MFA thesis by Han-Yu Chu

An Innovative C ashmere B ou tique.. Hayes Valley.. San Francisc o

An Innovat ive C ashmere B out ique .. Jos ephine Han -Yu C hu ( Juju ) #03317143 Gradu ate S cho ol of Fash i on Me rchandisi ng Ac ademy of Ar t Universit y Fi na l The sis Proj e c t May 2 , 2 0 1 3

ABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY

1-3

2.0 BUSINESS CONCEPT

4-7

2.1 BUSINESS INSPIRATION 2.2 MISSION STATEMENT 2.3 VISION STATEMENT

3.0 MARKET BACKGROUND 3.1 APPAREL INDUSTRY RESEARCH 3.2 DEMOGRAPHIC SEGMENTATION 3.3 GEOGRAPHIC 4.0 TARGET CUSTOMERS PROFILE 4.1 PRIMARY MARKET 4.2 SECONDARY MARKET 5.0 INTRODUCTION OF MARKET SURVEY 5.1 MARKET SURVEY ANALYSIS 5.2 SUMMARY OF RESPONSES 6.0 MARKETING PLAN 6.1 SITUATIONAL ANALYSIS 6.2 SWOT ANALYSIS

7 7 8-15 10-13 14 15

7.0 PRODUCT STRATEGY 7.1 PRODUCT STRATEGY OVERVIEW 7.2 COLLECTIONS

32-43

7.2.1 ATHENA PROCOPIOU 7.2.2 AUTUMN CASHMERE 7.2.3 CHAN LUU 7.2.4 CHINTI AND PARKER 7.2.5 ERIC AND BOMPARD 7.2.6 INHABIT 7.2.7 MALO 7.3 VENDOR SUMMARIES 7.4 PRICING STRATEGY

8.0 PROMOTIONAL STRATEGY 8.1 CREATIVE BRIEF 8.2 ADVERTISING 8.3 SOCIAL MEDIA 8.4 PUBLIC RELATIONS 8.5 PRESS RELEASES 8.6 STRATEGY CALENDAR

44-63

9.0 COMPETITIVE ANALYSIS 9.1 COMPETITOR SWOT ANALYSIS

64-69

34 34 36 37 38 39 40 41 43 43

16-21 18-19 20-21 22-27 24-26 27

46 47 48-50 51 52-57 58-63

28-31 30 30-31

TABLE OF

ONTENTS

9.1.1 J.CREW

13.3 ASSORTMENT PLAN

98-‐100

9.1.2 LORO PIANA 9.1.3 RAND AND STATLER

13.4 MONTHLY SALES 13.5 SALES AND INVENTORY BY MONTH

101

9.2 COMPETITIVE ADVANTAGE

103

102

10.0 BRANDING 10.1 BUSINESS CARD

70-73 73

13.6 SALES QUARTER YEAR 1-3 13.7 PROFIT & LOSS 13.8 MARKETING EXPENSES 13.9 CASH FLOW FORECAST

10.2 LETTERHEAD AND ENVELOPE 10.3 SHOPPING BAG

13.10 LOAN PAYMENT

109

14.0 APPENDIX 14.1 REFERENCE : FLLOR PLAN--INSPIRATIONS 14.2 CASHMERE APPAREL SURVEY QUESTION 14.3 IRB PAPER WORK 14.3.1 APPLICATION MEMO 14.3.2 COVER LETTER 14.3.3 CONSENT FORM 14.4 AUTOBIOGRAPHY 14.5 RESUME 14.6 TIMELINE

110-‐124

11.0 VISUAL MERCHANDISING 11.1 FLOOR PLAN 11.2 FLOOR PLAN -- INSPIRATIONS

104-‐105 106 107

73 74-85 76-81 82-85

12.0 OPERATIONAL PLAN 12.1 STORE HOURS 12.2 EMPLOYEE REQUIREMENTS 12.3 PERSONAL SELLING STRATEGY 12.4 ORGANIZATION CHART

86-93

13.0 FINANCIAL PLAN AND ANALYSIS

94-109

13.1 FINANCIAL SUMMARY 13.2 START UP COSTS

88 89 90-91 92-93

112 113-‐117 118 119 120-‐121 122 123 124

1.0 EXEC U TIVE SUMMA RY

MEET CASHMERE

TABLE OF CONTENTS > 1.0 EXECUTIVE SUMMARY

1.0 EXECUTIVE SUMMARY Josephine is the newest cashmere boutique in Hayes Valley, San Francisco. It specializes in highend cashmere that is perfect for the San Francisco lifestyle. Josephine targets both male and female customers in their 30’s or beyond, who prefer low-key luxury. These customers value fashion-conscious garments exhibiting quality on many levels. The boutique sells a mixture of clothing and accessories for customers during all seasons. It differentiates itself through its product offerings, compared to other boutiques in Hayes Valley that solely sells cashmere clothing items and accessories. The boutique provides something unexpected for customers looking to add to their existing wardrobe. Josephine has 600 square feet with approximately 320 units on the floor, and 100 units in stock. The boutique has wood floors and contemporary furniture, presenting a sophisticated image for interior and merchandise. Josephine carries Athena Procopiou, Autumn Cashmere, Chan Luu, Chinti and Parker, Eric Bompard, Inhabit, and Malo. Women’s clothing composes 60% of total assortments; Men’s clothing composes 25% of total assortment ; accessories items composes 15% of total assortments. The product assortment would range from $200- $400 in the lower priced products. The higher priced products will range from $500 and up. The total sales for the first year are $950,087 with a gross margin of 50.4 % of the total sales. The profit of first year is 7.6 %. Josephine hopes to increase sales year by year and launches new merchandise.

2 . 0 BU SI N E S S C ON C E P T 2 . 1 BU SI N E S S I N SP I R AT IO N 2 . 2 M I S SIO N STAT E M E N T 2 . 3 V I SIO N STAT E M E N T

TABLE OF CONTENTS > 2.0 BUSINESS CONCEPT > 2.1 BUSINESS INSPIRATION

2.1 BUSINESS INSPIRATION Having lived in San Francisco for over two years I have come to the understanding that we have no control over the weather. However, we can control the clothes we choose the wear. Comfort is the priority when selecting clothes. Durability and comfort play important roles in choosing fabrics. What kind of fabric has both durability and comfort? What kind of fabric are people most enthusiastic about? This is the answer: CASHMERE. Cashmere is a luxurious and fashionable fabric, and it is unique and special: it keeps you warm in the winter and cool in the spring. Especially considering the weather in San Francisco, I believe there is a market to capitalize on by opening a cashmere specific boutique in this city. The cashmere boutique named Josephine, is named after the legend of Josephine de Beauharnais. The story was-- In the late nineteenth century, Napoleon Bonaparte brought home a cashmere shawl from Egypt for his beloved wife--Josephine de Beauharnais. No one had ever seen a feather-light woolen item with such lustrous color, incredible softness and warmth in post-revolutionary Paris. Soon, Persian shawls became the most fashionable article of apparel for the higher classes of Europe.1 For the fashion elite of the 21st century, cashmere has remained as a fine good. WĂŝŶƚĞƌ͗ WZh ͛,KE͕ WŝĞƌƌĞͲWĂƵů͕ dŚĞ ŵƉƌĞƐƐ :ŽƐĞƉŚŝŶĞ Đ͘ϭϴϬϱ

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Many retailers produce their own lines of cashmere, however, Josephine will deliver diverse and fashionable cashmere apparel to San Francisco. Here is the business started…

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TABLE OF CONTENTS > 2.0 BUSINESS CONCEPT > 2.2 MISSION STATEMENT > 2.3 VISION STATEMENT

MISSION S TAT E M E N T .. Josephine is a new retail concept bringing worldwide cashmere brands that feature fashion-conscious garments to San Francisco. To provide quality-conscious customers a combination of timeless and dynamic styles containing natural fibers in well-picked merchandise.

VISION S TAT E M E N T .. “MEET CASHMERE” Josephine will continue to source new and superior merchandise, and build lasting friendships with our beloved clients. Cashmere is not a fabric, it is a way of life.

3 . 0 M A R K E T BAC KG ROU N D 3 . 1 A P PA R E L I N DU ST RY R E SE A R C H 3 . 2 D E M O G R A P H IC SE G M E N TAT IO N 3 . 3 G E O G R A P H IC

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3.1 APPAREL INDUSTRY RESEARCH This section is designed for Josephine to understand the apparel industry size thai is affected by government’s resources from a global insight to a local insight. The global apparel retail industry had total revenue of $1,175.4 billion in 2011, and the women’s wear consisted of 51.1% with the total of $600.5 billion.¹ The U.S. clothing and footwear specialty retailers had total revenue of $186,343.6 million in 2011.² To offer a variety of clothing for the business, Josephine will import clothing from multiple cashmeremanufacturing countries. According to data from the Office of Textile and Apparel (OTEXA), the U.S. apparel imports have increased from 2010 to 2011. The apparel import increased by 8.77% to $6,261 million. China remains as the largest exporter to the U.S., but it is decreased by 1.33%. Compared to China, Italy, France and UK have increased the percentage by 0.16%. It is a small amount, but we can tell that the U.S. is not relying fully on Chinese imports but also relying on substitute countries. Total Apparel IMPORTS_data in million_ data by OTEXA

WORLD

CHINA

ITALY

FRANCE

U.K.

2010

Ψϳϭ͕ϯϵϲ͘Ϯϲ

ΨϮϳ͕ϵϳϰ͘ϲϬ

$915.21

$124.16

$72.07

2011

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ΨϮϵ͕ϯϵϮ͘ϬϬ

Ψϭ͕ϭϬϭ͘ϭϰ

$145.27

$84.29

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Josephine would mainly import cashmere apparel, which is a subdivided category of wool apparel. According to data from the Office of Textile and Apparel (OTEXA), the U.S. men’s and women’s wool imports have increased from 2010 to 2011.

M/B Sweater, Wool IMPORTS _data in million_ data by OTEXA WORLD

CHINA

ITALY

FRANCE

U.K.

2010

$167.511

$124.563

$22.69

$5.982

$0.404

2011

$193.527

$145.123

$26.238

$7.038

$1.674

W/B Sweater, Wool IMPORTS OTEXA_data in million_ data by OTEXA WORLD

CHINA

ITALY

FRANCE

U.K.

2010

$537.424

$467.039

$35.169

$7.323

$1.429

2011

$591.827

$502.763

$50.054

$9.047

$1.997

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In the section of women’s wool sweater imports, Chinese imports have declined by 1.95% while Italian imports have increased by 1.91%. These numbers show us that US shoppers and companies are consciously making the decision to buy goods from different countries rather than rely solely on Chinese imports. This is true especially for the luxury sector. For instance, people tend to consider the manufacturing country while purchasing luxury goods. According to “United Sates Census Bureau,” the retail sales in 2007 are as follows: total US retail sales are $3,917,663,456,000; total California retail sales are $455,032,270,000, that account for 2.73% of the total US retail sales; San Francisco retail sales are $12,399,960,000, which accounts for 0.32% of the total US retail sales Retail Sales 2007_data by US Census TOTAL U.S.A.

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CALIFORNIA

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SAN FRANCISCO ΨϭϮ͕ϯϵϵ͕ϵϲϬ͕ϬϬϬ

The San Francisco’s retail sales per capita in 2007 are higher than the retail sales per capita of U.S. and California. This indicates that San Franciscans have a much stronger buying power compared to other cities. Retail Sales per capita,2007_data by US Census TOTAL U.S.A.

$12.99

CALIFORNIA

$12.561

SAN FRANCISCO $15.516

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3.2 GEOGRAPHIC SEGMENTATION San Francisco San Francisco is in northern California. It is known for its diverse culture, steep hills, architecture and weather. The temperature varies dramatically from day to night in San Francisco. The yearly average can range from a high of 70º F to a low of 46º F as reported by The Weather Channel. People who live in San Francisco always get confused because of the constantly changing weather. Although it is located in California, it is not as warm as other cities. It is surrounded by the Pacific Ocean and San Francisco Bay, which causes cool weather even during the summer. It is often called Fog City because of the heavy fog that rolls in and affects the weather. 1

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Hayes Valley Josephine will locate in Hayes Valley, San Francisco. Compared to Hayes valley, another neighborhood has more brand orientated stores. Hayes valley has more fashion boutiques and high-end interior decoration stores than other areas.

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3.3 DEMOGRAPHIC SAN FRANCISCO

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- Population: 805,235 - Male: 50.7% - Female: 49.3% - Median Age: 39.30 - Median Household Income: $73,721 - Median Education: Bachelor’s degree - Visitors: $15.9 million - Visitors spent $8.3 million in local business - Square Miles- 46.69 - Density of Population: 17,542

According to “San Francisco Census 2010,” the demographic is as follows: the total population is 805,235 people, which accounts for 0.26% of total population in the U.S.--308,745,538 people, and 2.16% of total population in California --37,253,956 people. The males make up 50.7%, and the females make up 49.3% among the San Francisco population. The age range of 18 to 64 makes up 73% of the population. Personal income ranges from $28,800 to $102,000, and the median household income 2006-2010 is $71,304. Tourism provides significant spending in San Francisco. In 2010, San Francisco hosted 15.9 million visitors, and they spent $8.3 billion at local businesses. The high median household income and the high level of shopping-friendly tourists in SF point to potential markets with regard to local residents and tourism. Fashion apparel is one of the largest industries in the region(San Francisco Travel.com) and it continues to grow as tourists flock from Asia to travel and shop.

4 . 0 TA RG E T C U STOM E R S P ROF I L E 4 . 1 P R I M A RY M A R K E T 4 . 2 SE C O N DA RY M A R K E T

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4.1 PRIMARY MARKET OVER VIEW: - Age: 35 - Status: In a relationship - Income: $70,000 - VAL: Achiever - Behavior: Low-key luxury, values material, detailed - 5P: Product PROFILE: Elizabeth is 35 years old. She is originally from New Jersey. She has a bachelor degree in marketing from Harvard University. She has worked as a professional personal financial analyst for 5 years or longer in J.P. Morgan Chase & Co., her annual income is $70,000. She lives with her fiance--Chris, in the Daniel Burnham Court building by Van Ness Avenue and Post Street, San Francisco. They split the rent of $2200. Every morning she takes her iPad to browse The Wall Street Journal and The New York Times while having breakfast. She immerses herself in the latest news. Although she is busy with her work on weekdays, she still finds time to go to WholeFood for grocery shopping. In addition, she likes to watch romance movies from NETFLIX, or watch the TLC/ Travel Channel. She reads at VOGUE, HOME&DESIGN, Times, Entrepreneur, Forbes magazines at her leisure. On weekends, she likes to have brunch with her friends in her neighborhood, or go to the deYoung if there are any new exhibitions related to fine art or fashion. She also enjoys going to Napa for wine tasting and going to Tahoe for skiing during ski season and having dinner in French restaurants with peers and Chris.

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She likes to shop at Neiman Marcus, Faconnable, Barneys New York, J.Crew, and GUMP’S. Also, Hayes Valley is one of her preferred shopping areas and she and Chris like to go shopping at home furnishings stores because they both like to decorate their lovely home in a contemporary style. She is not only interested in home goods but also in apparel. In addition, she is interested in new brands that she has never seen before. Although she likes to experience new goods she is always shopping for specific items that compliment her already existing conservative style. She is concerned with dressing appropriately for all occasions and seasons. She thinks simple wear is essential. She loves detailed, well-made clothing. She values materials most. She is willing to spend a high proportion of her income on clothing. She prefers to buy timeless designs, classic shapes, durable materials and she always considers comfort. She is conscious of her spending, and her decision to purchase is based on finding quality items at acceptable prices. For her, fashion is not about following trends but rather buying pieces she can wear for many years. She prefers low-key luxury to conspicuous logos, because she doesn’t like to show off her social status. When using VALS to segment Elizabeth, she is considered an Achiever because she favors established, prestigious brands, products and services that demonstrate success to her peers. Elizabeth would react to product when using the Marketing Theory of 5Ps (product, price, promotion, people, place) for her. Because PRODUCT is the most relevant to her as a customer. Product: To make product integrate to the functional descriptions and instructions.

