Highlight_Final Thesis by IChun Chen

I-Chun Chen 03653912 Fashion Merchandising Academy of Art University

CONTENTS 01 / Executive Summary

04 / Competition Analysis 4.1 Key Competitors Analysis 4.2 Competitive Analysis Chart

02 / Business Concept 2.1 Business Description 2.2 Mission Statement 2.3 Vision Statement 2.4 Business Concept

03 / Market Analysis 3.1 Macro-Environment 3.1.1 Taiwan Market Environment 3.1.2. Global Eco Friendly Trend 3.2 Micro-Environment 3.2.1 Babyâ&#x20AC;&#x2122;s Wear Industry 3.2.2 Organic Cottonâ&#x20AC;&#x2122;s Industry 3.2.3 Furniture Industry 3.2.4 Location Analysis 3.2.5 Customer Trend/Research

05 / Competitive Strategy 5.1 SWOT Analysis 5.2 Competitive Advantage 5.3 Positioning 5.4 Value and Differentiations

06 / Target Customers 6.1 Primary Customers 6.2 Secondary Customers 6.3 Tertiary Customers 6.4 Personas

07 / Product Plan 7.1 Sourcing and Brands 7.2 Proportion of Merchandise 7.3 Categories 7.4 Buying Plan

08 / Marketing Plan 8.1 Marketing Objectives 8.2 Marketing Strategy 8.3 Marketing Calendar

09 / Branding 9.1 Brand Identity 9.2 Business Card 9.3 Letterhead and Envelope 9.4 Shopping Bag and Gift Box

10 / Visual Merchandising 10.1 Floor Plan 10.2 Wall Display 10.3 Window Display 10.4 Storefront 10.5 Price Tag, Stamp and Window Signage

11 / Operational Plan 11.1 Organization Chart 11.2 Ownership Details 11.3 Employees Responsibilities and Benefits 11.4 Location and Hours of operation

12 / Financial Plan 12.1 Financial Plan Summary 12.2 Future Growth Plan 12.3 Financial Sheet

13 / Appendix 13.1 Resume 13.2 Reference

01 Executive Summary

Executive Summary Highlight is a lifestyle store which emphasizes the best life for children. Nowadays, more and more parents pay attention to quality of life especially for their children and raising the quality of their life has become a very important subject. Therefore, Highlight is a baby and childrens' retail store which imports and sells unique eco-friendly apparel and furniture in Taiwan. In Highlight, the quality of the merchandise must be a priority. The apparel is made from organic materials. All of the furniture is made with natural non-toxic materials. Highlight will be located in the south of Taiwan, Kaohsiung. Since Taiwanâ&#x20AC;&#x2122;s children market has room for improvement, Highlight hopes to receive the welcome signal from the consumer markets because the consumption ability is also going up year by year. We hope we will become a leading brand of childrenâ&#x20AC;&#x2122;s stores in Taiwan.

02 Business Concept

2.1 Business Description Highlight is a children’s lifestyle retail store which has apparel and furniture. For furniture, we will import small childrens' furniture from the USA and Denmark, which are focused on quality, comfort and safety. For apparel, we will carry local and international brands from U.S.A and Sweden. All brands will use organic cotton. We are dedicated to helping parents and children 0-5 years to find the best merchandise for fashion and bedroom. The price belongs to the mid to high price range. Highlight’s target markets are 25-44 yearold parents and 45-65 year-old grandparents. On the whole, we will introduce new styles and concepts for children. The development of Highlight will create a unique brand that adds value and new styles to the children’s market in Taiwan. Our goal is to provide customers with excellent experience. Our products are high quality, modern designs with considerations of sustainability and environment that are important in our retail store.

2.2 Mission Statement Highlight provides childrens’ merchandise with high integrity, service and quality. We promote green products to bring consumer new concepts. We promise our products are high quality and meet our customer’s expectations. Quality, organic and eco-friendly merchandise is our responsibility. Our merchandise is tailored to parents who think of themselves as individuals first. For us, customers are always first.

2.3 Vision Statement Highlight is committed to creating a leading brand children’s lifestyle store in Taiwan. It gives parents and children a chance to proclaim their individuality. The vision of Highlight is to create beautiful children’s clothes and furniture without compromising on social responsibility. Our products are designed and manufactured with love and respect for the world in which we live, the world where our children will grow and play.

2.4 Business Concept

03 Market Analysis

3.1 Macro-Environment

3.1.1 Taiwan Market Environmen t •Political What is "organic cotton”?

The Global Organic Textile Standards (GOTS)

Cotton is the world's most popular fabric. It is used for almost every type of clothing. Today, however, the pesticides used on conventional cotton increasingly threaten people, wildlife and the environment. Conventionally-grown cotton occupies only 3% of the world's farmland, but uses 25% of the world's chemical pesticides. Environmental changes affect each one of us. So, Organic cotton represents a return to safe and sustainable practices. Organic cotton is grown in a way that uses methods and materials that lessen the impact on our environment. A big effort in the organic movement is to use growing systems that replenish and maintain soil fertility and build biologically diverse agriculture. All cotton sold as organics must meet strict federal regulations covering how the cotton is grown. Therefore, the organic cotton needs certification organizations verify that organic producers use only methods and materials allowed in organic production, and it is grown without the use of toxic and persistent pesticides and synthetic fertilizers. Organic cotton is produced without the use of harsh chemical bleaches or dyes, and is allergy free. In conclusion, we try to do everything possible to minimize our ecological footprint by creating organic products and

The Global Organic Textile Standard is the worldwide leading textile processing standard for organic fibre including ecological and social criteria, backed up by independent certification of the entire textile supply chain. The aim of the standard is to define worldwide recognized requirements that ensure organic status of textiles from harvesting of the raw materials, through environmentally and socially responsible manufacturing up to labelling in order to provide a credible assurance to consumer. The standard covers the processing, manufacturing, packaging, labelling, trading and distribution of all textiles made from at least 70% certified organic natural fibr e. A textile product carrying the GOTS label grade organic must contain a minimum of 95% certified organic fibre whereas a product with the label grade ‘made with organic’ must contain a minimum of 70% certified organic fibre. ( Herbert Ladwig, 2014)

minimizes the impact on the environment.

â&#x20AC;˘Economic Taiwanâ&#x20AC;&#x2122;s Economy Trends The Gross Domestic Product (GDP) in Taiwan expanded 1.17 percent in the fourth quarter of 2014 over the previous quarter. GDP Growth Rate in Taiwan averaged 1.35 percent from 1981 until 2014, reaching an all time high of 5.64 percent in the fourth quarter of 1990 and a record low of -5.07 percent in the fourth quarter of 2008. (Trading Economics, 2014) Figures 1:

Figures 2:

Consumer confidence is expected to boost apparel performance As global conditions improve, the expor t-driven Taiwanese economy should see a shift in spending habits, even as Taiwanese consumers remain rather conservative in their spending since the 2008/2009 global recession. The economic rebound and strengthening consumer confidence should help to boost apparel sales over the forecast period. Nevertheless, consumers may be slower in changing austere habits, expecting heavy discounting and sustaining a preference for standard brands or cheaper alternatives through online channels, night markets and hypermarkets.

GDP in bn. USD

489,0

Inflation rate

0.1

21,572

Working population

10.97

(2014) GDP per capita in USD (2014) Economic growth

in mil. 2.98%

rate (2014) Average wage in

3,92%

(in %) 1,549.7

USD/month (2014) Gross fixed

Unemployment rate Export (cif; nominal;

2.0

yoy in %) 19.26

investment in % of

Import (cif; nominal;

1.1

yoy in %)

GDP (2014) Inflation rate (2014, yoy in %)

-0.19

External debt in

177,945

million USD (2014)

Taiwan Interest Rate 2000-2014 The benchmark interest rate in Taiwan was last recorded at 1.88 percent. Interest Rate in Taiwan averaged 2.07 percent from 2000 until 2015, reaching an all time high of 4.63 percent in December of 2000 and a record low of 1.25 percent in February of 2009. Interest Rate in Taiwan is reported by the Central Bank of Taiwan. (Trading Economics, 2014)

Figures 3:

•Sociocultural Population Trends The Taiwanese Ministry of the Interior estimated that the population of Taiwan in 2012 was 23,268,087. This makes Taiwan the 50th largest country in the world in terms of population, and the 16th most densely populated country in the world. Taiwan’s largest city is New Taipei, which is home to 3,903,745 people. New Taipei should definitely not be confused with Taipei City, the capital of Taiwan. Taipei City is entirely surrounded by the city of New Taipei and has a population of 2,635,766, making it

Taiwan’s fourth largest city. Together with the city of Keelung, they make up the Taipei Metropolitan Area, which has a total population of 6.9 million. Other major cities in Taiwan are Kaohsiung City (2,772,461), Taichung City (2,655,456) and Tainan City (1,874,724). No other Taiwanese city has a population of more than 500,000 people. (WPR, 2014) Figures 4:

Figures 5:

Figures 6:

Large international brands continue to saturate apparel

The continued immense and rapid expansion of international fast fashion brands in Taiwan such as Uniqlo and Zara heightened consumer preference for fast fashion. 2013 witnessed the continued growth of these major international brands and the expectation of more international brands to enter Taiwan in the following year. These brands are popular as they are perceived as being fashionable, exotic, high quality, standard-priced and as offering very good value-for-money. Taiwanese consumers continue to value Korean and Japanese fashion, primarily sold in private boutiques, and which offer a cheaper and more unique alternative to standard retail selections. (Apparel and Footwear in Taiwan, 2014) Consumers looking toward apparel consumption alternatives There continued to be an increase in the number of Taiwanese consumers switching from premium brands to economy and standard brands in 2013 due to weak consumer confidence and the increased preference for fast fashion. While the arrival of Uniqlo and Zara offered consumers greater choice, the growth of hypermarket private label, as well as increased reliance on discounting, were driving forces in apparel. Retailers continued to rely heavily on price-reduction strategies throughout the year, thus enforcing a cycle of consumers anticipating discounts to make purchases. (Apparel and Footwear in Taiwan, 2014)

â&#x20AC;˘Geography Taiwan Profile The Republic of China(Taiwan) was founded in 1912, making it the first democratic republic in Asia. In 1949, the government moved to Taiwan and maintained jurisdiction over an area encompassing the islands of Taiwan, Penghu, K inmen, Matsu, Dongsha, Zhongsha, and Nansha. Area: 36,000 square kilometers Population: 23 million Language: Mandarin / Taiwanese / Hakka / Indigenous Languages

Location Taiwan's total land area is about 36,000 square kilometers. It is shaped like a leaf that is narrow at both ends. It lies off the southeastern coast of mainland Asia, across the Taiwan Strait from China - an island on the western edge of the Pacific Ocean. To the north is Japan; to the south is the Philippines. Many airlines fly to Taiwan, making it the perfect travel destination. Taiwan lies on the western edge of the Pacific "rim of fire," and continuous tectonic movements have created majestic peaks,

rolling hills and plains, basins, coastlines, and other natural landscapes. Taiwan's tropical, sub-tropical, and temperate climates provide clear dif ferentiation bet ween the dif ferent seasons. There are rare or endangered species of wildlife on the island. Among these are the land-locked salmon, Taiwan serow, Formosan rock monkey, Formosan black bear, blue magpie, Mikado pheasant, and Hsuehshan grass lizard.

Age Specific Fertility Rates (2014) â&#x20AC;° Figures 7:

Total Fertility Rate Figures 8:

3.1.2. Global Eco Friendly Trend

In todayâ&#x20AC;&#x2122;s rather apathetic and over-polluted global environment where the drastic effects of climate change and environmental degradation surround us, including: extreme weather events, such as tornadoes, hurricanes, floods and melting of the polar ice caps in the Arctic; we seem to get overwhelmed by all of the talk of living an eco-conscious lifestyle. And in effect, decide to go on living our eco-ignorant lives the way we always have, wasting away the planets finite natural resources, such as water, natural gas, oil, and coal; while simultaneously significantly endangering the lives of ourselves, our family, and future generations. (Five Benefits of Promoting An Eco-Friendly Lifestyle For Your Kids, 2014)

For parents and grandparents, there is nothing more important than keeping your baby healthy. Dressing your baby in organic clothing is a responsible choice that will protect them from harm. Using eco friendly products frequently is the key to an improved and greener planet. It helps save the planet and bring awareness to build informed communities of nature-minded people. We just need to think outside the box a little bit and slowly change our lifestyle to become more eco-conscious, while also teaching our kids that the key to living a happier and healthier life.

