kate spade new york - pop up shop

lauren morgan | carmela mccleary | savannah weghorst FASM 410 Retail Management | Professor Cannata | Spring 2017

TABLE OF CONTENTS Executive Summary 3 Company Summary 4 Market Analysis 11 Target Consumer 17 Store Location, Design, & Product 18 Communication & Promotional Plan 36 Financial Plan 38 Conclusion 42

EXECUTIVE SUMMARY As an all encompassing lifestyle brand with global reach, Kate Spade New York is known for its playful sophistication, crisp colors, and fun graphic prints. With an extensive range of product categories, and locations in various countries around the world, Kate Spade New York has yet to maximize its brand awareness in India. There is an exciting market opportunity in Mumbai (specifically in the south) due to a market segmentation that aligns with Kate Spade New York’s target consumer. This segmentation will be thrilled with the opening of a beautiful, greenhouse themed pop-up shop in the heart of Mumbai’s luxury shopping the Palladium Mall. Featuring Kate Spade New York’s latest spring/summer collection, the pop-up will reveal the sales potential in the emerging city of Mumbai and expand brand awareness to the area, creating a plethora of loyal customers while also exploring the possibility of launching e-commerce in India.

COMPANY SUMMARY

WELCOME TO KATE SPADE NEW YORK! “crisp color, GRAPHIC PRINTS & playful sophistication are the hallmarks of kate spade new york. from handbags and clothing to jewelry, fashion accessories, fragrance, eyewear, shoes, swimwear, home decor, desk accessories, stationery, tabletop and gifts, our EXUBERANT APPROACH to the everyday encourages personal style with a dash of incandescent charm. we call it living colorfully.”

-Kate Spade New York, Mission Statement (katespade.com)

History

Kate Spade New York was established in 1993 by Kate Brosnahan Spade.

As a former accessories editor at Mademoiselle, Kate set out to create the perfect handbag. Six silhouettes were initially debuted which combined sleek, utilitarian shapes and colorful palettes. The first shop was officially opened in New York City in 1996. In 2007, Spade developed Kate Spade & Company (formerly known as Liz Claiborne, Inc.) and in 2008 Craig Levitt joined as chief executive officer and Deborah Loyd as president. With their help, Kate Spade flourished into a lifestyle brand, offering clothing, jewelry, bedding, legwear, shoes, stationery, and fragrance.

Corporate Structure Kate Spade and Company

Kate Spade New York

Jack Spade New York

Adelington Design Group

Corporate Governance Principal Executives & Board of Directors Craig Leavitt CEO George M. Carrara President and COO Deborah Lloyd Chief Creative Officer Nancy J. Karch Board Chair 2 Axis’ Geographic expansion Product category expansion; i.e. apparel categories such as athleisure and sleepwear Kate Spade and Company is a Public Corporation Parent Company that operates two global lifestyle brand subsidiaries: Kate Spade New York and Jack Spade New York. The Company has four category pillars: women’s, men’s, children’s, and home. The parent company also owns Adelington Design Group, a private brand jewelry design and development group. The brand was bought by Liz Claiborne from the Neiman Marcus Group in 2007 and the name was changed to Kate Spade and Company. In the same year, the founders broke away from the brand. The brand was bought by Coach in 2017 for $2.4 Billion. The corporate company is governed by a thirteen member Principal Executive Group and an eleven member Board of Directors.

Plans for Growth Kate Spade is currently focused on a two axis plan for growth. The first axis focuses on expanding Kate Spade’s outreach to new global markets. The second axis focuses on which product categories Kate Spade can expand into . This includes apparel categories such as athleisure and sleepwear.

SWOT & Brand Identity Matrix

Current Positioning

Kate Spade New York is recognized as a luxury brand predominantly geared towards young professionals who have an affinity for classic, timeless accessories with a modern twist. Although the company has very quirky and unique designs, it is still subject to intense competition. This perceptual map was created with different variables in mind: First is the essential pricing comparison, which gives a general idea of the type of companies that fall within the same range of prices for similar product categories. The second variable is the design aspect of the products. On the higher end, Tory Burch, Marc Jacobs, and Michael Kors come close in competition in terms of modernity in designs, while Coach, Ralph Lauren, and Burberry fall more toward a classic design aspect, but are still related in terms of product categories/pricing. On the lower end, Lilly Pulitzer, Vera Bradley, and Charming Charlie are listed as competitors because they feature similar designs at equal to lower prices. Charming Charlie in particular completely replicates Kate Spade New York designs and sells them for much less. In order to successfully address their competition, Kate Spade New York must be able to: appropriately price products, maintain customer relationships, develop quality and differentiated products, and Anticipate and respond to changing consumer demands in a timely manner, just to name a few.

