This Land by Lauren McGrady

This Land…

Personal Mission Statement …This Land…

Upon graduating from Columbia College, I plan to find a job in fashion industry that allows me to use the knowledge I have gleaned from all of my studies. I plan to work the floor of a corporate retailer long enough to learn the ropes so I can make a move to corporate buying. I would also love to keep myself involved in the restaurant industry, either through consulting or serving. My overall goal is make $60kin 3-4 years and save enough money to open my own businesses. In 10 years I would like to have my own men’s and women’s clothing boutique, as well as, a restaurant and bar. All of the business will carry domestic and local products.

Business Mission Statement Committed to scouring This Land for quality, American men’s workwear inspired garments and accessories, both past and present. This Land will offer hand selected luxury menswear items in a comfortable environment for today’s workingman.

Company Description This Land is will be an S Corporation. This choice will allow the small amount of investors to avoid double taxation on profits, and will limit potential losses. As a for-profit company, This Land will begin with two stockholders and will seek out other interested individuals for further investment. Ideally, these individuals would be willing to invest capital and trust the decisions of the original stockholders, and be excluded from the operations of the company. The products sold at This Land will be high-quality and well-crafted menswear—primarily workwear inspired garments—and accessories with a focus on products produced in the United States of America. To clarify, …This Land…

menswear includes shirts, pants and outerwear and accessories, such as ties, eyewear, belts, hats, bags, scarves and footwear. Above excellent customer service will be paramount at This Land as this will justify higher pricing and mark-up on products. Services will include assistance considering personal style and fit of garments along with educating customers on the history and care taken to produce products in the store. The markets for This Land’s products and services will be both online and in-store. With a growing curiosity for domestically produced and long-lasting clothing and accessories This Land will serve a world-wide market online, and a city-wide to regional market in-store. Located in Chicago, Illinois, customers will have the option to purchase products at the store’s physical location or at the online store. The advantages of high-quality clothing based on timeless designs allows This Land to sell a long-term investment to customers. For example, instead of buying a pair of footwear every year, a customer may be encouraged to purchase footwear that will last several years and develop characteristics unique the individual only. This philosophy disregards trends and current styles and embraces the notion that clothing should be classically durable enough to justify higher pricing as the cost-per-wear makes the product more valuable over time.

Analysis of the Business Environment This Land is based on product designs that have stood the test of time both aesthetically and practically. This fact helps to alleviate immediate and fleeting consumer trends by providing products that stand outside of the ebbs and flows of the fashion industry as a whole. Another unique and great quality This Land has, is the ability to clothe individuals in a wide range considering age. As a menswear only store the …This Land…

demographic will be exclusive to men, but this fact applied to the young and old alike. In times of economic hardship we look to cater to those interested in making sound purchases that will allow the consumer to purchase products that will provide the best quality for the money. In times of a flourishing economy, the high quality and higher pricing of our products will still retain their value and appeal, except they will be purchased in greater quantities and more regularity. Currently, the fashion industry generates over $1,700,000,000 annually. The percentage of individuals obtaining information and purchasing products online concerning fashion will continue to grow. Great attention and thought must be paid to the methods in which consumers are being reached and how they respond. Large firms dominate the industry--Barney’s, Macy’s, Neiman Marcus, Sak’s Fifth Avenue, etcetera—but smaller firms, especially niche and well-planned firms have proven to be successful when executed properly and efficiently, although eighty percent of small clothing stores fail within the first five years. Typical profitability in the well-established fashion industry can vary, but on average businesses mark their products up three-hundred percent over cost. Positive trends in the fashion industry include the proliferation of blogs and the ability to reach a larger base of consumers through the internet. These blogs often highlight certain products and suggest where they can be purchased. In other words, if a business can manage to be included in a widely read blog, it operates on two fronts; advertising and a conduit for sales. The internet makes the marketplace smaller and opens the door to consumers who may never have an opportunity to step foot in a businesses physical location. A negative trend is, well, the proliferation of blogs. With a growing ocean of

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information it can be difficult for consumers to navigate directly to a certain business’ site. This can be remedied however, by strategically aligning with a site or blog that caters to target customers. Physically, the business with be located in Chicago with a population around two and a half million. The business will also be located online, where hundreds of millions will have the opportunity to view the site-and this number will continue to grow at the internet becomes more readily available.