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4.2 SECONDARY MARKET OVER VIEW: - Age: 30 - Status: Single - Income: $100,000 - VAL: Thinker - Behavior: Durability, functionality, product value - 5P: Place, product PROFILE: Henry is 30 years old. He is originally from San Mateo. He has a bachelor degree in Information and Computer Science in the UC Irvine. He works in analytics for advertising for 5 years or longer, and his annual income is $100,000. He lives in Millbrae, and he pays $1600 in rent. He drives a BMW, he cares about car maintenance and his social life. In terms of social life, he likes to update his status and connect with his friends through Facebook, and he also likes to hang out with his co-workers or college classmates for Happy Hour. He likes to watch action or thriller movies, such as Drive. On weekends, he likes to spend time with his family. He does not subscribe to any magazines, but he glances at some SF local magazines, such as 7x7, at work. When using VALS to segment Henry, he is considered a Thinker. Although his income allows him to purchase apparel, he only looks for durability, functionality, and product value when selecting an item. He does not consider himself as a fashionable person. For him, materials are very important and he doesn’t like tight fitting clothing. He likes wearing clothing that is simple in style such as a t-shirt or sweater. He looks for items that are casual but not “Too out there” so he can wear them to work. He is willing to spend $500 at most for a piece of clothing. He seldom shops at boutiques. He used to shop at Ben Sherman, but currently he shops at Macy’s or Nordstrom. 20

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To shop in a department store is most convenient for him because it allows him to pick up the simple and casual wear he is looking for without having to shop around. The simple style he likes fits well with the merchandise I plan to offer. Henry is the type of customer that would react well to the Marketing Theory of 5Ps (product, price, promotion, people, place.) Because value is key for Henry, PLACE and PRODUCT are most relevant to him as a customer. Both would work to persuade him to shop at the store. PLACE: A widely publicized store opening by creating an ‘event’ on Facebook would entice him or attract his interest. PRODUCT: Personal selling is important to convince this customer about the product value and quality. Although he could spend $500 at most, he might be convinced to buy a piece of clothing with high durability and functionality that costs over $500.

5 . 0 I N T RODU C T ION OF M A R K E T SU RV E Y 5 . 1 M A R K E T SU RV EY A NA LYSI S 5 . 2 SUM M A RY O F R E SP O N SE S

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5.1 MARKET SURVEY ANALYSIS This survey has 108 valid responses from Facebook.com, Google+, friends, strangers in Union Square, SOMA, and Hayes Valley. Data was gathered from October 17th, 2012 to December 16th, 2012. The target audience is composed of females and males in the age range of 25 to 45. Customer: The responses support that Josephine should offer both womenâ&#x20AC;&#x2122;s and menâ&#x20AC;&#x2122;s collections. The assortment at Josephine would consist of 60% womenâ&#x20AC;&#x2122;s clothing, 25% menâ&#x20AC;&#x2122;s clothing and 15% accessories. Josephineâ&#x20AC;&#x2122;s target market ranges from the ages of 25 to 45 years old. People in a relationship or married are Josephineâ&#x20AC;&#x2122;s primary market because those who cohabitant can be less concerned about their living expenses due to the fact that they are shared. This may allow for income that can be allocated to spending on luxury goods. Furthermore, those in a relationship may want to spend more on goods that are presents for their partner. Those surveyed have worked in their fields for several year. This points to the fact that this group may consider purchasing higher priced products because they have the income to support luxury purchases. The large amount of students who took this survey contributes most heavily to the lower income bracket.

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Marketing: Many people surveyed subscribe to local magazines or newspaper, such as 7x7 magazine and SF Gate. The responses indicate that an advertisement is a marketing channel to approach potential customers.

Shopping behavior: Those surveyed prefer to buy clothing in boutiques. The response supports that opening a boutique is a feasible scheme, due to shopping behavior in SF. Most of those survey have shopped in Hayes Valley. They visit Hayes Valley for apparel boutiques and window-shopping. Those surveyed are interested in buying a brand of clothing that they have never heard of before; they are open-minded to accept unfamiliar brands. 78% of those surveyed have bought cashmere knitwear. The majority are willing to spend $100-$299 on cashmere knitwear and the price range is lower than Josephineâ&#x20AC;&#x2122;s pricing strategy. For that, Josephineâ&#x20AC;&#x2122;s sales persons will mention strength of merchandise, while selling cashmere knitwear to customers $ $ $ $

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Product: Those surveyed think cashmere is warmer and softer than other fibers. Here we see the importance of personal selling. Josephineâ&#x20AC;&#x2122;s sales persons must mention strength of cashmere yarn, as well as the softness and warmth of the fiber, while selling cashmere knitwear to customers. Josephine would select higher quality manufacturing processes from vendors to minimize quality issues. Moreover, most of them agree that the country where the garment is manufactured is important in selecting a piece of cashmere knitwear. For that, Josephine will offer a variety of manufacture countries for clients to select cashmere knitwear. Furthermore, we will attempt to trace the source of the fiber to show the customer exactly where the materials come from.

! ! !

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5.2 SUMMARY OF RESPONSES This survey has 108 valid responses. The major key points of this survey is listed as below: Customer: 1. 45% of those surveyed were 25 to 29 years old, and 16% of them were 30-34 years old. This response supports that Josephine’s target market ranges from the ages of 25 to 45 years old. 2. 25% of them have less than $14,999 annual income, 17% of them have $35,000-$49,000 annual income, 14% of them have $100,000$124,000 annual income. The large amount of students who took this survey contributes most heavily to the lower income bracket. Shopping behavior: 1. 49% of them prefer to buy clothing in boutiques. 2. 59% of them have shopped in Hayes Valley. 3. 41% of them are interested in buying a brand of clothing that they have never heard of before. Product: 1. 44% of total think cashmere is much softer than other fibers, and 31% of total think cashmere is much warmer. 2. 78% of those surveyed have bought cashmere knitwear. 3. 16% of them have paid $200-$299 for cashmere knitwear, and 32% of them have paid $300-over $1,000 for cashmere knitwear. 4. 29% of them are willing to spend at most $200-$299 on cashmere knitwear, and 30% of them are willing to spend at most $300-over$1,000 on cashmere knitwear. 5. 36% of those surveyed agree that the country where the garment is manufactured is important in selecting a piece of cashmere knitwear and 29% of them strongly agree.

6.0 MARKETING PLAN 6 . 1 SI T UAT IO NA L A NA LYSI S 6 . 2 S WO T A NA LYSI S

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6.1 SITUATIONAL ANALYSIS Cashmere resources produce is around 1% of the total global textile market.1 Each cashmere goat can just produce 4-6 ounces fiber in a year, and a sweater requires around 10 ounces to be produced.2 Cashmere’s value increases because it is rare fiber in limited supply. Cashmere is expensive and rare. Nowadays, customers can easily find a cashmere sweater less than $100. Some certain brands emphasize 100% cashmere without putting enough focus on the weaving skill. That’s because cheaper brands have knit more loosely knit cashmere products. It takes less time and less cashmere.3 1 &ĂďƌŝĐ ƚŽ &ĂƐŚŝŽŶ 2 ŚƩƉ͗ͬͬǁǁǁ͘ĐĂƐŚŵĞƌĞ͘ŽƌŐͬĐŵͬĐŽŶƐƵŵĞƌ͘ƉŚƉ 3 ŚƩƉ͗ͬͬǁǁǁ͘ŐŽŽŐůĞ͘ĐŽŵͬƵƌů͍ƐĂсƚΘƌĐƚсũΘƋсΘĞƐƌĐсƐΘƐŽƵƌĐĞсǁĞďΘĐĚсϭΘǀĞĚсϬ Y&ũ ΘƵƌůсŚƩƉйϯ йϮ&йϮ&ŽŶůŝŶĞ͘ǁƐũ͘ ĐŽŵйϮ&ĂƌƟĐůĞйϮ&^ ϭϬϬϬϭϰϮϰϬϱϮϵϳϬϮϬϰϱϱϯϵϬϰϱϳϳϭϬϮϱϴϬϲϳϴϬϮϳϳϭϲ͘ŚƚŵůΘĞŝсƐ Ŷ h>ǀŶ/zĨ ϵY^ ϴz zΘƵƐŐс &Yũ E ǌƉ:Ͳ yĐϵ Đ'ϮϴYZǀ>ŚĂϬϰϵĂϯ ŝ

6.2 SWOT ANALYSIS STRENGTHS WEAKNESSES 1. Merchandise are hard to find in SF. 1. Lack of brand recognition 2. Cashmere selections 2. Price range 3. Located in Hayes Valley 3. No customer base OPPORTUNITIES 1. Cashmere production 2. San Franciscan buying power

THREATS 1. Substitute Product 2. Global recession

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Strengths: 1. Josephine will offer timeless classic style that are revolutionized by combining contemporary details, and merchandise are hard to find in SF. 2. We believe cashmere is a delicate fiber, we want to make sure each product we sell is well-picked. Our products will import from multiple cashmere-manufacturing countries, which are known for their weaving skill in cashmere. Our cashmere will source from Mongolia and made in China, France, Italy, India, etc. 3. We want to approach potential customers in a leisure neighborhood. Compared to Hayes valley, another neighborhood has more brand orientated stores. Hayes valley has more fashion boutiques and high-end interior decoration stores than other areas. Weaknesses: 1. It’s a new boutique, and so we lack brand recognition. Customers can easily find any cashmere product in other places, and we don’t have enough product assortments for customers. 2. According to the survey “Cashmere Apparel Boutique,” 30% of those surveyed want to spend at most $100-$199 on cashmere knitwear. Potential customers want to pay less for a cashmere knitwear. 3. We don’t have customer base. Besides, we don’t have enough budget to pay for an advertisement in magazines. Opportunities: 1. The world production of cashmere is estimated at 15,000 to 20,000 tons. China is the largest producer of cashmere, gathering around 10,000 tons per year. Mongolia is the second-largest, gathering around 3,000 tons. Most cashmere is exported to cashmere-manufacturing countries. 2. The San Francisco’s retail sales per capita in 2007 are higher than the retail sales per capita of U.S. and California. This indicates that San Franciscans have a much stronger buying power compared to other cities. Threats: 1. Many retailers sell cashmere sweaters for less than $100. They employ cost-saving methods to impoverish products. 2. Cashmere fiber prices rose about $75 a kilogram in April 2009, when prices were low because of the global recession, to $130 in March 2011.1 1 ŚƩƉ͗ͬͬĨĂĐƚƐĂŶĚĚĞƚĂŝůƐ͘ĐŽŵͬǁŽƌůĚ͘ƉŚƉ͍ŝƚĞŵŝĚсϮϭϮϬΘĐĂƟĚсϱϳΘƐƵďĐĂƟĚсϯϴϯ

7 . 0 P RODU C T ST R AT E G Y 7 . 1 P R O DU C T ST R AT E G Y OV E RV I EW 7 . 2 C O L L E C T IO N S 7 . 2 . 1 AT H E NA P R O C O P IO U 7 . 2 . 2 AU T UM N C A SH M E R E 7 . 2 . 3 C HA N LU U 7 . 2 . 4 C H I N T I A N D PA R K E R 7 . 2 . 5 E R IC A N D B OM PA R D 7 . 2 . 6 I N HA B I T 7.2.7 MALO 7 . 3 V E N D O R SUM M A R I E S 7 . 4 P R IC I N G ST R AT E G Y

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7.1 PRODUCT STRATEGY OVERVIEW Josephine will carry Athena Procopiou, Autumn Cashmere, Chan Luu, Chinti and Parker, Eric Bompard, Inhabit, and Malo. Those brands have similar character: 1. They specialize in cashmere knitwear. 2. Timeless simple style are revolutionized by combining contemporary details. 3. There are very few sources to purchase their products in the city. I believe that would be a benefit and advantage for launching their products into San Francisco. Merchandise is hard to find in SF. 4. Josephine would carry other merchandise from these vendors if a competitor begins to carry the same clothing.

7.2 COLLECTIONS

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7.2.1

Founded in 2010, Athena Procopiou is a high-end scarf brand focused on unique intensely hued prints inspired by her diverse background: Greek born, Swiss raised, and British based. Athena Procopiou is originally a print designer. She has a degree in Illustration and Graphic Design at Central Saint Martins. After graduating in 2003, she established herself as a freelance designer. She develops her own brand that sets aside for free direction in prints with passionate and energetic. Athena Procopiou’s textiles are expertly produced in Italy. She uses only the highest-quality fabrics of cashmere, cotton, silk, and modal. The retail price ranges from $200-$400.

She paints, she designs, she wears, and she launches the fairytale fashion. 35

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7.2.2

Found in 1993, Autumn Cashmere is an innovative knitwear company that creates cashmere, cashmere blend and cotton sweaters. One of the strengths is that the company owns production facilities in Shanghai, China. This vertically integrated company creates a collaboration of design, production and distribution. Its collections embrace stylistic elements and seasonality for fashion minded customers. The retail price ranges from $100-$300.

Made Well. Fit Well. A Comfy Style

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7.2.3 is a fashion designer of jewelry, accessories and ready to wear. She received a degree in Fashion Design at the Fashion Institute of Design and Merchandising. She has been designing her collections with modern, simple and classic styles since 1996. The scarf line of Chan Luu uses cashmere and cashmere blended with silk. It is comfortable right next to skin and perfect for all seasons. A scarf retail price ranges from $120-$270.

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7.2.4 “A Youthful Style of Cashmere Sweater” Chinti and Parker is a brand new fashion label in the UK, which was founded in 2009 by Anna Singh & Rachel Wood. Chinti and Parker offers women’s clothing and accessories. It separates lines into two categories by fabrics: organic cotton and finest cashmere yarns from Italy. Products are produced in both Portugal and India. The apparel is characterized by everlasting wear, and it spells a new era of style and luxury. Chinti and Parker provides online business at the retail price from $350-$450.

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7.2.5 Snuggle Cashmere Eric Bompard, the chic French label, has been combining nobility and modernity of cashmere since 1985. It launched gentle apparel for men, women and children. The retail price ranges from $200-$600. The story of the company dates back to 1980s. Mr. Bompard went to Mongolia for a business, he had a chance to see the Capra Hisca goat can endure the unstable temperatures in Mongolia. He discovered a potential cashmere market that people can snuggle cashmere in between seasons. After the trip, he joined the Erdos Group, which manages more than half of the world’s cashmere market, for sourcing cashmere fiber. His passion is devoted to customers service. 39

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7.2.6

T I M E L E S S CLASSIC &ŽƵŶĚĞĚ ŝŶ ϮϬϬϯ͕ /E-‐ , /d ŝƐ Ă ĐĂƐŚŵĞƌĞ ĂŶĚ ĐŽƩŽŶ ŬŶŝƚǁĞĂƌ ůĂďĞů ǁŝƚŚ Ă ƉŚŝůŽƐŽƉŚǇ ĐĞŶƚĞƌĞĚ ŽŶ ƚŚĞ ďŽĚǇ ŽĨ Įƚ ĂŶĚ ƉƌŽƉŽƌƟŽŶ͘ /ƚ ƉƌŽǀŝĚĞƐ ƟŵĞůĞƐƐ ĐůĂƐƐŝĐ ƐƚǇůĞƐ ĂŶĚ ďĂƐŝĐ ŝƚĞŵƐ ĨŽƌ ĐƵƐƚŽŵĞƌƐ͛ ǁĂƌĚƌŽďĞƐ͘ /E, /d ĚĞƐŝŐŶƐ ǁŝƚŚ ŝŶŶŽǀĂƟǀĞ ĚĞƚĂŝůƐ ŝŶ ĐŽůŽƌ͕ ƚĞǆƚƵƌĞ͕ ƐƟƚĐŚŝŶŐ ĂĐƟǀĞ Ăƚ ĐůĂƐ-‐ ƐŝĐ ƐŝůŚŽƵĞƩĞƐ͘ dŚĞ ƌĞ-‐ ƚĂŝů ƉƌŝĐĞ ƉŽŝŶƚ ƌĂŶŐĞƐ ĨƌŽŵ ΨϭϬϬͲΨϰϬϬ͘

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7.2.7

Malo was founded in Florence in 1972. It is known for the super-luxe cashmere in men’s wear, women’s wear and accessories. In 2010, Malo was acquired by a group of Italian entrepreneurs. This team brings new ideas and designs to Malo, and it maintains the promise of a luxury product-100% made in Italy. Malo presents an exclusive lifestyle and contemporary luxury, which emphasizes the quality of cashmere fiber from Mongolia and the expertise of Italian skills. Presenting as a wholesaler and retailer, Malo has showrooms in Italy and Japan. The retail price ranges from $200-$1000. 41

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7.3 VENDOR SUMMARIES BRAND

WEBSITE

Athena Procopiou

www.athenaprocopiou.com

Autumn Cashmere

www.autumncashmere.com

Chan Luu

www.chanluu.com

Chinti and Parker

www.chintiandparker.com

Eric Bompard

www.eric-bompard.com

INHABIT

www.inhabitny.com

Malo

www.malo.it/en/

OFFICE/SHOWROOM 75-81 Burnaby Street SW10 0NS, London 231 West 39th Street, Suite 1111 New York, NY 10018 127 East 9th Street, Suite 1107 Los Angeles, CA 90015 Leconfield House, Curzon Street, London, W1J 5JA, UK 13 bis rue de Chartres, 92200 Neuilly-sur-Seine, France 1441 Broadway New York, NY, 10018 Via Torquato Tasso n.1 20123 Milano – Italia

CONTACT info@athenaprocopiou.com +44 (0) 207-352-6654 info@autumncashmere.com +1 212-398-2244 customerservice@chanluu.com +1 877-242-6588 info@chintiandparker.com +44 (0) 207-016-4332 contact@eric-bompard.fr +33 (0) 140-120-040. customercare@inhabitny.com +1 888-261-0524 info@malo.it +39 02-738-970-21

7.4 PRICING STRATEGY Josephine is a medium cost provider. The lower priced assortment will range from $200- $400. The higher priced products will range from $500 and up. The price range between $200 to $400 consists of 65% assortments of merchandise; over $500 consists of 35% assortments of the total. According to the survey “Cashmere Apparel Boutique,” 30% of surveyed want to spend less than $200 on cashmere knitwear. This result indicates that we could sell products to potential customers by taking mark downs on clearance, promotions, and so on.