Current Distribution

As of 2016, Kate Spade & Co operates 104 specialty stores, 77 outlets, and 52 concessions under the Kate Spade New York trademark. Specialty stores in the United States account for 83 percent of the company’s revenue (1,031.12 million US dollars) and 15.1 percent (188.15 million) in foreign countries, which are primarily Japan, Asia, Europe, and Canada, where there are 22 specialty stores. Japan products are distributed through department store concessions, retail stores, and ecommerce. Other Asian products are distributed through wholesale agreements and joint ventures.

Europe direct-to-consumer sales are made through specialty retail and outlet stores, concessions within department stores, and ecommerce. Canada direct-to-consumer sales are made through specialty retail, outlet stores, and ecommerce. Other international markets such as the Middle East, Australia, and Latin America, operate through third-party distributors, which all purchase products from Kate Spade New York through re-sale at free standing retail stores and dedicated department store shops. There are also currently 64 US outlets where Kate Spade New York is sold (13 foreign), 53 concessions, and a variety of products sold on cruise ships.

Kate Spade New York buys and sources from the Li & Fung agency whom acts as the primary global apparel and accessories buying agent and has audit factories that use internal monitors.

Kate Spade New York distributes products through leased facilities and has a domestic contract with a third-party facility to provide distribution operations services at the Ohio Facility. They sold the facility for 20.3 million USD and entered a 10-year sale-leaseback agreement.

Their foreign distributors are located in Latin America, Singapore, Malaysia, Indonesia, India, and Thailand. Products produced in Asia represent a majority of their purchases. There are 91 suppliers located in 12 countries. Domestic direct-to-customer sales include specialty retail stores, outlet stores, and ecommerce, whereas domestic wholesale includes department store chains (Macy’s, Dillard’s, Belk, Nordstrom, Neiman Marcus) and specialty retail stores. Kate Spade New York employs 3,600 full-time workers worldwide.

Current Communication & Promotion

Facebook: 3,157,078 likes

Instagram: 2M followers

Twitter: 915K followers

Pinterest: 342,279K followers

YouTube: 18K subscribers

Kate Spade New York’s marketing is focused on reinforcing brand relevance, increasing awareness, engaging consumers, and guiding consumers to retail stores and ecommerce sites. As of 2016, the company spent 56 Million USD on advertising, marketing, and promotion. This includes their print advertisements, billboards, and online videos.

Their print and billboard advertisements are very playful and eye-catching. The company does a good job with keeping a distinct look and color palette without being repetitive. As of late, their video advertisements are very successful because they pull in brand ambassadors that fit the brand’s aesthetic, (i.e. Anna Kendrick). These video advertisements are a series of short videos that they like to refer to as TV shows because they follow interesting story lines. Their methods of communication include direct mail, in-store events, and internet marketing.

MARKET ANALYSIS

PESTEL

Political

Pros: Strong and established democratic system that ranks high in voice and accountability Creating stronger ties with U.S., Canada, and Western Europe through signed agreements Cons: Continued allegations of corruption within political parties Terrorism threats both internally and externally through religious extremist groups, Naxalite, Islamic terror groups, and Kashmiri separatists Continued tensions with Pakistan Demand for new states Social tensions created from caste system, smaller regional and religious groups

Pros: Second largest workforce in the world, expected to increase Developed stock market continues to improve

Economic

Social

Cons: Inflation and decreased saving rates continue to pose a threat Government restrictions on cash purchases to prevent the generation and use of black market money

Pros Growing proportion of young age demographic; median age of 27.3 is lower than that of other emerging markets (such as Indonesia and Turkey). This is the age demographic Kate Spade New York targets Mahatma Gandhi National Rural Employment Guarantee Scheme has provided employement to 632 districts Cons: Need for Job Creation; underemployment is still high due to women staying at home and many agricultural and service jobs are still not under protection of labor laws Rapid Urbanization places stress on urban planning and infrastructure, creates overcrowding in cities such as Mumbai, and increases the prices of real estate in these cities, which create slums

Technological

Pros: A large number of technical graduates is providing technology growth; as of 2013 enrollment in higher education was at 20 million with 16% of enrollment in engineering and technology An increased number of technology institutes graduates who speak English gives India a competitive edge over countries like China in knowledge process outsourcing and business process outsourcing Push to incorporate technology into urban infrastructure

Legal

Pros: Solid legal framework for business entities due to comprehensive regulatory laws put forth through a number of regulatory bodies in India, such as the Registrar of Companies, Director General of Foreign Trade, etc.