Products and Services This Land will offer very high-quality menswear and as this plan previously stated this term includes shirts, pants and outerwear. This selection will be seasonally driven with heavy fabrics—such as oxford—and darker colors for winter and fall. Brighter colors and lighter fabrics--such as linen--will be carried in the spring and summer. Selvage denim will be a huge focus for This Land as it represents the pinnacle of quality and craftsmanship, while remaining timeless. We plan on carrying several domestic producers, particularly Levi’s Vintage Clothing, which reproduces--to exact specifications--certain styles made famous over the last century. Non-denim pants will include various types and colors of khakis along with seasonal favorites such as wool and seersucker. The selection of outerwear will also be seasonally driven and range from lightweight cotton to heavy wool. Accessories, such as ties, eyewear, belts, hats, bags, scarves and footwear will be carefully selected to accent the various outfit combinations available at the store. These items will be essential to the business as they will often carry a lower price and will complete the overall product vision of the business.

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Customer service will be essential to the success of This Land. Customers must feel comfortable with the assistance and trust the expert suggestions of the staff. With a product vision based in history and quality, the key to justifying higher priced products is relaying why a purchase is worth more, by explaining the fine details of craft and thoughtful design. This Land should be a source of education, which will encourage repeat business and create a deeper relationship between the business and its customers who, ideally, will view their purchases as a much broader experience than clothes.

Pricing Strategies Premium Pricing Use a high price where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are derived from the integrity of the garment and its classic design aesthetic that allow it to transcend time and trends.

Reasoning Garments will be sold at the suggested retail price of the manufacturer/designer. We anticipate these prices to be of a premium pricing standard based on the quality and limited availability of the merchandise. Customers will justify paying premium prices because they are receiving quality merchandise in high demand with very little availability. We will contract with American designers such as Pendelton, C.C. Filson, Yuketan Footwear, and Alden Footwear to create one of a kind garments and accessories solely available at This Land.

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Competitive Advantage This Land will offer expert customer service. The employees must have a passion for quality clothing and a vast understanding of construction, fabric, fit and function. This information will be crucial in sales situations, as it will build trust in an unsure customer and reaffirm trust for informed customers. The higher price of clothing will be explained; why the quality is better and why it is an investment. The education of customers will be integral to the success of This Land and will encourage customers make informed decisions. The ability to make customers comfortable and welcomed by the employees will be of utmost importance as will the ability to recognize the tastes and desires of customers. The clothes sold at This Land will represent the highest level of craftsmanship and durability with a heavy focus on American manufacturing—an increasingly sought after aspect of menswear. The growing demand for domestically produced clothing has been on a steady rise for the last seven years and shows no signs of slowing. The greatest attribute of work wear inspired clothing is longevity in the face of trends and This Land should be able to retain its core products without having to re-segment the markets based on the consumers’ needs every new season—a very common problem in small clothing retailers.

Target Market This Land’s target market will be Chicago-based males aged 25 to 55 with an income of $50,000 per year and above. With higher-priced clothing, it will be necessary to target individuals with superfluous income …This Land…

who take pride in their appearance and value well-made clothing. The benefits of patronizing This Land will be the obtainment of high-quality clothing and a greater appreciation for durability, functionality and aesthetics. This appreciation will open a world of products designed to last the tests of time and the rigors of man. Considering psychographics, this plan has made clear the targeted individuals will value the education provided by This Land and will be introduced to a new approach of clothing. With This Land being the sole leader in work wear inspired clothing in Chicago, patrons will have no choice but to return and continue to refine and bolster their personal aesthetic.