Figures 9:

3.2 Microenvironment

3.2.1 Childrenâ&#x20AC;&#x2122;s and Infants Wear Industry â&#x20AC;˘Global Market Size and Forecast Children's wear market value to hit $173.6 billion by 2017 The global economic meltdown did not dampen spirits in the vibrant children's wear market, primarily driven by rising income levels, virtually limitless apparel varieties and keenly aware market savvy kids. The global children's wear mark is estimated to hit a value of US $173.6 billion by 2017. Furthermore, growing affluence in emerging markets, nuclear families, and the trend of emulating western culture will also ensure a rapid market growth. The amount spent annually on children's clothing can vary dramatically from household to household, from under $25 to several thousand dollars. The average family spends $107.28 on children's clothing $123.79 for each girl, $90.77 for each boy. Spending varies dramatically depending on household income and age of the primary householders. Households with an income under $10,000 spend an average of $24.67 on boys' clothes and $49.75 on girls' clothes, while households that earn $70,000 or more spend an average of $167.04 on boys' clothes and $216.57 on girls' clothes. However, the developed regions within Europe and North America are considered traditional leaders and account for a principal share of the global children's wear market. Asia-Pacific, spurred by rapidly escalating markets in India, China, Korea, Thailand, Taiwan and others is poised to deliver the fastest growth rate of 5.3% through to 2017. (Matt Bodimeade, 2012) 30

The Global Children's Wear market during the forecast period Over the past few years, children in developed economies in the Americas and Europe have become highly fashion-conscious. These children are treated like adults and they are continually exposed to fashion media and branded clothing. In addition, increased international travel and awareness about branded clothing among their peers is also contributing to awareness about luxury and designer brands among children. Wealthy parents, celebrities, and high-profile businesspeople also prefer to clothe their children in luxury brands for numerous reasons. The growing desire among children to dress like adults and experience the newest fashion trends is inspiring several luxury brands to create miniature versions of adult clothing for children. Therefore, the increasing demand for luxury children's wear in developed economies is a trend that is expected to lead to the growth of the Global Children's Wear market during the forecast period.

Parents are increasingly spending more on their children's wear due to reasons such as peer pressure and the need to maintain their social status. Currently, across the globe, an average family spends approximately US$105 annually on their child's clothing. Spending extravagantly on children has become an important consideration in their upbringing. Higher disposable income is another reason for the increasing spending on children's wear by families. The availability of newer designer children's clothing and footwear has also increased consumer spending on children's wear, which is adding to the market growth. (Laura Wood, 2014) Figures 10:

•Taiwan Market Size and Forecast Children are their parents’ most precious treasure and a nation’s most important resource and future. Children's clothing represents the most rapidly growing sector in the clothing market, accounting for almost 11% of EU spending on clothing. As result of the great parental care and love, multiple development of children industry in Taiwan is taking shape. ( 施宜煌，2013) The world children’s clothing market is expected to exceed $186 billion by 2014, representing 15% market expansion since 2009. (Datamonitor) The children’s clothing market is predicted to exceed $115 billion in 2014, representing almost 2% yearly growth over a five-year period. (MarketLine) The children and infant clothing industry involves the design, manufacture and retail of children's clothes, which are made in a wide range of materials including cotton, wool, linen and many other fabric. Clothing styles and types change from one country to the next,

depending on culture and temperature. Clothing protects children from various potentially harmful threats such as the elements. Western clothing styles continue to be seen in increasing numbers of other countries outside of the West. The sector is becoming increasingly competitive. Retailers other than those involved strictly in children's wear are dedicating more and more space to promotional activities for children's wear. Department stores and grocers, for example, are according more importance to this market segment, with some establishing standalone children's clothing stores. The global children's clothing market will recover quickly from the economic recession. As children are constantly growing, their need for clothing replacement is higher than any other demographic.

3.2.2 Organic Cottonâ&#x20AC;&#x2122;s Industry

â&#x20AC;˘Global Market Size and Forecast "Organic" has been the buzzword of significance over the past decade in the food industry, and while it hasn't gained popularity in the fashion industry as quickly, it's on its way to becoming a mainstay, thanks in no small part to the rise of organic cotton. Put simply, organic cotton is any variation of the crop grown without the use of chemical pesticides and fertilizers. This is typically done

by replacing fertilizers with natural composts and rotating crops more frequently. Weeds are abated with innovative machinery or hand labor, and the matured crop is usually harvested by hand because harmful chemicals are absent, this makes the work safe for laborers. (Mattias Wallander, 2014)

Figures 11:

Why choose organic cotton? Conventionally grown cotton is one of most heavily sprayed field crops in the world-using 2 percent of the farmland worldwide, it consumes 10 percent of the world's pesticides and 25percent of all insecticides, according to Pesticide Action Network. Sprayed from the air, these highly toxic pesticides often drift over farmhouses, roads, water sources, and workers, resulting in water and soil contamination, as well as danger to wildlife and human health. For example, a 1993 EPA study focusing on carbofuran, an insecticide used on cotton, estimated that one to two million birds are killed annually by the chemical. Cotton is also a food crop: cottonseed oil is used in snack foods, and cottonseed is used to feed beef cattle. As insects gradually become resistant to pesticides, ever-increasing amounts are required to be effective.

Currently, the leading producers of organic cotton are Turkey, Syria, Tanzania, Brazil, India, the US and Australia. The largest producer of traditional cotton is China. Unfortunately, China's organic cotton production has remained stagnant for the past decade. Unlocking the key to increasing organic cotton growth in China is a high priority for proponents of the crop. Despite a recent drop-off, the Textile Exchange reports the organic cotton market is stabilizing and making incremental progress. An estimated 71 percent of retailers plan to increase their use of organic cotton going forward. Organic cotton isn't yet everywhere, but that day is coming soon. When considering the apparel industry is responsible for approximately 10 percent of the global carbon footprint, any way to reduce the environmental impact of our clothing should be taken seriously.

(Jane McConnell)

(Mattias Wallander, 2014)

Taiwan Market Size and Forecast

Functional textiles and eco-friendly textiles categories have both gained in demand in the clothing and household textiles markets. In recent years, the cotton-spinning industry has focused its R&D on improving manufacturing processes, thereby achieving equipment automation and production efficiencies. Taiwan's textile producers are successfully combining the advantages of natural and chemical fibers, with the aim of developing new highperformance, functional and high value-added products that meet consumer demands. Organic cotton has also attracted investment interest as the textile and apparel industries seek more ecologically sustainable operations. For example, several cotton-spinning mills in Taiwan have joined together to produce organic cotton textiles. The production processes used by these companies have been organic-certified, and their organic products have been successfully commercialized. It is expected that textiles using organic cotton and eco-friendly fibers will become important export items for Taiwan in the future. Taiwanâ&#x20AC;&#x2122;s textile industry is also considering ways to develop more eco-friendly functional textiles. This combination of advanced functionality and environmental sensitivity is making the industry even more competitive and socially responsible. (ICIA, 2014)

The Role of Taiwan Government in Facilitating "Sustainability" of the Sector Taiwan has implemented the VPC (Voluntary Product Certification) for organic textiles. In recent years, the importance of sustainability in economic and development work is widely recognized internationally. The innovation of manufacturing products to meet ecology demands as well as environmental protection goals is the trend in both the textile and apparel industries. The government has been requested by consumer groups to establish an organic certification mechanism as a way to manage production of organic textile products. The range of materials included in the certification system includes organic cotton, organic wool, organic hemp, organic silk and organic leather. The products cover yarn, fabrics,

clothing and household textiles categories. (ICIA, 2014) The validation process includes product testing and factory inspection, and is divided into four grades: (1) The first level: the product contains more than 95% organic material or organic transition material. (2) The second level: the product contains more than 70% organic material or organic transition material. (3) The third level: the product contains more than 45% organic material or organic transition material. (4) The fourth level: the product contains more than 5% organic material or organic transition material.

3.2.3 Furniture Industry Children's furniture is a popular category, and one of the things that makes it popular for retailers is a lot of the time it's not the parents buying it, it's the grandparents said Jerry Epperson who is a furniture analyst. He said the births are expected to increase over the next few years, as the children of the baby boomers the echo boom generation start to become parents. Large numbers of baby boomer grandparents eager to spoil their first grandchildren also could boost sales. However, children's furniture retailers face strong price competition because of an influx of products from Asia that have driven down prices. (Joan Ve rdon, 2014)

Here are ten of the top trends in this industry today: Green Furniture Kids furniture today is designed to be eco-friendly, sustainable and healthy for children. It is very common for the furniture to be organic and made with non-toxic processes. We want our kids to be green so the furniture we supply them with should reflect that. This is a trend that started a few years ago and is continuing strongly to this day. Bright Colors Bright colors that arenâ&#x20AC;&#x2122;t gender specific. It is not nearly as common as it used to be for girls to have pink furniture and boys to have blue furniture. Todayâ&#x20AC;&#x2122;s kids furniture is usually done in bright colors that are great for both genders. Greens, yellows, oranges and bright blues are popular. Bold Graphics These colors arenâ&#x20AC;&#x2122;t just being put together with polka dots and stripes. There is a huge trend towards using bright colors in bold graphic designs and patterned upholstery.

Black and White Furniture Although bright colors are definitely a trend, there’s also a parallel trend towards black and white furniture. Many parents are interested in providing their kids’ rooms with a look that is very modern and edgy. The two trends can be combined when a room that’s mostly done in black and white has some pops of colorful furniture added to it. Space Savers The economy has caused many families to scale back including making the choice to move to smaller homes or rent out extra rooms. The result is that there’s been an increase in the need for space-savings kids’ furniture. Bunk beds are popular again. Beds with storage underneath them are popular. Space-saving organizing systems are popular. Handmade Furniture Another trend launched as a result of the recession has been the trend to make your own items for kids in order to save money. Parents who are handy with tools may actually make their own metal or wooden kids’ furniture. More common, though, you’ll find homemade accessories for the furniture. For example knitted and crocheted bedding for kids is popular again.

Designer K ids Furniture As a backlash against the recession some people have overcompensated and started a trend towards high-end furniture for kids. Kids furniture designed in the style of Italian villas and Parisian home interiors are not uncommon as a trend among people who have the money to spare. Children's Desks One of the most popular kids furniture items is the desk. Kids spend so much time these days on computers that it is highly common for them to have their own computer desks. The desk may be in the child’s bedroom or in a common area. The trend is typically towards small, organized desks with a lot of drawers and cubbies. Personalized Furniture An emerging trend is furniture that kids can write on. For example, beds and even floors may be painted with chalkboard paint so kids can draw on them, or chairs that can you can place a photo of your child in. Retro Trends There are a few trends that were in favor in the past, fell out of favor and are now starting to creep back. For example, Asian influence in children’s furniture design is beginning to make a comeback. Likewise, bohemian styles are beginning to pop up again. It is a great time to pull stuff out of storage and revamp it for the kids.