8 . 0 P ROM OT IONA L ST R AT E G Y 8.1 8.2 8.3 8.4 8.5 8.6

C R E AT I V E B R I E F A DV E RT I SI N G S O C IA L M E D IA P U B L IC R E L AT IO N S P R E S S R E L E A SE S ST R AT E G Y C A L E N DA R

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8.1 CREATIVE BRIEF This creative brief implements a marketing program for Josephine. It is presented to approach a goal at the onset of a project. 1. We specialize in high-end cashmere that is perfect for the San Francisco lifestyle, and provide full service support for all our clients. 2. Our vision statement is: Meet cashmere. 3. Our target customer prefers low key luxury. 4. We offer merchandise in a combination of timeless and dynamic styles containing natural fibers. 5. We mention strength of merchandise, as well as the softness and warmth of the fiber, while selling cashmere knitwear to customers. 6. We offer cashmere knowledge for clients regardless of sales. 7. We present cashmere for utterly seamless transitions among occasions in ads. 8. We want to create a long term relationship with clients.

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8.2 ADVERTISING 7x7 is the local magazine of San Francisco. 7x7 is named for the square miles of the city. Founded in 2001, the local publishing magazine of San Francisco offers the combination of print, digital and online marketing channel. The magazine seizes the opportunity to present a stylish magazine for a young and affluent audience. 7x7 delivers the comprehensive food, design, fashion coverage, and social events in the Bay Area.1 On the print channel, 7x7 covers costs at least 528,000 circulation within a year. The average audience age is 37 years old, and the median household income is the third highest in the country.2 According to the survey “Cashmere Apparel Boutique,” 37% of those surveyed subscribe to 7x7 magazine. An advertisement would be a strongest marketing channel to meet potential customers. As result, Josephine wants to increase store traffic by buying full page print section for 6 months in 7x7. This activity costs Josephine $32,550 in total.3

1 ŚƩƉ͗ͬͬǁǁǁ͘ƐĨƐƚĂƟŽŶ͘ĐŽŵͬϳǆϳͲŵĂŐĂǌŝŶĞͲďϳϵϬϬ 2 ŚƩƉ͗ͬͬǁǁǁ͘ĞĐŚŽͲŵĞĚŝĂ͘ĐŽŵͬŵĞĚŝĂ ĞƚĂŝů͘ƉŚƉ͍/ сϭϲϴϵϳ 3 ŚƩƉ͗ͬͬǁǁǁ͘ϳǆϳ͘ĐŽŵͬĂĚǀĞƌƟƐĞ 47

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8.3 SOCIAL MEDIA Social media outputs are great approaches to potential customers by sharing, commenting and displaying. For example, one of well-known American apparel retailers--J.Crew, it not only runs its website but also manages its social media such as Twitter, Facebook and Tumblr. No doubt, social media is extremely important for every business. A new business, especially, introduces itself through social media. Josephine will use Twitter, Facebook and Tumblr to reach different users through social media. FACEBOOK Facebook is well-known social media, which allows people to keep up with friends and make the world connected. People share identities within own social circles. Founded in February 2004, Facebook has gained rapidly from 1 million users in the end of 2004 to 1.01 billion users in September 2012. Facebook announces that it has 584 million active users per day, and 604 million users are using Facebook mobile devices each month.1 In the U.S., Facebook has more traffic than Google.2 The average number of friends that a person has on Facebook is 229 people.3 The largest demographic of Facebook users: 55% of female; 26% of the age less than 18, 57% have kids, 32% with the income of $150,000+; 47% without college level.4 Some brands close the message option via Facebook; therefore, they lose opportunities in customer service. By using Facebook, we create a fan page and introducing images of selected merchandise, new arrivals, promotions, contact information, and share news from WWD, SF Gate,7x7, and so on. Besides, we leave the message option open, which is an interactive communication media for Josephine and customers.

1 ŚƩƉ͗ͬͬĮŶĂŶĐĞ͘ǇĂŚŽŽ͘ĐŽŵͬŶĞǁƐͬŶƵŵďĞƌͲĂĐƟǀĞͲƵƐĞƌƐͲĨĂĐĞďŽŽŬͲŽǀĞƌͲǇĞĂƌƐͲϮϭϰϲϬϬϭϴϲͲͲĮŶĂŶĐĞ͘Śƚŵů 2 ŚƩƉ͗ͬͬǁǁǁ͘ŚĂůůĂŵŝŶƚĞƌŶĞƚ͘ĐŽŵͬϮϬϭϮͬĨĂĐĞďŽŽŬͲĂĚǀĞƌƟƐŝŶŐͲĂĚǀĂŶƚĂŐĞƐͲĚŝƐĂĚǀĂŶƚĂŐĞƐͬ 3 ŚƩƉ͗ͬͬƉĞǁƌĞƐĞĂƌĐŚ͘ŽƌŐͬƉƵďƐͬϮϮϲϮͬĨĂĐĞďŽŽŬͲŝƉŽͲĨƌŝĞŶĚƐͲƉƌŽĮůĞͲƐŽĐŝĂůͲŶĞƚǁŽƌŬŝŶŐͲŚĂďŝƚƐͲƉƌŝǀĂĐǇͲŽŶůŝŶĞͲďĞŚĂǀŝŽƌ 4 ŚƩƉ͗ͬͬǁǁǁ͘ƋƵĂŶƚĐĂƐƚ͘ĐŽŵͬĨĂĐĞďŽŽŬ͘ĐŽŵη͊ĚĞŵŽ 48

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TWITTER Founded in July 2006, Twitter is an online social networking media, which enables its users to send and read text-based messages of up to 140 characters. It is a fresh and direct traffic of ideas. It connects audiences to the latest stories, ideas and news, easily, without spending entire time for reading.1 Frequently, “Get the inside take on a story2” a tweet combines a link for reader digging into news. In other words, Twitter is less about social friendship; Twitter maintains users to follow latest topics, people, and news, which can spread father and faster by tweeting. The largest demographic of Twitter users: 55% of female; 23% of the age between 25-34, 55% has kids, 30% with the income of $150,000+; 49% without college level.3 As of July 1, 2012, Twitter has 517 million accounts, with 141.8 millions users in the U.S.4 By using Twitter, we upload new arrivals and share promotions in a very short sentence. For instance, “A treat not a trick. Three days only. Buy 1 sweater get 30% off on a 2nd sweater,” in order to attract readers to visit our store and retweet this information to others.

1 ŚƩƉƐ͗ͬͬƚǁŝƩĞƌ͘ĐŽŵͬĂďŽƵƚ 2 ŚƩƉ͗ͬͬǁǁǁ͘ďƵƐŝŶĞƐƐŝŶƐŝĚĞƌ͘ĐŽŵͬďĞƐƚͲƌĞĂƐŽŶƐͲƚŽͲƵƐĞͲƚǁŝƩĞƌͲϮϬϭϭͲϲ͍ŽƉсϭ 3 ŚƩƉ͗ͬͬǁǁǁ͘ƋƵĂŶƚĐĂƐƚ͘ĐŽŵͬƚǁŝƩĞƌ͘ĐŽŵη͊ĚĞŵŽ 4 ŚƩƉ͗ͬͬƚĞĐŚĐƌƵŶĐŚ͘ĐŽŵͬϮϬϭϮͬϬϳͬϯϬͬĂŶĂůǇƐƚͲƚǁŝƩĞƌͲƉĂƐƐĞĚͲϱϬϬŵͲƵƐĞƌƐͲŝŶͲũƵŶĞͲϮϬϭϮͲϭϰϬŵͲŽĨͲƚŚĞŵͲŝŶͲƵƐͲũĂŬĂƌƚĂͲ ďŝŐŐĞƐƚͲƚǁĞĞƟŶŐͲĐŝƚǇͬ 49

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TUMBLR Founded in February 2007, Tumblr is one significant entry point for social networking and it is very popular. In September, 2011, Tumblr hosted 28 million blogs containing a total of 10 billion blog posts.1 As of December 9th 2012, Tumblr had more than 83.9 million blogs and 37.5 billion posts.2 The largest demographic of Tumblr users: 56% of female; 27% of the age between 18-24, 62% with no kids, 67% with the income of $0-50,000; 51% with college level degree.3 Tumblr maintains higher visual posts than textintensive posts, in order to entice followers. The factor that distinguishes Tumblr from other social media networks is the visual perspective.4 It supports text, photo, quote, link, chat, audio and videos through browser and mobile phone. In addition, it combines the social sharing of Facebook and Twitter for increasing traffic. Moreover, Tumblr is an easy way to use a blog platform, especially for a small business, which doesn’t have enough budget for creating its own website. By using Tumblr as Josephine’s main blog, we work on: introducing the boutique’s background; introducing each brand’s history, updating photos of new collections; updating daily news to readers, such as fashion and cashmere trends; updating in store news, such as promotions and special event.

1 ŚƩƉ͗ͬͬƌŽǇĂů͘ƉŝŶŐĚŽŵ͘ĐŽŵͬϮϬϭϮͬϬϰͬϬϰͬƚƵŵďůƌͲϱϬͲŵŝůůŝŽŶͲďůŽŐƐͲϮϬͲďŝůůŝŽŶͲƉŽƐƚƐͬ 2 ŚƩƉ͗ͬͬǁǁǁ͘ƚƵŵďůƌ͘ĐŽŵͬĂďŽƵƚ 3 ŚƩƉ͗ͬͬǁǁǁ͘ƋƵĂŶƚĐĂƐƚ͘ĐŽŵͬƉͲϭϵhƚƋ ϴŶŐŽ ďDη͊ĚĞŵŽ 4 ŚƩƉ͗ͬͬǁǁǁ͘ƐŽĐŝĂůŵĞĚŝĂĞǆĂŵŝŶĞƌ͘ĐŽŵͬƚƵŵďůƌͲƐƚƌĂƚĞŐŝĞƐͬ 50

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8.4 PUBLIC RELATIONS Public relations is a communication strategy of a company. By sending press releases to publications, Josephine expose target audiences to the store information. Josephine targets SF Chronicle, SF Examiner, SF Magazine, SOMA Magazine, and 7x7, those are the main San Francisco local publications. There are 1,161,500 circulations, and their readers’ median ages are from 25 to 60.1 In addition, Josephine will hire a local PR person, John Maloney, to help Josephine in traditional public relations, online PR, and marketing communications.

1 ĐŚŽͲDĞĚŝĂ͘ĐŽŵ

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8.5 PRESS RELEASES FOR IMMEDIATE RELEASE Hayley Goldbaum PR Consulting 304 Hudson Street New York, NY 10013 (909) 803-7824 GoldbaumHayley@gmail.com From Mongolia to Josephine’s of San Francisco Offering only the highest end cashmere from around the world San Francisco, CA July 27th, 2014 -- Josephine is newest cashmere boutique located in the Hayes Valley of San Francisco. The boutique will specialize in high end cashmere that is perfect for the San Francisco lifestyle. Josephine will sell a mixture of clothing and accessories for both male and female customers during the upcoming seasons. An important quality that sets Josephine apart from other cashmere boutiques is that we for only display high-end cashmere knitwear. Almost all cashmere in the world is made from Mongolia, however other retailers emphasize the 100% cashmere without discussing quality of cashmere with the customers. The garment’s weave determines the quality of the product. Josephine offers only the highest weaving skills in cashmere from different manufacturing countries. Our cashmere will source from Mongolia and made in China, France, Italy, India, and so on. To get the first hand encounter of the customer experience and the shopping atmosphere the grand opening will be August 1st, 2014. During the opening event, Josephine will serve the Chantal Guillon macaroons and a variety of tea flavors. Josephine’s emphasis is on creating a place the customer will want to go to and have a great quality shopping experience. The lower priced product assortment will range from $200- $400. The higher priced products will range from $500 and up. ###

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FOR IMMEDIATE RELEASE Juju Chu PR Consulting 623 Hayes Street, San Francisco, CA94102 (415) 994-9629 HanYuChu@gmail.com An introduction to Juju, the owner of Josephine.

San Francisco, CA September 1st, 2014-- Juju, the owner of Josephine has lived in San Francisco for over two years now. She understands that we have no control over the weather, but she realizes that we can control the clothes we choose the wear. Comfort is the priority when selecting clothes. Durability and comfort play important roles in choosing fabrics. Cashmere is not a fabric, it is a way of life. Cashmere is not only the finest fiber of all other natural fibers, but it is also the most luxurious and fashionable fabric. Cashmere has been included in the product line by many brands. Cashmere is unique and special: it keeps you warm in the winter and cool in the spring. “Especially considering the weather in this city, I believe there is a market to capitalize on by opening a cashmere specific boutique in San Francisco.-- Juju, the owner of Josephine” Josephine, where we want to create warm atmosphere. We all believe cashmere has a tangible allure that we can feel and once we’ve had it, we won’t forget how soft it is. Check out Josephine in Hayes Valley, San Francisco.

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FOR IMMEDIATE RELEASE Juju Chu PR Consulting 623 Hayes Street, San Francisco, CA94102 (415) 994-9629 HanYuChu@gmail.com The Production of cashmere. San Francisco, CA October 1st, 2014-- The innovative cashmere boutique, Josephine, is hosting an exhibition of knitting cashmere fiber into an article of clothing from a traditional Mongolian weaver on October 15th, 2014. Cashmere has been used in sweaters, shawls, gloves, dresses, coats, and so on. The production of cashmere takes five steps: collection, sorting and scouring, de-hairing, spinning, knitting and weaving. Collection: Cashmere fibers are collected by hand-combing or shearing the goat during the molting season, usually in Spring. Shearing is a faster method, but the results in a higher coarse-hair content and a lower quality. On the contrary, hand-combing takes much longer, but the result is a finer fiber. The method uses a coarse comb, pulled through the goat’s fleece to get the loose tufts. Sorting and scouring: The Farmers grade cashmere fiber by quality and color, for instance, no dark fibers mixed with white fibers. Then, the farmers scour the fiber by washing it to remove dirt and coarse hair. De-hairing: This step removes vegetable matters and the coarse outer guard hair Spinning, Knitting and Weaving: The cashmere fiber is traded internationally. Nowadays, the majority of cashmere products are manufactured in China. In addition, according to the textbook of “Fabric to Fashion”, it indicates that Italy, Japan, and Scotland are the three principle countries for sophisticated and innovative cashmere spinning, knitting, and weaving. ### 54

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FOR IMMEDIATE RELEASE Juju Chu PR Consulting 623 Hayes Street, San Francisco, CA94102 (415) 994-9629 HanYuChu@gmail.com “Still looking for warm accessories?” A specialty cashmere boutique that’s fit for San Franciscan braving the cold weather. San Francisco, CA December 1, 2013-- Strategically located in the shopping mecca known as Hayes Valley, Josephine is a specialty cashmere boutique that’s fit for San Franciscan braving the cold weather. Josephine sits next to cafés, restaurants, clothing boutiques, accessory boutiques, and specialty stores in Hayes Valley and compliments the vibrant district. No other boutique in this area solely sells cashmere clothing and accessories, which provides something unexpected for customers looking to add to their existing wardrobe. The brands Josephine carries are Athena Procopiou, Autumn Cashmere, Chan Luu, Chinti and Parker, Eric Bompard, Inhabit, and Malo. The boutique gives customers a first-hand experience of these brands. The associates are able to offer details about their products, style advice, and even help customers with personal shopping. ###

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FOR IMMEDIATE RELEASE

Juju Chu PR Consulting 623 Hayes Street, San Francisco, CA94102 (415) 994-9629 HanYuChu@gmail.com What is Cashmere? A story behinds cashmere fabric.