Location This Land will be located in the Fulton Market district in Chicago, and is properly zoned for commercial use. The meat industries and several high-end restaurants utilize the space in the neighborhood. We foresee this space becoming more residential in the near future. Restaurants such as Publican and Girl and the Goat have attracted national attention for quality and service. As a result, both are brimming with customers during lunch and dinner hours. The capacity of the restaurants is into the hundreds per day and This Land will, by default, be exposed to these individuals. The proximity of This Land to businesses that operate with the same principles will create a synergistic relationship that will be to the benefit of both. The operating hours of This Land and the surrounding restaurants will be nearly identical in order to capitalize on foot traffic and curiosity. With no other retail locations in the Fulton market district, This Land will stand out and be highly visible amongst a street with few storefronts. Fortunately, street parking is free, with no meters and over there are hundreds of spaces available—This Land needing a maximum of only 15 spots. The trading area …This Land…

for the business will be the city of Chicago with a population exceeding 2,500,000. With the population being extremely vast and varied, This Land will not appeal to all, nor will it try to. As a destination business, it will appeal to individuals who seek out quality in many facets of their lives.

Location Fact Sheet City:

Chicago, Illinois

Neighborhood: Cross Streets: Street Dimensions: • • • •

Fulton Market (Meat-packing District) W. Fulton Market Street & N. Peoria 1000 Square Feet

Storefront: Bathroom: Storage: Office:

Store Shape:

600 Square Feet 50 Square Feet 250 Square Feet 100 Square Feet

L-Shaped with two entrances and exits

Front:

Customer/General Use

Back:

Employee/ Office Use/Deliveries

Location of Windows: Monthly Rent: Lease Terms:

2 Large, east facing, front windows $1166/ $14 per sq. ft. 2 Year net lease with first and last Month’s rent plus security deposit

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Promotional Plan The menswear market—one may argue the entire fashion market—is driven by blogs and forums, where interested parties separate and coalesce into groups according to similar interests. Obtaining access to these groups is easy; you participate. There are those who dismiss forums and “group think” as a negative influence citing overly critical opinions and obsessive behavior. I see no reason why a business—that actually cares about the details of their products as much customers—shouldn’t inculcate itself into the current inner workings and culture they wish to profit from. In fact, it is the obsessed and overly critical that make products popular when deemed so. There are many extremely influential blogs—all mentioned in this plan—that can generate an enormous amount of interest—not to mention internet traffic—in a particular business if it appeals to the readership. If a business such as This Land is executed properly, there is no reason to believe blogs wouldn’t pay attention and we expect to generate a serious presence in a short period of time.

Financials START UP BUDGET Rent/yr Inventory Build-out Cost Salary for Employees

$14,000 $100,000 $10,000 $65,000__

TOTAL COST

$189,000

PROJECTED YEARLY SALES & EXPENSES Sales COGS

$1,200,000 $500,000 …This Land…

TOTAL REVENUE

$700,000

Advertising Expense Marketing Expense Salary Expense Rent Expense Utilities Expense Insurance Expense TOTAL EXPENSES

$2000 $2000 $65,000 $14,000 $6000 $1800 $90,800

TOTAL REVENUE AFTER EXPENSES

$609,200

PROFITABILITY SALES Sales growth for the first 3 years is expected to hit around 12% for the first year and approach 20% by the 3rd year. Retail can maintain a growth rate of 23% per year. Sales growth will probably generated cash funds.

