Ottössöns by nicolette.c.brown

GLOBAL SOURCING STRATEGY

established a few weeks ago.

FASM 420 | Perri Rothenberg + Blair Barba + Nikki Capizzo + Sara Donahue

Redefining The art of footwear.

a b s t ra ct Ottössöns strives to design luxury men’s leather footwear for the established man with a creative stye. Ottössöns creates a rare premium product that redefines the art of footwear through exclusive production, bespoke designs and premium manufacturing. The long term goal of this New York based company is to conduct business at the highest level of ethical standards while being as socially responsible as possible. Ottössöns puts forth their best foot to develop long term partnerships with suppliers who are committed to meeting the uppermost environmental, product and community standards while treating employees with the concept of family in mind. To be able to do this they have aimed to source products in Italy, Portugal and Brazil considering their established and progressively growing markets and technological innovations. After researching manufacturers around the globe, Ottössöns sought out suppliers with a parallel business structure, clientele, quality standard and guidelines in which they conduct their own business to satisfy their customers. Due to the desire to build close relationships, Ottössöns has developed a comprehensive strategy to guarantee a seamless, vertical and effective business model to optimize margins while minimizing risks. The initial research for this specific approach was to ensure the high quality product the customer is expecting. The top four countries to ensure these goals were Italy, Portugal, Brazil and Turkey. Though Turkey exemplifies many strong attributes, after extensive research Ottössöns felt as though they did not omnisciently fit into the current strategy. In this detailed guideline one will find an explanation for this decision along with the volumes and pricing based on one committed year of productions to manufacturers in each of the selected countries. This approach will ensure everlasting relationships that will help Ottössöns grow and position themselves within the luxury sector.

Contents

Introduction

Strategy Development Process

Country Analysis

Supplier Analysis

Costing

Strategy Development [ Evaluation & Analysis ]

Finalized Sourcing Strategy

Comparison of Final Costing

Conclusion

Appendix & Bibliography

c o m pa n y p r o f i l e Ottössöns strives to design for the established man with a creative style. We create a rare premium product that redefines the idea of art in footwear. Our goal is to use design to redefine business. Our objective is to conduct business to the highest level of ethical standards while being socially responsible. We have made it our mission to develop long term partnerships with vendors who are committed to meeting the uppermost environmental, product, and community standards while treating our employees with the concept of family in mind. To fulfill our potential we need to operate in ways that keeps our competitors on edge while making sustainability integral to our advancements as a company. We are an active member

designing ot tö s s ö n s

of Greenpeace’s “Commit or Cancel” policy for halting deforestation for cattle ranching in the Amazon Biome and we believe the best practice for supporting the development and implementation of a traceability system for our leather products is to ensure our leather within our supply chain is traceable back to where it originated by abiding by the Leather Working Group guidelines. Our customers are our business, they have the opportunity to design personalized shoes custom to their style and taste levels.

We offer selective production in which we distribute a rare product that demonstrates creativity, individuality and passion to create a timeless one of a kind piece. Our shoes are handcrafted with the finest leathers and fabrications for an authentic shoe with a redefined style. Our bespoke designs range from our signature Chelsea Boot to our redefined Classics are made with the customer in mind. Our core collection is designed by our Ottössöns design team, but it is the customer that decides the details. We offer a variety of vibrant color combinations and embellishments to redefine the art of men’s footwear. Finally we offer premium manufacturing while re-inventing the supply chain. We skip the traditional retail channels to build a direct relationship with our clients. Our showroom stores allow our customers to see, feel, touch and try on the product and purchase Online. This reduces costs and our carbon footprint by eliminating steps in the overall supply chain.

Sven Stockholm, Sweden Age 26 Business Student at Stockholm University [ Lives off Parents Income ]

t h e Ot tö s s ö n s

man

Since Ottössöns will have an international presence, there are several markets considering the wide variety of products we will be offering. The Ottössöns Man embodies an affluent lifestyle, driving German cars, and wearing Italian designer clothes such as Armani. The average salary of our consumer is $170,000 and 8

Douglas San Francisco, USA Age 31 Creative Director at Advertising Agency

Victor Shanghai, China Age 42 CFO at Global Investing Company

spends nearly $13,000 per year on fashion and beauty

feel confident with his purchase. He purchases expensive

products. They vacation twice a year in Thailand and St.

items not only for the brand name, but for the quality

Tropez and take annual winter ski trips to Val d’siere,

that is expected when paying a premium price. Accord-

France. One thing each of our men have in common is

ing to VALS the Ottössöns man is an experiencer not

the desire for unique products that embody an essence

afraid to take risks in business a business atmosphere or

of quality that not only lasts, but makes the consumer

his personal life, always striving for the best. 9

t h e p r o d u ct s & t h e P r i c e s “ T H E L OA F E R ”

“ T H E c h e l s ea”

Our first order of products will include 4 major styles, the (1) Loafer, the (2) Chelsea boot, the (3) Derby and the (4) Jodhpur boot. Each style will be made with genuine calf leather from the finest local tanneries. The shoes will be made with 3-ply leather soles handcrafted with each customer in mind. These products were chosen due to their versatility of use and need throughout each of the seasons.

“THE jodhpur”

“THE derby”

T h e P r i c e ra n g e [ w h o l e sa l e ]

The Loafer + $445.00 The Chelsea Boot + $415.00 The Derby + $400.00 The Jodhpur Boot + $430.00

t h e Ot tรถ s s รถ n s

aesthetic

why?

This document is the detailed and extensive guideline in which Ottössöns will conduct their first year of their sourcing strategy. It includes the preliminary and finalized cost structure based off of potential suppliers and manufacturers from the chosen countries of origin which include Italy, Portugal, Brazil and Turkey. Although Turkey offers strong potential, Ottössöns felt as though they would feel more content in investing time in the other countries due to product requirements, and outweighed risks verses potential benefits. This document ensures that the Ottössöns brand will optimize business opportunity in the luxury footwear sector by optimizing margin potential while minimizing their risks while maintaining value alignment and opportunity for extensive growth. By analyzing each country, and chosen sources along with their viability to accommodate volumes, production quality, efficient lead time and pricing requirements Ottössöns was able to finalize a strategy based off of these factors.

s t rat egy development process

WHY DEVELOP A STRATEGY? Ottössöns Luxury footwear developed a strategy to maximize opportunities and minimize risks. The four countries chosen have the top leather industries in the world and a progressive footwear market. Specific footwear designs were placed in Italy, Portugal, Brazil, and Turkey to optimize time efficiency within production. All of the countries have the capacity to make the current styles of Ottössöns footwear, at a quality that is expected from the company and the consumers. Ottössöns ’ footwear developed a reliable strategy, while ensuring our suppliers are vertical and flexible. A strategy was planned to validate a fluid logistics process to emphasize the reliability and flexibility of the suppliers chosen. All of these factors ensure positive working relationships, which lead to the overall value of the Ottössöns Footwear brand. This value ensures product will be sold at a cost large enough to maintain profit margins for Ottössöns footwear while producing a product at an acceptable cost for the consumer while guaranteeing quality.

Distribution of style per month

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,++++ -++++ .++++ /++++ 0++++ 1++++ 2++++ 3++++ 4++++ ,+++++ * + ,++++ -++++ .++++ /++++ 0++++ 1++++ 2++++ 3++++ 4++++ ,+++++ *

tota l vo l u m e o f ea c h s t y l e Tota l : 6 4 5 , 0 0 0 U n i t s P e r Y ea r .

The charts above highlight the volume of distribution that OttĂśssĂśns

will obtain throughout the first year of sales. Upon analysis over a year period the top graph features direct style quantities per month. The bottom graph highlights the overall volume of shoeâ&#x20AC;&#x2122;s to be manufactured. The graph is broken up by four styles. The two charts highlight the overall distribution and quantity. For further information see the sales chart. 15

s o u rc i n g g u i d e l i n e s & va l u e s

t h e Ot tรถ s s รถ n s

s o u rc i n g s t rat egy

KEY OBJECTIVES: Social Responsibility Product Impacts - Materials & Methods Sustainable and Humanely Sourced Leather Creating A Balance Internal & Eternal Awareness PRODUCT SOURCING Modern Technologies & Quality Craftsmanship Strong Relationships with Manufacturers Code of Conduct for all factories ANIMAL SKINS POLICY Particular Skins & Country of Origin Anti-Biome Animal Welfare

CODE OF CONDUCT Voluntary Employment Child Labor Fair & Equal Treatment Harassment & Abuse Nondiscrimination U.S. Customs Routine Auditing Documentation & Inspection Sub-contracting Developing premeditation plans COMMUNITY INVOLVEMENT Greenpeace The Leather Working Group Forest Footprint Disclosure

[ see appendix for detailed sourcing guidelines ]

va l u e s

- Ae s t h e t i c - D e s i re f or A r t i s t i c B e aut y a n d n e v e r s e tt l i n g f or a n av e r a g e pro du c t - Pe r s e v e r a n c e : Ac t i v e l y p u r s u i n g i n n ov at i v e s t y l e s t h at p u s h t h e b ou n d a r i e s of a r t i n f o o t w e a r - Te a mw or k - Q u a l it y - C om mu n i c at i on - Tr a i n i n g - Ad v a n c e m e nt : E n s u r i n g s h o e s a re m a d e w it h t h e l at e s t t e c h n o l o g y

c o u n t ry a n a ly s i s

i ta ly

b ra z i l

p o rt u ga l

turkey

WHY BRAZIL ? Being that Brazil is the second largest leather producer and exporter in the world, it has been chosen as a potential manufacturer for Ottössöns Luxury shoes. Brazil offers an eco-friendly and transparent manufacturing process. Leather can be sourced directly from the land of Brazil, through hundreds of reputable tanneries located in the parameters of the country. Manufacturers in Brazil provide a vertical manufacturing system, making it a convenient and reliable choice for producing the luxury footwear of Ottössöns .

SUMMARY OF BRAZIL & THE LEATHER INDUSTRY Brazil stands fifth in line for the Production of textiles. It produces 3.07% of the world’s textiles, equivalent to 2,089,000 tons. This industry produces 14 to 15 million jobs, both direct and indirect of Brazil’s industry. Brazil is considered the second largest leather producer and exporter in the world. The industry moves two billion dollars on a yearly basis. The country houses 14.4% of cattle worldwide. For 2012, the top four importers of Brazilian leather goods were China (importing $484,957,505.00), Italy ($428,834,484.00), United States ($259,828, 962.00), and Hong Kong ($241,164,231.00). Currently, Brazilian leather can be found via importing in 91 countries around the world. The leather industry represents over 14% of the Brazilian trade balance. Ottössöns strives to manufacture luxury footwear to be sold both in the United States and internationally around the world. Considering the large presence Brazil has made in the leather industry, it is wise for Ottössöns to consider them a leader in leather goods production. There are over fifty recognizable footwear manufacturing companies in Brazil, producing footwear for significant brands such as Clarks shoes, Nordstrom Private label, and Tory Burch.

WHY PORTUGAL? The Portuguese leather footwear industry is focusing on exactly what Ottössöns is looking for in their manufacturing- high quality and high advances in technology. Not only do they have very experienced leather production, but the industry is growing immensely. These two factors make Ottössöns anxious to become a member of the Portugal team, and the risks relatively low. Considering their world reputation, a favorable foreign investment climate, and an available and willing labor force spell success to Ottössöns. For Ottössöns, the economic instability is a possible risk in doing business in Portugal. However, the new political leadership is a plus. There is a great desire and commitment to get the economy growing again. As Portugal is an EU member, the other countries have a real and vested interest in making sure this will happen. Also, the business climate in Portugal now is welcoming foreign investment and there are incentives in place to lure our company into the fold. The combination of desiring our footwear business and the protections in place make it feasible to set up shop in Portugal and expect a profitable partnership. 19

SUMMARY OF PORTUGAL & THE LEATHER INDUSTRY

c o u n t r y a n a ly s i s

Portugal is known globally for its leather footwear manufacturing, ranking eighth world-wide for leather footwear exports. As the top tier of the leather footwear industry, Portugal was a natural pick to research further into manufacturing for Ottössöns. The international market appreciates Portuguese footwear, whose designers and manufacturers strive for technical innovation and luxury, which is what Ottössöns strongly believes in. The Portuguese market has begun to target foreign markets and focus on being known as a producer of higher quality shoes and identifiable brands. The market consists of mostly small to medium sized establishments, employing around 33,000 workers, according to the footwear association APICCAPS, while 90% of its production is done entirely for export. Although it has tough competitors that have the advantage of lower production and labor costs, it still manages to trade in surplus, subsidizing very well to the trade balance of Portugal. The production of leather footwear represents 88.2% of the manufacturers, 92.7% of employment, and 88.3% of the leather and leather goods industry business. The industry of leather footwear has around 900 exporting companies alone, and represented 85% of Portuguese exports in footwear in 2011, an expansion of 16% in comparison to 2010. Much of Portugal’s new found success in the footwear industry came with their passion for new technological development within the market. This passion brought together companies and universities that developed into the Technological Center and a constellation of footwear. Research and development was funded through ADI and began in the mid-90’s, and added up to over 36 million euros in total cost. The footwear industry is one of Portugal’s most important markets. Not only is it gaining advances in technology and production methods, but connecting with countries for exportation of their product. It has much room and desire for expansion and growth in the future.