Move towards improved corporate governance; passed the Companies Bill in 2013 which is to improve the business environment by creating accountability and transparency Cons: High tarriff rates than other emerging markets Need for a single financial regulator; The overlap in functions created from having multiple regulators such as RBI and SEBI

Environmental

Pros Climate Action Plan: Committed to increasing share of clean energy by 40% of its total energy by 2030 and pledges to fight climate change by taking energy efficient route and cutting back on its emission intensity Strong Environmental Policy Framework at both a national and state level. Regulatory agencies include the Central Pollution Control Board and the State Pollution Control Board.

Cons: Depletion of water resources due to excessive withdrawal for irrigation and dangerous level of pollutions due to waste from both domestic and industrial sources Energy dependence on fossil fuels; the increase in economic activity has increased the gap between supply and demand of energy. India is dependent on energy resources that are not environmentally friendly such as coal based thermal energy

Size of Market

Apparel retail sales in India in 2016 had a volume of $65.007 Billion.

The bag retail sales in 2016 reached a volume of $1.472 Billion. India is expected to grow to become the third largest market for apparel retail by 2019 (Euromonitor 2017). The growing retail market in India creates an optimal market opportunity to launch Kate Spade India.

Estimating Competition: Direct

‘Tory Burch is an attainable, luxury, lifestyle brand defined by classic American sportswear with a diverse sensibility.’ - toryburch.com Tory Burch currently operates 150 freestanding boutiques and has a presence in more than 3,000 department and specialty stores. Some locations include the Middle East, Latin America, Europe, and Asia. It is a private company, has around 2.5 thousand employees, and brought in 414 Million in sales as of 2016.”

‘A leading brand that represents a unique, synthesis of magic and logic that stands for quality, authenticity value and truly aspirational, distinctive, American style”. - coach.com Coach is a public company that brings in Annual sales of 4.4 Billion (2016), and employs over 15 thousand. Has multi-channel distribution, with over 430 Coach stores in North America and 520 international locations; approximately 40 in Europe and 480 in Asia.

Coach also operates international ecommerce to places such as Japan, South Korea, and United Kingdom. The company also has boutiques located within department stores and specialty retailers in North America, Europe, Australia, Latin America, Asia, and the Middle East.

‘LVMH focuses on creativity, product excellence, and aiming to be the best.”

LVMH has the same mission statement for all its brands.’ - lvmh.com Marc Jacobs is a private subsidiary, with annual revenue approaching 1 Billion.

The brand has 250 locations around the world between wholly owned and franchise stores.

*See Appendix Figures 2 & 3 for full competitor break down

‘Michael Kors is the leading American fashion designer for luxury accessories and sportswear. The company's heritage is rooted in producing polished, sleek, sophisticated American sportswear with a jet-set attitude.’ - michaelkors.com Michael Kors is a private company that opened its first retail location in 2006.

The company brings in annual revenue of 3.2 Billion (2015) and employs under 1 thousand. As of 2015, the company operates 550 North American retail locations including concessions, and 117 international retail stores in countries such as Europe and Japan. The company has over 1500 in-store boutiques in locations such as South Africa, Canada, Brazil, South Korea, and many more.

Indirect Competition

These retailers appeal to a target market with a lower budget. They are listed as indirect competitors because they produce similar products, but to a different target market. These are considered competitors because if a customer could not afford a style at Kate Spade NY, they might be able to find something vaguely similar at one of these retailers.

TARGET CONSUMERS

Aadhya Kaur, 26 Annual Income: $14,000 Born and raised in Mumbai, Aadhya has always had a passion for improving the youth in the city, especially to empower young females. She pursued an Education degree, and now is employed at a local High School as a Physics Professor. Although she enjoys science, she likes to express her quirky personality through her accessories. Betsey Johnson and Michael Kors are some of her favorite stops while in the mall. When she shops at Kate Spade, she typically purchases a new wallet and heels. ($285 on Average)

Reese Basak, 34 Annual Income: $50,500 Reese’s father (originally from India) met her mother in America on a vacation and decided to stay in the States with her. She was born in the US, but her family moved to India when she was 12 since her father missed his home. She pursued a Finance Degree in the US, but returned to India after graduation to become a financial advisor of her dad’s restaurant chain. The likes to buy fun pieces to show off at work to bring more life to her otherwise dull job. Tory Burch, Coach, and Zara are some of her favorite retailers. When she shops at Kate Spade, she typically purchases a new bag with matching wallet, necklace, a couple of bracelets, and earrings. ($770 on average) Whitney Taylor, 28 Annual Income: $60,000 Recent graduate, Whitney obtained a Pharmaceutical Doctorates Degree in the US, where she was born and raised). She moved to Mumbai with her friends as an adventure since they’ve spent most of their youth in school.