sustainable

from

internally

GROSS PROFIT MARGIN The Gross Profit Margin Average % of Sales for the first 3 years is projected to be 45%, changing by 8% per year. OPERATING EXPENSES The Operating Expenses Average % of Sales for the first 3 years is projected to be around 40%, changing by 8.5% per year. Operating Expenses % of Sales in the 3rd year is expected to be around 36%. The Industry Benchmark is 35.3%. Operating Expenses are greater than Industry Benchmark. CASH FLOW First year Cash Flow from operations is projected to be around $60,000. By year 3 Cash Flow From Operations should be $195,000 changing by 80.7% per year. Cash Flow from Operations should always be positive and improving, and it should always be able to cover the flow of

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debt. BREAKEVEN By year 3 the Breakeven % of Sales should be around 88% changing by 0.3% per year. OPERATING CAPITAL Operating Capital is 18% of Sales, changing by 11.7% per year. By year 3 Operating Capital should be around $415,000. Operating Capital for the Industry Benchmark is $462,898.

Cost of Living Budget

Results: Total Income Necessary Expenses Discretionary Income Investment Spending Discretionary Income less Investments Discretionary Spending Amount remaining to save or invest

Monthly $6,389.91 $2,174.33 $4,215.58 $0.00

Yearly $76,678.96 $26,092.00 $50,586.96 $0.00

$4,215.58

$50,586.96

66%

$1,085.00

$12,660.00

17%

$3,130.58

$37,926.96

49%

Monthly Budget

$3,333.33 $2,500.00 $0.00 $556.58 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

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Annual Amount $40,000.00 $30,000.00 $0.00 $6,678.96 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Comments 100% 34% 66% 0%

Comments

Total Income Necessary Expenses: Payroll Taxes Other income deductions Rent or Mortgage 2nd Mortgage or Home Equity Loan Property Taxes Water Garbage Gas & Electric Auto Insurance Auto repairs Food & Groceries (not dining out) Clothing (necessary) Telephone (not mobile phone) Home or Renters Insurance Healthcare or Insurance Costs Dental Care or Insurance Costs Life Insurance Costs Student Loans Home Repairs Home supplies Dry cleaning Laundry Investment Real Estate Expenses Business Income Expenses Childcare (daycare & babysitters) Child & Baby Expenses Other dependent expenses Total Necessary Expenses

Discretionary Expenses: Credit Card Bills Auto Loan (s) Gasoline Cable or Satellite TV Mobile Phone (s)

$6,389.91

$76,678.96

$402.33 $0.00

$4,828.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $125.00 $0.00 $0.00

$0.00 $0.00 $0.00 $0.00 $1,500.00 $0.00 $0.00

$400.00 $20.00 $0.00 $32.00 $250.00 $30.00 $0.00 $750.00 $100.00 $30.00 $20.00 $15.00

$4,800.00 $240.00 $0.00 $384.00 $3,000.00 $360.00 $0.00 $9,000.00 $1,200.00 $360.00 $240.00 $180.00

$0.00 $0.00

$0.00 $0.00 $2,174.33

$0.00 $0.00 $0.00 $26,092.00

$0.00 $0.00 $0.00 $100.00 $150.00

$0.00 $0.00 $0.00 $1,200.00 $1,800.00

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Home Improvement Home Security Garden Supplies Entertainment (not dining out) Dining Out Travel & Vacation Pets, Pet Care and Pet Food Clothing (above what's needed) Internet Access Computer Costs Gym membership Beer & Alcohol Cigarettes & Tobacco Total Discretionary Expenses

Investment Spending: 401K, 403B deposits IRA deposits Employee Stock Plans Brokerage Deposits Other Total Investment Spending

$20.00 $0.00 $20.00 $100.00 $120.00 $125.00 $0.00 $200.00 $20.00 $30.00 $50.00 $150.00 $0.00 $1,085.00

$240.00 $0.00 $240.00 $1,200.00 $1,440.00 $1,500.00 $0.00 $2,400.00 $240.00 $600.00 $1,800.00 $0.00 $12,660.00