WHY ITALY? When deciding whether to conduct business in Italy, there are many factors to consider. Italy has been recognized for manufacturing high quality products none along with having a mature economy. Italy’s location includes 7,400 km of coastline with 24 main commercial ports. Italy handles 10 million 20-foot equivalent units annually. This indicates that Italy has a sophisticated infrastructure for consistent and reliable exporting of our products. Since their unemployment rate is high, Ottössöns sees Italian manufacturing as a way to build jobs. One major benefit to keep an eye on is the passing of the Trans-Atlantic Trade and Investment Partnership. This will strengthen Italy and The United States relationship either further. This trade agreement will drop duties and tariffs for products going to and from the EU and US. It is clear that the benefits of going into production in Italy outweigh the minimal risks. Ottössöns will be able to trust that our manufacturers will produce high quality shoes sourced responsibly and made in a positive and safe environment aligned with our sourcing strategy and guidelines.

SUMMARY OF ITALY & THE LEATHER INDUSTRY Currently, the footwear industry in Italy accounts for a gross value of USD $4,646,000 Italy accounts for 15.4% of the European apparel retail industry value, Germany has the largest apparel industry value. Italy is the driv-

ing force of the EU footwear industry as the leading exporter and producer. Their main export markets include the USA, Romania, Switzerland, Russia and Japan. The Italian footwear industry is targeted towards leather footwear of medium to high quality with international, smaller brand names. This is the exact market of Ottössöns Footwear. The reason for smaller, more expensive shoes in Italy is simply because they are the innovators of the marketplace. Italian designers and shoes produced in Italy are the first to offer new products in terms of design. This manages on to its market share; exports have only declined 6% since 1999 (partly due to currency deflations) altering exporting prices. A large problem is to keep themselves competitive with similar products at lower prices and acceptable quality. A benefit to manufacturing in Italy is their structure, which has been stated to be the opposite of its mass market competitors like China and India. Italy is composed of mostly smaller firms employing 12-30 people. There are over 7,000 firms in the sector with 900 of them being shoe producers. All of the producers cooperate together. They have quick reaction times, low minimum order quantities and elastic production. More than half (55%) of the companies have reported a stable trend in revenues over the past 3 years. In all, The state of the leather and footwear industry is very established considering they are the innovators of the marketplace. Although costs are relatively higher, Ottössöns knows the product the finished product will satisfy the buyers, sellers and customers.

WHY TURKEY? Turkey has continued on a dynamic path toward economic prosperity. There strong growth within the past decade has provided a foundation for a wholly new level of commercial cooperation between their business and ours. In doing so, we uncovered many significant opportunities for Ottössöns within the luxury leather footwear market however, with more pressing obstacles that wave over head our market entrance is delayed. Today, with the knowledge of culture, political, economic, social and the business outlook in Turkey the risks are outweighing the opportunity for Ottössöns.

c o u n t r y a n a ly s i s

SUMMARY OF TURKEY & THE LEATHER INDUSTRY

Turkey’s rapidly expanding economy, political and economic stability, and the possibility of EU membership has attracted the attention of a variety of American companies. Turkey’s rapid growth and development over the last decade has become one of the success stories within the global economy. Today, Turkey is based upon a largely middle-income status with a population of 74 million and a gross domestic product (GDP) of US$735 billion, making it the 18th largest economy in the world. Within in the past decade Turkey has fostered an attractive international investment sector, due to a series of reforms in the wake of the 2001 financial crisis. With one of the largest and fastest growing labor forces among developing countries and emerging economies, Turkey has fostered an ideal location for competitive labor cost. However, Turkey faces significant economic risks going forward. With low domestic savings, Turkey’s economic growth relies on capital inflows to finance investments and development. The country’s large current account deficit (US $2 billion) and the composition of its financing remain a critical concern. With a combination of external and domestic factors there are several significant risks as Turkey moves forward. Geographically located between

the crossroads of Europe and Asia, Turkey has become a mixing pot, an ideal location for import/export success but a target for political and financial instability with neighboring countries. Under a deepened crisis scenario in the Euro zone, Turkey is prone to feel the spillover from the European debt crisis, correspondingly a sudden stop of capital inflows to emerging markets driven by a ‘flight to safety’ response. Turkey could possibly face a renewed recession at this point, their dependence on external financing has left the country prone to boom-bust cycles. The worry that emulates concern now is how to move forward with such a large uneducated labor force, a government who holds contradicting policies with instability of power, a geographical location that causes tension on values and influence on domestic and international levels, and a debt crisis that looms overhead with little establishment for a pocketbook to lean on. Turkey’s business climate fosters a large risk market.

FOOTWEAR LEATHER INDUSTRY With and economic, political and social outlook on Turkey the risk out weigh the benefits of the luxury leather footwear market. However, while looking into the opportunity for market growth Turkey is one of the most renowned leather export manufacturing districts around the world. According to statistics Turkey’s footwear industry is ranked 27th in world. Today, the Turkish footwear industry has a strong position among exporters of high quality fashion goods but little involvement with U.S. market. According to Italian Luxury fashion firm executive Pier Luigi Loro Piona, “Turkeys future lies in manufacturing high-value products rather than providing cheap labor.” Turkey has one of largest labor force with competitive labor costs within the luxury market, thus, bridging the gap between ‘made in china’ (low costs) and ‘made in Italy’ or U.S. (high labor costs). Looking forward the importance of ‘know how’ and a focus on value and high quality products with a strong design power is where the market shift is headed.

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c o u n t ry ra n k i n g s & e x p la n at i o n

COUNTRY RANKING Scale of 1 to 10 with 1 being the worst and 10 the best Portugal Explana:on

Business Climate

Costs

Government

Loca:on

Risks

Social Stability

Sourcing Guidelines

Footwear Industry

Trade Agreements

Trained Work-‐force

Socio-‐eco-‐poli:cal

Ease of doing business ranked 30/185 countries. Made easier by elimina:ng outdated start up formali:es and simplifying requirements . Cheap Labor: $4.19/hour. Leather costs cheap. Technology and cra\smanship to be considered.

Strong poli:cal leadership. Social democra:c party.

3,379 miles from NY port. Varies from 20 days of transporta:on.

Nega:ve economic stability. Budget deﬁcit. However, no terrorism.

Social Protec:on Laws. Fight suppor:ng minimum wages. Premium manufacturing, Labor Laws Established, Under EU Legisla:on-‐Na:onal Law.

Ranked 8th world wide for leather footwear exports. 900 expor:ng companies alone, Represents 85% of Portugal Exports, Technology developments.

None as of now, very strong if TTIP is established.

33,000 workers of high quality leather shoes. Leather footwear industry represents 88.2% of manufacturers

Economic instability, new poli:cal leadership is a plus, Business climate welcomes foreign investments. Strong currency stability with the EURO.

Italy

Explana:on

Italy has a well established business structure. They are top 8, and very industrialized.

Italy's costs have been rising substan:ally due to globaliza:on and compe::on. With higher costs comes higher quality.

Although their government went through a recent rough patrch, their government is stable and has close :es with the United States.

Their loca:on is ideal for European and middle east distribu:on. It is not ideal for shipping to the United States. It will take 28 days to bring products from Italy to the US

Risks are generally low when manuacturing in italy considering their developed economy. The only minor risk would be the diminishing of factories due to globaliza:on.

Italy's society is stable. They have an elaborate social security program, and are civilized.

Italy sources and manufactures products with transparency and quality in mind.

The footwear / leather industry is top of class in the world. Since we are manufacturing high end leather shoes, Italy embodies the direct market. Although this market is shrinking, there will always be a place for italian shoes within the marketplace.

Although Italy and the US do not have any direct trade agreements, the TTIP is currently trying to be passed. If passed, this will diminish tariﬀs within the next 2 years.

Itlay is known for their extensive footwear cra\smanship, they have the most trained work force in terms of shoes in the world.

As a whole, italy is very well developed in the marketplace. Although they have small implica:ons due to globaliza:on and high unemployment rate, none directly eﬀect manufacturing our product.

Brazil

Explana:on

Brazil is the largest economy in La:n America, & the 9th largest economy in the World. Brazil's current GDP growth is the highest it's been in 25 years. The current minimum wage in Brazil is $1.25/hour. Leather costs can be costly depending on speciﬁc quality. Brazil is ﬁ\h largest exporter of leather.

Brazil is Federal Republic. Dilma Rousseﬀ is the ﬁrst female president holding strong poli:cal leadership.

It takes 27-‐28 days to receive product via cargo freight from Rio Grande, Brazil to New York, NY.

Large labor unions. No terrorism.

Imporving taxa:on and labor laws.

Premium manufacturing and established labor laws that coincide with Okossons Footwear.

Brazil is 2nd largest exporter in leather and footwear. The Center for Brazilian Tannery Industry (CICB) has represented Brazil's tanning industry for 56 years (including footwear) Shoemaking industry billed $21.8 million in 2011.

There are no current Free Trade aggreements, but Brazil & the U.S have signed the Agreement on Trade & Economic Coopera:on. This is a mutual understanding of trust and coopera:on when trading with one another.

Brazilian leather industry creates 50,000 direct jobs every year.

Economy is the strongest it has been since 2009. The unemployment rate is currently 6.4%. (lowest since 2002). Business climate encourages foreign investment.

Turkey

Explana:on

Turkey is the 18th largest economy in the world. Business Conﬁdence in Turkey decreased to 107.46 in October of 2013 from 108.53 in September of 2013.

High labor cost avg. $5.6/hourly leather wage. Consider there pride in quality produc:on. Birdge piont between high and low labor cost markets.

Parlimentary Democracy with free market economy. REFORM for Decomcracy, poli:cally unstable, account deﬁcit, military s:ll has strong inﬂuence=NEGATIVE

The loca:on is ideal for Western and Eastern points between Europe and Asia. However, for the United States it taks abour 30 days to receive product via freght from Turkey to U.S.

Poli:cally instable with neighboring countries, account deﬁcit, slow innova:on, large workforce but uneducated, cons:tu:on needs reform, restructuring in judiciary (checks and balances), over militarized envrionment

Contrast from tradi:onal to modern has created a strong 'push and pull envrioment' . WEST VS. EAST

Premium manufacturing that :es with EU standards and regula:ons, coopera:ve ac:on with foreign companies.

Turkey's footwear industry is ranked 27th in world ranking for exports at US$398 million. With leather footwear trade taking up 23% of total exports and 19% total imports.NOT ALOT OF ACTION WITH US

The U.S.-‐Turkey partnership is based on mutual interests and mutual respect. Turkey is a candidate for the EU and U.S. market BUT NO DIRECT AGREEMENTS BETWEEN TURKEY AND US. Opportunity in CTPAT and TTIP

The footwear industry employs 26,954 people and the industry has about 4753 companies which are manufacturing various shoes and slippers.

Economic slowdown in Turkey in 2013 might give pause to some importers’ buying decisions. The unemployment rate is currently at 9%. However, governement is s:ll looking to grow with investment incen:ves.