San Francisco, CA January 1st, 2015-- The name is derived from Kashmir, India. The cashmere fiber is from a goat that has been carefully raised to produce a fine downy undercoat. Cashmere is native to the Himalayan mountains. Cashmere goats live in the high altitude, they live in unstable temperatures in an extreme altitude. Where is the best fiber from a cashmere goat? Some resources indicate that the neck, belly or the saddle of a cashmere goat is the best. In fact, the quality of cashmere is affected by nutrients that the goats consume and the climate conditions. The colder the climate, the finer and warmer the cashmere. Cashmere can be found in China, Mongolia, Iran, Pakistan, India and Afghanistan. Due to the harsh dry climate of the sub-Siberian Land, cashmere from Outer Mongolia and the Inner Mongolian parts of China are considered of the best quality. However, it is hard to know which part of a cashmere goat that cashmere fiber comes from, when purchasing a cashmere article. The tag often only shows a manufactured country of a cashmere article. The Josephine innovative cashmere boutique will not only offer general information but also trace the source of the fiber to show the customer exactly where the materials come from. Visit Josephine in Hayes Valley, San Francisco. ###

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FOR IMMEDIATE RELEASE Juju Chu PR Consulting 623 Hayes Street, San Francisco, CA94102 (415) 994-9629 HanYuChu@gmail.com How to describe the quality of cashmere? Juju from Josephine explains the quality San Francisco, CA February 1st, 2015 -- In the past, cashmere was expensive and rare. Nowadays, customers can easily find a cashmere sweater for less than $100. Some certain brands emphasize 100% cashmere without putting enough focus on the weaving skill. That’s because cheaper brands knit more loosely. It takes less time and cashmere. So, what’s the quality of cashmere? There are different stories: Firstly, the quality of cashmere has been measured by the length and diameter of the fiber. The sorter is better. According to International Year of Fibers, the US standard sets an average fiber diameter for cashmere of no more than 19 microns, and top quality fibre is 14 microns. Secondly, stretch the fabric. If you pull it and then it returns to its original shape immediately, that is good. If not, it may have been knit more loosely. Thirdly, feel it and try it on, quality speaks for itself. If you felt scratchy, that’s bad. Cashmere keeps you warm in the winter and cool in the spring, because cashmere has a high moisture content that varies according to weather conditions. It is weight for weight, warmer than wool. That is the power of cashmere. Interested in cashmere? Visit the innovative specialty cashmere boutique, Josephine, in Hayes Valley, San Francisco

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8.6 STRATEGY CALENDAR August, 2014

SALES PROMOTIONS

Store Opening 8/1, 2014. “New Born Cashmere Boutique” Grand Opening Event

SALES PROMOTIONS

“Cashmere is not a fabric, it’s a way of life.” 8/10-8/20, 2015 Check out our new arrival articles. Feel soft cashmere and have a miracle experience.

PRESS RELEASES From Mongolia to Josephine’s of San Francisco. SPECIAL EVENT Grand Opening Event September, 2014

SALES PROMOTIONS

Labor Day. 9/1, 2014 Thank you for participation to the United States economy.” Get 20% off on any order at Josephine.

PRESS RELEASES The introduction to the owner of Josephine. October, 2014

SALES PROMOTIONS

Halloween. 10/29-10/31, 2014 “A treat not a trick. Three days only. Buy 1 sweater get 30% off on a 2nd sweater.”

PRESS RELEASES The production of cashmere. November, 2014

SALES PROMOTIONS

Thanksgiving Day. “Gift for you; Gift for me.” Thank you my friend! Buy a gift for your friend, and get 15% off for your next purchase, 11/21-11/27, 2014 Black Friday 11/28, 2014 “One day express. Get 40% off on all selected merchandise.”

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December, 2014

SALES PROMOTIONS

12/6-12/12, 2014 “Still looking for cashmere accessories?” Cashmere comes with accessories. It’s time to get ready for your winter outfits. Let’s warm up in cashmere. Get 25% off on accessories with your purchase of $400+ Christmas Day 12/15-12/26, 2014 Merry Cashmere! Get 30% off on selected items.

PRESS RELEASES Still looking for warm accessories? January, 2015

SALES PROMOTIONS

New Year upgrade 1/1-1/8, 2015 Get 20 % off when you upgrade your wardrobe with timeless cashmere at Josephine.

PRESS RELEASES What is Cashmere? February, 2015

SALES PROMOTIONS

Valentine 2/1-2/15, 2015 Snuggle with cashmere. Get 22% off for a twin set of cashmere

SALES PROMOTIONS

“Meet cashmere” 2/25-3/3, 2015 “Launching international cashmere articles of San Francisco ” Meet your cashmere at Josephine in Hayes Valley, San Francisco.

PRESS RELEASES How to describe the quality of cashmere? March, 2015

SALES PROMOTIONS

St. Patrick’s Day 3/14-3/17, 2015 “Colored green” Pick what to wear to celebrate Irish-American culture in the United States. Get 15% off on each colored green item.

PRESS RELEASES The Production of cashmere.

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April, 2015

SALES PROMOTIONS

“Out with the old in with the new” 4/1-4/7, 2015 Upgrade your cashmere sweater. Bring any of your old sweaters as donations, and it will go to Dress for Success San Francisco. The non profit organization is supported entirely through the generosity of the community.

May, 2015

SALES PROMOTIONS

Mother’s Day 5/3-5/10, 2015 “Up to 25% off. Treat your beloved Mom to luxury cashmere.”

June, 2015

SALES PROMOTIONS

Father’s Day 6/14-6/21, 2015 “A contribution to Father. Get 25% off on all menswear!” Empress Josephine 6/23-6/27, 2015 “Empress Josephine’s Birthday Celebration on June 23rd” Who brings cashmere to fashion? The answer is Empress Josephine, the wife of Napoleon Bonaparte. Let us tell you the love story about cashmere. Check Josephine out and get 30% off on your purchase of $623+

July, 2015

SALES PROMOTIONS

Winter in July of San Francisco. 7/3-7/12, 2015 Have a cashmere scarf in hands for the unpredictable weather in San Francisco. Get 20% off on scarf collection.

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9 . 0 C OM P E T I T I V E A NA LYSI S 9 . 1 C OM P E T I T O R S WO T A NA LYSI S 9 . 1 . 1 J. C R EW 9 . 1 . 2 L O R O P IA NA 9 . 1 . 3 R A N D A N D STAT L E R 9 . 2 C OM P E T I T I V E A DVA N TAG E

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9.1.1 J.CREW STRENGTHS: 1. Size advantages 2. Italian Cashmere Yarn

WEAKNESSES: 1. Mass brands 2. Conservative style

OPPORTUNITIES: 1. International expansion 2. New specialty shops

THREATS: 1. Substitute products 2. Currency fluctuations

Strengths: 1. Founded in 1983, the lifestyle retailer sells urban professional appeal for customers. As of March 22nd, 2012, J.Crew operates 266 retail stores in the U.S.1 2. “Made in China of Italian Cashmere Yarn.” Parts of J. Crew’s cashmere cardigans, priced in between $100-$600, were made from Italian yarn, which shipped to factories in China to be knitted. Weaknesses: 1. J.Crew is a mass brand but costly. Since products have been mass produced, the quality is not considered “good” quality--a brief summary of “Looking to Vent with J.Crew.”2 2. J.Crew’s style is much conservative. Most cashmere sweaters styles are tight in the neck. Opportunities: 1. It has announced that starting on March 22nd, 2012, it will expand it international distribution from 29 to 107 countries, reaching customers throughout Asia, Australia, Europe, the Middle East and South America.3 2. J.Crew ventures into new specialty shops for men, women, and kids. Threats: 1. Another cashmere brands offer similar products at a better value. 2. The currency fluctuations could increase the costs in other countries. 1 ŚƩƉ͗ͬͬǁǁǁ͘ďŝǌũŽƵƌŶĂůƐ͘ĐŽŵͬƉƌŶĞǁƐǁŝƌĞͬƉƌĞƐƐͺƌĞůĞĂƐĞƐͬϮϬϭϮͬϬϯͬϮϭͬDDϳϯϳϬϱ 2 ŚƩƉ͗ͬͬũĐƌĞǁĂĮĐŝŽŶĂĚĂ͘ďůŽŐƐƉŽƚ͘ĐŽŵͬϮϬϭϭͬϭϮͬůŽŽŬŝŶŐͲƚŽͲǀĞŶƚͲǁŝƚŚͲũĐƌĞǁͺϭϰ͘Śƚŵů 3 ŚƩƉ͗ͬͬǁǁǁ͘ŵƵůƟǀƵ͘ĐŽŵͬŵŶƌͬϱϱϯϬϮͲũͲĐƌĞǁͲƚŽͲůĂƵŶĐŚͲŐůŽďĂůͲĞͲĐŽŵŵĞƌĐĞͲϭϬϳͲĐŽƵŶƚƌŝĞƐ 66

TABLE OF CONTENTS > 9.0 COMPETITIVE ANALYSIS > 9.1.2 LORO PIANA

9.1.2 LORO PIANA STRENGTHS: 1. Supply chain 2. Technology OPPORTUNITIES: 1. Grow supply chain

WEAKNESSES: 1. Niche market 2. Conservative style THREATS: 1. Intense competition

Strengths: 1. Loro Piana is the Italian clothing retailer operating the fine cashmere apparel to fashion industry. In 1940s, Loro Piana started to export fine cashmere fabric for international demanding clients. 2. All products are made in the company’s Italian factories. Weaknesses: 1. The price rage of a cashmere cardigan is around $1500-$2500 and higher. Due to the high price range, this limits their target demographic who could afford the price. 2. Loro Piana never follows fashion trends. The reason is because their primary customer are more sensitive to quality than fashion. Opportunities: 1. To expand wholesale structure and develop Loro Piana’s product range in order to grow their business around the world. To keep searching for the finest cashmere fiber around the world. Threats: 1. Customers could re-evaluate their spending on luxury products, for example, they may consider buying other high-end brands such as Louis Vuitton.

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9.1.3 RAND AND STATLER STRENGTHS: 1. Size Advantage 2. Merchandise OPPORTUNITIES: 1. Tourist Traffic 2. New Market

WEAKNESSES: 1. Location 2. Employee Control THREATS: 1. Substitute Products 2. Rent Inflation

Strengths: 1. Founded in 2011, Rand + Statler is under the Azalea empire, which includes Azalea, Welcome Stranger and Rand + Statler. Those three boutiques are located in Hayes Valley. Rand + Statler shares staffs and structures with Azalea and Welcome Stranger. 2. Consider a small scale Barneys New York, Rand + Statler carries fashion designer lines A.P.C, Alexander Wang, ACNE, Balmain, Paul Smith, Rick Owens, and Aesop. Weaknesses: 1. Hayes Valley has fewer visitors than the downtown area. 2. Due to my personal experience, there are at least 5 employees who run the shop on weekdays. Because the business is slow on weekdays, Rand + Statler should reduce their employees work hours. Opportunities: 1. Having editorials in 7x7 or any local publications frequently will attract readers to visit Rand + Statler. 2. Expanding the diversity of merchandise in order to increase new customers. Threats: 1. Merchandise selection is one of Rand + Statler strengths and threats. Customers can easily switch to another service in either department stores or other boutiques. 2. The rent is unexpectedly getting higher year by year in San Francisco. It will affect profits and create loses for Rand+ Statler.

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9.2 COMPETITIVE ADVANTAGES 1. Many retailers have their own lines of cashmere, but Josephine will import a wide selection of cashmere labels. Multiple cashmere brands help distinguish Josephine from competitors. 2. Josephine will charge higher prices than mass brand products, because there are very few sources to purchase those cashmere brands in the city. 3. Unlike some brands offer conservatively styled cashmere knitwear, Josephine will offer much fashionable and wearable merchandise.

1 0 . 0 B R A N DI N G 1 0 . 1 BU SI N E S S C A R D 10.2 LET TERHEAD AND ENVELOPE 1 0 . 3 SHO P P I N G BAG

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623 Â Hayes Â Street, Â San Â Francisco, Â CA Â 94102

Josephine 623 Â Hayes Â Street, Â San Â Francisco, Â CA Â 94102-Â Â TEL Â 415-Â994-Â9629 Josephineinhayes.tumblr.com Â

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10.1 BUSINESS CARD 10.2 LETTERHEAD AND ENVELOPE 10.3 SHOPPING BAG

1 1 . 0 V I SUA L M E RC HA N DI SI N G 11.1 FLOOR PLAN 1 1 . 2 F L O O R P L A N - - I N SP I R AT IO N S

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11.1 FLOOR PLAN Josephine has an open back window along with wood stands for displaying units, which allows pedestrians or customers to see through the interior. Although there are no mannequins being shown in the window display, the store keeps three mannequins for displaying new collections. Josephine has 600 square feet with approximately 320 units on the floor, and 100 units in stock. Women’s clothing are hanging on the left section and folded on presentation tables, which compose 60% of the total assortments. Men’s clothing are hanging on the left section and folded on presentation tables, which compose 25% of the total assortment. Accessories items are placed on ladders and presentation tables, which compose 15% of the total assortments. This area is not crowded, it has an ample space that allows customer to visit the store. The store has wood floors and contemporary furniture, presenting a sophisticated image for the interior and merchandise. This boutique targets upper-class customers who prefer to shop in a comfortable and welcoming zone.

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11.2 FLOOR PLAN -- INSPIRATIONS

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1 2 . 0 OP E R AT IONA L P L A N 12.1 12.2 12.3 12.4

ST O R E HOU R S E M P L OY E E R E QU I R E M E N T S P E R S O NA L SE L L I N G ST R AT E G Y O R G A N I Z AT IO N C HA RT

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12.2 STORE HOURS Location: Josephine is located at 623 Hayes Street, San Francisco. Hours: Open daily 11am-8pm Closed for public holidays Rent: $6,728 per month 3 Months Deposit: $26,711 Space: 600 sq. ft. Return policy: We gladly accept returns accompanied by an original receipt within 7 days of purchase. The original method of payment will be refunded. Items reduced in price for sale or clearance cannot be returned or exchanged.

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12.2 EMPLOYEE REQUIREMENTS Company history: Founded in 2014, Josephine is the newest cashmere boutique located in Hayes Valley of San Francisco. We specialize in high end cashmere that is perfect for the San Francisco lifestyle, and provide full service support for all our clients. Josephine is seeking two retail sales associates to ensure our clients receive a positive shopping experience. The position is perfect for someone with an excellent sales background in the fashion apparel industry. Job description: Retail sales associates Superb opportunity: At Josephine we provide our sales associates with the training for a professional career with real momentum. You will be coached on store management, sales techniques and customer service. Primary responsibilities: Have knowledge of cashmere Maintain and grow existing business Manage the stock and inventory Educate potential clients on the value of our products Follow up to close sales and file customer directories for future reference Requirements: Bachelor’s degree or higher At least one year experience in the fashion apparel fields. Ability to take initiative and bring new ideas Ability to work independently, professionally, and efficiently Excellent oral and written communication skills along with knowledge of sales strategy. Benefits: Medical insurance Paid vacation and sick time due to San Francisco Labor Laws Employee discount : 25 %

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12.3 PERSONAL SELLING STRATEGY Step 1: Prospecting Prospects should be “qualified,” which means that we want to spend time on a “qualified” customer without wasting time. Key points to assess a potential customer: 1. Both females and males who are in their 30s 2. One who wears classic style and is sensitive to quality 3. One prefers low-key luxury to conspicuous logos Step 2: Making the first contact “Introducing” A greeting meeting starts from “How are you today?” Act as one’s friend, but be sincere and friendly. Move on, introduce merchandise or current promotions, such as: 1. “Have you been to our store before? (if no) Thank you for coming in. Most merchandise is made from cashmere, please feel free to try it on, and let me know if you have any questions.” 2. “Have you been to our store before? (if yes) Thank you for coming back. These sweaters (or something else new) have just arrived in new colors. Feel free to try them on, and let me know if you need any sizes. 3. Determine products or services for them. Step 3: Sales presentation “Be nice. Don’t force.” After step 2, we want to leave the customer to browse the store by himself. However, we have to be aware of the customer’s reaction to the merchandise. Promptly, provide any preference to the customer, such as colors, sizes, and prices. 1. If he/she is looking for something specific, the sales presentation should begin with the mediumpriced merchandise and upon the reaction from the customer, narrow up or down to his budget. 2. If he/she is constantly looking for the same article, a great compliment must go first “it’s really nice on you” then ask him “Do you want to try it on?” and hands him/her similar article to match it. Sometimes, we struggle with the situation when a customer says ”The size doesn’t fit me,” and then they leave the store. In order to avoid the issue, we must hand him/her another two sizes for him/her to try on.