3.2.4 Location Analysis •Kaohsiung Profile Facing Taiwan Strait on the west and Bashi Channel on the south, Kaohsiung is a beautiful and modern metropolis located in southern Taiwan as well as the second largest city of this island. On December 25, 2010, Kaohsiung City was merged with Kaohsiung County to be Greater Kaohsiung, a metropolis occupying an area of 2,946 km extending from the Central Mountains to Taiwan Strait. The total population will be approximately 2.77 million. Possessing all kinds of natural landscapes and living facilities, this metropolis will develop as a new international city. Kaohsiung City is an important international hub for Taiwan. It has a complete air/marine transportation network port and the industries of logistics, financial insurance, and services as the center of talent incubation and technology R&D. Kaohsiung County owns a variety of agricultural resources as well as industrial and high-technology parks. Such an advantage will create more practical benefits from the merging. In this new Kaohsiung, immediate services and more comprehensive social welfare to each of its citizens will be ensured as the merging optimizes the deployment of the resources and better facilitates the district administration. With all the features and advantages, Greater Kaohsiung’s competitiveness will be greatly enhanced as promised. Kaohsiung is now at a new starting point in communication with the world. (Information Bureau, Kaohsiung City Government)

Population：Approx. 2,770,000 Area：Approx. 2947.6159 km2 Population density：941 people/km2

â&#x20AC;˘Zuoying District

Geography Zuoying District is in the north of Kaohsiung City. It connects Sanmin District to the east, Gushan District to the south, Nanzih District to the north, and faces Taiwan Strait to the west.

Total Land Size Area: 19.3888 square kilometers

Population There are 40 boroughs, 760 neighborhoods, 76,413 households, and 195,436 residents

3.2.5 Customer Trend/Research Attitudes Toward Shopping for Baby-Related Items Fashion has always been a powerful means of expression, as the way we dress reflects our cultural mentality, personality, and even our feelings. In addition, fashion has the great merit of combining practicality with aesthetics, and could be perceived as a pragmatic form of art. Being influenced by many different cultural and social factors and permanently adapting to the needs and requirements of a continuously developing society, fashion has suffered a lot of radical changes over the course of time. During its ongoing process of evolution, it has generated many different styles and trends, revealing traits characteristic to each distinctive generation. As the children's clothing industry was growing in popularity, more and more fashion designers decided to focus their work exclusively on designing clothes for young children and babies with children's clothes gaining a lot in aspect and originality. Supermarkets and clothing stores began to fill up with ingenious and colorful clothing articles for children, lots of shops even specializing in exclusively selling children's clothes. A lot of children nowadays spend more and more time looking for the most interesting and imaginative clothing items they can find. Mesmerized by so many clothing models, designs and colors, many children can hardly decide upon a single item in particular.

As soon as they step inside children's clothing stores, children are immersed in a colorful and magnificent world, similar to the world created by toy stores. In fact, the young generations' interest towards clothes, and thus their inclination towards originality, aesthetics and sense of beauty. There are some key points when parents buy merchandise for their children. First, more than half of parents with children age 4 or under who own baby-related products research these products online then buy them in-store. Researching online is a way for parents to see reviews and compare various product attributes side by side. However, the idea of actually seeing a product in person in order to touch and feel it is also important when making purchases in this category, particularly on big ticket items such as furniture and transport items. Second, the parents rely on information and advice from their friends and family when buying baby products. Friends and family discounts are likely to appeal to this group as they may be bringing friends and family with them when shopping, this can encourage both parties to make purchases during shopping trips. Last, knowledge of key brands is also a key factor when shopping for baby-related products. They rely on their own knowledge of a few key brands and make purchase decisions based on that. Brands should ensure that they are promoting products and educating parents online, since so many are researching products in that medium. (Alison Lipson, 2013)

The Power of the Grandparent Economy Grandparents.com commissioned Peter Francese, founder of American Demographics, to uncover the facts and to shatter some myths about grandparents. He estimates that grandparents will spend $52 billion on their grandkids this year, the bulk of it on school tuition and other education costs ($32 billion), but also on gifts like clothes ($11 billion) and toys ($6 billion). And his research projects continued strong spending, in part because the employment rate among grandparents has increased 10 percent, even while that of all other age groups has seen steady declines during the recession.ďź&#x2C6;Peter Francese, 2009ďź&#x2030;

04 Competition Analysis

In the childrenâ&#x20AC;&#x2122;s apparel and furniture market, there are three direct competitors and two indirect competitors for Highlight. They are chain stores around Taiwan, and the price range is between $15-$80.

•Direct Competitors Why And 1/2 Est: 1979 Price range: $15 - $80 Company Overview： Why And 1/2 was established in 1979, and it has many stores in Taiwan including department stores and franchise stores. Why And 1/2 sells their private label for children apparel that includes parent-child attire and accessories. The famous pattern of Why And 1/2 is pop bear.

Strengths: •Local brand •Good shopping environment •Various styles •Clothes are in full specifications and of bright colors •Alluring advertisements Weaknesses: •Employees do not have to have fashion background to assist customers

Les Enphants Est: 1971 Price range: $15 - $80

Company Overview: Les Enphants was established in 1971. They have other distributions all over Asia, Taiwan, Indonesia, Thailand and China. They sell a lot of different merchandise in stores that include apparel, shoes and supplies. Strengths: •Quality is proportional to price •The size of company gives the monetary advent on marketing •Varieties choices on brands •Good customer service Weaknesses: •Employees do not have to have fashion background to assist customers •The store offers more international brands than local brands has negative impact due to the lack awareness of the international brands

Chick Est: 1974 Price range: $15 - $70 Company Overview: Chick was established in 1974, and it is baby clothings store. Thay develop a wide range of poducts for children and maternity. Chick focus on baby wear and goods, and they also have private labels and import other brands. Strengths: •Brand awareness is high •Good quality •Customer loyalty degree is high •The size of company gives the monetary advent on marketing Weaknesses: •The age for apparel is only 0~3 years old •Employees do not have to have fashion background to assist customers

•Indirect Competitors Love World Est: 1975 Price range: $15 - $70 Company Overview: Love World is Taiwan original brand, and it was founded in 1975. It has a wide range of merchandise for children from newborn to 12 years old and focuses on children's wear. They operate in private label and import overseas wholesale brands. Strengths: •Promotional events on every month •Varieties choices on brands •The size of company gives the monetary advent on marketing Weaknesses: •Employees do not have to have fashion background to assist customers •Quality is lower •Less seasonal clothing types

Best pals Est: 1999 Price range: $15 - $70

Company Overview: Best Pals was founded in 1999. Best Pals has unique and diverse selection on children's clothing. The store has multi-brands that include Western and casual style brands that make parents choose what they want. Strengths: •Variety of choices on brands •The size of company gives the monetary advent on marketing Weaknesses: •Employee does not have to have fashion background to assist customers •Lower quality on apparel

4.2 Competitive Analysis Chart

Founded

Number of

Price

Stores in

Range

Strengths

Weaknesses

Kaohsiung

W hy And 1/2

1979

3 Boutiques

$15 - $80

4 Departments

•

Local brand

•

Good shopping environment

fashion background to assist

•

Various styles

customers

•

Clothes are in full specifications and of

•

Employee does not have to have

Bright colors

Les Enphants

1971

13 Boutiques

$15 - $80

8 Departments

•

Alluring advertisements

•

Quality is proportional to price

•

The size of company gives the

fashion background to assist

monetary advent on marketing

customers

•

Varieties choices on brands

•

Good customer service

•

Employee does not have to have

The store offer more international brands than local brands has negative impact due to the lack awareness of the international brands

Chick

1974

7 Departments $15 - $70

•

Brand awareness is high

•

Apparel’s age is only 0~3 years old

•

Good quality

•

Employee does not have to have

•

Customer loyalty degree is high

fashion background to assist

•

The size of company gives the

customers

monetary advent on marketing L ove W orld

1975

7 Boutiques

$15 - $70

•

Promotional events on every month

•

Varieties choices on brands

fashion background to assist

•

The size of company gives the

customers

monetary advent on marketing

Best Pals

1999

1 Department

$15 - $70

•

Varieties choices on brands

•

The size of company gives the

•

Less seasonal clothing types

•

Employee does not have to have fashion background to assist customers

•

Quality is lower

•

monetary advent on marketing

Employee does not have to have

Lower quality on apparel

05 Competitive Strategy

5.1 SWOT Analysis

Strengths

Weakness

•

First organic lifestyle store in Taiwan

•

Limited inventory

•

Reasonable price for the high quality

•

No online store

merchandise

•

Longer Lead time

•

High-quality customer service

•

The types of apparel are not suitable

•

High-quality apparel and furniture

•

Diverse choices of product

•

In-store events

•

Unique interior design

•

Holding unique promotions

for formal occasions •

Not an well known brands

Opportunities •

Creating a new lifestyle trend of

Threats •

children in Taiwan •

Have a large group of potential

products •

customers to open more locations •

Variety of new brands expand new products

Department stores sell various

The price competitions is fierce in Kaohsiung, Taiwan

•

Children population becomes lower for these years

5.2 Competitive Advantage

The competitive advantage of Highlight is that we promise we provide high integrity, service and quality. 足- We commit to the customers relationships. We provide customers with products and services, to the best product and quality assurance in mind. We have the fast prompt customer service because we always put our customers first. Also, we have a special service which is no matter how much our customers spend in the store, we provide free shipping and free return service within Taiwan. - We commit to our products selected different countries vendors because of quality, eco-friendliness and prestige. If customers have any questions about the quality, we will also take responsibility for that to the end. - We commit to choosing organic cotton for cleaner, eco-friendly clothing. Organic cotton provides superior softness and quality, which is wonderful for baby's tender skin making it a great choice for customers and an important choice for our environment.

5.3 Positioning

The positioning is separated with quality and price. However, the positioning of Highlight belongs to high quality and mid-high price when it is compared with other competitors. WHY And 1/2 and Les Enphants are similar with Highlight. However, the direct competitors are may very widely depending on the type of style and quality.

5.4 Value and Differentiations

Our beliefs and ideals include natural, non-toxic and comfortable clothing and furniture. In terms of apparel, all of them are made of organic cotton, especially childrenâ&#x20AC;&#x2122;s garments. We have 100% internationally certified of organic cotton, so the garments do not irritate skin. Nowadays, service has been increasingly recognized as a critical factor for any business. Therefore, if customers have any questions, we also have after-sales service. We are eager to solve the problems from customers. In order to make parents feel easy to shop at store, we provide different coloring books with nontoxic crayons for children. They can enjoy drawing and waiting for their parents.

06 Target Customers

6.1 Primary Customers Highlightâ&#x20AC;&#x2122;s primary customers are 25-34 years old parents who live in Kaohsiung of Taiwan. The families often have doublesalaries, so they can support the household spending. Although they are busy at work, they still enjoy their life.

Demographics -25 to 34 years old parents who have children between 0-5 years old -Middle to high level. The annual income USD 15,000 â&#x20AC;&#x201C; 25,000 -Graduated from Graduate school / University -Live in Urban districts -Family Size: Nuclear family -Occupation: Office staff Geographics - Taiwan, especially south of Taiwan - Kaohsiung is the second metropolitan area

Psychographics - Leisure activities - Focus on quality of life - Do not have much time to go shopping - Set the trend - Loyal consumers Lifestyle and Behaviors - Looks for non-brand names - Admired for strong aesthetic taste level - It is a devotee of popular culture Preferences and Media/ Brand Associations - Brand loyalty - Heavy computer user - Up-to-date with the latest technology

6.2 Secondary Customers The Secondary customers of Highlight are 35-44 years old parents. The income level is little lower than primary customers. They pay more and more attention on the education of children and want to give their children the better quality life.

Demographics - 35 to 44 years old parents who have children between 0-3 years old - Middle to high level. The annual income USD 25,000 â&#x20AC;&#x201C; 35,000 - Graduated from University - Live in Urban or Suburban districts - Family Size: Nuclear family - Occupation: Office staff Geographics - Taiwan, especially south of Taiwan - Kaohsiung is the second metropolitan area

Psychographics - Follow the trend - Frequent travelers - Focus on quality of life - Focus on a specific type of merchandise Lifestyle and Behaviors - Adventurous in trying trends from the norm - Interest to foreign brands Preferences and Media/ Brand associations - Social media savvy such as Facebook and Instagram

6.3 Tertiary Customers Highlight’s tertiary customers are 55-65 years old grandparents. Some of them are grandparents. They spend substantial amounts on goods and ser vices for themselves, as well as for their grandchildren.