Total

Average

6.1

7.7

6.8

5.8

s u p p l i e r a n a ly s i s

HOW SUPPLIERS WERE SELECTED FOR INITIAL RESEARCH

of operational metrics such as price, capacity, flexibility and

When conducting research for potential suppliers, Ottössöns

ation of our suppliers’ capabilities and practices amongst;

footwear used their sourcing guidelines as a criteria that

quality, management, services and their strategic outlook,

needed to be met by future suppliers. If criteria relating to

Ottössöns selected suppliers who fit in line with their val-

forced labor, sustainability, and quality assurance were not

ues, ideals, and visions. Ottössöns ’ feels that by producing a

of importance to a supplier, Ottössöns ’ did not see them

premium product, the development process must see ‘eye to

fit for a role in the research conducted for potential manu-

eye’ from start to finish, holding true to our sourcing guide-

facturers. Concerns for Ottössöns ’ also included finding

lines as well as customer satisfaction. While selecting high-

supplier’s that produced quality products in reliable fac-

performance suppliers, Ottössöns ’ looked to our customers

tory infrastructures. Current clients of manufacturer’s were

to be the designers, mimicking the U.S. market perception

examined to ensure proper quality and reliability could be

map of importance in a luxury brand; reputation 24%, de-

provided by the researched suppler. Potential suppliers must

sign 38%, prestige 47%, craftsmanship 48% and price 55%.

also adhere to international laws, including the Bureau of In-

Ottössöns ’ selected suppliers who fostered quality assurance

ternational Labor Affairs (ILAB). The ILAB formulates and

at a competitive price, reliability with a keen eye for details

assists in supporting labor policy as well as economic and

and perfection, vertically integrated design processes push-

trade policies. The previously stated factors were of great

ing innovation, and reliability. These seven skills foster the

importance to Ottössöns luxury footwear, when selecting

buyer-supplier relationship that Ottössöns ’ believes will

suppliers for initial research. The following countries, Italy,

distinguish the company in a competitive marketplace and

Brazil, Portugal, and Turkey, were all analyzed for potential

create a competitive edge for the company image and the

manufacturing purposes. When delving into the importance

suppliers selected.

delivery, we critically evaluated suppliers. By strategic evalu-

s u p p l i e r a n a ly s i s : b ra z i l

B ra z i l :

When conducting research for suppliers in Brazil, Ottosson considered their sourcing guidelines as vital criteria that needed to be met by all potential suppliers. Panjiva.com, an international supplier database system, was used to research reputable footwear suppliers in Brazil. All of the suppliers conducted for initial research needed to present adequate contact information, a list of their customers, and assurance of their detail oriented manufacturing process. B2Brazil, a certified online source for companies looking to conduct business in Brazil, listed footwear manufacturers in Brazil that met industry standards. From this information, Ottössöns ’ chose select Brazilian suppliers based of their specific assortment expertise and their ability to manufacturing luxury footwear. After selecting ten initial suppliers, Ottössöns ’ narrowed their selection down to the top three. This gave the company an opportunity to evaluate the strengths, weaknesses, risks, and benefits of the top 3 potential suppliers in each country. The top three suppliers chosen for Brazil were chosen based on their ability to produce adequate capacity levels. These capacity levels needed to meet the minimum number of units being placed by Ottössöns in the following months, while ensuring that the manufacturing process could handle additional orders with the growth of the business in the years to come. Location played an important role when selecting the top three manufacturers. Brazil’s dangerous flood season often destroys dirt roads in small areas, leaving business’ abandoned. Therefore, Ottössöns ’ needed locations that were in industrial areas, with the ability to safely travel to the nearest port where shipment of the goods could be processed and released from Brazil. Brazil’s dangerous flood season often destroys dirt roads in small areas, leaving business abandoned. Lastly, Brazil’s final three suppliers gave Ottössöns ’ substantial information regarding their transparent manufacturing process. Acquiring the most information from their suppliers was of great importance for Ottössöns , as open and honest relationships have the potential of building life long partnerships.

T h e To p 3 S u p p l i e rs : B ra z i l 1.

S h o e s E x p o rt e I m p o rt Lt da . ( Wo r l d S h o e s C o . )

World Shoes Company is a newly established supplier, offering the most current technology in manufacturing and a promise in quality assurance. Their first objective is to show that Brazilian shoes are made with the highest quality, competitive prices and deliveries are sent at the expected time. Current customers of World Shoes Co. include Nomad, Picadilly, Divalesi, and Jorge Bischoff. Jorge Bischoff is an international shoe designer specializing in luxury men’s and women’s footwear. World Shoes Company currently manufacturers shoes for the markets of South, Central, and North America. Recently, they expanded clients in Europe, Africa, and Australia. Their wide range of clientele expertise in the international marketplace makes them an attractive potential supplier. World Shoes Company is able to fulfill the capacities requested by Ottössöns shoes, as well as assuring that the quality of Ottössöns footwear meets the agreed upon standards and satisfies all parties involved. 2.

Wo r l d C o m m e rc e S h o e C o m m e rc i a l E x p. D e Ca lca -

d o s Lt da .

The World Commerce Shoe Commercial Exp. De Calcados Ltda. is located in Rio Grande do sul, conveniently close to the Port of Rio Grande, which is cited as one of them most important ports of the American continent, in terms of productivity, offering fast and quality services. They are a vertical supplier, offering their services in sourcing fine leather and an obligation in overseeing products through the production process. Customers of the World Commerce Shoe Commercial include Eddie Bauer, Inc. and Steven Madden. Both brands offer fine leather quality shoes, for both men and women. Although the quality of footwear will exceed that of their current customers, World Commerce Shoe Commercial is looking to expand their portfolio and expertise by offering production for all quality levels. Since Ottössöns is a new company, options are being kept open in regards to entering new suppliers offering new product lines. 3 . Pa q u e ta Ca lca d o s Lt da .

The Paqueta Calcados Ltda. was established in June 1945. Located in Sapiranga, Rio Grande do Sul, Brazil, Pauqeta initially started as a small shoe company and has grown to compromise several businesses. Paqueta’s international clients include, Gaston, Braga, Dumond, Lilly’s Closet, and atelier Ortope` Mix. Their company mission is as follows: “ Provide excellence expectations, desires and dreams of our customers, with motivated employees and satisfied with results sustainably” The company believes in a sustainable manufacturing process and uses state of the art technology to produce their products. Paqueta has the ability to fulfill the requested Ottössöns order, while maintaining quality assurance.

p o rt u ga l :

Each supplier was chosen based on their abilities and quality of production. Their customers in the industry were taken into con-

s u p p l i e r a n a ly s i s : p o rt u ga l

sideration along with their capacity of products produced. The information available was taken into consideration when narrowing the selection down, as some of the suppliers researched did not provide sufficient information for a complete evaluation. Starting out with ten manufacturers, the selection was then narrowed to the three strongest suppliers, researched fully, and evaluated for Ottรถssรถns.

C o n ta ct I n fo r m at i o n

Longra- 4650-328 Rande Felgueiras- Portugal Tel. 351 255 340 880 Email: info@soze.pt Zona Industrial ap 43 3721-908 Vila de Cucujรฃes ( OAZ ) Portugal Tel: 00351-256-386065 Website: www.ferratti.eu Address: Barroco - Lagares, 4610-404 FELGUEIRAS Tel: 351 255 311 606 E-mail: felfi.shoes@mail.telepac.pt Website: http://clientes.netvisao.pt/jlcipm/felfi/

T h e To p 3 S u p p l i e rs : p o rt u ga l

1 . Fa b r i ca d e Ca lca d o S o z e , S . A .

Soze Group was established in 1976. With 160 full time employees, their production reaches 7,050 to 8,150 pairs of luxury shoes per day. The company has great flexibility, being able to do various constructions such as cemented, mocassins, stitchdown, blake, timber, strobell, goodyear welted, and waterproof. Producing the highest quality shoes, the delivery time takes between four to six weeks for existing styles and materials, and between eight to ten weeks for new styles. Soze already has very high quality brands that they produce for including Hugo Boss, Dansko, Ted Baker, Ecco, Gant, Pollini, Kickers, Pataugas, and many more. They pride themselves on new technology investments such as CAD/CAM systems and water jet leather cutting systems which allow them to offer its clients new solutions along with a higher quality. Not only does it focus on high quality leather production, but has the machinery and experience in the market to manufacture the best possible quality shoes. 2 . F e r rat t i

Ferratti works with a combination of traditional craftsmanship and modern material made out of pure and natural cow, goat, and sheep leather. Without any kind of treatment, all the leather is dealt with in an ecologically friendly manner. Established in 1990, Ferratti manufactures all types of leather goods from handbags to shoes to leather accessories. Ferratti works with clients throughout Europe to develop the most luxurious products. Christian Pellet and Ted Baker have both been long standing brands of Ferratti. They believe that each of their products produced are rich in personality, style, and individuality. Ferratti sees their success from their talented employees and their high quality materials and processes, combining the latest technologies with their traditional craftsmanship. Able to produce over 6,500 pairs of luxury shoes a day, Ferratti’s 150 employees see detail and quality at the top of their priority lists. All of these qualities make this vertically integrated manufacturing company a right fit for Ottössöns 3. Felfi Shoes

Since 1987 Felfi Shoes Company has been one of Portugal’s top leather footwear manufacturer. They produce medium to high quality footwear ranging from men’s, women’s & children’s. Various construction systems are available such as: Cemented, Moccasin, Strobel, Sole Stitched, Stich & Turn, California, S. Crispino, and Pratik. Environmental preservation is also very important to Felfi and they stand a strong believer for complying to international regulation. With the ability to produce over 5,000 pairs of shoes daily, Felfi focuses on quality first and foremost. Their customers also represent their belief in quality, representing Hugo Manuel as one of their longest standing clients. Their sourcing guidelines and values match with that of Ottössöns, making Felfi a strong choice for manufacturing. .

i ta ly : When researching suppliers in Italy it was apparent that the Ottössöns standard of quality, craftsmanship and verticality were in mind during all stages of the process . Italy is often seen as

s u p p l i e r a n a ly s i s : i ta ly

a mecca for providing luxury goods and services to a variety of countries around the globe. The “Made In Italy” stamp is what many manufacturers pride themselves on. After analyzing 10 strong manufacturing companies who make men’s leather footwear, Ottössöns eliminated 70% of potential suppliers due to their small capacities. Italy often produces smaller orders to ensure their quality. Fortunately, Ottössöns has chosen 3 top suppliers in Italy that will not only ensure the quality of the final product, but are vertical and able to ensure strong lasting relationships and growth for the future. All of the chosen manufacturers are actively involved in leather associations to regulate the state of the leather and footwear industry. Some include The International Leather Split Group, ASSOMAC, and EXPOOL. A benefit to manufacturing in Italy is their structure, which has been stated to be the opposite of its mass market competitors like China and India. Italy is composed of mostly smaller firms employing 12-30 people. There are over 7,000 firms in the sector with 900 of them being shoe producers. All of the producers cooperate together. They have quick reaction times, low minimum order quantities and elastic production. More than half (55%) of the companies have reported a stable trend in revenues over the past 3 years.

T h e To p 3 S u p p l i e rs : I ta ly

1 . b r u m a’s , I n d i s t r i a I ta l i a n a Ca l zat u r e G r o u p

Industria Italiana Calzature group, also known as the IC Group was founded in 1962. They produce high quality shoes made in Italy registered as “Bruma’s” for male, and “Bfemme” for their female products. They are also a world wide licensor of “Flexa, a brand of Rossetti grp” They offer family management of the IC Group and call themselves professional old school makers, artisans.” by Bruno Donnari. In 2011 the company switched presidencies to their younger son Patrizio Donnari. With this change came a lot of implications to optimize their business structure. This is a main reason why Ottössöns chose Bruma’s as a main manufacturer. Future goals including economical and technological advances and updates to achieve the aims and targets, upgrading their own premium brands and licenses. They are a company that is not only established, but can also help us grow as they grow. At the headquarters, they carry out a full “Made in Italy” process from research, style, development until shoe production. The company started an important international process, exporting Bfemme and BRUMAS’S shoes to EU countries, ASIA and USA, looking constantly for new markets and sales partners, to settle its position either in the Italian or foreign markets, guaranteeing an important presence in the most qualified showrooms and fashion retailers. IC group’s know-how mixes new technologies and high-quality materials with the typical Italian care for details. Their slogan is “Because We Care.” 2 . M at u r e SA S

Mature S.A.S. have been in business and on the same premises for over 100 years. They originally opened a store cum workshop. “After one century everything in the world has changed, but our quality has not.” They received gold medals at the Lonon International Fair for the highest quality of merchandise produced. The four generations of the family still produce their own leather goods with very exclusive products. Their leather is tanned naturally with vegetable tanning. This is an eco friendly and durable, maintain free way of handling leather. Their product line is 100% made in Italy. They are able to produce all 315,000 units of our products, although they state on their website costs have been rising due to rising labor costs. Ottössöns emailed them for quotes, but they did not yet respond with specific numbers. 3 . C h i ko I ta ly

CHIKO Shoes is a vertically integrated fashion shoes producer, wholesaler and retailer, offering high end ready-towear, as well as fully customizable women fashion shoes which are custom made from the clients’ shoe illustrations. They were founded by Judy Chin in 1999. Their mission is to manage all vital aspects of product development, private design prototyping and shoe production so their customers can focus on marketing and sales. They are committed to meet needs of our customers with competitive pricing, impeccable quality and on time delivery with the most efficient service. They enable shoe designers to submit a sketch, in which their professional services will do the rest. They take pride in the quality they offer. Their shoes are made with 100%% of the finest materials by experienced shoe technicians. Unfortunately, they can only produce 1/2 of the 315,000 orders Ottössöns need, although they said they would work with us to find a solution.

turkey: While selecting suppliers for initial research, Ottössöns looked to suppliers who mimicked their company philosophy within their production processes. Ottössöns ’ wanted to foster an alignment with suppliers’ operations that fit seamlessly with their sourcing guidelines, values and mission. Specifying the selected Turkish

s u p p l i e r a n a ly s i s : t u r k e y

suppliers was a task for Ottössöns . Choosing who and what we wanted to foster through out our business identity was an exciting fleet. Ottössöns has taken a detailed look into the truths that formulate our top manufacturers. Narrowing down our broad selection between three top suppliers. We weighed our opportunities and risks for each relationship. “Standing out from among other countries in the world who practice mass production, Turkish shoe brands achieved differentiation with products that comply to international norms and target quality, bringing them to the position where they are today.” –Pier luigi loro Riana, Italian Luxury fashion firm Our top three suppliers are all based out of Istanbul Turkey, a city immersed in culture and amongst one of the largest cities in the world. This ideal location for the suppliers is near the coast, with easy freight access to the Haydarpasa Terminal, which offers port to port access to the New York terminal. C o n ta ct I n fo r m at i o n

