Business Report Milly Hailstone
Contents Page
Page 3 Mission Statement Page 4 Business Oppurtunity Page 5 Financial Projections Page 6 & 7 Industry Environment Page 8 The Unknown Customer Page 9 Customer Pen Portrait Page 10 & 11 Competitors Page 12 & 13 Look Book Spread Page 14 & 15 Marketing Page 16 & 17 Marketing Page 18 & 19 Operations Page 20 & 21 Financial Projections Page 22 5 Year Plan Page 23 Conclusion
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Mission Statement
“At Unknown our vision is to create clothing that goes hand in hand with alternative music, a subculture, a lifestyle choice for the younger side of Generation Y. Made in England.�
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Business Opportunity
There is currently a gap in the british market for underground/ alternative street fashion. In America, we see brands like UNIF, Bad Vibes, Lipservice and Widow, whilst in Australia there is Evil Twin. These brands have become extremely popular in their home countries,and even though these brands ship worldwide, British consumers are put off by expensive shipping rates and custom charges into the U.K. The below graph details that out of 80 people surveyed only 25% shop online from other countries.
There is room in the U.K for an alternative brand for women. Whilst there are lots for men - the contemporary market for women is out of date. Brands like Iron Fist and Kreepsville666, are classed as alternative, yet they lack cool, clean design. The current alternative scene seems very out of date, it’s seen the same subcultures and design style for 20 years. For women it features rockabilly/pin up or barely there leather and goth styles. The alt trade show, LondonEdge, talks about ‘the new alternative’ on their website, it’s time for something fresh to take over the scene, Underground could become mainstream, creating a new wave of underground design at the right price will lead to a new wave of alt fashion; it’s currently happening in America, and it will happen within the English street wear market too. To fill this gap, I am going to sell my collections via the internet.
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Financial Projections
The first Unknown collection has the potential to make ÂŁ856.88 revenue, leading to ÂŁ546.87 in profits. Potential total of garments sold is 20, with just 7 needing to be sold to break even. Each following collection could, on average, make 33% more profit than the latter.
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Industry Environment Unknown fits into two market catergories, the alternative market and the indie brand market. The alternative market is over populated with unoriginal unisex t-shirt brands with bad photography and models. The most successful brands in this arena, are all mostly male based, Abandon Ship Apparel, Drop Dead Clothing, Honour Over Glory, HYPE., Skull And Bones Boys Club to name a few. For women, outdated brands like Iron Fist cater to alternative ladies; however their target market is girls who were goth teenagers in the nineties; there is a huge gap for alternative girls aged 18-25 years. Independent womenswear brands which top the U.K market are The Ragged Priest, The White Pepper, Bitching & Junkfood. I would consider these types of brands to be more in competition with; as they are contemporary. Aims include to open an online clothing store aimed at the u.k market. An online store is the best place to begin selling because it requires far smaller costs to set up than a bricks and mortar store - also it is open 24 hours a day and is available to a global market. Having chosen to use sqaurespace.com as a website host, this also offers users an easy to use mobile/tablet version of the website. This is important as much of our target market use tablets and phones to do online shopping. We will also use ASOS Marketplace, it’s a great place for independent labels to start as ASOS Marketplace already has a large customer base. Our projected position for the future will be a small e-tailer selling underground clothing, that will grow into a respected alt-brand in years to come.
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The Unknown Customer
Demographic variables Gender: female Age: 18-25 Generation: Y Ethnicity: British white Marital status: single Life-stage: pre-family Occupation: student, creative industry, musician Education: a level/university Income: student loan, parents or ÂŁ12,000 full time job Social grade classification: kippers Geographic variables Region: cities in England Urban/suburban/rural: urban Residential location: city outskirts Housing type: house share or flat Size of city: Large Climate: seasonal british weather Psychographic & behavioural variables Lifestyle: busy & fun Social aspirations: ‘it’ girl, internet famous Self-image: strong, confident, thin Value perceptions: moral, kind, fun Purchasing motives & behaviour: always wants the new latest thing Interests & hobbies: fashion, music, art, fitness, films Attitude & opinions: strong minded yet reasonable Usage & benefit variables Benefits sought from products: enhance look, stand out from the crowd Usage rates: high at first, then drops Volume of purchases: high Price sensitivity: dependent on item Brand loyalty: yes End-use of products: re-sold via ebay/depop
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Customer Pen Portrait
Potential customers Annabel Lucey. 20. student Wears: Urban Outfitters, vintage, Dr Marten Aspires to wear: Mary Katrantzou, Opening Ceremony
Amy Hanson, 20, shop assistant @ Topshop Wears: Topshop, The Ragged Priest, we are cow Aspires to wear: UNIF
Olivia Emily. 21. student Wears: Black Milk, Asos, Underground Aspires to wear: Alexander Wang, Kokontozai. Our customers are females aged between 18 - 25 years, they are fashion forward, British city living, interactive, young independents that show strong identity through their attire. These extroverts will use social media and the internet to display their outfits and lifestyle. They often attend gigs, and are passionate about real music and living, they live in the moment, and have attitude, looking their best at all times. They buy for themselves, they are spenders not savers and internet shopping is a large part of this. They spend £40 on their phone contracts, £360 on rent & bills and £50 on food per month - all other money is disposable. 9
Competitors
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The Ragged Priest are an independent brand based in Essex, they started in 2007, and would be considered Unknown’s biggest competition. They have a similar target market, and sell from an e-commerce store. Similarities to Unknown include being based outside of London, Made in England, strong branding, and free U.K shipping. However, by pricing our garments slightly cheaper, and offering consumers better visuals in the form of photography and fashion films their customers will become ours. UNIF are a California based, underground clothing brand, they dress the underground music culture in America. Their designs are innovative and they currently lead the american underground streetwear market. UNIF are a brand that Unknown aspires to become like; they have a huge following and are turning underground into the mainstream. Bitching & Junkfood are an East London based design duo that sell their collections via their web store, they are growing rapidly with stockists in England, America and Japan. This brand has attitude, unknown aspires to create a brand that embodies independence and sass.