$0.00 $0.00

$0.00

$0.00 $0.00 $0.00 $0.00

Monthly $17,756.58 $13,459.00 $4,297.58 $0.00

Yearly $213,078.96 $161,508.00 $51,570.96 $0.00

% 100% 76% 24% 0%

$4,297.58

$51,570.96

24%

$1,395.00

$16,380.00

$2,902.58

$35,190.96

17%

Cost of Living Budget FOUR YEARS FROM NOW

Results: Total Income Necessary Expenses Discretionary Income Investment Spending Discretionary Income less Investments Discretionary Spending Amount remaining to save or invest

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Comments

Income: Your Primary Income Your Spouse's Income Child Support or Alimony Social Security Income Disability Income Pension Income Investment Income Real Estate Investment Income Business Income Other Income Total Income Necessary Expenses: Payroll Taxes Other income deductions Rent or Mortgage 2nd Mortgage or Home Equity Loan Property Taxes Water Garbage Gas & Electric Auto Insurance Auto repairs Food & Groceries (not dining out) Clothing (necessary) Telephone (not mobile phone) Home or Renters Insurance Healthcare or Insurance Costs Dental Care or Insurance Costs Life Insurance Costs Student Loans Home Repairs Home supplies Dry cleaning Laundry Investment Real Estate Expenses Business Income Expenses

Monthly

Annual

Budget

Amount

$4,166.67 $5,833.33 $0.00 $556.58 $0.00 $0.00 $2,000.00 $1,200.00 $4,000.00 $0.00 $17,756.58

$50,000.00 $70,000.00 $0.00 $6,678.96 $0.00 $0.00 $24,000.00 $14,400.00 $48,000.00 $0.00 $213,078.96

$652.33 $2,000.00

$7,828.00 $0.00 $24,000.00

$2,000.00 $4,583.33 $30.00 $20.00 $125.00 $130.00 $10.00

$24,000.00 $55,000.00 $360.00 $240.00 $1,500.00 $1,560.00 $120.00

$600.00 $20.00 $10.00 $83.33 $250.00 $30.00 $0.00 $750.00 $100.00 $30.00 $20.00 $15.00

$7,200.00 $240.00 $120.00 $1,000.00 $3,000.00 $360.00 $0.00 $9,000.00 $1,200.00 $360.00 $240.00 $180.00

$2,000.00 $0.00

$24,000.00 $0.00

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Comments

Childcare (daycare & babysitters) Child & Baby Expenses Other dependent expenses Total Necessary Expenses

$0.00 $0.00 $13,459.00

Discretionary Expenses: Credit Card Bills Auto Loan (s) Gasoline Cable or Satellite TV Mobile Phone (s) Home Improvement Home Security Garden Supplies Entertainment (not dining out) Dining Out Travel & Vacation Pets, Pet Care and Pet Food Clothing (above what's needed) Internet Access Computer Costs Gym membership Beer & Alcohol Cigarettes & Tobacco Total Discretionary Expenses

Investment Spending: 401K, 403B deposits IRA deposits Employee Stock Plans Brokerage Deposits Other Total Investment Spending

$0.00 $250.00 $60.00 $100.00 $150.00 $20.00 $0.00 $20.00 $100.00 $120.00 $125.00 $0.00 $200.00 $20.00 $30.00 $50.00 $150.00 $0.00 $1,395.00

$0.00 $0.00 $0.00 $161,508.00

$0.00 $3,000.00 $720.00 $1,200.00 $1,800.00 $240.00 $0.00 $240.00 $1,200.00 $1,440.00 $1,500.00 $0.00 $2,400.00 $240.00 $600.00 $1,800.00 $0.00 $16,380.00

$0.00 $0.00

$0.00

$0.00 $0.00 $0.00 $0.00

INSURANCE Insurance to cover loss due to theft and/or unforeseen destruction of property and/or merchandise will cost …This Land…

around $1800 per year. This is a cost of about $150 per month. While prevention against theft will be a top priority we understand that it will inevitably occur from time to time. This Land will not be employees. Should an premise, we will take costs associated with insurance. This Land in a position that is safety.