Address: Industry Mh. Without SK. Tortoplar Business Behold, I am No: 1/1 Gungoren – Istanbul – TU Istanbul Phone: +90 212637 82 70 Email: info@akarayakkabi.com Address:  Merter Rocks district of Fatih Caddesi Street  No: 10 Kat: 1/2 Gungoren / Istanbul Phone:  +90 212 637 34 10 – 11 E-mail: info@akarshoes.com

Address: Keresteciler Sitesi Fatih Cad. Uzun Sok. Aydın Han No:18, Merter - Güngören / İstanbul, 34173 İstanbul, Turkey Phone:+90 212 637 7866 BEYOGLU@BEYOCCLUAYAKKABI.com 32

T h e To p 3 S u p p l i e rs : t u r k e y 1 . a ka r

In a very short time from the founding date in 2004, AKAR has enlarging their customer portfolio creating a prestige customer base. Ottössöns looked to AKAR due to the solidity and belief in their mission to produce a premium product through quality manufacturing techniques. With an aim to produce classic leather shoes, by using the highest quality raw materials combined with good quality in craftsmanship. While pushing innovation through research and development departments there manufacturing operations foster strong production. We found the values and vision of AKAR to be a great foundation for a reliable business partner for Ottössöns. With their quality in classic leather shoes we felt that AKAR emulated our exact brand identity. 2 . TO KTA s KA L I P

TOKTAŞ KALIP was built on a strong foundation, which has enabled their success since the beginning of the 1960’s. This foundational pride is something that we believe strongly in here at Ottössöns. TOKTAŞ is a distinguished company with experience, reliability and quality found in there men’s footwear industry. With a dynamically expanding business practice TOKTAŞ has created an environment that vertically integrates a young and dynamic team with all state-of-the-art technology. We feel at Ottössöns that this growth and investment into a younger demographic is smart due to the large Turkish population. Providing opportunity is something that is very much needed throughout Turkey. For Ottössöns this innovation and employment base is the same market that we are looking to tap into in the states, Generation Y. We feel there will be great insight in the development of the product with a strong team of designers that pursue worldwide trends and fashions. TOKTAŞ has distinguished there company through a passionate, creative, hardworking and willing business model. Ottössöns feels that TOKTAŞ could truly push their brand while creating a strong relationship through brand transparency seamlessly aligning their own business practices. 3 . B E YO G L U Aya k ka b i

BEYOGLU Ayakkabi was established in Istanbul in 1993. Their mission highlights the importance of continuously increasing innovative, modern styles and quality of their products. As a completely vertical company there product performance is emulated in their fully handmade shoes. BEYOGLU Ayakkabi encompasses the quality and attention to detail that Ottössöns strives to achieve within their product, emulating “the art in footwear.” BEYOGLU Ayakkabi is not only producing quality products but at competitive pricing, while simultaneously looking to improve and expand. BEYOGLU Ayakkabi provides a highly motivated and healthy work environment, where trainings are considered important to support their development. With a strong reputation, innovative design practices, quality through craftsmanship all at a competitive prices, BEYOGLU Ayakkabi has encompassed a pristine status among the luxury men’s footwear market. These standards highlight what Ottössöns believes in fostering within our work environments..

s u p p l i e r rat i n g s

s u p p l i e r a n a ly s i s : b ra z i l

Supplier: Shoe Export e Import Ltda. ABILITIES

LEAD-TIME

CAPACITY

MANAGEMENT

COSTS

Costs are competitive

QUALITY

CUSTOMER SERVICE

Extremely helpful in providing initial company information

SERVICES OFFERED

CUSTOMERS

Nomad Brazil, Picadilly, Divalesi, Jorge Bischoff

STRATEGIC OUTLOOK

FLEXIBILITY

Flexibile with lead times : determined to please clients

SOURCING GUIDELINES

10 Meets all of Ottossons sourcing guidelines and standards.

Uses state of the art technology to manufacturer goods; easily located top port in Brazil (easy export)

can handle 55,000 shoes per day

Supplier: Paqueta Calcados Ltda.

ABILITIES

Accessibly located near ports; facility is smaller compared to competitors

LEAD-TIME

CAPACITY

Produces 13,000 shoes/day

MANAGEMENT

COSTS

Costing is higher than others due to small manufacturing facilities

QUALITY

CUSTOMER SERVICE

CUSTOMERS

Provided very little Company information; wrong email provided

SERVICES OFFERED

Primarily manufacturers for small independent private labels

STRATEGIC OUTLOOK

FLEXIBILITY

Always looking for new clients; however, not supportive of new production styles

SOURCING GUIDELINES

Accessibly located near ports; focuses primarily on sandal work. 10% of production is for non-‐Brazil companies.

LEAD-TIME

MANAGEMENT

QUALITY

Assures that delivery times will be met; however no specification on lead times Management team is qualified and agrees to Ottossons guidelines known for their Brazilian quality. Takes extra steps in ensuring quality standards are met

Vertical production-‐ guarantee of order, production, quality control, on time delivery

Wants long-‐term customers; building relationships. Updates to innovative technology when needed

Assures that delivery times will be met; however no specification on lead times Management offers a lot of information regarding history of company, less about present day

Quality is ensured; will be checked thoroughly to guarantee it meets company guidelines Vertical Production – sourcing, product manufacturing,; however, outsources details of production Does not specify if technology is updated and modern Meets all of Ottossons sourcing guidelines and standards.

Supplier: World Commerce Shoe Comercial Exp. De Calcados Ltda. ABILITIES

Assures that delivery times will be met; however no specification on lead times

CAPACITY

COSTS

Costs are competitive

CUSTOMER SERVICE

Clients are #1. Big focus on building long term relationships

SERVICES OFFERED

CUSTOMERS

Eddie Bauer, Inc. , Steve Madden

STRATEGIC OUTLOOK

Uses latest modern system to produce product

FLEXIBILITY

Looking to produce new product lines, such as men’s leather shoes.

SOURCING GUIDELINES

Meets all of Ottossons sourcing guidelines and standards.

can handle approximately 55,000 shoes per day

Employs 1,200 employees direct and indirect

Quality is ensured; will be checked thoroughly to guarantee it meets company guidelines Verticle Production – sourcing, product manufacturing, samples

Supplier: Soze Group ABILITIES

High range of construction skills

Willing to negotiate

CAPACITY

Production numbers of 8,150 pairs per day

MANAGEMENT

Long time establishment since 1976, 160 full time employees

COSTS

Willing to negotiate costs

QUALITY

Late responses to emails

SERVICES OFFERED

New technology such as CAD/CAM excel their quality to the highest of standards

CUSTOMER SERVICE CUSTOMERS

High quality brands represented: Hugo Boss, Dansko, and Ted Baker

STRATEGIC OUTLOOK

Believes in innovation for the future

FLEXIBILITY

Various manufacturing styles and technology capabilities

SOURCING GUIDELINES

Matches that of Ottรถssรถns, however could have excelled more in environmental care

Supplier: Ferratti

Offer vertical integration, and many manufacturing styles

ABILITIES

Offer many different types of materials and constructions

LEAD-TIME

Willing to negotiate , still very lengthy

CAPACITY

Able to produce 6,500 pairs of shoes per day

MANAGEMENT

Has been established since 1990, while employing over 150 well trained workers

COSTS

Willing to negotiate costs

QUALITY

CUSTOMER SERVICE

SERVICES OFFERED

CUSTOMERS

Received a quote, however stubborn to negotiate lower prices

Known for their quality and traditional craftsmanship, while using the latest technologies

STRATEGIC OUTLOOK

FLEXIBILITY

Very flexible in offering various craftsmanship and materials used

SOURCING GUIDELINES

Offers many different construction systems and styles of shoes

LEAD-TIME

Willing to negotiate , still very lengthy

MANAGEMENT

Been established since 1987, however does not have adequate leadership

Produces for leading customers in the industry such as Ted Baker and Christian Pellet

Supplier: Felfi Shoes

Offer a variety of services, while vertically integrated

Products produced are rich in personality, style, and individuality and always strive on improving Ecologically friendly, however, could improve on various sourcing aspects

ABILITIES

CAPACITY

COSTS

Willing to negotiate costs

QUALITY

Known for their high quality

CUSTOMER SERVICE

SERVICES OFFERED

Wide variety of services available

CUSTOMERS

Some inaccurate information on website, hard to communicate with

STRATEGIC OUTLOOK

Focusing on growth

FLEXIBILITY

SOURCING GUIDELINES

Environmental preservation is very important to Felfi as they stand a strong believer for complying to international regulation, lining up with that of Ottรถssรถns.

Produces around 5,000 pairs of luxury shoes daily

Represents strong customers such as Hugo Manuel

Have a high range of flexibility within their manufacturing styles

s u p p l i e r a n a ly s i s : p o rt u ga l

LEAD-TIME

s u p p l i e r rat i n g s

s u p p l i e r a n a ly s i s : i ta ly

Supplier: Bruma’s shoes by Indistria Italiana Calzature Group (Italy #1) ABILITIES

CAPACITY

COSTS

CUSTOMER SERVICE

CUSTOMERS

FLEXIBILITY

They carry out a “full made in Italy” process from research, style, development, until shoe production. Are able to produce all 315,000 units and are able to switch styles easily.

Costs in Italy are significantly higher than our counterparts, with that being said customers feel comfortable with the name. Are very prompt with replying to emails and understand customers are key.

CAPACITY

COSTS

CUSTOMER SERVICE CUSTOMERS

FLEXIBILITY

QUALITY

SERVICES OFFERED

7 9 8

Their lead time is around 9 weeks which is rather long, but they say “You can not rush quality!”

Michelle Mezzasoma, International Community manager has been more than helpful and care about their customers. Their quality is amazing and have been creating shoes from over 50 years. They create men’s, women’s and licensed “flexa” brands. From research, style, development and shoe production. Recently new presidency of company, targeting technological updates to achieve premium brands. High quality and parallel to Ottossons.

They are able to work with us to make sure our orders benefit us and themselves as a supplier.

SOURCING GUIDELINES

Are able to manufacture products, although they only do menswear.

LEAD-TIME

Lead time is around 9 weeks.

Costs are rather high compared to other manufacturers and countries.

Have been producing shoes in family factory for 40 years, quality seems handcrafted.

ABILITIES

MANAGEMENT

STRATEGIC OUTLOOK

Have good customer base including several luxury shoe brands sold internationally.

Supplier: Marture S.A.S. Italy

LEAD-TIME

7 8 5

Are able to produce all 315,000 units.

Prompt and make sure to emphasize their family relationships.

MANAGEMENT

QUALITY

SERVICES OFFERED

Nordstroms

STRATEGIC OUTLOOK

Are able to switch styles, but only do menswear.

SOURCING GUIDELINES

Management team is organized and on top of orders.

Vertical for all of menswear, but that is where they are limited.

8 7

Updating technologies to stay competitive in globalized marketplace. High quality and parallel to Ottossons.

Supplier: chiko, Italy

ABILITIES

CAPACITY

COSTS

CUSTOMER SERVICE CUSTOMERS

FLEXIBILITY

6 9 3 5

Are able to manufacture products from menswear to womenswear with a lot of design options. Are able to produce all 315,000 units. Costs are average in comparison to other Italian companies. Still high. Their website is very easy to read and understand.

LEAD-TIME

MANAGEMENT

QUALITY

SERVICES OFFERED

Unknown, but have licenses.

STRATEGIC OUTLOOK

Able to produce a lot of styles but may not be able to be innovative in designs.

SOURCING GUIDELINES

Lead time is around 9 weeks.

Quality is not as high as others, doesn’t have family craftsmanship.

Management team is very polite and eager for customers to understand the logistics.

Offer many services for mens and womens footwear including a lot of color and leather options.

9 7

Updating technologies to stay competitive in globalized marketplace. High quality and parallel to Ottossons.

Supplier: Akar Deri Ayakkabi Sanayi ve Ticaret Limited Sirketi ABILITIES

CAPACITY

COSTS

CUSTOMER SERVICE

CUSTOMERS

7 9 5

Reasonable price gained, competitive pricing within the market place.

AKAR aims to be an open resource for exploration. While creating open lines of communication with cooperation. Brands: Corrente, Dino Maginal, Enrico Cavalli, Duca D'Meglio, Caboverde International 'piyasayada' by imposing, to increase exports and production capacities.

LEAD-TIME

Production time will be added to a 4-‐6 week lead time.

MANAGEMENT

Corporate identity, value in business to business relationships.

Offering the market a huge amount of different models. While complying with varied areas and the different markets in different countries.

QUALITY

SERVICES OFFERED

STRATEGIC OUTLOOK SOURCING GUIDELINES

Produce classic leather shoes, by using the high quality raw material, by finishing quality craftsmanship

Individual creation and the unique style through their own research and development department.

