrated technological advances within their products. For example, they already have fabrics that prevent bacteria growth and protect against UV rays. Additionally, they have created portable self-inflation vests for their wetsuits. With the continual rise of wearable technology in today’s society, Patagonia has the potential to continue to develop products that integrate the use of technology. As consumers become more dependent on technology, it is imperative to incorporate this way of life within Patagonia’s own products. There is major opportunity to expand with technological advances while still remaining sustainable and eco-friendly. Strategies for Growth 43
KEY COMPETITORS
HOW THEY STACK UP Strengths
-Columbia contributes to large scale and grassroots environmental organizations, like the Conservation Alliance as well as smaller organizations like Save the Seagrass. - They also employ a solar electric system at their headquarters in Portland, OR that is working hard to reduce their carbon emissions. - In addition to environmental projects, they donate money to a number of other medical and social organizations, promoting things like gender equality and healthier lifestyles for children.
Price Point
-In comparison to Patagonia, Columbia offers similar products at a lower price point.
Product Categories Men Women Children Footwear Activity Gear
“Columbia is made up of real people who are as passionate about the outdoors as you are.�
Venues Columbia Retail Stores Columbia Outlet Stores Select Department Stores www.columbia.com
Key Competitors 47
HOW THEY STACK UP Strengths
- Clothes The Loop is an environmental program set up by The North Face company to help promote textile recycling. The program offers rewards to customers if they donate clothing to participating retail stores, as a way to help reduce the amount of clothing waste in the United States. -North Face reports sales at $2 billion and by 2017 they expect to increase sales to $3.3 billion.
Price Point
-In comparison to Patagonia, The North Face has price points within the same range of Patagonia.
Product Categories
Venues
Men
TheNorth Face Retail Stores
Women
The North Face Outlet Stores
Boys / Girls
Mountain Althletics Stores
Footwear
Summit Series Stores
Equiptment
Dealer Stores www.thenorthface.com Key Competitors 49
HOW THEY STACK UP Strengths
- From their headquarters in Utah to their factory in China, they are committed to complying with the highest standards of social responsibility at all operations. - Twenty percent of the power used at their Salt Lake City office, home to their headquarters and manufacturing facilities, is wind generated. - Black Diamond is an active member of the Outdoor Industry Association’s Sustainability Working Group, dedicated to advancing industry standards on environmental and social responsibility. - Black Diamond, Inc. supports numerous organizations and efforts to preserve the places where we climb, ski, and trek.
Price Point
-In comparison to Patagonia, Black Diamond has price points within the same range and higher of Patagonia.
Product Categories Men Women Climbing Equiptment Skiing Equiptment
“To champion the preservation of, and access to, mountain, crag and canyon environments while minimizing our own environmental footprint.”
Venues The Black Diamond Retail Store Retailers www.blackdiamondequipment.com
Key Competitors 51
HOW THEY STACK UP Strengths
- Marmot’s CityTech Collection boasts uptown looks with backcountry performance. - All Marmot products that contain recycled polyester are labeled UpCycle® - They have a complete shirt line that is certified according to the Global Organic Textile Standard (GOTS). - Marmot does not support the use of Down from live pluck or Foie Gras geese or ducks.
Price Point
-In comparison to Patagonia, Marmot has price points within the same range of Patagonia.
Product Categories Men Women Boys Girls Equiptment
“To create fair human working conditions, to support social initiatives and to foster a multi-cultural company philosophy; To produce the best outdoor equipment which meets the expectations of mountain professionals
Venues Marmot Flagship Stores Authorized Retailers www.marmot.com
and enthusiasts; To produce environmental friendly products and foster a global ecological awareness” Key Competitors 53
HOW THEY STACK UP Strengths
- Arc’teryx offers repair services worldwide, they repair over 10,000 used Arc’teryx items per year. - Arc’teryx is a Bluesign system partner. - Arc’teryx maintains a detailed Restricted Substances List (RSL) that specifies a broad range of materials not permitted for use in their products due to environmental, health, or occupational safety reasons. - They partner with some great organizations to help achieve positive impacts beyond the reach of their day-to-day operations
Price Point
-In comparison to Patagonia, Arc’teryx has price points within the same range of Patagonia.
Product Categories Men Women Boys Accessories Climbing Gear Packs
“Delivering unrivalled performance, Arc’teryx quality conveys absolute confidence. PURSUE PERFECTION: Design/ Craftsmanship/Performance.”