Demographics - 55 to 65 years old grandparents who want to buy children’s apparel for between 0-3 years old - Middle to high level. The annual income USD 25,000 – 50,000 - Graduated from University - Live in Urban or Suburban districts - Family Size: Stem family - Occupation: Retiree

- Taiwan, especially south of Taiwan - Kaohsiung is the second metropolitan area

- Enjoys sharing experience and accept ant good comments - Enjoys placing activities and has positive life attitude - Emphasis on family atmosphere

Lifestyle and Behaviors - Loves the great bargain - Likes to go a specific store

- Do not use social media - Like the traditional way of publicity

6.4 Personas

Primary Target Market Name: Emily Chou Age: 27 Education: National Sun Yat-Sen University Depar tment of Business Administration Occupation: Rise Global Trades Co., Ltd.: Manager Marriage: 3 years Children: 2 year old girl Emily is focused on quality of life, and she likes unique and special merchandise of stores especially fashion and modern art. Emily normally spends around $700 ~ $1200/month on personal shopping including for her kid. She loves to visit a good quality small boutiques and department stores for her children which is located in Zuoying district. Also, Emily She loves to hang out with her family and friends and uses social media including Facebook and Instagram to update her status.

Secondary Target Market Name: Emma Chang Age: 36 Education: Fu Jen Catholic University Department of Textile and Clothing Occupation: Well Mart Merit Co., Ltd.: Marketing manager Marriage: 5 years Children: 4 year old girl Emma loves fashion, so she always follows the trend. She enjoys foreign culture such as movies, music and food. In cost of living, she spends around $600 ~ $1000/month on personal shopping. When she goes shopping, she expects a clean and comfortable shopping environment. Also, She loves to visit international brands for her children such as Ralph Lauren, Tommy Hilfiger. Emma is good at using digital products, and she likes to use Internet to search the newest information. In her free time, She loves to visit museums and exhibitions in Kaohsiung Museum of Fine Art with her family. Having her family around means happiness to her.

Tertiary Target Market Name: Jean Shen Age: 60 Education: Shih Chien University Department of Finance and Banking Occupation: Bank of Taiwan (Retired) Marriage: 38 years Children: 30 year old daughter and 27 year old son Jean is a traditional Taiwanese woman who attaches importance to her family. Recently, she started dabbling in the stock market. She knows a great deal about the snares and pitfalls of playing the stock and is determined to proceed warily. In her shopping behaviors, Jean spends around $500 ~ $1000/month on personal shopping. She likes to shop at department stores because she likes the good quality goods. She dotes on her grandson, so she likes to visit the childrenâ&#x20AC;&#x2122;s stores which are close to her home. She has to watch TV before she goes to sleep. She likes to watch health and financial TV show. She places great emphasis on the importance of family life and times. Therefore, she has a family trip three times within two months.

07 Product Plan

7.1 Sourcing and Plan

Sisso Sissoâ&#x20AC;&#x2122;s brand designer, Ms. Greer Chon, a fashion designer, encountered her lifeâ&#x20AC;&#x2122;s changing point when she was pregnant. The birth of baby inspired her to reconsider the importance of the material. In order to give her baby the most natural protection, she plunged into the world of Organic Cotton and started designing baby clothes and accessories with the Organic Cotton. Sisso was founded in 2010 in Taiwan. They offer apparel from 0-3 year old boys and girls. Price range is $15 to $70.

Mini Rodini Mini Rodini is a Swedish childrenâ&#x20AC;&#x2122;s wear brand that was founded in 2005 by illustrator Cassandra Rhodin as a tribute to all children, their imagination and sense that everything is possible. Mini Rodini takes children seriously with playfulness, meaning it is important that children too have clothes that match their own personality, mood and creativity. Mini Rodiniâ&#x20AC;&#x2122;s vision has always been to make it both easy and exciting for parents to buy better products for their kids in regards to the design as well as environmental and ethical aspects of the production. And while the playful and humorous aesthetics may speak directly to the children, the quality of the products is equally important. They offer apparel from 0-11 year old boys and girls. Price range is $40 to $150.

Koolabah Koolabah is a Swedish design concept that creates fashion in unisex for small trendsetters from 3 months to 6 years and price range is $30 to $100. They want the clothes to be nice to look at with its minimalist design and unique shapes, but at the same time they strongly focus on functionality and ergonomics. Inspiration is drawn from the Scandinavian and the Japanese culture and elements from the 80's are a recurring theme in the all collections. All the garments are made from 100% organic materials.

Kate Quinn Kate Quinn is the U.S.A childrenâ&#x20AC;&#x2122;s wear brand that was founded in 2006. Their designs highlight the baby's natural beauty with simple, elegant lines and fresh, nature-inspired colors. Clothes are available in soothing basic colors, like Vanilla Bean and Chocolate, on their own or uniquely mixed with contrasting fun, vibrant shades like Dragonfly blue and Pomegranate red. Designed by Kate Quinn, former Hollywood Stylist, and certified organic from seed to packaging. Their apparel was created to be both fashionable and environmentally friendly. They offer apparel from 0-4 year old boys and girls. Price range is $25 to $100.

Winter Water Factory W i n t e r Wa t e r Fa c t o r y i s a B r o o k l y n b a s e d d e s i g n a n d manufacturing company specializing in screen printed textiles and organic cotton clothing from 3 months to 6 years old, and the price range is from $14 to $58. The company is the brainchild of Stefanie Lynen and Todd Warnock. Fresh, bold and beautiful prints are the signature of Winter Water Factory. Every item is crafted from 100% certified organic cotton and is made in the USA from the fabric to the final stitch. They believe in creating high quality products for healthy planet.

GoatMilk GoatMilk is the U.S. children’s apparel. The basic, simple and classic with a modern twist are their features. These are the fundamental principles behind the brand Goatmilk. Co-founders, Tania Vargas and Roland Bello, both children of immigrants, grew up conservationists. Meaning that they learned at a very early age how to re-use and re-purpose, how not to be wasteful, and that in general less is more. Tania and Roland stated, “There are many things we cannot control, but when we can, we try to choose what’s best for the planet we live on. It’s the way we live.” They have stayed true to this philosophy with the creation of GoatMilk. They offer apparel from 0-5 year old boys and girls. Price range is $15 to $52.

Purebaby Purebaby is an Australian owned fashion label creating unique, organic clothing for babies and children. Established in 2002, Purebaby was born out of a desire for beautiful and simple products made with awareness and care. Always inspired by the beauty in nature, each Purebaby piece is soft and comfortable beautifully designed beautifully organic. They offer apparel from 0-4 year old boys and girls. Price range is $30 to $90.

Flexa Founded in Denmark in 1972, FLEX A specializes in design, manufacturing and sales of Scandinavian interior solutions for Kids. All FLEX A products are designed to create a safe and stimulating environment which adapts, grows and transforms to meet children's ongoing developmental needs. They use their knowledge of children to create the world best functional, playful and sustainable room solutions at affordable prices. Price range is $83 to $210.

The Land of Nod The Land of Nod is the U.S.A childrenâ&#x20AC;&#x2122;s furniture brand that was founded in 1996. Price range is $69 to $299. Their exclusive selection of kids and baby furnishings has expanded to include toys, room dĂŠcor, storage and baby gear. Basically, everything for before, during and after naptime, with a focus on design for kids and people that used to be kids. They believe every product they create has a soul. This soul comes from the story behind the item, and boy are there stories. Stories of real people, themselves moms, dads, aunts and uncles, lovingly creating products for your family that are always safe, always high quality, and often just downright hilarious.

Founded Contact 2F., No.614, Zhongmei St., West Dist., 2010 Taiwan Taichung City 403, Taiwan (R.O.C.) 886.4232.65279 sisso.service@gmail.com

Categories Tops Bottoms Bodysuits Accessories Gifts

Whole Sale Range Retail Price Range Minimum Order Lead Time $7 - $35 $15 - $70 $1,000 1-2 month

Age Range Store Location Business 0 - 12m Taipei Store/Online 1- 3y Taichung

Mini Rodini

2005 Sweden

Klippgatan 11, Stockholm, Sweden 468.641.7788 wholesale@minirodini.se buybuyspree@gamil.com

Tops Bottoms Bodysuits Accessories Gifts

$17 - $50

$40 - $150

$1,000

3-4 month

1 - 4m 4 - 9m 9m -1.5y 1.5 - 3y 3 - 5y

Sweden

Store/Online

Koolabah

2009 Sweden

Brogatan 1 413 01 Göteborg Sweden +46 7 0828-1477 koolabah＠Koolabah.com buybuyspree@gamil.com

Tops Bottoms Bodysuits Accessories Gifts

$15 - $50

$ 30 - $100

$1,000

3-4 month

18 - 24m 2 - 5y

Sweden Europe Japan Russia South Korea Taiwan USA

Store/Online

Kate Quinn

2006 U.S.A

4F., No.9, Sec. 3, Kangning Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) 886 2263 42860 service@yuehze.com.tw

Tops Bottoms Bodysuits Accessories Gifts

$12- $50

$25 - $100

$1,500

2-3 month

0 - 12m 1 - 4y

U.S.A

Store/Online

Winter Water Factory 2003 U.S.A

110 E. 9th Street #A691 Los Angeles, CA 90079 213-627-9586 wendyscloset@gmail.com info@winterwaterfactory.com

Tops Bottoms Bodysuits Accessories

$7 - $29

$14 -$58

$1,200

2-3 month

0 - 12m 1- 3y

U.S.A Canada Australia Germany U.K

Store/Online

Goat Milk

2010 U.S.A

523 East 12th Street New York, NY 10009 212-500-1437 info@goatmilknyc.com

Tops Bottoms Bodysuits Accessories Gifts

$7.5 - $26

$15 - $52

2-3 month

1 - 4m 4 - 9m 9m -1.5y 1.5 - 3y 3 - 5y

U.S.A Store/Online Canada Australia Austria France Italty The Netherlands Sweden Switzerland Taiwan Japan Hong Kong South Korera

Purebaby

2002 Australia

135 Cromwell St Collingwood VIC,3066 613.9417.5344 enquiries@purebaby.com.au

Tops Bottoms Bodysuits Accessories Gifts

$15- $45

$30-$90

$1,000

2-3 month

0-12 m 1-4 y

Austrialia

Store/Online

Flexa

4F, 5, Alley 10, Lane 62, Chih Cheng Rd. 1972 Denmark Shihlin DistrictI, Taipei City, Taiwan (R.O.C.) 886 2283 67567 sale@babyjoytw.com

Beds $40 - $105 Play Baby Storage Textiles Bed parts Tables & Chairs Mattresses

$83 - $210

$2,000

2-3 month

U.S.A U.K Austria France Germany Taiwan 40 Countries

Store

The Land of Nod

1996 U.S.A

Furniture Bedding Storage Rugs Lighting Décor Toy&Gift

$69 - $299

$2,500

2-3 month

U.S.A

Store/Online

Sisso

Brands

8135 River Drive, Morton Grove, IL 60053 800.933.9904 business.sales@landofnod.com

$35 - $150

7.2 Proportion of Merchandise

Goat Milk, 12%

Sisso, 13%

Mini Rodini, 7%

Winter Water Factory, 15%

Koolabah, 10%

Kate Quinn, 23%

Flexa, 46%

The Land of Nod, 54%

7.3 Categories

Sisso

Core Assortment

Item SKU S910310 S831203 S930725 S820204-2A S820204-2A Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $30.00 $25.00 $45.00 $37.00 $37.00 Wholesale Price $15.00 $12.50 $22.50 $18.50 $18.50 Mini Rodoni

Item SKU SP1415ALS78 SP1415ALS80 SP1415ALS85 SP1415AL905 SP1415AL915 Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $48.00 $43.00 $37.00 $75.00 $84.00 Wholesale Price $24.00 $21.50 $18.50 $37.50 $42.00 Koolabah

Item SKU AW1415CLB03 AW1415CLB01 AW1415CLP11 AW1415CLT02 SP1415ALS30 Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $40.00 $44.00 $66.00 $37.00 $82.00 Wholesale Price $20.00 $22.00 $33.00 $18.50 $41.00 Kate Quinn