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3. We offer highest weaving skills in cashmere from different manufacturing countries. Our cashmere will source from Mongolia and are made in China, France, Italy, and India. For example, Italy is prominent in manufacturing cashmere. Italy produces high quality clothing for luxury garments, because Italian knit technology is excellent. Italian manufacturers use a heavier gauge yarn knitted into a high density garment. In addition, Italy has an advantage in water, because of their clear crystal mountain fed streams and rivers. The country is an excellent agent to produce out of natural fiber. Step 4: Objection Handling “Never argue with customer” Every business may encounters customers’ negative feedbacks, but we want to keep any potential customers who may return. We overcome obstacles by: 1. They may compare our products with other brands. We can tell them our brands are hard to find in San Francisco. The merchandise is a limited edition. 2. Customers may compare products to J.Crew. We can explain that J.Crew is a mass brand but costly. Since products have been mass produced, the quality is not consider as “good” quality and it pills a lot. Besides, J.Crew’s style is much more conservative with tight necks. 3. They may consider the price. We may mention the return policy. They can return it with store credit in a year, or offer him/her the similar article but at a lower price. Step 5: Closing the sale “Don’t be afraid to take one’s credit card” 1. The ‘alternative choice’ does not have the chance for customer to say no, but leads them towards to yes. For example, “Do you want this sweater in navy or black?” 2. Stop the sales presentation, and let the customer say “Yes.” 3. If he/she seems to agree with the order, just ask him/her “May I take your order?” Step 6: After the sale We collect clients’ information, and send them emails about any news or promotions. We send them our best wishes on their birthday via a written mail. We all want to build a strong relationship with clients. 91

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12.4 ORGANIZATION CHART

OWNER

FULL TIME: SALES ASSOCIATE

PART TIME: PR PERSON

PART TIME: ACCOUNTANT

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OWNER - Responsible for the store’s operation. - Responsible of maintain and grow existing business - Create marketing strategy and plan and discuss with PR person - In charge of visual merchandising, and change window display twice a week - Communicate with current vendors and travel to their showrooms once a year - Responsible for sourcing new vendors through trade shows and internet - Responsible for inventory control - Responsible for reviewing daily sales analyses and discuss with accountant - Responsible for training employees in selling strategy FULL TIME: SALES ASSOCIATES - In charge of the daily store operation including cash registers and sales. - Maintain window display and in-store visual merchandising - Responsible for merchandise presentation - Educate potential clients on the value of our products - Follow up to close sales and file customer directories for future reference PART TIME: ACCOUNTANT - In charge of accounting and consulting. Four hours a week. PART TIME: PUBLIC RELATIONS - In charge of public relations and marketing for Josephine. This include press release, email marketing, social media, and events.

1 3 . 0 F I NA NC IA L P L A N A N D A NA LYSI S 1 3 . 1 F I NA N C IA L SUM M A RY 1 3 . 2 STA RT U P C O ST S 1 3 . 3 A S S O RT M E N T P L A N 1 3 . 4 M O N T H LY S A L E S 1 3 . 5 S A L E S A N D I N V E N T O RY B Y M O N T H 1 3 . 6 S A L E S QUA RT E R Y E A R 1 - 3 13.7 PROFIT & LOSS 1 3 . 8 M A R K E T I N G E X P E N SE S 1 3 . 9 C A SH F L OW F O R E C A ST 1 3 . 1 0 L OA N PAYM E N T

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13.1 FINANCIAL SUMMARY Sales The estimate of Josephine’s first year sale is $950,087 Average item price: $380.49 (Total sales ÷ total units= Average item price) $950,087 ÷ 2,497 = $380.49 Average units per transaction: 1 The average pricing of Josephine is middle to high, and so we expect customer will buy at least one sweater or a scarf at Josephine. Average transaction for each customer: $380.49 (Average item price * Average units per transaction= Average transaction for each customer ) $380.49 * 1 = $380.49 Expected traffic per day: 99 Monday-Friday: 40people per day*5days=200 visitors Saturday-Sunday: 280people per day*2 days= 560 visitors According to my personal shopping experience, there are few visitors on weekdays than visitors on weekends in Hayes Valley. For example, Rand+Startler has 5-10 visitors within an hour on weekdays and 35 visitors within an hour on weekends. The expected traffic for Josephine is that 200 visitors would visit Josephine on weekdays and 560 visitors on weekends. Expected conversion per day: 7% ; Customer per day: 6.93 We expect 1/14 of total visitor volume would become Josephine’s clients. Sales per day: $2,636.81 (Average transaction for each customer * Customer per day = Sales per day) $380.49 * 6.93 = $2,636.81 Sales per year: $949,249.92 Annual open days for Josephine: 360 days $2,636.81 * 360= $949,249.92 96

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13.2 START UP COSTS Item

Detail

Technology and Phones

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

Selling Floor and Backstock Fixtures

$ Amount

Depreciate ?

# Months of Useful Life

1,660.00

Yes

27.67

Floor Fixtures/Shelves, Display Tables, Jewelry $ Cases

15,280.00

Yes

254.67

633.33

915.67

Leasehold Improvements (Material & Labor)

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

38,000.00

Yes

Rent Deposit

3 Months Rent Deposit

26,911.00

n/a

Wages and Salaries

3 Months

33,153.00

n/a

Marketing Startup

Initial Marketing Campaign

24,615.00

n/a

Opening Inventory

Cost BOM$ Inventory

96,994.26

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

3,500.00

n/a

Working Capital

Cash Needed in first months to keep bank funds positive

5,000.00

n/a

246,113.26

Total

Monthly Depreciation Expense

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13.3 ASSORTMENT PLAN 55%

Season SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING

Class A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf W_Dress W_Shirt W_Shirt W_Skirt W_Skirt W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater A_Scarf A_Scarf A_Scarf A_Scarf M_Cardigan M_Polo

Vendor Athena Procopiou Athena Procopiou Chan Luu Chan Luu Chan Luu Chan Luu Chan Luu Chan Luu Chan Luu Chan Luu Chan Luu Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Chinti and Parker Eric Bompard Eric Bompard Eric Bompard Eric Bompard Eric Bompard Eric Bompard

SKU 141010101 141010102 141010301 141010302 141010303 141010304 141010305 141010306 141010307 141010308 141010309 141020401 141020402 141020403 141020404 141020405 141020406 141020407 141020408 141020409 141020410 141020411 141020412 141020413 141020414 141020415 141020416 141020417 141010502 141010503 141010504 141010505 141030502 142030505

IMU %

Projected SEASON Target Whls Target Retail unit sales Item Content Color Sizes 5 Plain weave_Multicolor 85% Pattern_Raw Modal, 15% cut.Silk Height: Fuchsia 62.4 Inches,one Width: 70.2 Inches $148.50 $330.00 8 Gauze_Abstract Pattern_Fringe. 85% Modal, Height: 15% 62.4 Inches, Silk orange Length: one 71.8 Inches$117.00 $260.00 10 Ultramarine Green New 50% Turquoise cashmere, Cashmere 50% SilkGreen and Silk Dip Dyed one Scarf, 62" $110.25 x 58" $245.00 10 Shale New Turquoise Cashmere 70% cashmere, and Silk 30% Shadow SilkGreen Dyed Scarf,one 62" x 58" $92.25 $205.00 14 Alhambra Cashmere and 70% Silk cashmere, Scarf, 62"30% x 58" SilkGreen one $87.75 $195.00 14 Cantaloupe Cashmere and 70%Silk Cashmere, Scarf, 62" 30% x 58" Silk Orange one $87.75 $195.00 10 Nude Cashmere and Silk Tie-Dyed Scarf, 62'' xNude 58''70% cashmere, one 30% silk $110.25 $245.00 10 Doeskin Combo Modal90% andmodal, Cashmere 10%Polka cashmere Dot Gold Scarf, 62"x 58" one $65.25 $145.00 10 Shrimp Combo Cashmere 70%and cashmere, Silk Ethnic 30%Print silklight Scarf, orange 78'' x 34'' one $110.25 $245.00 10 Blue Nights Wool Cut Out 100% Scarf, wool78'' x 34'' Navy one $55.35 $123.00 8 Dress Blue Cashmere and 70%Silk cashmere, Graduated 30%Polka silkNavy Dot Scarf, 62''one x 58'' $121.50 $270.00 32 Check Print Dress 100% cotton grey/navy/goldXS,S,M $105.75 $235.00 32 Check Print Shirt 100% cotton grey/navy XS,S,M $65.25 $145.00 32 Rainbow Heart Shirt 100% cotton white XS,S,M $65.25 $145.00 32 Breton Mini 100% cashmere concrete and ivory/ XS,S,M bluebird $63.00 and cream $140.00 32 Check Print Skirt 100% cotton gold/navy XS,S,M $65.25 $145.00 30 Star Shoulder Sweater in 100% navycashmere with cream stars.navy XS,S,M $200.25 $445.00 30 Overlapping Polka Sweater 100%incashmere watermelon withwatermelon cream and navy XS,S,M polka dots. $245.25 $545.00 30 Overlapping Polka Sweater 100%incashmere navy with creamnavy and grey marlXS,S,M polka dots.$245.25 $545.00 30 Polka Dot Sweater in bluebird 100% cashmere with cream polka navy dots. XS,S,M $245.25 $545.00 30 One Pocket Sweater 100% cashmere navy/oatmeal/parrot XS,S,Mblue$213.75 $475.00 30 Rainbow Heart Sweater100% in light cashmere grey with multilight colour greyheart intarsia. XS,S,M $245.25 $545.00 30 Letter Sweater_A 100% cashmere black one $202.50 $450.00 30 Letter Sweater_E 100% cashmere black one $202.50 $450.00 30 Letter Sweater_K 100% cashmere black one $202.50 $450.00 30 Letter Sweater_J 100% cashmere black one $202.50 $450.00 30 Letter Sweater_L 100% cashmere black one $202.50 $450.00 30 Letter Sweater_S 100% cashmere black one $202.50 $450.00 8 Tie & dye striped print 180x85, scarf 100% cashmereCoconut beige one $130.50 $290.00 8 Hummingbird print big120x120, square scarf 100% cashmere Navy blue one $130.50 $290.00 8 Shell print big square scarf 120x120, 100% cashmere Sailor Blue/Lime Green $130.50 $290.00 8 Coco palm print square90x90, scarf 100% cashmere Foam Blue one $105.75 $235.00 44 M_"High School" cardigan 2 ply, 70% cotton 30% cashmere Flannel grey S,M,L,XL,XXL $139.50 $310.00 70 2 ply, polo 70% cotton Caribbean blue/Navy S,M,L,XL,XXL blue$108.00 $240.00 M_Short sleeve colour block shirt 30% cashmere

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55%

Season SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING SPRING FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL

Class M_V-neck W_Cardigan W_Cardigan W_Jacket W_Jacket W_Shirt W_Shirt W_Sweater W_Sweater W_Sweater W_Sweater W_T-shirt W_Sweater W_Sweater A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf A_Scarf W_Sweater W_Sweater W_Sweater W_Sweater W_Sweater A_Scarf M_Cardigan M_Jacket M_Jacket

Vendor SKU 142030508 Eric Bompard 142020504 Eric Bompard Eric Bompard 142020505 Eric Bompard 142020508 Eric Bompard 142020509 142020510 Eric Bompard 142020511 Eric Bompard Eric Bompard 142020512 Eric Bompard 142020513 Eric Bompard 142020514 142020515 Eric Bompard 142020516 Eric Bompard INHABIT 141030605 INHABIT 141030606 Athena Procopiou 142010103 Athena Procopiou 142010104 Athena Procopiou 142010105 Athena Procopiou 142010106 Athena Procopiou 142010107 Athena Procopiou 142010108 Autumn Cashmere 142010109 Autumn Cashmere 142020201 Autumn Cashmere 142020202 Autumn Cashmere 142020203 Autumn Cashmere 142020204 Autumn Cashmere 142020205 Eric Bompard 142010501 142030501 Eric Bompard Eric Bompard 142030503 Eric Bompard 142030504 M_V-neck Eric Bompard 142030506 M_V-neck 142030507 Eric Bompard W_Cardigan Eric Bompard 142020501 W_Cardigan Eric Bompard 142020502

IMU %

Projected SEASON Item Content Color Sizes Target Whls Target Retail unit sales 35 2 ply, 100% cashmere Loquat Orange/Caribbean S,M,L,XL,XXL $166.50 blue/Purple/Candy $370.00 Pink M_Classic V neck pullover 32 Mini cardigan giant intarsia 2 ply,spots 100% cashmere Frost Grey/Coconut S,M,Lbeige$166.50 $370.00 32 Extrafine four-stripe cardigan 2 ply, 100% cashmere Coconut beige/Black S,M,L $198.00 $440.00 32 Cropped marl short jacket 6 ply, 100% cashmere Cyclade Blue/Acerola S,M,L Red$209.25 $465.00 30 Kimono with brocade 2 ply, 100% cashmere Frost Grey M $166.50 $370.00 32 Shirt with silk fabric details 2 ply, 70% cotton 30% cashmere Frost Grey/Navy S,M,L blue $121.50 $270.00 32 Black S,M $78.75 $175.00 Piping pyjama shirt 100% crepe silk 35 Crew neck pullover with 2 ply, confetti 100%print cashmere Sailor Blue S,M $130.50 $290.00 35 Mini crew neck giant intarsia 2 ply, 100% spots cashmere pullover Latte Beige/Frost S,M,L Grey $155.25 $345.00 35 Diamond intarsia V neck 2 ply, pullover 100% cashmere Latte Beige S,M,L $157.50 $350.00 35 Openwork crew neck pullover 4 ply, 100% cashmere Dragonfly Green/Frost S,M,L Grey $157.50 $350.00 35 ply, 70% cashmere 30% Autumn silk white S,M,L $110.25 $245.00 Extrafine pink flamingo2 print t-shirt 58 Cables & Links Cashmere 76%Crew cashmere Neck Sweater 24% cotton ivory XS,S $180.00 $400.00 58 Broken Stripes V Neck 49% Sweater alpaca 27% linen 24% Bisque merino wool S,M $149.85 $333.00 8 Plain weave. Height: 54.6 Inches, 90% Modal, Length: 10% Cashmere 54.6 Inches maroon one $117.00 $260.00 6 Plain weave. Height: 58.5 90% Inches, Modal, Length: 10% Cashmere 58.5 steel Inches grey one $135.00 $300.00 5 Plain weave. Height: 58.5 Inches, 42% Cashmere, Length: 42% 58.5 Inches Modal, light green 16% Silk one $180.00 $400.00 5 Plain weave. Height: 54.6 Inches, 90% Modal, Length: 10% Cashmere 54.6 Inches purple one $157.50 $350.00 5 Plain weave. Height: 54.6 Inches, 42% Cashmere, Length: 42% 54.6 Inches Modal, Turquoise 16% Silk one $135.90 $302.00 10 Plain weave. Height: 54.6 Inches, 90% Modal, Length: 10% Cashmere 54.6 Inches Salmon pink one $117.00 $260.00 14 Color block scarf 100% cashmere Sweatshirt & Hemp one & Bankers $67.05Grey $149.00 40 Tweed Raglan Crew 100% cotton Blackberry & Cobalt XS Combo $79.20 $176.00 37 Sailor stripe split 100% cashmere Springtime & Navy XS,S,M $118.80 $264.00 37 Hombre Cardigan with100% Suedecashmere Elbow Patches Brown ComboXS,S $133.65 $297.00 37 Ombre Featherweight Hoodie 100% cashmere Fog/Navy XS,S,M $138.60 $308.00 34 Hi Lo Side Button Sweater 100% cashmere Pebble M $143.55 $319.00 10 Black & White landscape 100% cashmere cashmere voile scarf,Autumn 120x120white one $119.25 $265.00 58 M_Sleeveless cardigan. 100% 3 ply cashmere Navy blue S,M,L,XL $112.50 $250.00 20 M_Shawl collar jacket. 100% 8 ply cashmere Maple green S,M,L,XL $483.75 $1,075.00 10 M_All over ribs buttoned 100% jacket. cashmere 4 ply Wood pigeon beige/ S,M,L,XL Black/ $292.50 Fire red $650.00 70 M_ Sleeveless V neck pullover. 100% cashmere 2 ply Nautilus blue/Bourgogne S,M,L,XL $101.25 red/Wood pigeon $225.00 beige 55 M_Fitted V neck pullover 100% with cashmere leather elbow patches. Wood pigeon 2 ply beige/Blackcurrant S,M,L,XL $180.00 purple$400.00 32 Embroidered cardigan.100% 2 ply cashmere Charcoal grey S,M,L,XL $155.25 $345.00 32 3 mixed colour cardigan. 100% 8 plycashmere Torrent blue/Flannel S,M,L,XL grey$211.50 $470.00

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55%

Season FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL FALL 100

Class Vendor W_Cardigan Eric Bompard W_Crew neck Eric Bompard Eric Bompard W_Jacket W_V neck Eric Bompard M_Sweater INHABIT M_Sweater INHABIT M_Sweater INHABIT M_Sweater INHABIT A_Scarf Malo A_Scarf Malo A_Scarf Malo A_Scarf Malo A_Scarf Malo A_Scarf Malo A_Scarf Malo A_Stole Malo A_Stole Malo A_Stole Malo A_Stole Malo M_Bumper Malo M_Cardigan Malo M_Cardigan Malo M_hat Malo M_Turtleneck Malo M_Turtleneck Malo W_Cape Malo W_Cardigan Malo W_Dress Malo W_Jacket Malo W_Outwear Malo W_Outwear Malo W_Pant Malo Totals