Venues Arc`teryx Brand Stores Authorized Retailers www.arcteryx.com
Key Competitors 55
LIFESTYLE TRENDS
GET FI T
After many years of struggling with negative body image within the fashion industry, we are finally starting to turn that around. In the early 2000s, much of the fashion industry was known for ads involving women who were far too skinny. This went beyond advertisements and consumed the entire industry with a barbie-like stereotype.
It’s about time the fashion industry started stripping themselves of this idealistic image. Having such an impact on young women through magazines and advertisements, the fashion industry is one of the most powerful influencers of the minds of young women.
The New Femininity is strong, natural, and healthy; one that empowers a woman’s body, her curves, and her self acceptance.
Many active wear campaigns are embodying a woman who is strong above skinny, and most importantly, comfortable in her own skin. With activewear taking over fashion and almost becoming everyday wear, women are listening. Being an athleisure company, Patagonia fits perfectly within this trend and provides products that fit perfectly within the athleisure lifestlye. Lifestyle Trends 59
GO GR EEN Sustainability is the trend of the 21st century. Being eco-friendly has now become a way of life. More than ever, people have become more conscious about the environment and the impact society has on it. Consumers are more eagerly looking to buy products that appear to be better for the environment.
Patagonia has been in front of this trend for years now, looking to make the least carbon footprint as possible when producing their products. Doing everything in their power to become eco-friendly, from promoting consumers to repair products instead of buying new ones to encouraging employees to car pool and ride their bikes to work, Patagonia’s underlying mission is to go green. Being in front of this trend gives Patagonia a leg up on the competition who are actively trying to catch up to their eco-friendly attitudes and practices.
Lifestyle Trends 61
WOMEN’S OUTERWEAR TRENDS
K EY ITEM : THE FLEEC E Z I P - U P
•Boxy Silhouette •Easy Movement •Minimal Lines •Weatherproofing for Extreme Conditions •High Performance
64 Women’s Outerwear Trends
K EY I TEM : THE PA R K A
•Slimmer Fit •Padded for Warmth •Classic Detailing •Weather Protection •Storage Pockets •Technical Trims
Women’s Outerwear Trends 65
KEY I TEM : THE P UFFE R
•Boxy Fit •Durable •Performance & Style •Transitional •Protective Collar •Graphic Checks
66 Women’s Outerwear Trends
KEY I TEM : THE GI LET
•Simplified Silhouette •Performance Zips •Outdoor Appeal •Insulation •Cargo Pockets •Technical Trims
Women’s Outerwear Trends 67
K EY D ETA I LS Features
Materials & Textures
•Media Storage
•Tweeds
•Statement Zippers
•Fleece
•Vintage Finishes
•Lacquered Finishes
•Reflective Accents
•Patterned Quilting
•Customized Fit
•Waterproof Fabrics
•Extended
•Wovens
Protection
Fashion Colors •Cardinal •Cerise
•Green Glass •Dusk Blue
Core Colors •Navy
•Damson •Prune
•Taupe
Women’s Outerwear Trends 69
THE 6 MONTH BUYING PLAN
THE CORPORATE PLAN Fall 2015 Planned Net Sales, Fall 2015
Est. Net Sales, Fall 2014 Plan % Last Year Average Stock, Retail Inventory Turnover Planned Reductions, $
13000.0 11500.0 13% 7632.7 1.7 1300.0
Reductions, % Sales
10%
Plan IMU %
54% The 6 Month Buying Plan 73
(000’s) Net Sales % Fall Plan BOM Stock Stock/Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost 74 The 6 Month Buying Plan
August
September
October
1820.0
2340.0
1950.0
14.00%
18.00%
15.00%
6916.0
7722.0
7410.0
3.8
3.3
3.8
7722.0
7410.0
7956.0
104.0
195.0
195.0
8.00%
15.00%
15.00%
2730.0
2223.0
2691.0
1255.8
1022.58
1237.86
November
December
January
Fall 2015
2340.0
2730.0
1820.0
13000.0
18.00%
21.00%
14.00%
100%