Whitney currently has a job within her degree, and looks to advance in her career as far as possible. When she’s not in scrubs, she enjoys showing her bubbly personality through her clothing and accessories. She is very familiar with Kate Spade since that was her go-to in the US, along with Tory Burch and Marc Jacobs. When she shops at Kate Spade, she typically purchases a new bag,, scarf, two pairs of earrings, and heels. ($757 on average)

STORE LOCATION

Location Justification

The location of the pop-up shop will be within the Palladium Mall, a luxurious mall that is located within Mumbai’s High Street Phoenix shopping area. India as whole is scaling up in the luxury goods market with a 16% increase in luxury spending in 2016 due to a slowdown in the black market. Sales of apparel and footwear in particular has grown 14.4% annually from 2010-2015. The Indian fashion market today is worth $67 billion and this is expected to reach $88 billion by 2020. More Indians are wearing western styled clothing as opposed to traditional Indian clothing and the number of Indians able to afford branded fashion is set to quadruple in the next five years.

The median age in India is 27.3 which is lower than other emerging markets (such as Indonesia and Turkey). This is good for Kate Spade New York, as it aligns with the young age demographic that is targeted.

As far as the choice to open the pop-up specifically in Mumbai, there is already a Kate Spade New York in New Dehli, so this new location will set out to expand market reach in India. Mumbai is one of the world’s top ten centers for commerce in terms of global financial flow. The Palladium Mall is strategically located in one of the prime developing areas of the city and offers exclusive shopping with four levels in a sophisticated and elegant atmosphere.

Mumbai Demographics

Mumbai is the capital city of the state of Maharashtra in India. Mumbai is known as being a business

mecca in India. The 6th most populous city in the world, Mumbai has a large population of 23 million people.

The population known for being a melting pot made up of many races due to the large number of migrants who travel to Mumbai for job opportunities. The main languages spoken are Marathi, English, and Hindi. The area is known for having a large number of polyglots (individuals who speak multiple languages). Hinduism is the official religion of Mumbai and the most common, followed by Muslim and Buddhism.

Mumbai has a very young population with 65% of the total population being born after the year of 1980.

The median age of the population is 26.9 years old. The Young Adults (18-29) and Middle Youth (20-44) age groups dominate the Indian consumer market accounting for a combined 42.7% of population share. The Young Adult demographic is marrying later and waiting longer to start families. Nearly 31% of this demographic stated that they planned on increasing their overall spending in 2017. This generation is more likely to spend money on experiences instead of large purchases such as houses and cars that are status symbols to older generations. The Young Adults are also embracing the shared economy, using services such as Airbnb and Uber. This generation leads the growth trend for online transactions due to their openness towards new technology. The Middle Youth group is at the age of making large financial decisions such as purchasing homes and cars. Their main priorities are spending time with their kids and spouse (40%) and making money (25%) (Euromonitor 2017).

Indian Consumer Segments

Kate Spade Mumbai would be primarily focused on the Upper Class and the Urban Middle Class since these groups will have enough annual income to afford our products. These segments only account for 6% of India’s total working population due to India’s large income equality. The Urban Middle class makes an average annual income of $11,439 while the Movers & Shaker Segment makes an average annual income of $250,000 (Goldman Sachs, 2016).

* 2016 The Asian Consumer: Indian Consumer Close-Up by The Goldman Sachs Group Inc.

Behavioral Trends

The following section is comprised of behavioral trends observed from the Indian consumer lifestyle. While not all of these aspects directly relate to Kate Spade New York, it is important to completely know and understand the consumer so that the brand can reach them better.

Eating out has become a growing trend.

Driven by the younger generations, 30.9% of the population eats out 1-2 times a week and 30.1% eats out more than three times a week.

The typical choices of food chosen at restaurants include Northern Indian (28%), Chinese (19%), South Indian (9%), and American (7%). Despite the large trend to eat out, 47.3% still prepare and eat their meals at home daily.

Drinking alcoholic beverages at home is considered taboo in Indian culture. 36.6% of millennials consume alcohol outside the home at least once a week followed by Generation X at 31.7% and Baby Boomers at 14.4%. For nonalcoholic drinks, tea is considered a habitual and social drink choice for most and coffee consumption has begun gaining popularity among younger generations.

Healthy living is an important life decision for many Indian consumers. 54.1% would prefer to eat organic food and approximately 55% consciously limit their intake of fats and sugars.

Physical activity is of high importance with 56% of Indian consumers participating in physical activity daily. Only 8.2% of the population is obese compared to America’s 35.7%.