Participated in the global market trade organizations and meetings organized by the introduction of a reliable, modern and aims to become a global brand of high quality.

Production time will be added with 4-‐6 week lead time .

Aim to offer new and updated collections through technology. With quality throughout production.

Supplier: TOKTAŞ KALIP ABILITIES

CAPACITY

COSTS

CUSTOMER SERVICE

CUSTOMERS

7 8 7 9

Vertical with a young and dynamic team and all state-‐of-‐the-‐art technology

LEAD-TIME

TOKTAŞ has an annual production capacity of 300,000 pairs of shoes. All production processes between two locations accounting for 2000 m of factory space. Competitive pricing within the market place.

MANAGEMENT

Human resource department that are passionate, creative, hard working, willing to answer question and provide assistance.

QUALITY

SERVICES OFFERED

Brands; Bulldozer, Woffo and Raffine along with major shoe store chains in the market

STRATEGIC OUTLOOK

It has also commenced to make export investments through special productions addressing European states.

SOURCING GUIDELINES

Vertical with blend of high technology and fine art, design, innovation.

LEAD-TIME

We carry over 350 models of shoes, classical, fashionable and also attractive modern lines.

MANAGEMENT

Competitive pricing. Low with flexible payment possibilities.

CUSTOMER SERVICE

Friendly personnel for consultations in English, German, and Turkish.

CUSTOMERS

FLEXIBILITY

8 5

Communication by means of prompt response to customers ,strong after sale support

TOKTAŞ is a distinguished company with its experience, reliability. TOKTAŞ prepares and produces the articles for Turkey’s leading men’s garment brands and various foreign menswear brands. Teams of designers pursue worldwide trends and fashion closely.

TOKTAŞ is a distinguished company with its experience, reliability and quality in the sector.

“Punctual Supply” Samples offered

Our Principles are: Production from the best leather with the highest quality. . Premium leather is used for the uppers and the finest leather is used on the inside for foot comfort. We use only the finest leathers. Our leather cutting is carried out by sophisticated and fully automated machines. To become the most preferred footwear chain by expanding our chain of stores in Turkey and abroad. To increase our competitive power and profitability. To create a constantly improving, highly motivated and healthy work. Trainings are considered important to support their development

Supplier: BEYOGLU Ayakkabi ABILITIES

CAPACITY

COSTS

QUALITY

SERVICES OFFERED

Brands: Damat & Tween, N-‐O2, Hotic, Yesil Kundura, Divarese, Uptown, Giouane Centile in Europa and Turkey.

STRATEGIC OUTLOOK

Balancing between past and future with handmade and new design perspectives.

SOURCING GUIDELINES

s u p p l i e r a n a ly s i s : t u r k e y

FLEXIBILITY

Vertical manufacturing processes with innovation that is pushed through R&D (research and development) Low density in the value of pricing.

"All production occurs in our own building."

costing

p r e lP iLACEMENT m p la c e& m eARGIN n t & Cm a r g i n ca lc u lat i o n PRELIM M ALCULATION

ITALY DERBY

Total Units

645,000 75,000

LOAFER

CHELSEA

JODHPUR

75,000 120,000 45,000

Wholesale Cost per Unit Margin %

$ 411.72 $ 449.76 $ 415.72 $ 425.00 $ 102.93 $ 112.44 $ 103.93 $ 106.25 $ 308.79 $ 337.32 $ 311.79 $ 318.75 400.00% 400.00% 400.00% 400.00%

Total Wholesale $ 240,943,800

$ 30,879,000.00 $ 33,732,000.00 $ 49,886,400.00 $ 19,125,000.00 $ 8,433,000.00 $ 12,471,600.00 $ 4,781,250.00

Total Purchase $ 60,235,950 $ 7,719,750.00 Total Margins $ 180,707,850 $ 23,159,250.00

$ 25,299,000.00 $ 37,414,800.00 $ 14,343,750.00

Avg Wholesale $ 373.56 Avg Purchase $ 93.39

Avg Margins $ 280.17 Avg Margins %

400.00%

Avg Cost/Unit $ 93.96

CATEGORY: GENUINE MEN'S LEATHER SHOES

PORTUGAL SOZE GROUP QUOTE COSTS

alopes@soze.pt

JODHPUR p o rt u ga l prelim

FREIGHT, DUTY, BROKER, INSURANCE

COST

83.34

10.97 $

TOTAL

94.31

costs ( a b ov e ) v e rs e s

CHELSEA

supplier q u ot e

FREIGHT, DUTY, BROKER, INSURANCE

COST

83.34

DERBY

FREIGHT, DUTY, BROKER, INSURANCE

COST

73.93

10.97 $

TOTAL

94.31

TOTAL

84.90

BRAZIL DERBY

PORTUGAL LOAFER

CHELSEA

JODHPUR

120,000 75,000

DERBY

LOAFER

105,000

$ 396.92 $ 387.12 $ 407.44 $ 428.00 $ 234.04 $ -‐ $ 99.23 $ 96.78 $ 101.86 $ 107.00 $ 58.51 MEN'S$ 175.53 $ PORTUGAL 297.69 SOZE GROUP $ QUOTE 290.34 COSTS $ CATEGORY: 305.58 GENUINE $ 321.00 $ -‐ alopes@soze.pt LEATHER SHOES 400.00% 400.00% 400.00% 400.00% 400.00% JODHPUR DUTY, BROKER, $ 47,630,400.00 $ 29,034,000.00 $ COST -‐ $ FREIGHT, -‐ $ 24,574,200.00 $ TOTAL -‐ INSURANCE $ 11,907,600.00 $ 7,258,500.00 $ -‐ $ -‐ $ 6,143,550.00 $ -‐ 83.34 10.97 $$ 94.31 $ 35,722,800.00 $ 21,775,500.00 $ $ -‐ $ $ -‐ $ 18,430,650.00 -‐

CHELSEA

JODHPUR

30,000 $ 202.76 $ -‐ $ 50.69 $ 152.07 $ -‐ 400.00% $ 6,082,800.00 $ -‐ $ 1,520,700.00 $ -‐ $ 4,562,100.00 $

-‐

CHELSEA FREIGHT, DUTY, BROKER, INSURANCE

COST

83.34

FREIGHT, DUTY, BROKER, INSURANCE

COST

73.93

94.31

Ottössöns received quotes

DERBY $

10.97 $

TOTAL

10.97 $

TOTAL

84.90

from two of its top suppliers in Portugal. Soze Group, rated the top supplier, quoted the most affordable prices while Ferratti Manufacturing quoted significantly higher. However, both of these pric-

LOAFER

FRIGHT, DUTY, BROKER, INSURANCE

COST

73.93

10.97 $

TOTAL

84.90

es are still up for negotiation with the manufacturers. Ottössöns chose to go with Soze Group’s quote as it matched Ottössöns price range. *Details located in Appendix

Evaluated Products, Volumes & Requirements When evaluating the criteria for the products of Ottössöns , suppliers needed to be vertical and have the capability of fulfilling the capacity requirements of 645,000 units annually, between three countries. Since Ottössöns is a high fashion luxury retailer, not mass- market, the total number of units produced per year is 645,000. Four styles will be manufactured, the Jodhper, Derby, Chelsea boot, and loafer. Products are primarily being placed in Q3, because Ottössöns ’ feels as though the products offered are transitional pieces best suited for those leaving summer and entering fall.

s t rat egy development + E va l uat i o n & a n a ly s i s

The derby is going to be produced with continuous flow, manufacturing 300,000 units per year, as it is a classic style to be worn year round. Ottössöns will be producing 150,000 units of the Chelsea boot per year. A majority of the Chelsea boot order will be placed in September and December, as this is a premiere back to school style and gift for the Holidays. Ottössöns will also be placing an order of 150,000 units for the loafer. The distribution of the loafer will be inverse to that of the Chelsea boot, as it is of popular demand for spring and summer. The jodhpur boot is a season style and 45,000 units will be placed for distribution of the Holiday season. Note: If the Jodhpur is profitable during this time, plans to place additional units for the following year will be considered.

Evaluated selected countries

When developing a strategy, Ottössöns wanted to emphasize specific criteria’s that were parallel to their established values. When evaluating selected countries the criteria’s that needed to be met were a stable socio-political- economical landscape, along with premium footwear manufacturing facilities that do not only produce high quality products but also insure technical innovation.

of their luxury footwear. The current labor force in Turkey is uneducated; half of the working age population has less than a basic education and this accounts for 64% of the unemployed. Turkey’s current economical stability is unstable, giving pause to many exporters/importers purchasing decisions. Because of this, Ottössöns felt the benefits did not outweigh the risks of manufacturing in Turkey.

Due to Turkeys unstable government and current constitution reform, Ottössöns felt that this specific country did not meet their criteria requirements for production

Due to this, the other three potential countries, Italy, Brazil and Portugal excelled in their abilities to manufacture Ottössöns fine leather footwear.

Evaluated future requirements

When evaluating future requirements, the criteria must be aligned with the sourcing guidelines of Ottössöns Luxury Footwear. Manufactures must be willing to negotiate potential costs in the future as the volume of product increases and must also be able to fulfill these volumes in the future. Ottössöns Luxury Footwear strives to build lasting business relationships with their selected suppliers, which enables them to create a seamless logistical process.

maximized margins

When evaluating Ottössöns ’ potential profit margins, a goal was set to maintain an average of at least 350%. When studying the initial costs, all of the countries selected for production surpassed the 350% profit margin goal to a near 400%. After receiving quotes and negotiating with potential suppliers, the initial costs of Ottössöns were significantly lower. If Ottössöns did not negotiate, company margins would erode thus not maintaining the 350% goal. To maximize margins, Ottössöns ’ planned to negotiate prices with a 20% decrease, in hopes of finding a cost in middle ground.

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s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

selected

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sources

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& 1 suppliers must have the ability to fill the order requested, considering its large quantities with / the opportunity % # -of progressive growth. Suppliers must be reliable and reputable, and meet the 0 ' fulfilled needs of orders both, nationally and internationally. In addition, OttĂśssĂśns â&#x20AC;&#x2122; most im( 0 portant attribute-when evaluating suppliers is the supplierâ&#x20AC;&#x2122;s exquisite quality and attention to ) # detail, while providing a competitive market price. &

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CUSTOMS DECLARATION TIME: 24 HOURS LOADING CARGO ON BOARD: 2 DAYS DELIVERY EXPORT CONTAINER = 15 HOURS

fob delivery time: 3.2 days SEA TRANSIT TIME: 16 DAYS 8 HOURS TIME IN THE PORT TRANSSHIPMENT: 14 DAYS ARRIVAL TO PORT OF DISCHARGE: 24 HOURS DISTANCE: 7,488,9 KM / 4043.7 MILES

CIF Delivery time: 33 days 8 hours FREIGHT FORWARDING & CUSTOMS CLEARING: 2 DAYS DISTANCE: 0.88 NAUTICAL MILES LAND DELIVERY TO FINAL DESTINATION: 1 DAY 12 HOURS

[ total ] dpp delivery: 36 days 23 hours NY globa l t ermina l, n ew york, n y

]

shipping timeline s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

Rio gra nde, bra zil

Figueira Da Foz, portugal CUSTOMS DECLARATION TIME: 24 HOURS LOADING CARGO ON BOARD: 2 DAYS DISTANCE: 2.87 NAUTICAL MILES

fob delivery time: 3 days SEA TRANSIT TIME: 8 DAYS 17 HOURS TIME IN THE PORT TRANSSHIPMENT: 10 DAYS ARRIVAL TO PORT OF DISCHARGE: 24 HOURS DISTANCE: 2925.03 NAUTICAL MILES (5417.16 KM)

CIF Delivery time: 22 days 7 hours FREIGHT FORWARDING & CUSTOMS CLEARING: 2 DAYS DISTANCE: 0.88 NAUTICAL MILES LAND DELIVERY TO FINAL DESTINATION: 1 DAY 12 HOURS

[ total ] dpp delivery: 25 days 7 hours NY globa l ter mina l, ne w yor k, n y

] 45

]

gen oa , ita ly

CUSTOMS DECLARATION TIME: 24 HOURS LOADING CARGO ON BOARD: 2 DAYS

SEA TRANSIT TIME: 12 DAYS 1 HOUR TIME IN THE PORT TRANSSHIPMENT: 10 DAYS ARRIVAL TO PORT OF DISCHARGE: 24 HOURS DISTANCE: 7,488,9 KM / 4043.7 MILES

CIF Delivery time: 26 days 1 hours FREIGHT FORWARDING & CUSTOMS CLEARING: 2 DAYS DISTANCE: 0.88 NAUTICAL MILES LAND DELIVERY TO FINAL DESTINATION: 1 DAY 12 HOURS

[ total ] dpp delivery: 28 days 1 hours NY globa l t ermina l, n ew york, n y

]

fob delivery time: 3 days

]

s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

DISTANCE: 2.87 NAUTICAL MILES

Hay da rpa sa , t ur key

CUSTOMS DECLARATION TIME: 24 HOURS LOADING CARGO ON BOARD: 2 DAYS

fob delivery time: 3 days SEA TRANSIT TIME: 15 DAYS 9 HOURS TIME IN THE PORT TRANSSHIPMENT: 14 DAYS ARRIVAL TO PORT OF DISCHARGE: 24 HOURS DISTANCE: : 5163.91 NAUTICAL MILES (9563.57 KM)

CIF Delivery time: 30 days 9 hours FREIGHT FORWARDING & CUSTOMS CLEARING: 2 DAYS DISTANCE: 0.88 NAUTICAL MILES LAND DELIVERY TO FINAL DESTINATION: 1 DAY 12 HOURS

[ total ] dpp delivery: 33 days hours NY globa l ter mina l, ne w yor k, n y

] 47

]

Evaluated

INITIAL VS PRELIMINARY VS FINAL COSTS

prelim costs vs initial quotes and

s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

product qualities

Through Ottössöns ’ research, the following preliminary costs sheets, by country, are the ideal manufacturing costs of production that generate a sufficient profit margin. These costs are then compared to the initial costs/quotes received by potential manufacturers along with the final negotiated prices of each product per country. At this time, Portugal is the only country that has supplied Ottössöns with manufacturing quotes.