Item SKU K4E003EL K3E218SL K4S459FO K3E310TS K3E520TS Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $22.00 $34.00 $32.00 $26.00 $26.00 Wholesale Price $11.00 $17.00 $16.00 $13.00 $13.00

Winter Water Factory

Item SKU B4723 B1093 B7723 B1923 B2381 Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $44.00 $38.00 $58.00 $52.00 $24.00 Wholesale Price $22.00 $19.00 $29.00 $26.00 $12.00 Goat Milk

Item SKU GM042 GM049 GM051 GM046 GM016 Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $26.00 $38.00 $40.00 $32.00 $26.00 Wholesale Price $13.00 $16.00 $20.00 $16.00 $13.00 PureBaby

Item SKU PN1003S14 PN1004S15 PN1000S33 PA1006S16 PN1006S14 Material 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton 100% Organic Cotton Retail Price $44.00 $25.00 $24.00 $17.00 $48.00 Wholesale Price $22.00 $12.50 $12.00 $8.50 $24.00 Flexa

Item SKU 82-50103-40 82-10047-40 82-10048-40 Material MDF and ash wood MDF and ash wood MDF Retail Price $99.00 $59.00 Wholesale Price $49.50 $29.50

$148.00 $74.00

82-70087-79 MDF

$88.00 $44.00

The Land of Nod

Item SKU 262846 524689 263486 255319 302623 Material Solid teak/Solid mahogany Solid sustainable rubberwood Solid mahogany/Solid teak Solid sustainable rubberwood Canvas Retail Price $399.00 $149.00 $99.00 $69.00 Wholesale Price $199.50 $74.50 $49.50 $34.50

$24.95 $12.48

100

101

7.4 Buying Plan

• Trade Shows

Name PlayTime

Where New York /Paris/Tokyo

When New York: Aug 1-3, 2015

Website http://www.playtimenewyork.com/trends-events/

Paris: Jul 4-6, 2016 Tokyo: Aug 25- 27, 2016 Children’s Club

New York

Aug 2-4, 2015

http://www.enkshows.com/childrensclub/

Baby Products Fair

Hong Kong

Jan 11-14, 2016

http://www.hktdc.com/fair/hkbabyfair-en/HKTDC-Hon g-Kong-Baby-Products-Fair.html

102

• Calendar

Order

Delivery January February

March April May June July August September October November December

Sisso

F/W Order

F/W Delivery

S/S Delivery Mini Rodini

S/S Order

F/W Order S/S Delivery

Koolabah

S/S Order

F/W Order S/S Delivery

Kate Quinn Winter Water Goat Milk

F/W Order

Nod

F/W Delivery S/S Order F/W Delivery S/S Order

F/W Order

F/W Delivery S/S Order

F/W Order S/S Delivery

The Land of

S/S Order

F/W Order

S/S Delivery Flexa

F/W Delivery

F/W Order S/S Delivery

S/S Delivery Purebaby

F/W Delivery S/S Order

S/S Delivery Factory

F/W Delivery

F/W Delivery S/S Order

F/W Order S/S Delivery

F/W Delivery S/S Order

103

104

08 Marketing Plan

105

8.1 Marketing Objectives

(1) Obtain at least 300 new customers per month. (2) Highlight is going to build brand awareness and attract potential customers. (3) Coordinate the development of a new ad campaign with advertising agency with goal of increasing brand recognition by 2017. (4) Increase market share for childrenâ&#x20AC;&#x2122;s product to all southern of Taiwan by 2017.

106

107

108

8.2 Marketing Strategy • Marketing Campaigns Grand opening event The grand opening event will be held on Saturday , February 27th, 2pm to 5pm. We will invite magazine’s journalists, bloggers and customers. They will report and share the opening ceremony. We also engage photographer to record event. At the grand opening, we will serve refreshments, such as snacks or appetizers for our guests. Highlight offer discounts and special pricing during the grand opening. When customers attend the event, they will have $10 gift card and have 10% discount on all merchandise. • Invitation cards • Facebook • Direct mail

109

VIP Store Event-runway We need to increase our visibility, so we will hold the event-runway during holiday season such as Halloween and X’mas. We will also invite bloggers to join us, and we also provide feature wall for our customers to take photos in front it. They will share the event on their fan pages. It is an excellent opportunity to publicize our brand.

110

• Facebook • Instagram • Email • Line

Seasonal sales We will have seasonal markdown sale for the holiday such as Chinese New Year, Mother’s Day, Father’s Day and Christmas. Each promotional sale will last two weeks. It will offer 10% discount on all merchandise. • Facebook • Email • Line • Search Engine • Magazines • Official Website

111

Cooperation with bloggers Highlight cooperates with bloggers who have 0 to 5 years old children.

Grace is a blogger who has over 980,000 flowers on Facebook. She always shares her style and daily life and has attracted many people to follow her. Her daughter Toby will wear our apparel and share the feedback on Facebook.

112

The twins Chelsea & Jesper have over 240,000 followers on Facebook. Their Mom always share their daily life and apparel. Therefore, we sponsor them with our merchandise, and they will introduce these merchandise to their followers. â&#x20AC;˘ Facebook â&#x20AC;˘ Instagram 113

Lifetime membership Loyalty program improves customer retention and spending, so we provide accumulative cards when customers spend over $250 at store. They reach 10 points and they can earn the lifetime membership. We will offer special discount of 10% on all merchandise. • Facebook • Instagram • Official Website • Email • Line

114

Social Responsibility Taiwan Fund for Children and Families(T.F.C.F) was found in 1950. TFCF is a non-governmental organization that dedicates itself to award needy children and their families with welfare and benefits. With their professional social work experience, they prevent children away from being abused, and even provide the financial assistance to the needy children and families. They insist to assist their supported needy children with a timely assistance, heartfelt concerns, Christ’s love and professional social works. Highlight care more about children because they are our precious gifts. Therefore, we will donate 5% monthly of net sales to support them. • Facebook • Instagram • Line

115

â&#x20AC;˘ Marketing Channels Email Highlight adver tises our new sales, promotions and store events through email, and our customers can receive the latest information. Before we can start an email marketing campaign, we need to access our best customers' email addresses. Asking for email addresses in a polite and respectful way will make our customers look forward to our email newsletters or promotions. The other way to collect email addresses from our customers is through comment cards and response cards.

116

Official Website The Highlight website will has online shopping for our customers within Taiwan. We provide free shipping and retur n when customers buy our merchandise online. On the website, we also show sales promotions and special events information.

117

Facebook fan page Social network also takes up a lot of time, and Internet users are happy to get stuck in. This leads to the use of platforms becoming second-nature, forming habits that influence their lives, both on and offline. Social media has helped us stay engaged with our customers. Therefore, Facebook will be used for spreading our information on sales promotions and special events. We also hope to get feedback from our customers, so we can improve it. There are 15 millions people in Taiwan use Facebook every month.

118

Instagram Instagram is another popular social networking tool in Taiwan. We will post our newest merchandise on it every week. We will use hashtags such as #highlight #childrenswear #fashionchildren which is a way to link our pictures.

119

Line Line is an instan t messaging app which can send mass messages to all customers. We can create messages from the smartphone app or the PC admin page and batch send them to customers who have friended with our account. Messages can be reserved for sending in advance, providing us with the flexibility needed to time messages to campaigns and events. It is the ultimate tool to promote your businesses and events. Close the distance by becoming â&#x20AC;&#x153;friendsâ&#x20AC;? with our customers. There are over 17 millions people in Taiwan use Line everyday.

120

Magazines 親子天下 Baby（Commonwealth Parenting baby Special Issue）： It provides parents who have 0-6 years old children the most practical education and care knowledge and also includes lifestyle information. 嬰兒與母親 (Baby & Mommy)： It is a book to pregnancy, perinatal health care and 0 - 6 years old baby feeding, nutrition, disease prevention, psychological nursing, education as the main content of the popular science magazine of mother and infant. At the beginning of Highlight, it needs to build brand awareness. We will place our Ads on two most popular magazines. The message that we will put on Ads is that……

“ Wish Granted Fashion For Our Babies”

121

Direct Mail Direct mail is the most common form of direct mar keting. Therefore, the invitation cards will use direct mail to send to our new customers. We will send 1000 direct mails to Gushan district and Sanmin district which are near Zuoying district. The address will collect from post office and the recipients that we will depend on their marital status and salary.

122

123

Search Engines Ya h o o a n d G o o g l e a r e m o s t popular search engines in Taiwan. Search advertisements are targeted to match keywords entered on search engines. In order to create Highlightâ&#x20AC;&#x2122;s brand awareness, we will use banner to s p re a d o u r b ra n d q u i ck l y. T h e re fo re, e f fe c t i ve key wo rds can help increase your websiteâ&#x20AC;&#x2122;s re l e va n c e a n d i t s ra n k i n g o n search engine results pages. The keywords include baby clothing, kid apparel, organic and children furniture.

124

125

8.3 Marketing Calendar

Feb Event (Grand Opening) Store Event-Runway show (Chinese New Year, Mother;s Day, Father's Day, Halloween, X'mas) Seasonal Sales Cooperation with bloggers (Grace) Cooperation with bloggers (Chelsea & Jesper) Lifetime Membership Social Responsibility Email Official Website Facebook Fan Page Instagram Line Magazine Print ADS (嬰兒與母親) Magazine Print ADS (親子天下baby雜誌) Direct Mail To buy Yahoo banner To buy Google banner

126

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Event (Grand Opening) $2,000 Magazine Print ADS (嬰兒與母親） $1,200 Magazine Print ADS (親子天下baby雜誌) $1,200 Email $1,700 Cooperation with bloggers(Grace) $1,200 Cooperation with bloggers(Chelsea & Jesper) $120 $120 Official Website Store Event-Runway Show (Chinese New Year,Mother;s Day, Father's $1,000 Day, Halloween, X'mas) $1,200 To Buy Yahoo Banner To Buy Google Banner $1,200 Direct Mail $30

Total $

Jul

Aug

$50 $120 $1,200

1,370 $

Sep

$1,200 $1,700 $1,800 $1,000 $1,200

6,900 $

7,250 $

Oct

3,720 $

Nov

May

$50

$1,700

$120

$120 $1,000

$1,200

1,370 $

Dec

Jan

$1,200 $50 $1,200 $120 $1,200

3,770 $

$50 $1,700 $120 $1,000 $1,200

2,320 $

$120 $1,200

3,070 $

Jun

$1,200 $120 $1,000 $1,200

3,520 $

$1,200 $120 $1,200

4,020 $

2,520

Total $ $ $ $50 $ $ $ $120 $ $ $ $1,200 $ $ $ $

2,000 2,400 2,400 250 6,800 4,800 3,120 5,000 7,200 7,200 30 -

1,370 $

41,200

127

128

09 Branding

129

130

9.1 Brand Identity

131

9.2 Business Card

132

9.3 Letterhead and Envelope

133

9.4 Shopping Bag and Gift Box

Thicker paper bag

Canvas bag

Gift Box Size: 11 ½ x 8 ½ x1 5/8” / 19x12x3”

134

9.5 Price Tag, Stamp and Window Signage

Price Tag

Stamp

Window Signage

135

136

10 Visual Merchandising

137

10.1 Floor Plan

700 sq.ft.

138

139

10.2 Wall Display

140

10.3 Window Display

141

10.4 Storefront

142

143

144

11 Operational Plan

145

11.1 Organization Chart

11.2 Ownership Details Highlight is a private business and it owned by I-Chun Chen. Highlight will hire 3 full-time and 1 part-time employees to help operate the store.