Ethical living is also a Indian consumer priority with 77% of the population wanting to have a daily positive impact on the environment.

National Geographic’s Greendex ranked India as the #1 sustainable country in 2014. 38.1% try to shop local and 44.4% buy ethical

and Eco-conscious products. There is also a large interest in recycling used technology gadgets.

Due to the high costs associated with owning a home, ownership is low and 30% of Middle Youths rent homes. Co-living has become increasingly popular among Young Adults following the growing trend of embracing the shared economy.

Leisure and recreation is not a top priority among the working class. 48.3% of Indian workers feel a constant pressure to get things done and 63% take fewer holidays then they are allowed. In 2016, Global Empathy Index ranked India as having some of the worst work culture with very poor work/life balance.

The beauty industry in India has large potential to grow with 38.2% of women spending more than ten minutes to apply their makeup.

This trend is being driven by Upper Class working women.

When shopping, 65% of Indians stated that they are highly influenced by consumer reviews and social media posts. Online shopping has been recently growing with 77% of Internet users buying apparel online at least once a year. Only 22.8% of households have access to Internet. 5.8% of those online consumers browse the Internet through mobile devices.

Transportation

46% Daily Commutes 18.3% Daily Commutes

46% Daily Commutes *walk some portion

430 Cars per km of Road 22.9% Daily Commutes

* 2017 In 10 years, private vehicle rides double to 23% in Mumbai by Somit Sen from The Times of India *See Appendix Figure 1.1 for Transportation Breakdown

Mumbai is without a doubt a overcrowded city. The area has a large amount of foot traffic and heavy traffic. According to Somit Sen from the Times of India stated in the article In 10 Years, Private Vehicle Rides Double to 23% in Mumbai that only 22.9% of daily commutes are done by personal vehicles (Sen, 2017). There are a number of other ways for civilians to get around using public transit. Mumbai offers red double-decker buses, yellow taxis, and a suburban train system, and the largest organized bus transport system in India.

Direct Mall Competition

Aldo Accessories, Michael Kors, Coach, Juicy Couture, and Burberry are all considered direct competitors within the High Street Phoenix mall. Each of these stores offer a mix of leather goods and accessories at competitive prices in comparison to Kate Spade New York. Each of these brands are also located within close walking distance of the popup. Aldo brings in an annual revenue of $130,000 USD (2015) and is located on the Skyzone Ground Level of the Palladium Mall. Also located on the same level is Michael Kors, which brings in 3.2 billion dollars in annual revenue (2016), Coach which has an annual revenue of $4.4 billion USD (2016), and Burberry, which has an annual revenue of 3.7 billion USD in revenue (2016). Juicy Couture is located on the second floor of the Palladium mall and has an annual revenue of 19.5 million USD (2015).

Indirect Competition

The Shree Siddhivinayak and the Worli Sea Face both serve as strong indirect competitors because they according to Mumbai Travel, these are the two largest tourist attractions. Shree Siddhivinayak is one of India’s biggest temples, with beautiful architecture and many different amenities. The Worli Sea Face is posh sea-front area within the business district of Mumbai. This destination is very popular amongst locals and tourists with its blue waters and huge waves, especially during monsoon season. Both of these locations attract people all year round.

Area Attractions

Mumbai Area Attractions

High Street Phoenix The area surrounding High Street Phoenix is home to many retail spaces offering home goods, fashion, jewelry, auto goods a large number of local restaurants and cafes, apartment living, hotels, banks, a family hospital, and grocery markets.

The area is renowned for its upscale and international shops.

Area Attractions Tulika Arts Gallery Worli Fort Tryst Nightclub Gold’s Gym Nehru Planetarium Shree Siddhivinayak (Temple, large tourist attraction) Worli Sea Face (walkway facing ocean, large tourist attraction

Human Resources

The pop-up shop will employee two store managers, two assistant managers, and five sales associates. All will be full time employees. All salaries are based off median luxury retail salaries in Mumbai, India. Managers will receive $2.00 per hour and be responsible for reaching sales targets, increasing profits, overseeing of stock control, receiving of shipments, employee management, schedule and payroll management, consistent store meetings, implementation of visual merchandising standards, opening and closing procedures, register management, and customer service. Assistant managers will receive $1.65 per hour and responsibilities will include employee management, implementation of visual merchandise standards, customer service, and register duties. Sales associates will receive $1.20 per hour and will be responsible for the general maintenance of the store, customer service, and register duties.

In terms of merchandise management and strategic management, there is already a team put in place to oversee retail in Asia. The team’s functions will extend to Mumbai, India. The recruitment and selection of all in-store employees (managers and associates) will be outsourced to Reliance Brands Limited whom currently have a long-term license agreement with Kate Spade.