PRELIM

Style # WHOLESALE Jodphur Chelsea Modified Derby Loafer

Average Price Average Cost

Average Margin

901 902 903 904

$ 430.00 $ 415.00 $ 400.00 $ 445.00 $ 422.50 $ 94.78

78%

Turkey Cost Margin% $ 74.22

82.74%

$ 71.74

82.71%

$ 67.38

83.16%

$ 71.98

83.82%

$ 71.33

83.12%

INITIAL VS INITIAL PRELIMINARY VS FINAL COSTS VS PRELIMINARY VS FINAL COSTS

PRELIM

PRELIM INITIAL OINITIAL FINAL FFER OFFER FINAL

PRELIM PRELIM

INIT

Turkey Turkey Turkey P Portugal Por Turkey ortugal Turkey Cost Cost Turkey CCost ost Cost Quot Cost Cost Margin% Margin% Margin% Margin% Cost Style # W HOLESALE Margin% Margin% Margin% Margin% Style # WHOLESALE

901 $ $ 430.00 $ 82.74% 74.22 901 $ 430.00 74.22 902 $ $ 415.00 $ 82.71% 71.74 902 $ 415.00 71.74 903 $ $ 400.00 $ 83.16% 67.38 Modified Derby Modified Derby 903 $ 400.00 67.38 INITIAL VS P904 RELIMINARY INAL C$ OSTS Loafer 904 V $ S F 445.00 83.82% 71.98 Loafer $ 445.00 $ 71.98 Average Price Average Price $ 422.50 $ 422.50 $ 71.33 94.78 $ 71.33 Average Cost Average Cost $ 94.78 $ Jodphur

Jodphur

82.74%

Chelsea

82.71%

Margin Average MAverage argin

rgin%

PRELIM

INITIAL OFFER

FINAL

Turkey Cost

Margin%

82.74%

Jodphur

82.71%

Chelsea

78%

902 $ 78.39% $ 415.00 58.51

$ 89.68 Modified Derby $ 84.37

83.82%

Average Margin

83.12%

INITIAL OFFER Portugal Quote Cost Margin%

Margin%

85.90% $ 146.15 86.79% $ 113.97

PRELIM

Average 69.22% Margin

86.00%

INTIAL OFFER

FINAL

Italy Cost

Margin%

$ 113.44 $ 113.12 $ 113.69 Modified Derby $ 122.64 Loafer

75%

Jodphur

75%

Chelsea

$ 1

78.97% 78.97%

86.00% 86.00%

PRELIM INITIAL OINITIAL FINAL FFER OFFERFINAL

PRELIM PRELIM

INIT

$ 86.58% 74.22 $ 82.74% 83.34 $ 85.90% 71.74 $ 82.71% 83.34

92.01 80.62% $ $ 75.20 89.68 79.92% $ $ 77.05

78.60% 57.69 106.65 86.58% $ 75 1 82.51%$ $ 78.39% 58.51 102.93 85.90% $ 75 1 81.43%$ $

84.37 81.52% $ $ 76.02 89.38 83.39% $ $ 80.17

78.91% 58.51 103.49 85.37% $ 74 1 81.00%$ $ 79.91% 58.77 112.44 86.79% $ 75 1 81.98%$ $

86.00% 83.12%

88.86 $ $ 77.11

$ $ 59.16 106.38

78.97% 81.75%

81.39%

PRELIM INTIAL OINITIAL FINAL FFER OFFER FINAL

$ 1

86.00%74.82

PRELIM

INIT

Portugal Turkey Turkey Turkey Portugal Po Italy Cost Italy Cost Cost Italy Cost Brazil Cost Negotiated Cost Cost Quo Cost Margin% Margin% Margin% Margin% Style # WHOLESALE Margin% Margin% Margin% Margin% Margin% Cost

901 $ 82.51% $ 106.65 430.00 902 $ 81.43% $ 102.93 415.00

$ 74.22 75%

82.74%

$ 71.74 75%

82.71%

$ 92.01 $ 113.44 $ 89.68 $ 113.12 $ 84.37 $ 113.69 $ 89.38 $ 122.64

83.16% 83.82%

$ 422.50 $ 106.38 94.78 $ 71.33

Average Price Average Cost $ 77.11

$ 130.06

$ 59.16 59.16 $

83.12%

903 $ 74% 81.00% $ 103.49 400.00 $ 67.38 Loafer 904 V$ INAL $ 71.98 75% 74.39% V $ S P 80.17 81.98% $ S F 112.44 445.00COSTS INITIAL RELIMINARY

85.37% $ 113.97

74.82%

78%

78.97%

FINAL

Jodphur 66.01% $ 75.20 Chelsea 64.78% $ 77.05 Modified Derby 71.51% $ 76.02

86.58% $ 146.15

75%

88.86 $ $ 88.86

$ 422.50 $ 94.78 $ 71.33 $ 59.16 $ 78.64

Average Price Average Cost $ 88.86

74%

84.37 $ $ 84.37 89.38 $ $ 89.38

83.82%

903 $ $ 85.37% 67.38 78.91% $ 400.00 58.51 $ 83.16% 73.93 INITIAL $ V PRELIMINARY V S INAL C$ OSTS Loafer 904 $ F 86.79% 71.98 S 89.38 79.91% $ 445.00 58.77 $ 83.82% 73.93

83.16%

gin%

83.16%

78.60% $ $ 57.69 57.69 86.58% $ 1 78.60% 86.58% 78.39% $ $ 58.51 58.51 85.90% $ 1 78.39% 85.90% 78.91% $ $ 58.51 58.51 85.37% $ 1 78.91% 85.37% 79.91% $ $ 58.77 58.77 86.79% $ 1 79.91% 86.79%

Portugal Turkey Turkey Portugal Por Portugal Portugal Turkey Negotiated ICost taly Cost Cost Cost Margin% Quot Cost Cost Quote Cost Margin% Margin% Margin% Margin% Margin% Style # WHOLESALE Margin% Margin% Margin% Cost

901 $ 78.60% $ 430.00 57.69

$ 92.01

92.01 $ $ 92.01 89.68 $ $ 89.68

78% 74.82%

81.75%

PRELIM Brazil Cost

Average Price $ 115.72 Average Cost

Average Margin 72.61%

$ $ 93.20 430.00 $ $ 93.88 415.00 $ $ 90.28 400.00 $ $ 89.26 445.00

79.91% 1 72% $ $ 58.77 89.26 86.79% $ 80%

$ 88.86 $ 115.72

$ $ 59.16 91.66

78.97% 72.61%

83.12%

FFER OFFER FINAL PRELIM INITIAL OINITIAL FINAL Turkey

Cost Margin% Margin% Style # WHOLESALE

74% 901 73% 902 72% 903 72% 904

78.60% 1 74% $ $ 57.69 93.20 86.58% $ 78% 78.39% 1 73% $ $ 58.51 93.88 85.90% $ 77% 78.91% 1 72% $ $ 58.51 90.28 85.37% $ 77%

86.00% 78.31%

PRELIM

INITI

Turkey Turkey Portugal Port Brazil Cost Cost Cost Margin% Cost Margin% Quote Margin% Margin% Margin%

Brazil Cost

Margin%

$ 74.22 78% $ 71.74 77%

82.74%

$ 67.38 77% $ 71.98 80%

83.16%

82.71% 83.82%

$ 422.50 $ $ 91.66 94.78 $ 71.33

78% 78.31%

$ 1

$ 113.80 $ 92.01 $ 110.88 $ 89.68 $ 110.36 $ 84.37 $ 115.90 $ 89.38

74% $ 57.69 78.60% 73% $ 58.51 78.39%

85.90% $ 14

72% $ 58.51 78.91%

85.37% $ 11

74% $ 58.77 79.91%

86.79% $ 11

$ 112.74 $ 88.86 83.12%

86.58% $ 14

$ 59.16

73.32% 78.97%

$ 13

86.00%

Evaluate Risks/Benefits, Distance/lead time, quality/flexibility, capacities, services, raw materials

s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

The Following information pertaining to each potential country identifies the risks vs benefits, distance & lead time, quality & flexibility, capacities, raw material availability, and additional services added at the time of production.

BENEFITS + BRAZIL

Second largest leather producer in the World

Multitude of renowned footwear manufactures (currently over 50 in the Country)

Brazil houses 14.4% of cattle world wide

In house tanneries exists in most manufacturing facilities – customization of specific

leathers/quantities of hides requested

Recent improvements in unemployment rate

Relatively low labor costs compared to other countries of specialized leather production

POTENTIAL RISKS + BRAZIL

No trade agreements in place with the United States (other than Agreement on Trade

and Economic Cooperation) resulting in additional import fees

Lack of modernization in tax system and labor laws resulting in potentially ill fitted

working conditions/workers

Freight shipments take 36 days, resulting in an additional 5 weeks in lead-time

schedules. Ottössöns ’ concern lies in guaranteeing product arrives on time for whole

saler and consumer satisfaction.

During the extensive research conducted of quality and flexibility in Brazil, Ottössöns ’ concluded that both are satisfactory. Brazil is known for their quality of leather goods, specifically in their footwear. The footwear industry has also been deemed flexible in Brazil. Manufacturers pride themselves on building strong professional relationships with clients; therefore, often resulting in a calm and collected negotiating process. Ottössöns ’ also investigated added values and services in their potential Brazilian manufacturers. Studies showed that a majority of manufacturers have their own tanneries on site, resulting in faster production times. This is certainly an added benefit to Ottössöns in ensuring that products are produced on time and in the best of quality. This also results in minimal supply shortages during the production of Ottössöns ’ footwear in Brazil.

benefits + potential risks + portugal

-Some risks associated in conducting business

-Easy route to the United States, with a straight

in Portugal is its declining and even negative

route west varying from 22 days. Lead time

growth in their growing budget deficit and the

can take from 4 to 8 weeks, depending on the

national debt and downgrades in their credit

manufacturer.

ratings. -The cost of leather and supplies is also inexpensive in -However, the state of the leather footwear

comparison to other top leather producing countries,

industry is a benefit. Portugal has focused on

however, they are still known for their high quality

being a producer of high quality shoes and

craftsmanship and quality of production. Advancements

there is a difference in sophistication in

in technology make for ease in flexibility while manu-

production. With medium to small sized establish-

facturing. Various tanneries exist in Portugal while

ments, it fits right into the business model of Otössöns.

many of the leather footwear manufacturers are vertically integrated and have established an in-company

-33,000 footwear workers reside in Portugal,

tannery.

60% of their total labor force. - With over 900 exporting companies alone, the indus-The socio-political stability is very strong, and

try of leather footwear is largely represented.

the non-existence of terrorism is a plus. Because of the country’s use of the Euro, the stability of its currency holds very strong.

s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

BENEFITS + italy

Accounts for 15.4% of European Retail Industry. the footwear industry in Italy

accounts for a gross value of USD $4,646,000

There are over 7,000 firms in the sector with 900 of them being shoe producers. All of

the producers cooperate together. They have quick reaction times, low minimum order

quantities and elastic production

Promising movement towards membership within the European Union (TTIP)

- Italy ranks as one of the top ten economies world wide based on real GDP. The GDP

has reached 1.74 trillion in 2012.

It has well over 53,000km of roads and motorways and is ranked 24th f 155 countries

in the Logistics Performance Index of 2012 (ranks infrastructure development)

potential risks + italy

Main problems that are hindering growth in the footwear industry is the cost of labor

(68%) International competition (63%), being financially limited thus hindering the op

portunity for firms to grow (40%)

Italy has high labor costs and no fixed minimum wage costs. The average cost of labor

per hour is USD10.00

High unemployment rate, yet high quality craftsman ship. Ottössöns can create an

opportunity for employment.