146

11.3 Employees Responsibilities and Benefits CEO & Store Owner - Attend trade shows - Trend analysis and trend forecasting - Analyze and review past and present monthly sales, inventory, and open to buy reports - Develop and execute the storeâ&#x20AC;&#x2122;s merchandise assortment plan - Coordinate and plan timing of deliveries with vendors - Develop a calendar and plan for visual merchandising; communicate to Store Manager - Develop a social media strategy and plan - Train and communicate information about product knowledge to entire team

General Manager - Create genuine connections with customers by asking questions, listening to their needs, and offering suggestions - Manages the implementation and execution of all store operations - Evaluates store sales performance daily using key performance indicators - Executes the visual merchandising plan as directed from CEO - Manages and implement social media and marketing plan on all platforms - Analyze and track and increase social media following - Assist in planning store events and promotions - Super vises the Sales Associates; track sales associates performance and development - Reports to the CEO

Sale Person - Assist in opening and closing housekeeping routines - Maintain visual presentations by restocking and merchandising - Process new arrivals efficiently (tag, steam, hang) - Be knowledgeable of merchandise to communicate it to the customer - Assist in social media posts (Facebook, Instagram) - Responsible for contributing to store sales goals - Responsible for obtaining customers contact information and email into POS system - Reports to the Store manager and CEO

Part-time Sale Assistant - Process new arrivals efficiently (tag, steam, hang) - Be knowledgeable of merchandise to communicate it to the customer - Assist in social media posts (Facebook, Instagram) - Responsible for contributing to store sales goals - Reports to the Store manager and sale persons

147

148

11.4 Location and Hours of Operation

Hours - 11:00am â&#x20AC;&#x201C; 9:00pm - Open 360 days a year. Closed during Chinese New Year (5 days).

Location - No.58, Liwen Rd., Zuoying Dist., Kaohsiung City 813, Taiwan (R.O.C)

Rent - 700 sq.ft - $ 930/Month

Return & Exchange Policy - If you are not happy with any product, we will gladly accept any reasonable request for exchange or return for store credit within 7 days from the date of purchase. - Clearance items are final sale. No returns or exchanges are accepted on clearance merchandise.

149

150

12 Financial Plan

151

12.1 Financial Plan Summary Start Up Cost Forecast Highlightâ&#x20AC;&#x2122;s start up cost is $145,706.14 and this money will be obtained via banks and other investors. 30% of the startup cost will come from banks at 3.6% of interest rate annually, and 70% will come from private investors. The startup cost will be used for our business expenses that will include technology and phones, fixtures, leasehold improvements, rent deposit, salaries, marketing startup, opening inventory, other start up expenses, contingency reserve and working capital. The store rental cost for the first month will be $ 2,790, and that includes a three-month rent deposit. Therefore, each month's rent will be $ 930.

Marketing Expenses

We estimate our first year sales will reach $493,648, which will be powered by our marketing plan. The plan includes an informational website, e-mail, social networks, magazines, store events, cooperation with bloggers and search engines ads that can both generate additional revenue and increase brand-awareness. We also plan to attend trade shows to get the newest information,

First Year Total Cost: $ 41,220 Event: $ 2,000 Magazine Print Ads: $ 4,800 Email: $ 300 Cooperation With Bloggers: $ 11,600 Official Website: $ 3,120 Store Event-Runway Show: $ 5,000 Search Engine Banner: $ 14,200

trends and negotiate the best pricing and terms.

Direct Mails: $30

152

Profit And Loss Forecast Our expected profit in the first year is 10.7% of the total net sale ($493,648) The estimated gross margin is 44.3%, and the estimated total expense is 33.1% There will be 4 workers in Highlight, including a CEO, Store manager, t wo sales people and a part-time assistant. The following list shows each positionâ&#x20AC;&#x2122;s annual salary: CEO: $ 30,000 Store Manager: $16,900 Sales Person: $ 12,000 Part-time Assistant: $ 4,800

Cash Flow Forecast Our expected start up loan is $145,736 and our cash flow will be $78,702 at the end of the first year.

Expected Turnover Rate First year: 4.01

Second year: 4.63

Third year: 5.77

Sales Forecast Our first year annual sales estimate is $493,648. The second year annual sales estimate will grow 5% and reach $518,330. The third year annual sales estimate will continue to grow to 5% and reach $544,247. We will carry more different brands and we will hold the promotional activity to sell quantity with the increment product.

153

Average Item Price

Average Customer Transaction

Highlight plans a total sale of 11,930 units for the first year in business, and the total cost of goods of USD$ $255,617.78 with a 48.6% markup.

$41.38 (1 unit per transaction) Apparel: $37.99 (1 unit per transaction) Furniture: $118.92 (1 unit per transaction)

Highlight’s merchandise categories include one-piece items, tops, bottom, outerwear, accessories and furniture. Apparel is the largest category, which will be 95% of merchandise and the furniture will be 5%. Duty rates in Taiwan vary from 0% to 30%, with the average duty rate at 6.52%. The duty of apparel is 12%. Based on our first year sales forecast, total sales $493,648 ÷ 11,930 units = $ $41.38. In term of apparel, The average price point is $434,190 ÷ 11,430 units= $ $37.99. The average price point of furniture is $59,458 ÷ 500 units = $ $118.92.

Annual Sales In First Year Highlight’s first year sales estimate is $493,648. Average price of an item: $41.38 Average units per transaction: 2 Average customers transaction: $41.38 x 2 = $ 82.76 Expected traffic of Highlight: 55 traffic per day Expected customers: 30% Buying customer per day 55 x 30% =16.5 16.5 customers x $82.76 = $1,371.24 sales per day $1,371.24x 360 days= $493,648

154

11.2 Future Growth Goal After 2-3 years of steady business, we will grow our business, so we will hire more employees, launch more collections and lines and have an online store to expand our market. Business growth is critical to our store's success. Therefore, a successful business regularly reviews its business plan to ensure it continues to meet its needs. It's sensible to review current performance on a regular basis and identify the most likely strategies for growth. We will open an online store during the third year. In 5 years, if our revenues permit, we plan to open the second retail store in Tainan city because Tainan city is also the big city in south of Taiwan. Tainan city is an ideal second location because it near Kaohsiung city, and it will be easier to manage operationally.

155

156

11.3 Financial Sheet Startup Capital Spending Plan and

Monthly Depreciation Expense

Startup Capital Spending Plan & Monthly Depreciation Expense

Monthly Depreciation Expense

Depreciate ?

# Months of Useful Life

1,350.00

Yes

22.50

4,500.00

Yes

75.00

Flooring, Paint, Electrical, Light Fixtures, Fitting Rooms, Doors, Signage, Awning & Labor

25,000.00

Yes

416.67

Rent Deposit

3 Months Rent Deposit

2,790.00

n/a

Wages and Salaries

3 Months

18,600.00

n/a

Marketing Startup

Initial Marketing Campaign

12,340.00

n/a

Opening Inventory

Cost BOM$ Inventory

59,656.14

n/a

Other Start Up Expenses

Permits, Insurance, Utility Deposits, Supplies

1,000.00

n/a

Contingency Reserve

Extra Cash for Unforeseen Expenses and Repairs $

2,500.00

n/a

Working Capital

Cash Needed in first months to keep bank funds $ positive

18,000.00

n/a

145,736.14

514.17

Item

Detail

Technology and Phones

Cash Register, Fax/Copier, Printer, PC, Phones,Software

Selling Floor and Backstock Fixtures

Floor Fixtures/Shelves, Display Tables, Jewelry Cases

Leasehold Improvements (Material & Labor)