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Marketing
USPS: Designed and manufactured in England, we believe manufacture will become full circle, and return to Britain, giving to jobs to British workers, thus boosting the economy and reducing carbon footprint. Unique brand, catering for young alternative market. “In the wake of the horse meat scandal, the importance of buying British food and special attention to the origins of products has been reinforced. There is scope for the fashion industry to promote clothing Made in Britain and to push for some manufacturing to be bought back to the UK.” (Sender, T. (2013). Making Fashion More Transparent. Available: http://academic.mintel.com/display/667045/?highlight. Last accessed 25/05/14.)
Alternative styled girls, are often frustrated with the lack of clothing out there. It’s easy to end up looking too ‘goth’, or just ending up wearing a band t-shirt and skinny jeans like all the boys in our subculture. There is a need for a new wave of cool alternative clothing, by creating a new independent label it would benefit the market. There are currently no brands that cater exclusively to the younger side of the alt market, that is why this business idea will suceed. My consumer is looking for something new, that Unknown can offer them.
(Mercer, J. (2013). E-Commerce. Available: http://academic.mintel.com/display/638218/. Last accessed 25/05/14.)
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After looking at disadvantages of online shopping on Mintel, we will offer free shipping codes exclusively via our instagram, twitter and mailing list. This will erase Mintel top barrier to buying clothes online.
(Mercer, J. (2013). E-Commerce. Available: http://academic.mintel.com/display/638218/. Last accessed 25/05/14.)
Marketing Strategy Social Media
The use of social media sites, Instagram and Twitter will promote our business, using these platforms we can interact with potential customers and our target market. Gaining followers will promote our business, so tactics like buying followers can be used - people like to follow brands that are already established and if the brand has a small following, it can be seen as bad or unpopular. If a brand has a good following it will encourage more users to follow it. For promotional purposes an instagram giveaway of one dress from the collection will work for us.
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Self Marketing
Increasing my internet presence and becoming a fashion blogger has increased my follower count - having gained around a thousand new followers, through different mediums, such as Blogspot, Instagram and Lookbook.nu. Now that I have a better following (which increases daily), I plan to use myself as a marketing tool.
Social Media Response
After uploading preview’s of the debut collection on instagram, our target market are taking note and leaving very positive comments and following our social media sites.
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Fashion Bloggers
Having connected with Charlotte Fisher, an established fashion blogger, she works with high street brands and a lot of independent labels. On Instagram alone, she has 27 thousand followers, she has agreed to be a promoter for our brand in return for some clothing, which she will pick. She will blog our current look book and pictures of herself wearing our brand.
As Charlotte would be considered more mainstream, I also will collaborate with an alternative styled blogger, such as Amy Valentine or Helen Melon Lady. These girls have (ever changing) brightly coloured hair, tattoos and listen to rock and metal - they also have great style, and a huge following. Working with one of these girls will potentially propel our brand into the alternative market.
Benefit 1
Made In England
Helping Economy
Free Shipping
Saves customer money
Benefit 2
Benefits Matrix
Cheaper than competitors Less carbon footprint
Using Fashion Expand Customer base Create brand awareness Blogger Guerilla marketing will also be appropriate for marketing our brand.