Legal Issues

Kate Spade is currently under contract with Reliance Brands Limited whom has exclusive distribution rights and retains in-depth knowledge and expertise in terms of the market in India. The distribution and retail license agreement is long-term.

In terms of the building location, the pop-up shop must abide by all building codes put into place by the Palladium Mall. A certificate of registration called a “gumasta� must also be obtained from the Municipal Corporation of Greater Mumbai.

Other legalities that must be taken into consideration include the government imposed cash transaction restrictions that serve the purpose of minimizing the generation and holding of illegal cash. Transactions with cash above $3,093.60 has been banned. The government has also implemented demonetization of certain bills in order to kill black market money stock which caused a temporary limit on ATM withdrawals. This ATM restriction has since been lifted.

STORE DESIGN

Interior Designers: Dakota Nesselbush & Madison Mullins

Design Variables

With 500 sqft. and inspiration from luxury greenhouses’, this Kate Spade New York pop up shop is a bright and inviting space featuring: all white interior and exterior fixtures, lush greenery in and out (including sprouting from the bags in the windows) to embody a real greenhouse, hanging displays neatly featuring merchandise, and beautiful wood flooring.

The flow of traffic will move in a circular pattern, with customers entering the store and walking the interior perimeter to browse product; with all of the product surrounding the interior perimeter, there is open space in the center of the store. There will be a light and airy ambiance throughout the space, with warm lighting fixtures (along with the natural light from the windows), open windows, bubbly music, and friendly employees.

Interior Designers: Dakota Nesselbush & Madison Mullins

Design Variables

The Pop-Up shop windows and front entrance will be secured through lock-and-key, with mall security securing the perimeter throughout the night. All merchandise will be placed under the counters (along with our extra inventory) and locked as well.

Interior Designers: Dakota Nesselbush & Madison Mullins

Product Assortment

Fixtures & Unit Costs

Flooring: $2.59 Interior Lighting: $90

Ottoman: $299 Ottoman Fabric: $90 Built in seating Fabric: $76

Exterior Lighting: $79.99 POS System: $169

Interior Greenery: $1,685 Exterior Greenery: $500

Custom 3D Wall Panel: $10K

Promotion & Communication

*See Appendix Figure 1 for costing breakdown

The promotional plan for the pop-up will be consistent with Kate Spade New York’s brand image and seeks to attract and excite the target consumer in Mumbai India. One month before the pop-up shop opening in Mumbai, full page advertisements will be featured in two of India’s most popular fashion publications’ March issues: Elle India and Grazia India. Because internet usage is rapidly expanding in India (90% growth in internet users compared to the global average of 19 percent) with 153 million active social media users as of 2015, social media will be heavily utilized in the promotional plan.

Kate Spade New York’s official instagram strictly posts lifestyle photos that represent the brand’s story, therefore, to avoid breaking up this curation, we will rely on top Indian social media influencer’s and fashion bloggers to promote the pop up shop in Mumbai through their personal instagrams.

Thirty Indian fashion bloggers will be contacted with monetary incentives to make two social media posts revolving around the pop-up: one during and one after. Thirty additional bloggers and influencer’s whom are interested in the brand and have a wider online audience will receive personalized Kate Spade New York Gift Boxes with at least two products (one bag and one small accessory) curated to their preferences as well as an invitation to the pop-up shops opening event. In return, these blogger will be required to make a minimum of two posts on social media: one promoting the product and another covering the opening event. Youtubers will be required to vlog the event. Three Facebook posts will be made on the Kate Spade New York page: one advertising the store opening date, one covering the opening event, and one advertising the closing date.

Promotion Activities

Opening Event The opening event will be invite-only (fashion bloggers and influencers) and will take place the night before the pop-up shop’s grand opening. Guests will receive exclusive access to be the first to shop the summer collection while enjoying non-alcoholic cocktails and fun, colorful horderves.

Opening Day In-Store Promotion To offer excited customers further incentive to make purchases on the first day of the pop-up shop’s opening and to “wow” them with excellent customer service, each purchase made on the first day will come with a gift bag. The small giftbag will include a Kate Spade New York notebook, pen, and Live Colorfully roller-ball fragrance.

Promotion Management Kate Spade New York’s headquartered social media team will be responsible for making all social media posts, reaching out to bloggers and influencers, and tracking social media posts. Current chief marketing officer, Mary Renner Beech, will utilize her contacts to ensure advertising in both print media sources, while event management and planning will be outsourced to a local fashion public relations firm in Mumbai.