Total

$ Amount

157

Assortment Plan

158

159

Sales and Inventory Flow Year 1

Sales and Inventory Flow year one GM% IMU% year 2 growth year 3 growth

44.3% 48.6% 5.0% 5.0%

shrink %

Jan-Yr0

Feb-Yr1

Net Sales COGS GM$ GM%

Oct-Yr1

Nov-Yr1

Dec-Yr1

Jan-Yr1

Q1-Yr1

Q2-Yr1

Q3-Yr1

Q4-Yr1

Yr1 Total

$119,928

$128,197

$135,871

$135,138

$128,146

$115,951

$121,600

$120,226

$135,871

$37,759 20,378 $ $17,380 46.0%

$40,434.3 21,882 $ $18,552 45.9%

$43,485.8 24,863 $ $18,623 42.8%

$38,369.9 21,472 $ $16,898 44.0%

$38,369.9 21,510 $ $16,860 43.9%

$43,188.5 23,250 $ $19,938 46.2%

$46,638.4 26,919 $ $19,720 42.3%

$46,043.8 26,516 $19,527 42.4%

$115,951 $63,222 $52,730 45.5%

$121,600 $67,212 $54,389 44.7%

$120,226 $67,845 $52,381 43.6%

$135,871 $76,685 $59,186 43.6%

$493,648 $274,963 $218,685 44.3%

4,043.43 $ 10.0%

1,887.93 $ 5.0%

4,340.74 $ 10.0%

1,887.93 $ 5.0%

2,021.72 $ 5.0%

4,348.58 $ 10.0%

1,918.49 $ 5.0%

3,836.99 $ 10.0%

2,159.43 $ 5.0%

4,663.84 $ 10.0%

4,604.38 10.0%

$7,819 6.7%

$8,250 6.8%

$10,104 8.4%

$11,428 8.4%

$37,601 7.6%

$45,172 $24,100

$247,690 $131,790

$130,908 $73,031

$148,379 $82,758

$135,894 $73,731

$662,871 $361,310

$809

$755

$868

$755

$809

$870

$767

$864

$933

$921

$115,951

$118,925

$121,600

$121,679

$122,290

$120,226

$119,928

$128,197

$135,871

$135,138

$128,146

$121,749

$121,600

$120,226

$135,871

$121,749

$117,438 2.9

$118,925 3.1

$120,262 3.1

$121,639 2.8

$121,984 3.2

$121,258 3.0

$120,077 2.8

$124,063 3.1

$132,034 3.3

$135,505 3.1

$131,642 2.9

$124,948 2.8

$118,850

$121,449

$126,055

$130,226

1.0

$40,402 $21,661

Mar-Yr2

$121,749

Avg Stk Stk:Sls Turn

May-Yr2

$105,047

$41,013 $22,755

Jun-Yr2

$106,452

$41,200 $22,884

Jul-Yr2

$104,933

$48,407 $25,784

Aug-Yr2

$108,260

$49,324 $28,223

Sep-Yr2

$106,093

$50,648 $28,752

Oct-Yr2

$103,251

$45,479 $25,495

Nov-Yr2

Q1-Yr2

Q2-Yr2

Q3-Yr2

Q4-Yr2

4.01 Yr2 Total

$113,739

$121,749

$106,452

$106,093

$118,491

$42,456 22,935 $ $19,521 46.0%

$45,660 25,841 $ $19,819 43.4%

$40,288 21,764 $ $18,524 46.0%

$40,288 22,801 $ $17,487 43.4%

$45,348 24,498 $ $20,850 46.0%

$48,970 27,714 $ $21,256 43.4%

$48,346 27,361 $20,985 43.4%

$121,749 $66,863 $54,886 45.1%

$127,680 $70,148 $57,533 45.1%

$126,237 $70,406 $55,831 44.2%

$142,664 $79,573 $63,091 44.2%

$518,330 $286,990 $231,340 44.6%

4,245.60 $ 10.0%

1,982.32 $ 5.0%

4,557.78 $ 10.0%

1,982.32 $ 5.0%

2,122.80 $ 5.0%

4,566.01 $ 10.0%

2,014.42 $ 5.0%

4,028.83 $ 10.0%

2,267.40 $ 5.0%

4,897.03 $ 10.0%

4,834.60 10.0%

$8,210 $0

$8,663 $0

$10,609 8.4%

$11,999 8.4%

$39,481 7.6%

$53,493 $25,971

$49,637 $24,099

$48,980 $23,780

$47,430 $23,028

$117,098 $56,852

$138,537 $67,261

$151,769 $73,685

$146,047 $70,907

$553,452 $268,705

$49,527 $24,046

$45,749 $22,212

$43,260 $21,003

$48,297 $23,449

$49,979 $24,265

$119,606

Jan-Yr2

$39,646 21,418 $ $18,229 46.0%

$43,827 $21,278

$118,491

Dec-Yr2

$123,079

$45,578 25,794 $ $19,783 43.4%

$45,387 $22,036

$110,121

$45,243 $24,135

$39,646 21,418 $ $18,229 46.0%

$849

$793

$912

$793

$849

$913

$806

$907

$979

$967

$102,082

$105,047

$106,452

$104,933

$108,260

$106,093

$103,251

$110,121

$118,491

$119,606

$113,739

$107,022

$106,452

$106,093

$118,491

$107,022

$111,915 2.9

$103,565 2.6

$105,750 2.6

$105,692 2.3

$106,596 2.6

$107,176 2.5

$104,672 2.3

$106,686 2.6

$114,306 2.7

$119,049 2.6

$116,673 2.4

$110,381 2.4

$108,833

$106,434

$109,489

$114,715

1.1

1.2

Mar-Yr3

$107,022

Apr-Yr3

May-Yr3

Jun-Yr3

Jul-Yr3

Aug-Yr3

Sep-Yr3

Oct-Yr3

Nov-Yr3

Dec-Yr3

Jan-Yr3

Q2-Yr3

Q3-Yr3

Q4-Yr3

4.63 Yr3 Total

$83,258

$89,485

$86,208

$92,522

$90,246

$84,606

$89,918

$99,034

$95,342

$107,022

$89,485

$90,246

$99,034

$41,629 22,489 $ $19,140 46.0%

$47,857 27,084 $ $20,773 43.4%

$41,629 22,489 $ $19,140 46.0%

$44,579 24,082 $ $20,497 46.0%

$47,943 27,133 $ $20,810 43.4%

$42,303 22,853 $ $19,450 46.0%

$42,303 23,941 $ $18,362 43.4%

$47,615 25,723 $ $21,893 46.0%

$51,419 29,100 $ $22,319 43.4%

$50,763 28,729 $22,034 43.4%

$127,836 $70,206 $57,630 45.1%

$134,064 $73,655 $60,409 45.1%

$132,549 $73,927 $58,622 44.2%

$149,798 $83,552 $66,246 44.2%

4,457.88 $ 10.0%

2,081.44 $ 5.0%

4,785.67 $ 10.0%

2,081.44 $ 5.0%

2,228.94 $ 5.0%

4,794.31 $ 10.0%

2,115.14 $ 5.0%

4,230.28 $ 10.0%

2,380.77 $ 5.0%

5,141.88 $ 10.0%

5,076.33 10.0%

$8,621 $0

$9,096 $0

$11,140 8.4%

$12,599 8.4%

$41,456 7.6%

$47,720 $23,169

$121,477 $58,978

$146,602 $71,176

$155,128 $75,316

$152,566 $74,072

$575,773 $279,542

$26,164 $12,703

Purchases -Retail Purchases -Cost

$50,771 $24,650

$44,543 $21,626

$50,322 $24,432

$50,857 $24,692

$45,423 $22,053

$48,056 $23,332

$50,577 $24,555

$56,495 $27,429

$102,182

Q1-Yr3

$111,961

$44,579 25,229 $ $19,350 43.4%

$48,695 $27,392

$39,646 21,418 $ $18,229 46.0%

Feb-Yr3 BOM

Apr-Yr2

$102,082

$27,884 $13,538

EOM

$43,077 $23,166

$42,456 24,028 $ $18,428 43.4%

Shrinkage

$54,096 $26,264

$50,749 $24,639

$544,247 $301,340 $242,907 44.6%

$892

$833

$957

$833

$892

$959

$846

$952

$1,028

$1,015

EOM

$83,258

$89,485

$86,208

$92,522

$90,246

$84,606

$89,918

$99,034

$102,182

$95,342

$86,208

$89,485

$90,246

$99,034

$86,208

Avg Stk Stk:Sls Turn

$95,140

$86,372

$89,485

$87,847

$89,365

$91,384

$87,426

$87,262

$94,476

$100,608 2.1

$98,762

$90,775

$92,313

$89,615

$90,951

$95,692

$94,399

1.4

1.5

1.6

5.77

Shrinkage

160

Sep-Yr1

$120,226

$43,407 24,951 $ $18,457 42.5%

Purchases -Retail Purchases -Cost

MD$ MD%

Aug-Yr1

$122,290

$48,260 $27,307

BOM

Net Sales COGS GM$ GM%

Jul-Yr

$121,679

$37,759 20,378 $ $17,380 46.0%

Feb-Yr2

MD$ MD%

Jun-Yr1

$121,600

$115,951 $59,656

Avg Stk Stk:Sls Turn

Net Sales COGS GM$ GM%

May-Yr1

$118,925

$37,759 20,609 $ $17,149 45.4%

Shrinkage EOM

Apr-Yr1

$118,925

$40,434 22,234 $ $18,200 45.0%

MD$ MD% Purchases -Retail Purchases -Cost

Mar-Yr1

$115,951

BOM

2.0%

2.4

2.0

2.1

1.9

2.1

1.9

2.0

2.1

2.0

1.9

Sls Qtr Yr1-3

-Yr1

Q2-Yr1

Q3-Yr1

Q4-Yr1

5,951

$121,600

$120,226

$135,871

5,951 ,222 ,730 5%

$121,600 $67,212 $54,389 44.7%

$120,226 $67,845 $52,381 43.6%

$135,871 $76,685 $59,186 43.6%

7,690 1,790

$130,908 $73,031

$148,379 $82,758

$135,894 $73,731

1,600

$120,226

$135,871

$121,749

8,850

$121,449

$126,055

$130,226

1.00

0.95

1.04

Yr1 Total

Year 1

Year 2

Year 3

BOM

$115,951

$121,749

$107,022

Sales Purchases

$493,648 $662,871

$518,330 $553,452

$544,247 $575,773

EOM

$121,749

$107,022

$86,208

Avg Inv Turn

$123,079 4.01

$111,961 4.63

$94,399 5.77

Q1-Yr1

Q2-Yr1

Q3-Yr1

Q4-Yr1

BOM Inventory

$115,951

$121,600

$120,226

$135,871

Total Net Sales COGS GM$ GM%

$115,951 $63,222 $52,730 45.5%

$121,600 $67,212 $54,389 44.7%

$120,226 $67,845 $52,381 43.6%

$135,871 $76,685 $59,186 43.6%

Purchases -Retail Purchases -Cost

$247,690 $131,790

$130,908 $73,031

$148,379 $82,758

$135,894 $73,731

EOM Inventory

$121,600

$120,226

$135,871

$121,749

BOM/Avg Inventory

$118,850

$121,449

$126,055

$130,226

Turn

0.98

1.00

0.95

1.04

Pink Rice 3-Year Merchandise Inventory Flow Summary Q1-Yr2 Q2-Yr2

Q3-Yr2

Q4-Yr2

$121,749

$106,452

$106,093

$118,491

$493,648 $274,963 $218,685 44.3%

$121,749 $66,863 $54,886 45.1%

$127,680 $70,148 $57,533 45.1%

$126,237 $70,406 $55,831 44.2%

$142,664 $79,573 $63,091 44.2%

$662,871 $361,310

$117,098 $56,852

$138,537 $67,261

$151,769 $73,685

$146,047 $70,907

$106,452

$106,093

$118,491

$107,022

$123,079

$108,833

$106,434

$109,489

$114,715

4.01

1.12

1.20

1.15

1.24

Yr2 Total

Pink Rice 3-Year Merchandise Inventory Flow Summary

Yr1 Total

Pink Rice 3-Year Merchandise Inventory Flow Summary Q1-Yr2 Q2-Yr2

Q3-Yr2

Q4-Yr2

Yr2 Total

Q1-Yr3

$121,749

$106,452

$106,093

$118,491

$493,648 $274,963 $218,685 44.3%

$121,749 $66,863 $54,886 45.1%

$127,680 $70,148 $57,533 45.1%

$126,237 $70,406 $55,831 44.2%

$142,664 $79,573 $63,091 44.2%

$518,330 $286,990 $231,340 44.6%

$127,836 $70,206 $57,630 45.1%

$662,871 $361,310

$117,098 $56,852

$138,537 $67,261

$151,769 $73,685

$146,047 $70,907

$553,452 $268,705

$121,477 $58,978

$106,452

$106,093

$118,491

$107,022

$123,079

$108,833

$106,434

$109,489

$114,715

$111,961

$92,313

4.01

1.12

1.20

1.15

1.24

4.63

1.38

Q1-Yr3

Q2-Yr3

Q3-Yr3

Q4-Yr3

$107,022

$89,485

$90,246

$99,034

$518,330 $286,990 $231,340 44.6%

$127,836 $70,206 $57,630 45.1%

$134,064 $73,655 $60,409 45.1%

$132,549 $73,927 $58,622 44.2%

$149,798 $83,552 $66,246 44.2%

$544,247 $301,340 $242,907 44.6%

$553,452 $268,705

$121,477 $58,978

$146,602 $71,176

$155,128 $75,316

$152,566 $74,072

$575,773 $279,542

$89,485

$90,246

$99,034

$86,208

$111,961

$92,313

$89,615

$90,951

$95,692

$94,399

4.63

1.38

1.50

1.46

1.57

5.77

$107,022

$89,485

Yr3 Total

161

Cash Flow Forecast

Jan - Yr 0

Feb - Yr 1

Mar - Yr 1

Apr - Yr 1

May - Yr 1

Jun - Yr 1

Jul - Yr 1

Aug - Yr 1

-$3,263

$1,431

$4,015

$1,993

$2,869

$4,979

-$721

$1,530

$1,377

$40

$315

-$1,062

-$153

Less: Shrink and MDs (cost)

$2,356

$1,283

$2,529

$1,283

$1,374

$2,534

Plus: Depreciation Expense

$514

Less: Principal Payments

$729

Startup Loan/Personal $$

$145,736

Less: Start-up Capital Expenditures

$31,850

Equals: Available Start-up $$

$113,886

Profit or <Loss> (GM$-Expenses) Less: Monthly Incr. of Inv ( at Cost)

$59,656

Equals: Monthly Working Cash

-$59,656

-$7,363

-$66

$1,140

-$791

$1,057

$4,453

-$3,316

Equals: Monthly Net Cash

$54,230

-$7,363

-$66

$1,140

-$791

$1,057

$4,453

-$3,316

Cumulative Net Cash

$54,230

$46,867

$46,800

$47,941

$47,149

$48,206

$52,659

$49,343

162

May - Yr 1

Jun - Yr 1

Jul - Yr 1

Aug - Yr 1

Sep - Yr 1

Oct - Yr 1

Nov - Yr 1

Dec - Yr 1

Jan - Yr 1

Yr 1

$1,993

$2,869

$4,979

-$721

$1,094

$2,509

$4,455

$3,514

$5,521

$28,396

$40

$315

-$1,062

-$153

$4,254

$3,948

-$377

-$3,597

-$3,291

$62,639

$2,529

$1,283

$1,374

$2,534

$1,304

$2,235

$1,468

$2,717

$2,683

$23,049

$514

$6,170

$729

$8,744

-$791

$1,057

$4,453

-$3,316

-$4,678

-$3,889

$3,150

$4,179

$5,915

-$59,866

-$791

$1,057

$4,453

-$3,316

-$4,678

-$3,889

$3,150

$4,179

$5,915

$47,149

$48,206

$52,659

$49,343

$44,665

$40,776

$43,925

$48,105

$54,020

163

P&L

164

Net Sales COGS Merchandise GM$

Feb-Yr1 $40,434 $22,234 $18,200

Mar-Yr1 $37,759 $20,609 $17,149

Apr-Yr1 $37,759 $20,378 $17,380

May-Yr1 $43,407 $24,951 $18,457

Jun-Yr1 $37,759 $20,378 $17,380

Jul-Yr1 $40,434 $21,882 $18,552

Research & Development

$200

Merch. GM w/ R&D

$18,000

$16,949

$17,180

$18,257

$17,180

$18,352

Wages Commissions Rent Charitable Expense Marketing Expense Travel expense Health Insurance Insurance Accounting/Books Banking Interest Expense Depreciation Utilities & Security Telephone Supplies Misc. Repairs et al Credit Card Transaction Fee Shrinkage Total Expense

$6,200 $0 $930 $2,022 $7,250 $2,000 $400 $85 $100 $20 $131 $514 $230 $50 $80 $50 $809 $393 $21,263