SKU 142020503 142020506 142020507 142020517 141030601 141030602 141030603 141030604 142010701 142010702 142010703 142010704 142010705 142010706 142010707 142010708 142010709 142010710 142010711 142010712 142010713 142010714 142010715 142010716 142010717 142010718 142010719 142010720 142010721 142010722 142010723 142010724

IMU %

Projected SEASON Target Whls Target Retail unit sales Item Content Color Sizes 32 Sequined sweater. 2 ply70% cashmere 30% silkNew camel S,M,L,XL $141.75 $315.00 40 Flannel syrup pink$121.50 $270.00 Two-colour with moss 100% stitch cashmere crew neck pullover. 2 ply grey & S,M 32 Jacquard jacket with shawl 100% collar. cashmere 8 ply black S,M,L $315.00 $700.00 35 Maxi V neck pullover. 2100% ply cashmere Sailing blue/Pepper S,M,Lbrown/Cotto $150.75 tiles red $335.00 100% cashmere 58 M_Cashmere crew neck Quill S,M,L $170.10 $378.00 100% cashmere 40 M_Tipped cashmere v-cardigan Earth/Vapor S,M,L $180.00 $400.00 65 % alpaca, 35 % linen. 40 M_Alpaca/linen crew Titanium M,L $129.60 $288.00 100% cashmere 40 M_tipped cashmere v-neck Black M,L $135.00 $300.00 15 cloud scarf 100% cashmere platinum/brown one $39.15 $87.00 10 M_Wool blend scarf with 51%mixed wool stitch 49% cashmere pattern,slate&gray/cream crafted on a mechanical one $101.25 loom $225.00 10 M_Wool blend scarf, 35cmx180cm, 52% wool 48% check cashmere stitch, multicolor crafted on a one mechanical $101.25 loom $225.00 M_Wool blend scarf with 51%two wool tone 49% herringbone cashmere maple pattern, / iron 32cm / blue one x170cm. $101.25 Crafted on mechanical $225.00 loom 10 M_Scarf with a maxi-herringbone pattern 100% brown cashmere, 30cmx60cm, one $216.00 crafted on a mechanical $480.00 loom3 12 M_Wool blend scarf, chevron 100% cashmere pattern, 35 cm xcream 170 cm, crafted one on mechanical $69.75 loom $155.00 3 M_Scarf 100% cashmere 100% withcashmere selvage edges, 38cm orange x 180cm crafted one on a $119.25 mechanical loom $265.00 4 Light stole with needling 100% fringes. cashmere Produced onbeige a mechanical loom. one $238.50 $530.00 3 two-tone light stole. Produced 100% cashmere on a mechanicaldark loom. grey one $252.00 $560.00 10 Striped stole in wool blend, 47% bouclé-effect wool 32% silkyarn, 21%purple+blue+plum 50 polyamide cm x 200 cm, oneProduced $72.00 on a mechanical $160.00 loom 4 Iridescent light wrap 100% cashmere one $168.75 $375.00 20 M_Wool blend bomber70% jacket virgin withwool 8 mother 30% cashmere ofbrown pearl buttons.M,L Herringbone $274.50 knit in relief, $610.00 1 ply. 20 M_Alpaca blend cardigan, 48%long alpaca inset 32% sleeves, virgin1wool light ply fully brown 20%fashioned cashmere XS,S,M,L,XL knit $317.25 $705.00 20 M_100% cashmere cardigan 100% with cashmere 2 pockets, 6 buttons, light brown 1ply M $495.00 $1,100.00 30 M_Cap 100% cashmere100% 2/28:cashmere 14 meters of thisgrey/black material only weigh M,L 1 gram. $96.75 1 ply $215.00 20long sleeves,1 ply, loom M_Sheared basic turtleneck 100%100% cashmere cashmere 2/28: black/navy/grey/beige 14 meters ofM,L,XXL this material $247.50 only weigh$550.00 1 gram. Zipper, 10 M_Aran turtleneck 100% 100% cashmere, cashmere 1 ply fullygrey fashioned knitM $337.50 $750.00 30 Cape with fur stitch in mohair. 100% cashmere 4 ply. black S,M $310.50 $690.00 25 "S-shaped" cardigan pearled 100%stitch cashmere black/white/navy S,M $393.75 $875.00 30 1 ply on a loom. Shirt-waister dress with100% long cashmere sleeves 100% cashmere black/ivory/purple 2/28: 14 XS meters of this $310.50 type of yarn$690.00 weigh just 1 gram. 25 "New Fancy Coast" special 100% shape cashmere sleeveless jacket snow 100% cashmere. M,L 1 ply $443.25 pearled stitch. $985.00 25 minimal shawl jacket in90% cashmere cashmere blend. 10%1 polyamide ply.alabaster S,M,L $427.50 $950.00 5 stole cardigan with cables, 100% Furcashmere collar. 4 ply. clam M,L $675.00 $1,500.00 20 loose trousers in wool blend 94% virgin wool 5% cashmere grey/anthraciteS,M,L 1% elastam $220.50 $490.00 $17,524.80

$38,944.00

$2,497.00

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13.4 MONTHLY SALES Monthly sales curve Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Total

20%

16%

15%

16%

17%

100%

12%

13%

22%

21%

20%

12%

100%

August, November, December, and January are the biggest sales months of Josephine. This boutique will open in August, 2014, which is a good time to start the business. Secondly, according to Table 2 from Google Trend, the searching peak-period for cashmere sweater is from November to January. Those three months are shoppers’ big event because of holidays, such as Thanksgiving, Christmas, and New Year. Therefore, we will strive for high sales. In addition, due to the weather condition, the lowest temperature of San Francisco are December and January. People will prefer to purchase sweaters more than other months.

Table2: Google Search Interest: Cashmere Sweater. United States, 2012 http://www.google.com/trends/explore#cat=0-18-68&geo=US&q=cash mere+sweater&date=1/2012+12m&cmpt=q Table1: Monthly Average Weather for San Francisco http://www.weather.com/weather/wxclimatology/monthly/graph/USCA0987

101

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13.5 SALES AND INVENTORY BY MONTH year one GM% IMU% year 2 growth year 3 growth

50.4% 55.0% 10.0% 12.0%

shrink %

0.00%

Jul-Yr0

Aug-Yr1

BOM

$215,543

Net Sales COGS GM$ GM%

MD$ MD% Purchases -Retail Purchases -Cost

$285,905

Nov-Yr1

Dec-Yr1

$321,643

$270,588

Jan-Yr1 $233,700

Feb-Yr1

Mar-Yr1

Apr-Yr1

May-Yr1

Jun-Yr1

Jul-Yr1

Q1-Yr1

Q2-Yr1

Q3-Yr1

Q4-Yr1

Yr1 Total

$197,521

$206,581

$215,372

$241,744

$238,810

$215,543

$321,643

$197,521

$215,372

$87,907 39,558 $ $48,349 55.0%

$61,265 29,224 $ $32,042 52.3%

$66,371 32,854 $ $33,517 50.5%

$112,320 60,653 $ $51,667 46.0%

$107,214 55,483 $ $51,731 48.3%

$102,108.8 52,841 $ $49,267 48.3%

$61,265.3 29,775 $ $31,490 51.4%

$70,325.4 33,545 $ $36,780 52.3%

$65,930.1 30,262 $ $35,668 54.1%

$70,325.4 34,811 $ $35,514 50.5%

$74,720.8 36,987 $37,734 50.5%

$215,543 $101,635 $113,908 52.8%

$321,643 $168,977 $152,665 47.5%

$197,521 $93,582 $103,939 52.6%

$215,372 $106,609 $108,763 50.5%

$950,078 $470,803 $479,275 50.4%

0 $ 0.0%

3,676 $ 6.0%

6,637 $ 10.0%

22,464 $ 20.0%

16,082 $ 15.0%

15,316 $ 15.0%

4,901 $ 8.0%

4,220 $ 6.0%

1,319 $ 2.0%

7,033 $ 10.0%

7,472 10.0%

$10,313 4.8%

$53,862 16.7%

$10,439 5.3%

$21,537 10.0%

$96,152 10.1%

$81,974 $41,070

$551,809 $274,015

$257,816 $126,744

$229,761 $114,523

$262,942 $127,886

$1,302,329 $643,168 $19,002

$1,758

$1,225

$1,327

$2,246

$2,144

$2,042

$1,225

$1,407

$1,319

$1,407

$1,494

$4,311

$6,433

$3,950

$4,307

$215,543

$239,956

$285,905

$321,643

$270,588

$233,700

$197,521

$206,581

$215,372

$241,744

$238,810

$237,097

$321,643

$197,521

$215,372

$237,097

$227,749 2.5

$262,930 3.9

$303,774 4.3

$296,116 2.9

$252,144 2.5

$215,610 2.3

$202,051 3.2

$206,581 2.9

$210,976 3.1

$228,558 3.1

$240,277 3.4

$237,954 3.2

$265,761

$255,863

$206,514

$233,256

$237,435

0.8

1.3

1.0

0.9

4.00

Aug-Yr2 BOM

MD$ MD%

$239,956

Oct-Yr1

$114,078 $61,620

Avg Stk Stk:Sls Turn

Net Sales COGS GM$ GM%

Sep-Yr1

$215,543 $96,994

Shrinkage EOM

2.0%

$237,097 $

Purchases -Retail Purchases -Cost

Sep-Yr2 $202,175

$110,073 $57,222

Oct-Yr2 $255,527

$85,976 $43,366

Nov-Yr2

$88,552 $43,570

Dec-Yr2

$83,289 $39,809

Jan-Yr2

$297,647

$263,951

$218,390

$76,452 $38,181

Feb-Yr2 $181,011

$75,951 $37,905

Mar-Yr2 $188,560

$77,358 $38,437

Apr-Yr2 $188,560

$105,137 $50,331

May-Yr2 $195,812

$75,831 $36,484

Jun-Yr2 $212,734

Jul-Yr2

Q1-Yr2

Q2-Yr2

Q3-Yr2

Q4-Yr2

Yr2 Total

$225,626

$237,097

$297,647

$181,011

$195,812

$96,697 45,690 $ $51,008 52.8%

$67,392 31,843 $ $35,549 52.8%

$73,008 36,139 $ $36,869 50.5%

$123,552 66,718 $ $56,834 46.0%

$117,936 61,032 $ $56,904 48.3%

$112,320 58,125 $ $54,194 48.3%

$67,392 33,359 $ $34,033 50.5%

$77,358 36,900 $ $40,458 52.3%

$72,523 34,594 $ $37,930 52.3%

$77,358 38,292 $ $39,066 50.5%

$82,193 40,685 $41,507 50.5%

$237,097 $113,671 $123,426 52.1%

$353,807 $185,875 $167,932 47.5%

$217,273 $104,852 $112,421 51.7%

$236,909 $117,270 $119,639 50.5%

$1,045,086 $521,668 $523,418 50.1%

4,835 $ 5.0%

3,370 $ 5.0%

7,301 $ 10.0%

24,710 $ 20.0%

17,690 $ 15.0%

16,848 $ 15.0%

6,739 $ 10.0%

4,641 $ 6.0%

4,351 $ 6.0%

7,736 $ 10.0%

8,219 10.0%

$15,505 6.5%

$59,249 16.7%

$15,732 7.2%

$23,691 10.0%

$114,177 10.9%

$87,083 $47,896

$317,894 $174,842

$303,496 $166,923

$252,151 $138,683

$290,178 $159,598

$1,163,720 $640,046 $20,902

$68,545 $37,700

Shrinkage

$112,115 $58,179

$125,461 $69,004

$123,889 $68,139

$117,037 $64,370

$92,424 $50,833

$94,035 $51,719

$83,028 $45,665

$83,547 $45,951

$85,577 $47,067

$103,563 $56,960

$99,532 $54,743

$1,934

$1,348

$1,460

$2,471

$2,359

$2,246

$1,348

$1,547

$1,450

$1,547

$1,644

$4,742

$7,076

$4,345

$4,738

EOM

$202,175

$255,527

$297,647

$263,951

$218,390

$181,011

$188,560

$195,812

$212,734

$225,626

$220,653

$297,647

$181,011

$195,812

$220,653

Avg Stk Stk:Sls Turn

$219,636 2.5

$228,851 3.0

$276,587 3.5

$280,799 2.4

$241,171 2.2

$199,701 1.9

$184,786 2.7

$188,560 2.4

$192,186 2.6

$204,273 2.5

$219,180 2.8

$223,139 2.7

$248,112

$240,250

$188,486

$213,706

1.0

1.5

1.2

1.1

Aug-Yr3 BOM Net Sales COGS GM$ GM% MD$ MD% Purchases -Retail Purchases -Cost Shrinkage