FINANCIAL PLAN

Sales Forecast

*See Appendix Figure 1.2 for Financial Plan Breakdown

Income Statement

Other expenses will include the design and build of the space, worker wages, rent, logistics, promotional activities, and legal permits. The pop-up will experience a loss of ($50,521) in the first week due to larger expenses leading up to the opening of the shop.

However, by the end of the four weeks, Kate Spade will incur a total profit of $74,452.

In addition to the financial gains, following the pop-up shop, Kate Spade will have a firm grasp on the viability of the Mumbai market for a potential permanent store. If the opportunity does happen to arise to open a permanent location, the shop will have created valuable local relations, brand awareness, and future loyal customers.

Budgeting

Interior and exterior fixtures amount to an estimated total of $19,248. The most expensive fixture is by far the custom 3D wall panels at $10,000, however Kate Spade can reuse these in other locations following the commencement of the pop-up.

CONCLUSION Mumbai offers an exciting market opportunity for Kate Spade New York. With the growing apparel retail sales, the rise of the Urban Middle class, and the young age of the Indian population, Mumbai presents itself as the ideal location for Kate Spade to grow their global reach. The greenhouse themed pop-up will bring excitement to the Palladium Mall’s customers and will create brand awareness in Mumbai. While many of the stores in the Palladium stick to a dark earth toned color palette for their stores, the colorful products, lush greenery, and white greenhouse will stand out and make a strong statement. The colorful and exuberant brand identity will act as a key success factor in differentiating Kate Spade from the large selection of international brands that the mall offers. With projected profits of $74,452, Kate Spade Mumbai will generate cash for the company as well as act as a strong starting point for a long term investment in the Indian market.

Thank You! lauren morgan | carmela mccleary | savannah weghorst FASM 410 | Spring 2017

Special thanks to Interior Designers Dakota Nesselbush & Madison Mullins!

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Galante, Meredith. "How Kate Spade New York Uses Social Media To Sell Handbags." Business Insider. Business Insider, 17 Apr. 2012. Web. 28 May 2017. <http://www.businessinsider.com/kate-spade-dominates-social-media-platforms-2012-4>.

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Loeb, Walter. "Kate Spade Is A Brand Ready To Boom Around The World." Forbes. Forbes Magazine, 22 July 2013. Web. 28 May 2017. <https://www.forbes.com/sites/walterloeb/2013/03/22/kate-spade-a-brand-that-will-grow-globally/ - 5dfef4e3313b>.

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Appendix

Figure 1: Cost Breakdown For Promtional Plan

Appendix Figure 1.1 Transportation Local Trains The local train system accounts for 46% of daily commutes and runs from 4am-1am (Sen, 2017).

They have two main lines that run from the Eastern and Western suburbs. Over half a million people use the trains every day with separate compartments on the train for men and women. The slow trains stop every couple minutes to pick up and drop off passengers at every stop, while the fast train only stops at a few select locations to get to the city faster. First class tickets cost four times a second class coach ticket. Second class can get extremely overcrowded during peak hours, making traveling difficult. Despite the overcrowding, Mumbai claims that locals are still the fastest form of travel. They offer Smart Cards that can be preloaded, one time purchases can be made on Automatic Ticket Vending Machines (ATVMs), or Season Tickets are offered as well. A monthly pass for second class can range from 100Rs to 500Rs depending on the distance traveled. There are an average of 3,000 deaths a year related to the train system including passengers, individuals trying to ride on top of trains, and pedestrians. .

Buses The Bombay Electric Supply and Transport Company (BEST) runs the bus system in Mumbai. The buses reach “every nook and corner of the city” (City of Mumbai Official Website). The bus fare is cheap and supposedly safe. The fare for a Km distance can range from 4Rs to 15Rs for an air conditioned bus. The BEST also offers passes.

Taxis The most relaxing, yet most expensive, form of travel in Mumbai would be by taxi. Fares are paid by meter and tips are optional. Mumbai also offers Cool Cabs that are air conditioned but even more expensive.

Auto Rickshaws Mostly seen in the suburbs, a rickshaw driver will zip in and out of traffic in narrow lanes. They are not a commonly used transportation for work, but are cheaper than taxis.

Walking 46% of all daily commutes walk on foot for at least some distance of their travel (Sen, 2017). Public Works funnels money into updating and widening the roadways with no focus on updating or increasing walk-ability.