7956.0
8463.0
7462.0
7632.7
3.4
3.1
4.1
3.6
8463.0
7462.0
7500.0
6644.7
286.0
325.0
195.0
1300.0
22.00%
25.00%
15.00%
100.00%
3133.0
2054.0
2053.0
14884.0
1141.18
944.84
944.38
6846.6 The 6 Month Buying Plan 75
VENTURA, CA STORE PLAN
Fall 2015
Plan Net Sales, Fall 2015 Est. Net Sales, Fall 2014 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %:
600.0 530.0 13% 323.1 1.86 60.0 10% 54%
The 6 Month Buying Plan 77
(000s)
August
September
October
96.0
102.0
90.0
16.00%
17.00%
15.00%
316.8
326.4
315.0
3.3
3.2
3.5
Plan EOM Stock
326.4
315.0
334.8
Plan Reductions
4.8
9.0
9.0
% Fall
8.00%
15.00%
15.00%
Purchases, Retail
110.4
99.6
118.8
Purchases, Cost
50.784
45.8
54.6
Net Sales % Fall Plan BOM Stock Stock / Sales Ratio
78 The 6 Month Buying Plan
November
December
January
Fall 2015
108.0
120.0
84.0
600.0
18.00%
20.00%
14.00%
100%
334.8
348.0
310.8
323.1
3.1
2.9
3.7
3.3
348.0
310.8
310.0
277.9
13.2
15.0
9.0
60.0
22.00%
25.00%
15.00%
100.00%
134.4
97.8
92.2
653.2
61.8
45.0
42.4
300.5 The 6 Month Buying Plan 79
DENVER, CO STORE PLAN
Fall 2015 Plan Net Sales, Fall 2015
433.3
Plan % Last Year:
13%
Est. Net Sales, Fall 2014
385.0
Average Stock, Retail:
247.7
Planned Reductions, $:
43.3
Reductions % Sales: Plan IMU %:
10% 54%
Inventory Turnover:
1.7
The 6 Month Buying Plan 81
August
September
October
60.7
73.7
65.0
14.00%
17.00%
15.00%
230.5
243.1
240.5
3.8
3.3
3.7
Plan EOM Stock
243.1
240.5
250.4
Plan Reductions
3.5
6.5
6.5
8.00%
15.00%
15.00%
Purchases, Retail
76.7
77.6
81.5
Purchases, Cost
35.3
35.7
37.5
(000’s) Net Sales % Fall Plan BOM Stock Stock / Sales Ratio
% Fall
82 The 6 Month Buying Plan
November
December
January
Fall 2015
73.7
86.7
73.7
433.3
17.00%
20.00%
17.00%
100%
250.4
268.6
250.4
247.7
3.4
3.1
3.4
3.5
268.6
250.4
250.0
214.7
9.5
10.8
6.5
43.3
22.00%
25.00%
15.00%
100.00%
101.4
79.3
79.7
496.1
46.6
36.5
36.7
228.2 The 6 Month Buying Plan 83
ASSORTMENT PLANS
PRODUCT ASSORTMENT
86 Assortment Plans
Assortment Plans 87
Planned Purchases, Retail: Average Retail Price:
$14,884,000 $207.50
%
$
Unit
Sizes
Total
Purchases
Purchases
XS
10%
$1,488,400
5954
M
25%
$3,721,000
14884
$1,488,400
5954
S L
XL
XXL
20% 25% 10% 10% 100%
88 Assortment Plans
$2,976,800 $3,721,000 $1,488,400 $14,884,000
11907
14884 5954 59536
%
$
Unit
Avg.
Classification
Total
Purchases
Purchases
Retail
Fleece
35%
$5,209,400
40072
$130
Soft Shell
25%
$3,721,000
18605
$200
Down
25%
$3,721,000
14884
$250
Waterproof
15%
$2,232,600
8930
$250
100%
$14,884,000
82492
Assortment Plans 89
S TATEM EN T OF R I SK
We carefully looked at the past sales figures from Patagonia and analyzed our market the best we could. However, with a planned 13% increase of sales, it’s possible that we have planned too much of a sales increase for this year. Patagonia is always encouraging people not to buy new things, but to reduce their consumerism and recycle the things they already have. In the past few years, people have been rapidly purchasing jackets from Patagonia, and it is possible that our environmental message has finally reached the community and our projected sales could plateau instead of increase. Despite this singular posibility, we believe that our sales plan forecasts an accurate increase in sales for the upcoming year.
Statement of Risk 91
R ESOUR C ES http://www.patagonia.com/us/home https://www.linkedin.com/company/patagonia_2 http://www.wgsn.com/home/ http://www.columbia.com http://www.thenorthface.com/en_US/index.html http://blackdiamondequipment.com http://marmot.com http://arcteryx.com/Home.aspx?language=EN http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=7901350 http://www.wsj.com/articles/why-fashion-insiders-are-buzzing-about-patagonia-1420825704
Resources 93
6 Month Buying Plan Women’s Outerwear Fall 2015 Shandy Frey, Georgiana Knox, Ashlee Scott FASM 245 / Winter 2015