offering worker’s comp for accident occur on This Land every measure to help ensure the injury are covered via will not be putting any employees detrimental to their health or

Suppliers This Land’s most important suppliers will be broken in these categories:

Shirting: • • • • • •

Gitman Brothers Band Of Outsiders Engineered Garments Haversack Post Overalls Nigel Cabourn

Denim: • • • • •

Levi’s Vintage Clothing A.P.C Momotaro Kicking Mule Left Field

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Trousers: • • • •

Monality Band Of Outsiders Nigel Cabourn Post Overalls

Jackets: • • • • • •

Shipley and Halmos Haversack Monality Nigel Cabourn Engineered Garments Woolrich Woolen Mills

Footwear: • • • • • • •

Alden Yuketen Band Of Outsiders Red Wing Wolverine Viberg Mark Mcnairy

Accessories: • • • • •

Kenton Sorenson Leather Goods Ray Ban Sunglasses Folk Belts Band of Outsiders Ties Gitman Brothers Ties

Books and Magazine: • • • •

Free and Easy Apartmento Inventory Men’s File

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There are hundreds of suppliers, but the above represent the pinnacle of quality. All of the aforementioned suppliers offer 90-day credit terms, with seasonal delivery schedules varying company to company. Many of these companies produce in small quantities, and inventory shortages will be problematic, but the small number of garments produced increases value and will allow for higher margins considering profit.

Critical Risks The national economy continues to be stagnant and growth has been slow, but This Land has a niche that will comfort consumers looking to get the greatest amount use for their money. For example, instead of buying two or three pairs of dress shoes a year, a customer might opt to buy one—more expensive—very high quality pair that will last several years and develop personal characteristics. This example can be applied to every product category available at This Land and will help mitigate economic woes. Competition within clothing retail can be devastating. Fortunately, this particular section of menswear stores are more inclusive than exclusive and often support businesses that may compete in the same market. The reasoning behind this type of thinking is rare, but not uncommon. For example, Vancouver Canada has three world-class menswear stores— Inventory, Roden Gray and Neighbour—all within a few blocks of one another. In a word, a “scene” has developed and all three businesses have benefited from mutual respect and support, all knowing that there is enough quality clothing available to maintain a unique selection.

Executive Summary This Land will be a menswear specialist located in the Fulton Market district of Chicago. The purpose of this plan is to highlight certain opportunities currently available to a retail business capable of targeting and executing for …This Land…

a particular high-end market. Leading the charge in an untapped menswear market is a daunting yet thrilling prospect. With a projected profit of $600,000 in the first year, This Land not only breaks even, it exceeds even and will create a new outlet for masculine aesthetics.

Conclusion This Land stands poised to fill a profitable void in the Chicago menswear market—the void itself being as important as our numerous strengths. While the demand is high for the products and services This Land will provide, there isn’t a business satiating consumers’ appetites just yet. We feel our competitive advantages—high quality products, expert customer service—will set This Land apart in a market packed with similar small businesses struggling to find an identity and brand consumers can comprehend and desire. The target market is already searching for the products This Land will carry and is a group who shares information through forums and blogs. In many ways, the target market will act as advertising and promotion, informing and encouraging each other to take interest. This Land bucks trends when it comes to the location of the business. It is a destination, not a chance find. We feel it will not only keep real estate costs low, it will also create intrigue. One of the many selling points of This Land is its low-cost advertising and brand-building budget—a draining and crippling hurdle for many small retail businesses. The suppliers of This Land are the preeminent producers of our time and show no signs of changing tastes or production techniques—promoting high price points due to high quality. The notion that clothes are an investment and can help to build a wardrobe that will last a lifetime is appealing to anyone looking to get the biggest bang for their buck—in the meantime covering various professions, ages and backgrounds. In the end, This Land is for men who actually care about real quality, not about prestige.

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