Appendix

Figure 1.2 Financial Plan The financial plan outlines realistic revenue projections and expenditures to estimate the profit that the Kate Spade Pop-Up will generate. Based on the High Street Phoenix Mallâ&#x20AC;&#x2122;s 60,000 daily foot traffic, an average basket of $604, and realistic conversion rates, the pop-up is estimated to generate $342,468 in revenue within a four week span. Using a 60% markup, the cost of goods sold is priced at $136,987. Interior and exterior fixtures amount to an estimated total of $19,248. The most expensive fixture is by far the custom 3D wall panels at 10,000, however Kate Spade can reuse these in other locations following the commencement of the pop-up.

Other expenses will include the design and build of the space, worker wages, rent, logistics, promotional activities, and legal permits. The pop-up will experience a loss of ($50,521) in the first week due to larger expenses leading up to the opening of the shop. However, by the end of the four weeks, Kate Spade will incur a total profit of $74,452. In addition to the financial gains, following the pop-up shop, Kate Spade will have a firm grasp on the viability of the Mumbai market for a potential permanent store. If the opportunity does happen to arise to open a permanent location, the shop will have created valuable local relations, brand awareness, and future loyal customers.

Appendix

Tory Burch A s an American lifestyle brand that emulates the personal style and sensibility of chairman and CEO, Tory Burch, the brand operates 150 b0utiques around the globe and maintains its prescence in more than 3,000 department and specialty stores.

Their mission statement describes Tory Burch as an “attainable, luxury, lifestyle brand defined by classic American sportswear with a diverse sensibility”. Campaigns carry an overall light and cool aesthetic and are advertised most successfully over social media.

Tory Burch has had 2 popup shops for her Tory Sport line between 2015 and 2016 One was located in New York City on Elizabeth street and took place from Monday to Sunday on the third week of September 2015. The NY popup was 1,200 square feet and the space was designed by the designer herself.

Coach F ounded in 1941 as a family-run workshop, Coah made it’s name by offering customers high quality craftsmanship and a unique nature. Known as a leading New York design house, Coach’s collections which include women’s and men’s bags, small leathergoods, business cases, footwear, apparel, jewelry, and other lifestyle products, are both modern and luxurious. Their mission statement describes the brand as “a leading brand that represents a unique synthesis of magic and logic that stands for quality, authenticity, and trul aspirational, distinctive, American style.” Coach is a public company that brings in annual sales of 4.4 billion USD (2016) and employes over fifteen thousand employees.

They operate on a multi-channel distribution strategy with over 950 store locations globally and e-commerece that extends to places such as Japan, South Korea, and the United Kingdom. Coach recently reinvented their advertising by including a more English bohemian aesthetic. The company spends 242 million (as of 2014) on marketing.

Coach has had three pop-up shops since 2014 in locations such as Kansas City, London’s Covent Garden, and New York.

Key Players

Figure 2: Direct Competitors

Appendix

Key Players Marc Jacobs In 1984, Marc Jacobs created Marc Jacobs International with Robert Duffy basing the brand on the concept of an admiration for fashion and quality. Combining both tradition and innovation, the brand has become industry established. Marc Jacobs offers complete collections of both ready to wear and accessories. It is a private subsidiary with annual revenue approaching one billion (2016), the brand has 250 locations globally between wholly owned and franchise stores. The brand utilizes print ads that carry a sexualized tone with stark contrasts. More recently apparel ads have been toned down, especially in comparison with Marc Jacobs fragarance ads. Marc Jacobs has featured a few popup shops since 2014. During the 2014 fashion week, Marc opened a popup for two days called “Daisy Marc Jacobs Tweet Shop” where instead of a currency exchange, customers made a social media post about the shop in exchange for merchandise: a Marc Jacobs bag awarded to the best tweeter at the end of each day.

This gained a lot of attention and success, so they redid the concept in the Covent Garden in London. More recently, (March of 2016) Jacobs collaborated with Julie Verhoeven on a 200 square foot popup on the fifth floor of Bergdorf Goodman’s.

Michael Kors W ith a mission that describes the brand as “the leading American fashion designer for luxury accessories and sportswear [with a] heritage rooted in producing polished, sleek, sophisticated American sportswear with a jet-set attitude”, Michael Kors opened its first retail location in 2006 and now operates 550 North American retail locations including concecessions, and 117 international retail stores extending from Europe to Asia. The company has over 1500 in-store boutiques globally. Michael Kors ads are always highly contrasted and include themes revolving around the jet-set lifestyle. One of the most popular pop-ups launched in Dubai in November of 2014 and was Instagram based. The concept was dedicated to the “Selma” Bag and involved an Instagram feature that the allowed the brand to send your handle a shoppable link. “ #InstaKors” was used to market the shop on social media. More recently in 2016, Kors opened “The Kors Edit”, a pop up that features monthly themes in New York City.

Figure 3: Direct Competitors Continued