$220,653 $

Sep-Yr3

Dec-Yr3

Jan-Yr3

Feb-Yr3

Q1-Yr3

Q2-Yr3

Q3-Yr3

Q4-Yr3

4.62 Yr3 Total

$197,683

$196,779

$220,653

$265,636

$159,225

$170,188

$129,729 67,135 $ $62,594 48.3%

$123,552 63,938 $ $59,614 48.3%

$74,131 36,695 $ $37,436 50.5%

$85,094 40,590 $ $44,504 52.3%

$79,775 38,053 $ $41,723 52.3%

$85,094 42,121 $ $42,972 50.5%

$90,412 44,754 $45,658 50.5%

$260,807 $125,038 $135,769 52.1%

$389,188 $204,463 $184,725 47.5%

$239,000 $115,337 $123,663 51.7%

$260,600 $128,997 $131,603 50.5%

$1,149,594 $573,835 $575,759 50.1%

5,318 $ 5.0%

3,707 $ 5.0%

8,031 $ 10.0%

27,181 $ 20.0%

19,459 $ 15.0%

18,533 $ 15.0%

7,413 $ 10.0%

5,106 $ 6.0%

4,787 $ 6.0%

8,509 $ 10.0%

9,041 10.0%

$17,056 6.5%

$65,173 16.7%

$17,305 7.2%

$26,060 10.0%

$125,594 10.9%

$84,980 $46,739

$328,062 $180,434

$355,734 $195,654

$272,048 $149,627

$302,182 $166,200

$1,258,026 $691,915 $22,992

$88,671 $48,769

$91,901 $50,546

$91,476 $50,312

$100,623 $55,343

$175,506

Jul-Yr3

$253,281

$106,098 $58,354

$170,188

Jun-Yr3

$135,907 73,390 $ $62,517 46.0%

$96,185 $52,902

$164,869

May-Yr3

$265,636

$153,451 $84,398

$164,869

Apr-Yr3

$80,309 39,753 $ $40,556 50.5%

$139,366 $76,651

$159,225

Mar-Yr3

$74,131 35,027 $ $39,104 52.8%

$141,096 $77,603

$216,215

Nov-Yr3

$106,367 50,259 $ $56,109 52.8%

$47,600 $26,180

$154,440

Oct-Yr3

$226,444

$116,578 $64,118

$2,127

$1,483

$1,606

$2,718

$2,595

$2,471

$1,483

$1,702

$1,596

$1,702

$1,808

$5,216

$7,784

$4,780

$5,212

EOM

$154,440

$216,215

$265,636

$253,281

$197,683

$159,225

$164,869

$170,188

$175,506

$196,779

$180,498

$265,636

$159,225

$170,188

$180,498

Avg Stk Stk:Sls Turn

$187,546 2.1

$185,327 2.1

$240,926 2.7

$259,458 2.0

$225,482 2.0

$178,454 1.6

$162,047 2.1

$164,869 1.9

$167,528 2.1

$172,847 2.0

$186,143 2.1

$188,639 2.2

$214,236

$218,956

$164,788

$180,743

$199,240

1.2

1.8

1.5

1.4

5.77

102

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13.6 SALES QUARTER YEAR 1-3

Yr1 Total

Year 1

Year 2

Year 3

BOM

$215,543

$237,097

$220,653

Sales Purchases

$950,078 $1,302,329

$1,045,086 $1,163,720

$1,149,594 $1,258,026

EOM

$237,097

$220,653

$180,498

Avg Inv Turn

$237,435 4.00

$226,444 4.62

$199,240 5.77

Q1-Yr2

Q2-Yr2

Q3-Yr2

Q4-Yr2

$237,097

$297,647

$181,011

$195,812

Q1-Yr1

Q2-Yr1

Q3-Yr1

Q4-Yr1

BOM Inventory

$215,543

$321,643

$197,521

$215,372

Total Net Sales COGS GM$ GM%

$215,543 $101,635 $113,908 52.8%

$321,643 $168,977 $152,665 47.5%

$197,521 $93,582 $103,939 52.6%

$215,372 $106,609 $108,763 50.5%

$950,078 $470,803 $479,275 50.4%

$237,097 $113,671 $123,426 52.1%

$353,807 $185,875 $167,932 47.5%

$217,273 $104,852 $112,421 51.7%

$236,909 $117,270 $119,639 50.5%

Purchases -Retail Purchases -Cost

$551,809 $274,015

$257,816 $126,744

$229,761 $114,523

$262,942 $127,886

$1,302,329 $643,168

$317,894 $174,842

$303,496 $166,923

$252,151 $138,683

$290,178 $159,598

EOM Inventory

$321,643

$197,521

$215,372

$237,097

$297,647

$181,011

$195,812

$220,653

BOM/Avg Inventory

$265,761

$255,863

$206,514

$233,256

$237,435

$248,112

$240,250

$188,486

$213,706

Turn

0.81

1.26

0.96

0.92

4.00

0.96

1.47

1.15

1.11

Yr2 Total

Q1-Yr3

Q2-Yr3

Q3-Yr3

Q4-Yr3

Yr3 Total

$220,653

$265,636

$159,225

$170,188

$1,045,086 $521,668 $523,418 50.1%

$260,807 $125,038 $135,769 52.1%

$389,188 $204,463 $184,725 47.5%

$239,000 $115,337 $123,663 51.7%

$260,600 $128,997 $131,603 50.5%

$1,149,594 $573,835 $575,759 50.1%

$1,163,720 $640,046

$328,062 $180,434

$355,734 $195,654

$272,048 $149,627

$302,182 $166,200

$1,258,026 $691,915

$265,636

$159,225

$170,188

$180,498

$226,444

$214,236

$218,956

$164,788

$180,743

$199,240

4.62

1.22

1.78

1.45

1.44

5.77

103

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13.7 PROFIT & LOSS

Net Sales COGS Merchandise GM$

Aug-Yr1 $87,907 $39,558 $48,349

Sep-Yr1 $61,265 $29,224 $32,042

Oct-Yr1 $66,371 $32,854 $33,517

Nov-Yr1 $112,320 $60,653 $51,667

Dec-Yr1 $107,214 $55,483 $51,731

Jan-Yr1 $102,109 $52,841 $49,267

Feb-Yr1 $61,265 $29,775 $31,490

Mar-Yr1 $70,325 $33,545 $36,780

Apr-Yr1 $65,930 $30,262 $35,668

May-Yr1 $70,325 $34,811 $35,514

Jun-Yr1 $70,325 $34,811 $35,514

Jul-Yr1 $74,721 $36,987 $37,734

Yr1 Total $950,078 $470,803 $479,275

Research & Development

$520

$5,020

$520

$5,020

$520

$15,240

1.6%

Merch. GM w/ R&D

$47,829

$27,022

$32,997

$51,147

$51,211

$48,747

$26,470

$36,260

$35,148

$34,994

$37,214

$464,035

48.8%

Wages Commissions Rent 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

$10,251 $4,835 $6,728 $9,295 $0 $687 $200 $800 $100 $222 $916 $100 $90 $60 $100 $2,637 $967 $37,987

$10,251 $3,204 $6,728 $6,545 $2,500 $687 $200 $800 $100 $218 $916 $100 $90 $60 $100 $1,838 $674 $35,010

$10,251 $3,352 $6,728 $9,545 $0 $687 $200 $800 $100 $214 $916 $100 $90 $60 $100 $1,991 $730 $35,863

$10,251 $5,167 $6,728 $6,545 $0 $687 $200 $800 $100 $210 $916 $100 $90 $60 $100 $3,370 $1,236 $36,559

$10,251 $5,173 $6,728 $8,545 $0 $687 $200 $800 $100 $207 $916 $100 $90 $60 $100 $3,216 $1,179 $38,352

$10,251 $4,927 $6,728 $1,120 $0 $687 $200 $800 $100 $203 $916 $100 $90 $60 $100 $3,063 $1,123 $30,468

$10,251 $3,149 $6,728 $3,220 $3,500 $687 $200 $800 $100 $199 $916 $100 $90 $60 $100 $1,838 $674 $32,612

$10,251 $3,678 $6,728 $3,120 $0 $687 $200 $800 $100 $196 $916 $100 $90 $60 $100 $2,110 $774 $29,908

$10,251 $3,567 $6,728 $1,120 $0 $687 $200 $800 $100 $192 $916 $100 $90 $60 $100 $1,978 $725 $27,613

$10,251 $3,551 $6,728 $1,120 $0 $687 $200 $800 $100 $188 $916 $100 $90 $60 $100 $2,110 $774 $27,774

$10,251 $3,551 $6,728 $3,120 $0 $687 $200 $800 $100 $185 $916 $100 $90 $60 $100 $2,110 $774 $29,771

$10,251 $3,773 $6,728 $3,120 $0 $687 $200 $800 $100 $181 $916 $100 $90 $60 $100 $2,242 $822 $30,169

$123,012 $47,927 $80,733 $56,415 $6,000 $8,244 $2,400 $9,600 $1,200 $2,414 $10,988 $1,200 $1,080 $720 $1,200 $28,502 $10,451 $392,087

12.9% 5.0% 8.5% 5.9% 0.6% 0.9% 0.3% 1.0% 0.1% 0.3% 1.2% 0.1% 0.1% 0.1% 0.1% 3.0% 1.1% 41.3%

Profit/Loss

$9,842

-$7,989

-$2,866

$14,588

$12,859

$18,280

-$6,141

$6,352

$7,535

$7,220

$5,224

$7,045

$71,948

7.6%

Credit Card Trans Fee rate

Fixed Expenses Variable Expenses Total Expenses Operating Margin %

$19,871 $17,149 $37,020 23.4%

$19,871 $11,965 $31,836 0.6%

$19,871 $15,262 $35,133 -4.8%

$19,871 $15,452 $35,323 31.6%

$19,871 $17,301 $37,173 28.1%

$19,871 $9,473 $29,344 40.4%

$19,871 $8,566 $28,438 9.7%

$19,871 $9,263 $29,135 20.8%

$19,871 $7,017 $26,888 24.6%

$19,871 $7,129 $27,001 24.0%

$19,871 $9,126 $28,997 18.4%

$19,871 $9,476 $29,347 22.2%

$238,457 $137,179 $375,636 60.5%

25.1% 14.4% 39.5%

BreakEven$ Volume BreakEven Sales per day BreakEven Sales per hour

$157,994 $5,266 $658

$4,966,805 $165,560 $20,695

-$728,622 -$24,287 -$3,036

$111,665 $3,722 $465

$132,089 $4,403 $550

$72,566 $2,419 $302

$293,362 $9,779 $1,222

$140,162 $4,672 $584

$109,230 $3,641 $455

$112,636 $3,755 $469

$158,016 $5,267 $658

$132,042 $4,401 $550

$5,657,945 $188,598 $23,575

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%/Sls 100.0% 49.6% 50.4%

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Research & Development: Josephine will subscribe to magazines/ newspapers from major fashion and SF local publications. Moreover, there is a $400$500 monthly budget for Josephine in purchasing sample from suppliers. In order to have a business back up plan, Josephine will attend trade shows for sourcing new suppliers. In September, the owner will visit the International Trade Fair for the Cashmere Industry in China. In February, the owner will visit suppliers’ showrooms in Europe. Wages: In July, 2014, before the store open, Josephine will provide a week sales training for employees. They will get familiar about this boutique business strategy and personal selling strategy. Josephine will pay $800/each for the training period. According to the data in SF from Simply Hired.com, the average retail sales associate salary is $41,000. And so, Josephine will offer the average wages, $3417 per month, for employees. In addition to salary, Josephine will offer 10% commission and 25% employee discount for them.

10% C OM M I S SIO N 25% E M P L OY E E D I S C OU N T

Accounting: According to the rate from Thumbtack.com, the average price for an accountant is $50 per hour. Josephine will hire an outside accountant through Thumbtack, he/she will work four hours once a week, which is $800 per month. Insurance: Josephine will offer employees for the basic health insurance.

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13.8 MARKETING EXPENSES Events: Josephine will hold 6 fashion events in 2014: August: Grand Opening event October: An exhibition of knitting cashmere December: Pre Celebrating Christmas March: “Out with the old in with the new” June: Celebrate Empress Josephine Birthday July: Winter in July of San Francisco Magazine Print ADS (7x7): Josephine will place full page print section for 6 months in 7x7. This activity costs Josephine $32,550 in total PR: Josephine will hire John Maloney in managing public relations, this include press release, email marketing, social media, and events. Production Costs: Josephine will hire a fashion photographer and models for spring and autumn catalogues.

Events Magazine Print ADS (7X7) PR: John Maloney Catalogs printing x300 Production Costs Total

106

Jul $5,425 $1,250 $

$2,100 8,775 $

Aug $2,500 $5,425 $1,250 $120 9,295 $

Sep $5,425 $1,000 $120 6,545 $

Oct $3,000 $5,425 $1,000 $120 9,545 $

Nov $5,425 $1,000 $120 6,545 $

Dec $2,000 $5,425 $1,000 $120

Jan

Feb

Mar $2,000

Apr

May

Jun $2,000

Jul $2,000

$ $ $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $ $120 $120 $120 $120 $120 $120 $120 $ $2,100 $ 8,545 $ 1,120 $ 3,220 $ 3,120 $ 1,120 $ 1,120 $ 3,120 $ 3,120 $

Total 13,500 32,550 13,500 1,440 4,200 65,190

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13.9 CASH FLOW FORECAST Aug - Yr 1 $246,113

Sep - Yr 1

Oct - Yr 1

Nov - Yr 1

Dec - Yr 1

Jan - Yr 1

Jan - Yr 0

Feb - Yr 1

Mar - Yr 1

$9,842

-$7,989

-$2,866

$14,588

$12,859

$18,280

-$6,141

$6,352

$10,986

$20,677

$16,082

-$22,974

-$16,600

-$16,280

$4,077

Less: Shrink and MDs (cost)

$967

$2,696

$4,380

$13,591

$10,025

$9,547

$3,370

$3,094

Plus: Depreciation Expense

$916

$1,231

Startup Loan/Personal $$ Less: Start-up Capital Expenditures

$55,940

Equals: Available Start-up $$

$190,173

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

$96,994

Less: Principal Payments Equals: Monthly Working Cash

-$96,994

-$2,426

-$31,676

-$23,644

$23,657

$19,119

$24,698

-$13,903

$2,943

Equals: Monthly Net Cash

$93,179

-$2,426

-$31,676

-$23,644

$23,657

$19,119

$24,698

-$13,903

$2,943

Cumulative Net Cash

$93,179

$90,753

$59,077

$35,433

$59,091

$78,210

$102,908

$89,005

$91,948

Oct - Yr 1

Nov - Yr 1

Dec - Yr 1

Jan - Yr 1

Jan - Yr 0

Feb - Yr 1

Mar - Yr 1

Apr - Yr 1

May - Yr 1

Jun - Yr 1

Jul - Yr 1

Yr 1

-$7,989

-$2,866

$14,588

$12,859

$18,280

-$6,141

$6,352

$7,535

$7,220

$5,224

$7,045

$71,948

$20,677

$16,082

-$22,974

-$16,600

-$16,280

$4,077

$3,956

$11,867

-$1,320

-$771

$106,694

$2,696

$4,380

$13,591

$10,025

$9,547

$3,370

$3,094

$1,450

$4,641

$4,932

$63,334

$916

$10,988

$1,231

$14,767

-$31,676

-$23,644

$23,657

$19,119

$24,698

-$13,903

$2,943

$1,814

-$9,604

$1,587

$2,569

-$101,859

-$31,676

-$23,644

$23,657

$19,119

$24,698

-$13,903

$2,943

$1,814

-$9,604

$1,587

$2,569

$88,314

$59,077

$35,433

$59,091

$78,210

$102,908

$89,005

$91,948

$93,761

$84,157

$85,745

$88,314

107

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13.10 LOAN PAYMENT Month

Balance of Loan

Principal

$73,833.98

$1,231

Total Payment Due 222 $ 1,452

$72,603.41

$1,231

218 $

1,448

$71,372.85

$1,231

214 $

1,445

$70,142.28

$1,231

210 $

1,441

$68,911.71

$1,231

207 $

1,437

$67,681.15

$1,231

203 $

1,434

$66,450.58

$1,231

199 $

1,430

$65,220.01

$1,231

196 $

1,426

$63,989.45

$1,231

192 $

1,423

$62,758.88

$1,231

188 $

1,419

$61,528.32

$1,231

185 $

1,415

$60,297.75

$1,231

181 $

1,411

$59,067.18

$1,231

177 $

1,408

$57,836.62

$1,231

174 $

1,404

$56,606.05

$1,231

170 $

1,400

$55,375.48

$1,231

166 $

1,397

$54,144.92

$1,231

162 $

1,393

$52,914.35

$1,231

159 $

1,389

$51,683.78

$1,231

155 $

1,386

$50,453.22

$1,231

151 $

1,382

$49,222.65

$1,231

148 $

1,378

$47,992.09

$1,231

144 $

1,375

$46,761.52

$1,231

140 $

1,371

$45,530.95

$1,231

137 $

1,367

$44,300.39

$1,231

133 $

1,363

$43,069.82

$1,231

129 $

1,360

$41,839.25

$1,231

126 $

1,356

$40,608.69

$1,231

122 $

1,352

$39,378.12

$1,231

118 $

1,349

$38,147.56

$1,231

114 $

1,345

$36,916.99

$1,231

111 $

1,341

$35,686.42

$1,231

107 $

1,338

$34,455.86

$1,231

103 $

1,334

$33,225.29

$1,231

100 $

1,330

$31,994.72

$1,231

96 $

1,327

$30,764.16

$1,231

92 $

1,323

$29,533.59

$1,231

89 $

1,319

$28,303.02

$1,231

85 $

1,315

$27,072.46

$1,231

81 $

1,312

$25,841.89

$1,231

78 $

1,308

$24,611.33

$1,231

74 $

1,304

$23,380.76

$1,231

70 $

1,301

$22,150.19

$1,231

66 $

1,297

Interest

$63,989.45

$1,231

192 $

1,423

$62,758.88

$1,231

188 $

1,419

$61,528.32

$1,231

185 $

1,415

$60,297.75

$1,231

181 $

1,411

$59,067.18

$1,231

177 $

1,408

$57,836.62

$1,231

174 $

1,404

$56,606.05

$1,231

170 $

1,400

$55,375.48

$1,231

166 $

1,397

$54,144.92

$1,231

162 $

1,393

$52,914.35

$1,231

159 $

1,389

$51,683.78 3.60% $50,453.22

$1,231

155 $

1,386

$1,231

151 $

1,382

$49,222.65

$1,231

148 $

1,378

$47,992.09

$1,231

144 $

1,375

$46,761.52

$1,231

140 $

1,371

$45,530.95

$1,231

137 $

1,367

$44,300.39

$1,231

133 $

1,363

$43,069.82

$1,231

129 $

1,360

$41,839.25

$1,231

126 $

1,356

$40,608.69

$1,231

122 $

1,352

$39,378.12

$1,231

118 $

1,349

$38,147.56

$1,231

114 $

1,345

$36,916.99

$1,231

111 $

1,341

$35,686.42

$1,231

107 $

1,338

$34,455.86

$1,231

103 $

1,334

$33,225.29

$1,231

100 $

1,330

$31,994.72

$1,231

96 $

1,327

$30,764.16

$1,231

92 $

1,323

$29,533.59

$1,231

89 $

1,319

$28,303.02

$1,231

85 $

1,315

$27,072.46

$1,231

81 $

1,312

$25,841.89

$1,231

78 $

1,308

$24,611.33

$1,231

74 $

1,304

$23,380.76

$1,231

70 $

1,301

$22,150.19

$1,231

66 $

1,297

$20,919.63

$1,231

63 $

1,293

$19,689.06

$1,231

59 $

1,290

$18,458.49

$1,231

55 $

1,286

$17,227.93

$1,231

52 $

1,282

$15,997.36

$1,231

48 $

1,279

$14,766.80

$1,231

44 $

1,275

$13,536.23

$1,231

41 $

1,271

$12,305.66

$1,231

37 $

1,267

$11,075.10

$1,231

33 $

1,264

$9,844.53

$1,231

30 $

1,260

$8,613.96

$1,231

26 $

1,256

$7,383.40

$1,231

22 $

1,253

$6,152.83

$1,231

18 $

1,249

$4,922.27

$1,231

15 $

1,245

$3,691.70

$1,231

11 $

1,242

$2,461.13

$1,231

7 $

1,238

$1,230.57

$1,231

0 $

19 Interest20 Rate

109

110

1 4 . 0 A P P E N DI X 1 4 . 1 R E F E R E N C E : WA L L P L A N S - - I N SP I R AT IO N 1 4 . 2 C A SH M E R E A P PA R E L SU RV EY QU E ST IO N 1 4 . 3 I R B PA P E R WO R K 1 4 . 3 . 1 A P P L IC AT IO N M E M O 1 4 . 3 . 2 C OV E R L E T T E R 1 4 . 3 . 3 C O N SE N T F O R M 1 4 . 4 AU T O B IO G R A P H Y 1 4 . 5 R E SUM E 14.6 TIMELINE