DISTANCE & LEAD TIME: The av-

days. Their motto “You can not rush

erage distance to get products from

quality.” With that being said, Ot-

Italy to the United States is nearly 26

tössöns can place orders early to en-

days. With that being said, Italy has

sure products will be available during

very strong relations with the United

season. The average lead time accord-

States making it one of their top ex-

ing to trading economics is only 18

porter and importer. Lead times in It-

days. With advancing technologies,

aly can be quite long due to the qual-

companies are being able to manu-

ity. The average lead time is around 90

facture at rapid and competitive rates.

QUALITY & FLEXIBILITY: “Made In Italy” is a renowned worldwide standard that has been founded on centuries of Italians making things beautifully and with care. Italians have passed down traditional artesian methods from generation to generation to generation until those techniques have been so refined, italians see them as a “gift of human creativity when we hold or wear a Made in Italy object today.” The power of Italian Intelligence is internationally appreciated. This means the “marriage of masterful design and artisan technique.” The reason for smaller, more expensive shoes in Italy is simply because they are the innovators of the marketplace. Italian designers and shoes produced in Italy are the first to offer new products in terms of design. CAPACITY: Currently, the footwear industry in Italy accounts for a gross value of USD $4,646,000 Italy accounts for 15.4% of the European apparel retail industry value, Germany has the largest apparel industry value. Italy is the driving force of the EU footwear industry as the leading exporter and producer. Their main export markets include the USA, Romania, Switzerland, Russia and Japan. The Italian footwear industry is targeted towards leather footwear of medium to high quality with international, smaller brand names. This is the exact market of Ottössöns Footwear. This manages on to its market share; exports have only declined 6% since 1999 (partly due to currency deflations) altering exporting prices. Italy is composed of mostly smaller firms employing 12-30 people. There are over 7,000 firms in the sector with 900 of them being shoe producers. An index based on a survey of purchasing managers in the manufacturing industry increased to a 26-month high of 51.4 from 50.3 in July, London-based Markit Economics. VALUE ADDED SERVICES: In Italy, factory output accelerated in August at the fastest pace in 28 months, boosted by an increase in new orders that partly reflected a substantial growth in export sales, Markit said in a separate report. Italy has been updating technology by 12% annually to stay competitive in the marketplace. They also offer fully integrated services 100% Made in Italy, from sourcing, tanning, manufacturing and shipping. Italy is a fully integrated country to manufacture.

BENEFITS + turkey

Strong attractive international retailer environments with increasing project

s t rat egy d e v e l o p m e n t + E va l uat i o n & a n a ly s i s

attractiveness

Strong business-to-business relationship between buyer and seller

Promising movement towards membership within the European Union

Turkey is creating momentum to adopt European business regulations and standards in Turkey, thereby ultimately making it easier to sell and conduct business in this market.

potential risks + turkey

Contradictory policies, a culture that is mixed with modern and traditional values and

ideals -

Lack of education and high unemployment rates that follow

The close proximity of political instability in neighboring countries

in ongoing account deficit

The need to accelerate its innovation & increase promotional strategies

A constitution that needs extensive reform

A restructured judiciary and an over militarized political system

At this point Turkeyâ&#x20AC;&#x2122;s growth potential will be constrained unless it implements productivity enhancing reforms before the problems of an ageing population start to become noticeable.

DISTANCE & LEAD TIME:

The

Turkey has only a $42 million share

footwear industry, which was selling

sector. This is due primarily with the

approximately 90% of its products

limited ease of trade access between

to domestic market in the past years,

U.S. and Turkey. In addition with a

started to attach more importance to

distance of about 5425 miles, an ap-

exportation in recent years. Accord-

proximate flight duration time of 11

ing to the export data, in terms of the

hours and 15 mins and lead-time dis-

US market, Turkey has no significant

tance for freight delivery averages out

participation. In a $9 billion-market

to be 30 days.

QUALITY & FLEXIBILITY: Quality is derived from the roots of the leather industry. Turkey is one of the most renowned leather quality souring areas, the leather footwear industry seamlessly ties into the quality marketplace. Intensive usage of local sources in production is another characteristic of the industry. So, a great part of the added value is created with Turkeys own resources. Currently 70% of the production input demand is met locally and 30% by imports. CAPACITY: Turkish footwear industry employs 380 thousand workers approximately in 40,000 companies and has external and internal trade volume worth of $2.3 billions. The Footwear industry has a share of 1.4% in total GDP and 2% in total investments. The most important characteristic of the footwear industry is being labor intensive and depending mostly on small sized companies: 3% of production is made in technology oriented companies, 63% in semi technology oriented companies and 34% in labor oriented companies. The country’s total export competency, has improved by 50% within the last three years. VALUE ADDED SERVICES: Turkey has long been renowned for its leather industry. With a heritage stretching back hundreds of years Turkish footwear industry, started to work as small sized industry in 1950s, Since then has made great progress in the process of becoming industrialized with the machinery investments made in the 1980s. As a result of new market searches, which became widespread in the 1990s, the industry has increased its exportation to the world. Turkish footwear industry has increased product quality, technological and human force substructure day by day. Raw Material Availability: Turkey’s leather industry has become one of the leading suppliers in the world. Their variety and availability of quality raw materials seems endless. With the first leather exports in 1960’s Turkey has encompassed one of finest quality guarantees within there leather sector market. Turkey is particularly known for processing sheep and goat leather, for which it ranks second place in Europe.

In this detailed strategy you will find the volumes and pricing based on one committed year of production to manufacturers in each of the selected countries: Italy, Brazil, and Portugal. With this strategy, Ottössöns will have the opportunity to build lasting relationships with manufactures, helping the company grow in to an internationally recognized luxury footwear brand. Ottössöns recognizes that with opportunity comes risk and with risk comes opportunity. Ottössöns ’ believes there is a market opportunity in the luxury footwear industry to produce men’s shoes in a way that hasn’t been done before. Ottössöns ’ sourcing guidelines are the core structure of their business, amplifying their brand image and potential market growth. Ottössöns is implanting a multinational strategy to productively and efficiently manufacture their goods overseas. A multinational strategy is necessary to implement as it allows manufacturers to increase their revenues by focusing on selling their products in countries with rapidly growing economies. The apparel and footwear industries are highly com-

the final

petitive and fragmented due to low barriers of entry.

s t rat egy

apparel and footwear industry. Ottössöns ’ has a com-

It is fairly easy for new companies to enter into the petitive advantage over most companies because they are under capitalized or they lack broad-based global sourcing. Ottössöns ’ feels as though Italy, Brazil, and Portugal are the strongest countries in manufacturing the luxury footwear of the Company. Although, Turkey offers inexpensive manufacturing and has the capabilities to produce the products needed, however, the country’s benefits do not outweigh their risks.

By taking a detailed looked into the Turkish leather footwear industry, Ottössöns was able to identify the risks and benefits associated with producing product. While there are many significant opportunities for Ottössöns in Turkey, there are also more pressing obstacles that hinder entrance into the market. The following list includes reasons as to why Ottössöns has decided not to manufacture product in Turkey, challenges that are faced include: - contradictory policies - a culture that is mixed with modern and traditional values and ideals - lack of education and high unemployment rates - the close proximity of political instability in neighboring countries - an ongoing account deficit - the need to accelerate its innovation, - a constitution that needs extensive reform - a restructured judiciary - The strong lack of democracy within the country After an extensive review of the previously stated facts, the company feels as though it is in Ottössöns best interest to invest elsewhere. Furthermore, Italy, Brazil, and Portugal offer a more viable and attractive business climate.

italy

The final sourcing strategy that Ottössöns has

Ottössöns felt as though investing an average of

implemented starts in Italy. Ottössöns believes

$10 more per pair for the infamous “Made In It-

that investing not only in a product, but a brand

aly” name would place our product in the luxury

is an essential way to optimize the future implica-

category, thus progressively increasing sales and

tions of their business. By positioning themselves

ensuring quality to the customers. The average

with other Luxury footwear companies, Ot-

margin is 365%, which is 15% above our targeted

tössöns has to create a competitive advantage. It-

margin percentage goal. Brazil’s average margins

aly accounts for a gross value of USD $4,646,000

are +10% (375%) and Portugal’s Margins are the

and 15.4% of the European apparel retail indus-

highest at +167%. For our initial placement Italy

try value. They understand care considering they

will be producing 49% (315,000 out of 645,000

are not only innovators for design and style, Al-

total units) of the product assortment. Italy will

though several competitors are moving produc-

be producing only 25%(75,000 of total 300,000)

tion to China considering decrease in labor costs,

of the Derby, Ottössöns only continuous style.

they are losing the “Made in Italy” name that is

They are producing the smallest quantity because

often associated with luxury products. These ba-

they are the most expensive and simple shoe,

sic principles is what encouraged Ottössöns final

giving Portugal (35%) and Brazil, the 2nd larg-

placement strategy to place 48% of their product

est leather manufacturer in the world 40%. The

assortment in Italy for year 1. Our predominant

loafer (150,000 total) will be split 50% Italy and

manufacturer has been in business for over 60

50% Brazil. This leaves for minimal risk consid-

years and offers a vertical process from product

ering the diverse hemispheres and production

development to shipping stressing its high qual-

2 of the 4 seasons. The Chelsea boot (150,000

ity products, verticality, and able to exceed the

total units), also being distributed twice a year

315,000 products placed in Italy. Bruma’s from

will be predominately (80%) made in Italy due

IC Group is a feasible, capable, mature and ca-

to the customization and craftsmanship. This

pacitates our expectations.

will also be a ‘best seller’ therefore Ottössöns Is willing to invest to keep the customer converting

Ottössöns

placed a goal margin potential of

to purchase again. The fourth and only seasonal

350%, the final average cost to produce all four

style, the Jodhpur will be produced in solely in

styles, the Jodhpur, Chelsea, Loafer and Derby

Italy due to the technicality style. Our plan is to

In Italy was $116.23. Although this price is 9.2%

transfer these styles to Portugal year 2 after if the

higher than the average cost per unit ($106.69)

quality is up to the Ottössöns standard. There

are no standard minimum wage prices in Italy,

is italy-focused is for the fact that Italy embodies

yet the standard of the workplace is modernized.

strict product and sourcing requirements parallel

The average minimum wage is USD 10.00 per

to Ottössöns . Their involvement in leather asso-

hour. Although higher, Ottössöns believes the

ciations ensure that the products will be sourced

workplace is a place to create a long lasting career

in a sustainable manner. In all, although costs are

and to develop a craft. It takes 28 days and 1 hour

slightly more expensive (by 9%) Ottössöns feels

to ship products from Genoa, Italy to the New

as though investing in quality products will give

York Terminal, 3 days longer than Portugal and 8

us a competitive advantage in the luxury shoe

days shorter than Brazil. Although Italy is slightly

sector. Startup companies often cut costs and

more expensive, Ottössöns will be able to exceed

quality to get their product into the marketplace.

the goal margins while maintaining strong last-

Ottössöns feels the opposite; to keep the brands

ing relationships with suppliers who are family

vision, mission and aesthetic in line, quality and

orientated. Another reason why the final strategy

customer reassurance must always be a priority.

brazil

Ottössöns has chosen to financially invest in

market. Even while accommodating clients with

Brazil, utilizing their viability to produce for

their negotiable lead-times and production costs,

manufacturing the quality leather footwear of the

World Shoes Compnay is able to guarantee the

company. Brazil’s position as the second largest

pre-agreed upon quality of every product manu-

leather producer in the world, gives confirmation

factured in their facilities.

that the selected manufacturer has the resources to produce at the quality and time previously es-

By manufacturing in Brazil with World Shoes

tablished by both parties. Brazil lacks in risk in

Company, Ottössöns is able to produce 195,000

comparison to the benefits provided in produc-

units with guaranteed profit margins of at least

ing with the Country’s strongly developed leather

350% on each style. On average, planned prod-

industry. With an industry that moves on average

ucts to be manufactured are generating profit

$2 billion annually, Brazil is capable of produc-

margins of 380-390%. In offering a vertical pro-

ing product with competitive lead times and cost,

duction operation, Ottössöns is able to guaran-

while still maintaining the desired quality of the

tee the steady inventory of their materials and

client.

the overseeing of their product from the start of manufacturing to the finalized pair of shoes.