$6,200 $0 $930 $1,888 $3,720

$6,200 $0 $930 $1,888 $1,370

$6,200 $0 $930 $2,170 $4,020

$6,200 $0 $930 $1,888 $2,520

$6,200 $0 $930 $2,022 $1,370

$400 $85 $100 $20 $129 $514 $230 $50 $80 $50 $755 $367 $15,518

$400 $85 $100 $20 $127 $514 $230 $50 $80 $50 $755 $367 $13,166

$400 $85 $100 $20 $125 $514 $230 $50 $80 $50 $868 $421 $16,264

$400 $85 $100 $20 $122 $514 $230 $50 $80 $50 $755 $367 $14,311

$400 $85 $100 $20 $120 $514 $230 $50 $80 $50 $809 $393 $13,372

Profit/Loss

-$3,263

$1,431

$4,015

$1,993

$2,869

$4,979

Credit Card Trans Fee rate

Fixed Expenses Variable Expenses Total Expenses Operating Margin %

$8,559 $8,290 $16,849 7.4%

$8,559 $4,704 $13,263 22.7%

$8,559 $2,352 $10,911 37.2%

$8,559 $5,113 $13,672 25.9%

$8,559 $3,498 $12,057 30.6%

$8,559 $2,399 $10,958 40.9%

BreakEven$ Volume BreakEven Sales per day BreakEven Sales per hour

$226,970 $7,566 $946

$58,534 $1,951 $244

$29,314 $977 $122

$52,739 $1,758 $220

$39,363 $1,312 $164

$26,771 $892 $112

07 51 57

Jun-Yr1 $37,759 $20,378 $17,380

Jul-Yr1 $40,434 $21,882 $18,552

Aug-Yr1 $43,486 $24,863 $18,623

Sep-Yr1 $38,370 $21,472 $16,898

Oct-Yr1 $38,370 $21,510 $16,860

Nov-Yr1 Dec-Yr1 $43,189 $46,638 $23,250 $26,919 $19,938 $19,720

Jan-Yr1 $46,044 $26,516 $19,527

Yr1 Total $493,648 $274,963 $218,685

$200

$17,180

$18,352

$18,423

$16,698

$16,660

00 $0 30 70 20

$6,200 $0 $930 $1,888 $2,520

$6,200 $0 $930 $2,022 $1,370

$6,200 $0 $930 $2,174 $6,900

$6,200 $0 $930 $1,918 $3,770

00 85 00 20 25 14 30 50 80 50 68 21 64

$400 $85 $100 $20 $122 $514 $230 $50 $80 $50 $755 $367 $14,311

$400 $85 $100 $20 $120 $514 $230 $50 $80 $50 $809 $393 $13,372

$400 $85 $100 $20 $118 $514 $230 $50 $80 $50 $870 $422 $19,143

$2,869

$4,979

59 13 72 9%

$8,559 $3,498 $12,057 30.6%

39 58 20

$39,363 $1,312 $164

%/Sls 100.0% 55.7% 44.3%

$200

$2,400

0.5%

$19,738

$19,520

$19,327

$216,285

43.8%

$6,200 $0 $930 $1,918 $2,320

$6,200 $0 $930 $2,159 $3,070

$6,200 $0 $930 $2,332 $3,520

$6,200 $0 $930 $2,302 $1,370

$400 $85 $100 $20 $116 $514 $230 $50 $80 $50 $767 $373 $15,603

$400 $85 $100 $20 $114 $514 $230 $50 $80 $50 $767 $373 $14,151

$400 $85 $100 $20 $111 $514 $230 $50 $80 $50 $864 $419 $15,283

$400 $85 $100 $20 $109 $514 $230 $50 $80 $50 $933 $453 $16,006

$400 $85 $100 $20 $107 $514 $230 $50 $80 $50 $921 $447 $13,806

$74,400 $0 $11,160 $24,682 $41,200 $2,000 $4,800 $1,020 $1,200 $240 $1,430 $6,170 $2,760 $600 $960 $600 $9,873 $4,793 $187,888

15.1% 0.0% 2.3% 5.0% 8.3% 0.4% 1.0% 0.2% 0.2% 0.0% 0.3% 1.2% 0.6% 0.1% 0.2% 0.1% 2.0% 1.0% 38.1%

-$721

$1,094

$2,509

$4,455

$3,514

$5,521

$28,396

5.8%

$8,559 $2,399 $10,958 40.9%

$8,559 $7,988 $16,547 11.1%

$8,559 $4,753 $13,312 21.2%

$8,559 $3,301 $11,860 29.7%

$8,559 $4,145 $12,704 36.3%

$8,559 $4,662 $13,221 33.0%

$8,559 $2,498 $11,057 43.4%

$102,710 $53,703 $156,413 68.3%

20.8% 10.9% 31.7%

$26,771 $892 $112

$148,439 $4,948 $618

$62,743 $2,091 $261

$39,993 $1,333 $167

$35,016 $1,167 $146

$40,120 $1,337 $167

$25,491 $850 $106

$785,494 $26,183 $3,273 165

Loan Payment

Balance of Loan

Principal

$42,992.16

$729

129

$41,534.80

$729

125

166

Total Payment Due

Month

Interest

5.75 $ $43,720.84 Loan Repayment $729 Schedule $ $250 @131

860

$42,263.48

855

$40,806.12

$40,077.44

$39,348.76

$38,620.08

$37,891.40

$37,162.72

$36,434.04

$35,705.35

$34,976.67

$34,247.99

$33,519.31

$32,790.63 $32,061.95

$31,333.27

$30,604.59

$29,875.91

$29,147.23

$28,418.55

$27,689.87

$26,961.19

$26,232.51 $25,503.82

$24,775.14

$24,046.46

$23,317.78

$22,589.10

$729

$729 $729

$729

$ $

127

122

120

118

116

114

111

109

107

105

103

101

87 85

83 81

79 77

$ $

858

853

851

849

847

845

842

840

838

836

834

831

829 827

825

823

820

818 816

814 812

810 807

805

803

801

799

796

Interest Rate

3.60%

Loan Repayment Schedule $250

$21,860.42

$20,403.06

$21,131.74

$19,674.38

$18,945.70

$18,217.02

$17,488.34

$16,759.66

$16,030.98

$15,302.29

$14,573.61

$13,844.93

$13,116.25

$12,387.57

$11,658.89

$10,930.21

$10,201.53 $9,472.85

$8,744.17

$8,015.49

$7,286.81

$6,558.13

$5,829.45

$5,100.76

$4,372.08

$3,643.40

$2,914.72

$2,186.04 $1,457.36 $728.68

$729

794

$729

790

Loan Repayment Schedule $250 @ 5.75

$729

7 -

$ $

792

788

786

783

781

779

777

775

772

770

768

766

764

761

759

757

755

753

751

748

746

744

742

740 737

735 733 -

167

168

13 Appendix

169

I-CHUN CHEN 13.1 Resume

ichunchen79@gamil.com (415) 527- 6230

EDUCATION Master of Fine Art in Fashion Merchandising / GPA 3.7, Anticipated Graduation-May 2015 Academy Art of University, San Francisco, California Bachelor of Art in the Department of Health Administration, June 2012 I-Shou University, Kaohsiung City, Taiwan (R.O.C.)

PROFESSIONAL EXPERIENCE Sale Associate, June 2010 - Septenber 2011 Tang Pao International Co., Ltd / Tainan, Taiwan -Sell speciďŹ c products and services to consumers -Demonstrate products and show consumers how to maximize their features -Process orders in person and over the phone -Check inventory to ensure the desired product was in stock

SKILLS Fashion : Product Development and Sourcing, Visual Merchandising, Trend Analysis and Textiles & Other Raw Materials Computer: Photoshop, Illustrator, Excel, Word and Power Point

LANGUAGES Mandarin & Taiwanese : Native speaker English : Fluent 170

13.2 Reference 1. “About Organic” Organic cotton plus. 20142 Edition. Web. 2014. < http://organiccottonplus.com > 2. “About the global organic” The global organic textile standard international working group. 2013 Edition. Web. October 10. 2013. < http://www.global-standard.org/about-us.html > 3. “Eco-friendly baby clothes” Mama’s health. 2000 - 2013 Web. < http://www.mamashealth.com/eco/childclothes.asp > 4. Jane McConnell. ”Clothing industry booming” ecomall.com < http://www.ecomall.com/greenshopping/mothero2.htm > 5.”Taiwan GDP Growth Rate” tradingeconomics.com 2015 Edition. Web. <http://www.tradingeconomics.com/taiwan/gdp-growth> 6. “ 5 Benefits of promoting an Eco-Friendly lifestyle for your kids” woobamboo.com. 2014 Edition. Web. < http://www.woobamboo.com/eco-friendly-benefits-for-kids/ > 7. Groshan Fabiola. ”Children Clothing - a New Trend in Modern Society” . streetdirectory.com. 2014 Edition. Web. < http://www.streetdirectory.com/travel _ guide/202110/kids _ and _ teens/childrens _ clothing _ _ _ a _ new _ trend _ in _ modern _ society.html > 8. Mattias Wallander. “Organic Cotton: Threading Its Way Into Our Closets”. huffingtonpost.com. 2014 Edition. Web. February 14, 2014 < http://www.huffingtonpost.com/mattias-wallander/organic-cotton-threading- _ b _ 4784430.html > 9. Erin Read. “Grandparent Economy”. creatingresults.com. 1999-2013 Edition. Web. February 22, 2010 < http://knowledge.creatingresults.com/2010/02/22/grandparent-economy-baby-boomer-spending/ > 10.Peter Franceses. ”The Power of the Grandparent Economy” grandparents.com. 2007-2014 Edition. Web. April 20. 2009 < http://www.grandparents.com/money-and-work/saving-and-investing/the-power-of-the-grandparent-economy > 11. “Children's and Infants Clothing Industry Market Research & Statistics” reportlinker.com. 2014 Edition. Web. < http://www.reportlinker.com/ci02116/Children-s-and-Infants-Clothing.html >

171

12.“ Taiwan Population 2014” worldpopulationreview.com. 2014 Edition. Web. October 9. 2014. < http://worldpopulationreview.com/countries/taiwan-population/ > 13. Ministry of Foreign Affairs Republic of China (Taiwan). “About Taiwan” taiwan.gov.tw. 2014 Edition. Web. < http://www.taiwan.gov.tw/ct.asp?xItem=21496&ctNode=1918&mp=1001 > 14. Tourism Bureau, Republic of China(Taiwan) < http://eng.taiwan.net.tw/ > 15. Vmarker. “Top 10 Trends in Kids Furniture” 2014 Edition. Web. < http://vmarker.hubpages.com/hub/Top-10-Trends-Kids-Furniture > 16. Heather Buen. “What are Current Trends in the Children’s Furniture?” dallassinglemom.com. 2014 Edition. Web. October 16. 2013 <http://dallassinglemom.com/current-trends-childrens-furniture/ > 17. Cheryl Lu-Lien. “K ids’ Furniture Grows Up” wsj.com. 2014 Edition. Web. Jan 27. 20 05 < http:// w w w.wsj.com/ar ticles/ SB110678214237837284 > 18. Alison Lipson. “Children’s clothes shopping”.mintel.com. November 2013 19. “ Taiwan Population 2014” worldpopulationreview.com. 2014 Edition. Web. < http://worldpopulationreview.com/countries/taiwanpopulation/#> 20. “Apparel and Footwear in Taiwan” euromonitor.com. 2014 Edition.< http://www.euromonitor.com/apparel-and-footwear-in-taiwan/report> 21.”Five Benefits of Promoting An Eco-Friendly Lifestyle For Your Kids” woobamboo.com . 2014 Edition. Web. < http://www.woobamboo.com/eco-friendly-benefits-for-kids/> 22. Laura Wood “Global Children's Wear Market 2014-2018”. 2014 Edition. Apr 30, 2014 23. International Cotton Advisory Committee” Statement From The Delegation of Taiwan At The 69th Plenary Meeting Of The International Cotton Advisory Committee” icac.org. 2014. Edition. Web. <https://www.icac.org/meetings/plenary/69 _ lubbock/documents/country _ reports/e _ taiwan.pdf>

172

Thank You

173

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