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14.1 REFERENCE : FLOOR PLAN -- INSPIRATIONS 1. http://www.schoener-wohnen.de/designer-lexikon/131091-hochacht.html 2. http://www.ohcomely.co.uk/blog/354 3. http://www.dailyicon.net/2011/05/game-of-trust-by-yiannis-ghikas/ 4. http://emmas.blogg.se/2011/april/nicely-styled-studio-flat-for-sale.html 5. http://www.thefancy.com/things/297045517/Triple-Level-Industrial-Garment-Rack 6. http://www.pinchdesign.com/iona.htm 7. http://www.ciscohome.net/lighting/bird-cage-lamp 8. http://www.rollandhill.com/products/Excel-Floor-Lamp.html 9. https://www.onekingslane.com/product/15733/911332 10. http://www.apartmenttherapy.com/diy-vintage-tennis-racket-mirr-111250 11. http://www.apartmenttherapy.com/sandy-nicks-seems-huge-small-cool-contest-169503 12. http://www.austenhill.com/2013/02/its-friday-love.html 13. http://www.zinhome.com/products/Franklin-Low-Bookshelf.html 14. https://www.onekingslane.com/product/14827/929486 15. http://novh.us/post/4910811624/via-you-have-broken-the-internet-handmade-coat 16. http://jakephipps.com/ 17. http://www.nightwoodny.com/ 18. http://onsmartpages.com/storefixturesusa/headlessmannequins/ 19. http://www.swirlmarketing.com/blog/retaildetails/2010/07/11/fabulous-fitting-rooms-andsummer-store-display-ideas/ 20. https://www.onekingslane.com/product/16296/902858 21. http://www.kathykuohome.com/Product/Detail/1972-Hatcher-Modern-Rustic-ReclaimedWood-Polished-Silver-Bookshelf 22. http://www.rupertblanchard.com/ 23. http://www.nightwoodny.com/

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14.2 CASHMERE APPAREL SURVEY QUESTION *This survey is based on opening a cashmere boutique in San Francisco. This questionnaire is conducted by the Fashion Merchandising student of Academy of Art University. This questionnaire is intended for educational purposes only. * Required 1. What is your gender? * [] Male [] Female 2. What is your age range? * [] 20-24 [] 25-29 [] 30-34 [] 35-39 [] 40-44 [] 45-49 [] 50-54 [] 55-60 [] Over 60 3. What is your marital status? * [] Single [] In a relationship [] Married 4. What is your highest degree? * [] Did not complete high school [] High school [] Bachelor degree [] Master degree [] Ph.D 5. What field is your occupation in? * [] Art

[] Banking [] Education [] Engineering [] Entertainment [] Fashion [] Finance [] Housemaker [] Law [] Medical [] Retail [] Service [] Student [] Technology [] Other____________ 6. How long have you worked in your field? * [] less than 5 months [] 6 months or more [] 1-4 years [] 5-9 years [] 10-19 years [] 20 years or more 7. What is your annual income? * [] Less than $14,999 [] $15,000-$24,999 [] $25,000-$34,999 [] $35,000-$49,999 [] $50,000-$74,999 [] $75,000-$99,999 [] $100,000-$124,999 [] $125,000-$149,999 [] $150,000-$199,999 [] $200,000 and over 113

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8. Are you currently a resident of San Francisco? * [] Yes. ((Please move to question 9)) [] No. I live in the San Francisco Bay Area. (Please move to question 10) [] No. I am a visitor from another city in the US. (Please move to question 10) [] No. I am a visitor from another country. (Please move to question 10) 9. In which neighborhood do you live in San Francisco? [] Bayview [] Castro, Noe Valley [] Chinatown [] Embarcadero (south) [] Embarcadero, Barbary Coast [] Financial District [] Haight Ashbury & Cole Valley [] Hayes Valley, Tenderloin, North of Market [] Ingelside-Excelsior [] Inner Richmond [] Inner Sunset [] Lake Merced [] Marina, Cow Hollow [] Mission, Bernal Heights [] Nob Hill, Russian Hill [] North Beach, Fisherman’s Wharf [] Outer Richmond [] Outer Sunset [] Pacific Heights, Western Addition, Japantown [] Potrero Hill [] Presidio [] South of Market [] St. Francis Wood, West Portal [] Twin Peaks, Glen Park [] Visitacion Valley 114

10. Where do you most prefer to shop for clothing? * [] Boutique [] Department store [] Discount retailer [] Online website [] Specific retailer [] TV home shopping 11. What is your primary concern in purchasing clothing? * Please check your top 3 choices [] Brands [] Design [] Manufacturing country [] Material [] Practical function [] Price [] Quality [] Trend 12. When did your last shop for knitwear? * [] Last week [] Last month [] Three months ago [] Six months ago [] Last year [] Never 13. Would you buy a brand of clothing that you have never heard about before? * Less interested 1 2 3 4 5 Most interested 14. Are you interested in purchasing clothing made from cashmere? * Less interested 1 2 3 4 5 Most interested

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15. Do you think cashmere is a luxury animal fiber? * Less agree 1 2 3 4 5 Strongly agree 16. How much are you willing to spend on cashmere knitwear at most? * [] Less than $99 [] $100-$199 [] $200-$299 [] $300-$399 [] $400-$499 [] $500-$599 [] $600-$699 [] $700-$799 [] $800-$899 [] $900-$999 [] over $1,000 17. Have you ever bought cashmere knitwear? * [] Yes [] No (Please move to question 21) 18. If yes. What is the highest price you have paid for cashmere knitwear? [] Less than $99 [] $100-$199 [] $200-$299 [] $300-$399 [] $400-$499 [] $500-$599 [] $600-$699 [] $700-$799 [] $800-$899 [] $900-$999 [] Over $1,000

19. If yes. How many cashmere sweaters or shawls do you have? [] 1 [] 1-3 [] 4-6 [] Over 6 20. If yes. What is the most important difference between cashmere knitwear and other fibers? [] Cashmere is durable. [] Cashmere is much more expensive. [] Cashmere is much softer. [] Cashmere is much warmer. 21. Do you think the country where the garment is manufactured is important in selecting a piece of cashmere knitwear? * Less agree 1 2 3 4 5 Strongly agree 22. What’s your opinion about 100% cashmere, which costs under $150 from some brands? * [] It pills a lot. [] Poor strength [] Poor wrinkle resistance [] Poor quality 23. What would you motivate to spend over $500 on cashmere knitwear? * [] Brand prestige [] Cutting/Trimming [] Manufacturing country 115

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[] Original Material [] Practical function [] Promotion [] Quality [] Trend [] I’ve never considered buying cashmere knitwear over $500. 24. Have you ever heard about any of these brands before? * Please click all that apply. [] Athena Procopiou [] Autumn Cashmere [] Chan Luu [] Chinti and Parker [] Eric Bompard [] Hawick Cashmere of Scotland [] Inhabit [] Malo [] Pisubazaar [] No. I haven’t heard of them. (Please move to question 26) 25. Do you own any of those brands in question 24? Click all that apply. [] Athena Procopiou [] Autumn Cashmere [] Chan Luu [] Chinti and Parker [] Eric Bompard [] Hawick Cashmere of Scotland [] Inhabit [] Malo [] Pisubazaar 26. Will you buy cashmere knitwear from unfamiliar brands? * Less interested 1 2 3 4 5 Most interested 116

27. Do you prefer to purchase organic fabrics? * Less interested 1 2 3 4 5 Most interested 28. Have you ever been to Hayes Valley, San Francisco? * [] Yes [] No (Please move to question 31) [] I don’t remember. 29. If yes. Have you ever shopped in Hayes Valley? [] Yes [] No [] I don’t remember. 30. If yes. How often do you shop in Hayes Valley? [] Once a week [] Once a month [] Once in three months [] Once in six months [] Once a year 31. What’s your motivation to visit Hayes Valley, San Francisco? * [] Apparel boutiques [] Browsing [] Interior decorating stores [] Restaurants 32. What would be the most motivating reason for you to shop at a new cashmere boutique in Hayes Valley if you had never been there? * [] An advertisement [] A press release

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[] Friend’s recommendation [] Merchandise [] Promotions 33. Do you subscribe to any of the SF local newspapers or magazines listed below? * [] 7x7 Magazine [] Asterisk Magazine [] Bay Area News [] Bay Fashion Magazine [] Edible San Francisco Magazine [] San Francisco Magazine [] SF Examiner [] SF Gate [] SF Weekly [] None of them [] Other_____________ Powered by Google Docs Report Abuse - Terms of Service Additional Terms

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14.3.1 APPLICATION MEMO October 23, 2012 Institutional Review Board for the Protection of Human Subjects Academy of Art University Graduate School 79 New Montgomery Street San Francisco, CA 94105 Dear Members of the Committee: My name is Han-Yu, Chu and I am a graduate student in the Department of Fashion Merchandising. I am doing a research, which is based on opening a cashmere boutique in San Francisco. The target audience is composed of females and males from the age of 25 to 45. My Faculty Supervisor is Matthew Gerring at 415299-5035. As part of my research methodology, I will be using Google Docs to administer a survey regarding the cashmere apparel market in San Francisco. I will collect 100 responses gathered from social media and field research. Attached please find two (2) copies of the Cashmere Apparel Survey. The results of the survey will be confidential. All the research subjects will receive a cover letter and a “Consent to be a Research Subject” form that they will review and sign. I will make copies of these consent documents and will forward the originals to the IRB to be archived. I will conform to all of the policies and procedures specified in the IRB Policies and Procedures document. Please advise if I can provide you with any additional information. Thank you for your attention. Sincerely, Han-Yu,Chu #03317143 Fashion Merchandising Graduate Student Academy of Art University

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14.3.2 COVER LETTER Dear Sirs, My name is Han-Yu, Chu and I am a graduate student at the Academy of Art University. I am doing a study on cashmere apparel in Hayes Valley, San Francisco. You are being asked to participate in this research study because I believe that your opinion will be a great resource to this study. I obtained your name from Facebook. com. If you agree to be in this study, the survey is anonymous and totally secured. It is possible that some of the questions on the survey may make you feel uncomfortable, but you are free to decline to answer any questions you do not wish to answer, or to stop participation at any time. Although you will not be asked to put your name on the survey, I will know that you were asked to participate in the research because I sent you this letter and survey. Study records will be kept as confidential as is possible. No individual identities will be used in any reports or publications resulting from the study. Study information will be coded and kept in locked files at all times. Only study personnel will have access to the files. While there will be no direct benefit to you from participating in this study, the anticipated benefit of this study is a better understanding of the target market for a cashmere boutique in San Francisco. There will be no costs to you as a result of taking part in this study, nor will you be reimbursed for your participation in this study. Here is the link for the survey: https://docs.google.com/spreadsheet/viewform?fromEmail=true&formkey=dC1ZY09Uai1Kd1pZMlhQalh1 LWRHd0E6MQ If you have questions about the research, you may contact Han-Yu, Chu at 415-994-9629; My Faculty Supervisor is Matthew Gerring at 415-299-5035. PARTICIPATION IN RESEARCH IS VOLUNTARY. You are free to decline to be in this study, or to withdraw from it at any point. Thank you for your attention. Sincerely, Han-Yu, Chu Graduate Student Academy of Art University

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14.3.3 CONSENT FORM Academy of Art University Consent to Be a Research Subject Purpose and Background Han-Yu, Chu, a graduate student in the Department of Fashion Merchandising at the Academy of Art University is doing a study on the viability of a Cashmere Boutique. The researchers are interested in customer buying behavior of cashmere apparel products. Procedures If I agree to be a participant in this study, the following will happen: I will complete a short questionnaire giving basic information about using Google Docs to administer the cashmere apparel market in San Francisco. Results of the questionnaire will be kept confidential. Risks and/or Discomforts 1. It is possible that some of the questions on the survey may make me feel uncomfortable, but I am free to decline to answer any questions I do not wish to answer or to stop participation at any time. 2. Study records will be kept as confidential as is possible. No individual identities will be used in any reports or publications resulting from the study. Study information will be coded and kept in locked files at all times. Only study personnel will have access to the files. Benefits There will be no direct benefit to me from participating in this study. I am participating in this study of my own free will and have not been promised any compensation, benefits or special consideration. Costs/Financial Considerations and Financial Compensation There will be no financial costs or financial compensation to me as a result of taking part in this study.

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Questions If I have any questions or comments about participation in this study, I should contact my Faculty Supervisor is Matthew Gerring at 415-299-5035. Consent I have been given a copy of the “Research Subject’s Bill of Rights” and I have been given a copy of this consent form to keep. PARTICIPATION IN RESEARCH IS VOLUNTARY. I am free to decline to be in this study, or to withdraw from it at any point. My decision as to whether or not to participate in this study will have no influence on my present or future status as a student at AAU. x My signature below indicates that I agree to participate in this study.

______________________________________________________________________________ Subject’s Signature Date of Signature ______________________________________________________________________________ Signature of Person Obtaining Consent Date of Signature

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14.4 AUTOBIOGRAPHY People says fashion changes every day, season, and year. Yet I would say life change just in a minute. I pondered long and deeply what to do in the future. I tell myself : “Just do whatever you want as long as you are happy and willing to contribute yourself towards passion.” After gaining an academic degree in International Business from Shih Chien University, Taipei, Taiwan, as well as various part time retail experiences, I have become fascinated by the diversity and vibrance of marketing. I want to seek further knowledge in fashion merchandising. I have chosen to continue my studies in the U.S.A. because of its diverse cultures. I believe the Academy of Art university is the best place to study, because of its great resources in the curriculum. By getting into the Fashion Merchandise department, I learn the relation between textile, design, merchandising and marketing. After taking the MFA courses, I have a stronger direction of my future career. I discovered I would like to be a buyer. To be a buyer is a challenge for sourcing and merchandising, and these challenges interest me greatly. Having an internship experience with Loro Piana in the San Francisco store, I learned that the commodity can only be successfully introduced to customers by great merchandise and effective display. In addition, dealing with customers, I understand their demands and observe the trends and taste of the niche consumers. This work experience enabled me to engage in the high-end retailer industry which is of great benefits for my future career.

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14.5 RESUME Han-Yu Chu (Juju) 641 Post Street, Suite #215, San Francisco, CA 94109 +1 415-994-9629 hanyuchu@gmail.com ___________________________________________________________________________________ Education - Academy of Art University, San Francisco, California

May 2013

Master of Fine Art, Fashion Merchandising - Shin Chien University, Taipei, Taiwan

June 2010

Bachelor of Business Administration, International Business Experience - Internship

July 2013

Loro Piana, San Francisco . Working with Shipping Manager in receiving and sending of merchandise . Assisting the Visual Manager with merchandising and floor moves . Working with the sales associates in floor and back stock maintenance . Assisting associates with sales and translating for Chinese clients . Participating in Product Knowledge seminars to aid in understanding product attributes and end use alternatives - Visual Merchandising Assistant

Nov. 2011

Brooks Brothers, San Francisco and Palo Alto Assisting the Visual Manager with Christmas window display - Sales Associate

Aug. 2009May 2010

MUJI life style store, Taipei - Barista

Jan. 2009July 2009

Taipei Artist Village (Village Cafe) Language

- Native speaker of Mandarin Chinese Fluent Taiwanese Fluent English

Skills

- Mac OS, MS Office, Excel, Word, Outlook, PowerPoint, Photoshop, Illustrator, Dreamweaver

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14.6 TIMELINE 2011 Spring

ESL 64

English for Art Purpose 64

FSH 616

Dynamics of Fashion

FSH 630

Fashion Marketing & Promotion

2011 Intersection

GS 602

The Art & Ideology of 20th Century

2011 Summer

FSH 634

Textile & Other Raw Material

GS 613

History of 20th Century Fashion Arts

FSH 632

Trend Analysis & Product Development

FSH 637

Product Sourcing

FSH 675

Visual Merchandising: Image & Brand

WNM 600

Digital Applications

FSH 635

Creating Competitive Strategy

FSH 631

Merchandising Principles

FSH 657

Online Retailing

2011 Fall

2012 Spring

Spring Midpoint Review 2012 Summer

2012 Fall

2013 Spring

Final Review

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GS 606

Crossing Borders

FSH 900

Internship

WNM 800

Web Design

FSH 801

Direct Study: Market Research

FSH 801

Direct Study: Visual Merchandising

FSH 801

Direct Study: Marketing Strategy & Plan

GLA 671

Professional Practices and Communication for Fashion

FSH 801

Direct Study: Financial Planning

FSH 801

Direct Study: Thesis Wrap Up

Without You This Thesis Wouldn’t Be Possible. I would like to thank all of my instructors, friends, and family who have supported suggestions for “Josephine.“ Without your help, I will not be able to complete this thesis. Thank you so much! Special Thanks (sort by letter)

Academy of Art University … Gabriel Gima Judith Toerge Judith Zimrin Matthew Gerring Russell Clower ... Amy Lai Andrew Pessulo Eric Lo Fiona Siao Josephine Chen Jungle Lin Natasha Novick Sabrina Lin Tina Chou …