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Operations
Milly Hailstone Creative Director, this includes designing, pattern cutting and making all garments and stock. Marketeer, this includes coming up with marketing strategies, interacting with promotional bloggers and PR companies. Social Media Manager, this includes holding social media accounts to attract to a brand following and creating brand awareness. Brand Ambassador, this includes modelling for the brand look books and website photo shoots, using own social media sites and blog to promote the brand, wear the brand at blogger events, London trips etc. Sophie Stafford Brand Manager, this includes customer service, overseeing all aspects of the company Graphic designer, this includes brand architecture; logo design, fonts, banners, swing tags, clothing labels Brand Ambassador, this includes modelling for brand look books and website photo shoots and using own social media sites to promote the brand. First aider, qualified.
Funding Requirements
To grow our company, requirements include an industrial machine and overlocker, to get these funds we have a business investor, my father David Hailstone. In return for buying these machines he will get a 3% share of the companies profits. If the business goes bankrupt he will get to keep the machines. This is better for us than to take out a loan, as we don’t have to worry about paying any money back, as we don’t expect to be making great profits for the first few years. All money made in the first few years will be put back into the company so it can continue to grow.
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Risk Managment Plan Risk Identification
Risk Probability
Impact
Action Plan
Sewing Machine breakage
Low
Unable to make stock to sell
Find a sewing machine technician to repair breakage
Website Crashing
Low
Loss of custom
Contact website host, if problem persists, find new host.
Investor backs out
Low
No money to buy machines and fabrics
Find new investor, or use crowd funding to get funds
No sales
Medium
No break even or profit
Rethink marketing strategy and products
Demand becomes too great for me to solely make it all
Low
Customers made to wait before receiving item, leaving them dissatisfied
Out source making to factory, or use crowd sourcing for smaller scale.
Maker gets injured/ill (eg broken arm, flu) unable to make orders
Medium
Unable to send out orders, customers made to wait or refunded.
Out source making using crowd sourcing or find alternate seamstress
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Financial Projections
Start up out-goings Total Cost: £293.10 Investor will buy us an industrial sewing machine and overlocker for a 3% share of the business, so we don’t have to pay back these costs. This graph covers other start up costs, including website, domain, promotional and fabric.
Orb Dress Fabric £1.49 (0.5m @£2.99pm) 2 hrs to make £5.03 = £10.06 Total £11.55 x3.5 = £40.42 x4 = maximum revenue £161.68 Circle Dress £3.00 (0.5m @ £6pm) 2hrs to make = £10.06 Total 13.06 x 3.5 = £45.71 x4 = maximum revenue £182.84 Co-ords Fabric £3.33 (0.75m @£5pm) 4hrs to make £20.12 Total 23.55 x 3.5 = £82.42 x4 = maximum revenue £329.68 Metallic Dress Fabric £2.99 (1m @ £2.99pm) 2hrs to make £10.06 Total £13.05 x 3.5 = £45.67 x4 = maximum revenue £182. 68 3.5x what it costs to manufacture is standard mark up for retail. Minimum wage of £5.03 (under 21) being salaried for pattern cutter/maker. Max revenue £856.88 - capitol £293.10 = potential profit £563.78 (-3% to investor £16.91) = £546.87
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Break Even
Due to minimal start up costs to break even after first collection, 7 garments would need to be sold, this is a 20 piece collection, so we could make profit on the other 13.
Estimates for A/W 14/15 Collection
Fabric - Capitol £150 (30 garments) 30 garments sold at £40 each, max revenue = £1,200 Potential Profits £1,200 - £150 = £1,050 (-3% to investor £31.50) = £1018.5
Estimates for SS15 Collection
£200 on fabric £100 website £48 domain = 45 garments, sold at £40 each max revenue = £1800 Potential Profits = £1800 - £348 = £1452 (-3% to investor £43.56) = £1,408.44
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5 Year Plan 1st Year goals
Within the first year, goals include breaking even, having a stall at a music festival to test the market. Also, creating a AW14 Collection. Launch party.
2nd Year Goals
Create a third collection to sell at more festivals, get first pop up store at pop up Britain in London. Take measures to become more eco-friendly and British made as possible. Put innovative packaging ideas into effect. Approach Urban Outfitters Southampton about becoming a stockist.
3rd Year Goals
Outsource manufacture to British factory and introduce an accessories line. Gain more local stockists.
4th Year Goals
Continue festival circuit, and start selling band’s music on our website to create more of a lifestyle brand. Get a PR company, to gain more publicity and have celebrities wear our collections.
5th Year Goals
Have a longer term pop-up store, 3 months on Brick Lane/Shoreditch. Introduce swimwear range, and start becoming more of a lifestyle brand.
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Conclusion
Analysis of this business concludes that Unknown Clothing will be a successful start up. In terms of marketing, if the strategy is followed it could generate profits that hold no initial cost. After choosing an investor instead of a loan, Unknown Clothing is in the correct position to build a successful fashion line, with a steady profit margin within the first few years of business. Response from social media already suggests that Unknown could become very popular with the proposed target market.
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