Although the freight distance between Rio Grande, Brazil and New York is approximately 36 days, Ottössöns has appropriately calculated their lead-time expectations within their business plan to account for this lengthy venture. The final supplier chosen to manufacture the footwear of Ottössöns in Brazil, is Shoes Export e Import Ltda. (World Shoes Co.) Similar to most manufacturer’s in Southern Brazil located in Rio Grande do Sul, World Shoes Company is conveniently located close to the Port of Rio Grande, one of the most important ports of the American Continent, in terms of productivity. World Shoes Company caters to a large international

portugal

Manufacturing in Portugal brings high opportuni-

ally for its leather footwear manufacturing, ranking

ties while very low risk. The frame work of the in-

eighth world-wide for leather footwear exports. As

dustry in Portugal fits in correctly with the business

the top tier of the leather footwear industry, Por-

model of Ottössöns.

tugal was a natural pick for Ottössöns. The international market appreciates Portuguese footwear,

The geographical situation makes for an easy route

whose designers and manufacturers strive for tech-

to the United States, with a straight route west.

nical innovation and luxury, which what Ottössöns

However, it is a lengthy trip varying from 22 days,

strongly believes in.

but the shortest between Italy and Brazil. Portugal acts as a bridge between the three continents of Eu-

For manufacturing, Soze Group also reaches the

rope, Africa, and North America making for fairly

level to which Ottössöns is a part of. Being a long-

easy connections to these countries, including Ot-

time successful company, they know the industry

tössöns main manufacturing country, Italy.

and the quality of what is needed to be prosperous

Portugal has the technology and craftsmanship to

in the market. Furthermore, Soze Group matches

produce the quality that Ottössöns has in mind.

Ottössöns sourcing guidelines in respect to labor

With over 900 exporting companies alone, the in-

laws and social responsibilities. They are able to ac-

dustry of leather footwear is largely represented.

commodate Ottössöns volumes needed for luxury

Portugal has low cost of labor in comparison to

development with around 8,000 shoes produced

many western countries, at $4.19 US an hour.

daily. Producing the highest quality shoes, the de-

33,000 footwear workers reside in Portugal, 60% of

livery time takes between four to six weeks for ex-

their total labor force, providing a large number of

isting styles and materials, and between eight to ten

well trained workers. The cost of leather and sup-

weeks for new styles, however, Soze stands willing

plies is also inexpensive in comparison to other top

to negotiate, to meet Ottössöns requirements. Soze

leather producing countries, making a very reason-

ensures quality, and have long standing luxury cus-

able price for the high quality product Ottössöns

tomers to prove it such as Hugo Boss, Dansko, Ted

would like produced, and the lowest of the prices

Baker, Ecco, Gant, Pollini, Kickers, Pataugas. Not

between Italy and Brazil.

only does it focus on high quality leather production, but has the machinery and experience in the

The maturity of the market stands strong, especially

market to manufacture the best possible quality

through their new focus on technological innova-

shoes

tion within the industry. Portugal is known glob-

final costing

f i n a l p la c e m e n t & m a r g i n ca lc u lat i o n

FINAL PLACEMENT & MARGIN CALCULATION

Total Units

ITALY

Suppler: IC Group

DERBY

LOAFER

645,000 75,000

JODHPUR

Wholesale Cost per Unit Margin %

$ 400.00 $ 445.00 $ 415.00 $ 430.00 $ 113.12 $ 122.64 $ 113.69 $ 113.44 $ 286.88 $ 322.36 $ 301.31 $ 316.56 353.61% 362.85% 365.03% 379.06%

Total Wholesale $ 268,350,000

$ 30,000,000.00 $ 33,375,000.00 $ 49,800,000.00 $ 19,350,000.00 $ 9,198,000.00 $ 13,642,800.00 $ 5,104,800.00

Total Purchase $ 68,658,900 $ 8,484,000.00 Total Margins $ 199,691,100 $ 21,516,000.00 Avg Wholesale $ 416.05 Avg Purchase $ 106.45

Avg Margins $ 309.60 Avg Margins %

390.85%

Avg Cost/Unit $ 106.69

CHELSEA

75,000 120,000 45,000

$ 24,177,000.00 $ 36,157,200.00 $ 14,245,200.00

BRAZIL

Suppler: World Shoes Co.

DERBY

LOAFER

CHELSEA

JODHPUR

120,000 75,000

PORTUGAL

Supplier: Ferratti

DERBY

LOAFER

CHELSEA

105,000

JODHPUR

30,000

$ 400.00 $ 445.00 $ 415.00 $ 430.00 $ 400.00 $ -‐ $ 110.36 $ 115.90 $ 110.88 $ 113.80 $ 76.02 $ 289.64 $ 329.10 $ 304.12 $ 316.20 $ 323.98 $ -‐ 362.45% 383.95% 374.28% 377.86% 526.18%

$ 415.00 $ -‐ $ 77.05 $ 337.95 $ -‐ 538.61%

$ 48,000,000.00 $ 33,375,000.00 $ -‐ $ 13,243,200.00 $ 8,692,500.00 $ -‐

$ -‐ $ -‐

$ 42,000,000.00 $ -‐ $ 7,982,100.00 $ -‐

$ 12,450,000.00 $ -‐ $ 2,311,500.00 $ -‐

$ 34,756,800.00 $ 24,682,500.00 $

$ 34,017,900.00 $

$ 10,138,500.00 $

-‐

In conclusion, Ottosssons’ decided to choose a sourcing strategy that would be beneficial, both long term and short term for the company. By maximizing opportunities, Ottössöns ’ was able to minimize the potential risk associated with the individual countries chosen. Ottössöns ’ focused on mitigating risks by evaluating potential countries and suppliers by their quality assurance, the transparency of their manufacturing process, and their willingness to build lasting business relationship. In evaluating quality assurance, Ottössöns ’ sought out manufactures that met the company’s quality standards. Standards included, the use of fine leather, sourced humanely and sustainably, and the use of fine craftsmanship in the production of the shoe. Italy, Brazil, and Portugal provided manufactures that met these standards, while also meetings standards of facility transparency and the want to

concluding s tat e m e n t s .

maintain strong relationships with Ottössöns . Ottössöns ’ mitigated their potential risks, by eliminating Turkey as a potential partner in manufacturing their product. Turkey did not meet the standards that Ottössöns ’ looked for with in a business climate, due to their lack of economic and political stability. Dividing the product placement in Italy, Brazil, and Portugal also provided risk management. By producing in all three countries, Ottössöns can ensure that all product requests can be filled, if one of the three countries’ selected is unable to do so. 48% of Ottosson’s product assortment was placed in Italy, because the manufacturer chosen, Indistria Italiana Calzature Group, en-

sures lasting relationships due to the generations of services provided. Their made in Italy quality will ensure customers that the product of Ottössöns is made with a guarantee of Italian craftsmanship. 30% of Ottössöns ’ product placement was placed in Brazil, with Shoes Export e Import Ltda. (World Shoes Co.), due to their extensive market opportunity for the footwear industry and their low costs on labor. The remaining 21% of product was placed in Portugal, with Soze Group. Portugal’s manufacturing services offer great flexibility and strong technological advances. Portugal fills Ottössöns ’ request for innovative manufacturing, at a price in alignment with the company’s profit margin goals. Italy, Brazil, and Portugal all adhere to the sourcing guidelines created by Ottössöns Footwear, while also aligning themselves with the company values that create Ottössöns ’ brand identity. The following values are: -Aesthetic -Desire for Artistic Beauty and never settling for an average product - Perseverance: Actively pursuing innovative styles that push the boundaries of art in footwear -Teamwork -Quality -Communication -Training -Advancement: Ensuring shoes are made with the latest technology Margins for Ottössöns ’ meet a 350-400% profit in all selected countries. This mark up ensures that profit margins can be maintained for a successful business strategy, allowing for future growth and opportunity amongst the growing luxury market in the United States. Lead-times for quality crafted leather shoes take extensively longer than that of the average product; therefore, Ottössöns ’ created a business plan allowing for lead-times of 8-12 weeks, to ensure fulfillment of requested orders and the satisfaction of product quality. The order being placed for the upcoming fiscal year is 645,000 units, a common order size for the luxury goods market. The current inventory order was selected based upon current market opportunity and demand, both in the United States and internationally. Furthermore, Ottössöns plans for significant growth in the future, where orders placed will include larger quantities and lower initial costs. This is due to the established business relationships built and the company’s ability to negotiate lower prices after the first year of manufacturing. Lead-times also have the opportunity of being reduced after product placement is established within the production and facilities. Value added services, such as in-house tanneries, provide a convenience for Ottössöns with a completely vertical manufacturing process. The selected countries, Italy, Brazil, and Portugal, allow for sufficient company growth within the individual manufacturing processes of each country; allowing for Ottössöns to develop themselves in to an internationally recognized luxury footwear brand. Ottössöns is proud to have their footwear manufactured and produced within these countries, as they meet all of the company-required guidelines and stand within the top leather manufactures of the world. Ottössöns strives to create a product that is designed for the creative man, and feels as though they can accomplish this with their selected manufacturing countries of Italy, Brazil, and Portugal. 65

a p p e n d i x & f u rt h e r r ea d i n g

CATEGORY: GENUINE MEN'S LEATHER SHOES

PORTUGAL FERRATTI QUOTE COSTS

salesferratti@gmail.com

JODHPUR FREIGHT, DUTY, BROKER, INSURANCE

COST

146.15

10.97 $

TOTAL

157.12

CHELSEA FREIGHT, DUTY, BROKER, INSURANCE

COST

146.15

DERBY

FREIGHT, DUTY, BROKER, INSURANCE

COST

113.97

LOAFER

QUOTE 1 FOR PORTUGAL

113.97

10.97 $

FRIGHT, DUTY, BROKER, INSURANCE

COST

10.97 $

TOTAL

157.12

TOTAL

124.94

TOTAL

124.94

EMAIL CONVERSATION PORTUGAL & FERRATI

a p p e n d i x & f u rt h e r r ea d i n g

Tech Pack

Ottössöns Company Classification Period

17 East Jones Street Savannah, GA 31401 USA Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

Ottössöns FW 2014 Ottössöns Inc

COLORS

* Please Note: Colors shown are for reference only. For closest match, see material page, samples are available. CARE INSTRUCTIONS A. ALWAYS USE A SHOE HORN SO LEATHER WILL NOT COLLAPSE. B. BRUSH WITH HORSE HAIR BRUSH. C. CHAMOIS BUFF D. AFTER WEAR, ALLOW SHOES TO BREATH, THEN INSERT SHOE TREES E. COVER WITH SHOE BAG.

Fabric Content Colorway Description

1 (813) 690 1524

CALF LEATHER COGNAC JODPHUR BOOT

SIZE CHART (MENS) EUROPEAN 38.5 39 40 41 42 43 43.5 44 44 44.5 45

USA 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 12 SAMPLE SIZE

JAPAN 24.5 25 25.5 26 27.5 27.5 28 27.5 28.5 29 29.5

PACKAGING INFORMATION SHOES WILL BE SHIPPED IN STANDARD SHOE BOX ( L30CM x W23.5CM x H13CM ) WITH SHOE HORN (STANDARD SIZE / WOOD) AND DUST BAG ( ) .

OTHER INFORMATION / COMMENTS

9/30/20139/30/2013

Tech Pack

Ottössöns Component Sheet Company Classification Period Pair / Size

Ottössöns

Garment Label

MEN'S SHOES

Season

10/1/13

Buyer

Color/ Material

COGNAC / CALF

Material/ Reference

CALFSKIN

Lining / Color

GENUINE LEATHER

Name A B C D E F G H I J K L M N O P Q R S T U V W X Y Z C1

Sock Lining / Color

SOFTCAME L

NATURAL

Dimensions (cm) HEIGHT OF SHOE TOP OF SHOE TO TOP OF HEEL HEIGHT HEEL HEIGHT SHOE LENGTH SOLE HEIGHT TOE TO STITCHING HEEL TO STITCHING MID-‐HEIGHT TO STITCH TOP OF MID-‐STITCH TO MID SHOE SHOE OPENING LENGTH FRONT TO V DETAIL LENGTH HEIGHT OF V DETAIL SHOE LENGTH (VIEW 2) HEEL TO TOP OF LOGO LENGTH OF LOGO SHOE OPENING WIDTH LOGO TO SIDE OF SHOE OPENING OF SHOE TO TOE SHOE WIDTH BOTTOM OF SHOE FROM HEEL TO TOE BOTTOM OF SHOE TOP OF LOGO TO TOE SOLE WIDTH LOGO LENGTH END OF LOGO TO OUTSIDE OF SHOE HEEL TO BOTTOM OF LOGO HEEL WIDTH HEEL LENGTH

Insole Binding

18 15 3 32 1 14 18 5 10 12 6 2 32 3 8 7.5 3.5 20 14 24 20 11 5 1.5 2.5 3.5 4.5

17 East Jones Street

1 (813) 690 1524

Savannah, GA 31401 USA Ottössöns

Fabric Content

FW 2014

Colorway

Ottössöns Inc

Description

Sole / Sole Color

Edge Color / Mid Ornaments / Sole Color Finish

TR DK / BROWN

WOOD

BRASS

CALF LEATHER COGNAC JODPHUR BOOT Heel

Column1

STACK MATCH SOLE

Comments

A1 -‐-‐ 4CM / B1 -‐-‐ 3.5CM

Tech Pack

Ottössöns Materials Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

17 East Jones Street Savannah, GA 31401 USA Garment Label Season Buyer

1 (813) 690 1524

Fabric Content

Ottössöns

CALF LEATHER

Colorway

FW 2014

COGNAC

Description

Ottössöns Inc

JODPHUR BOOT

LEATHER INFORMATION

COGNAC CALF SKIN

STYLE # WIDTH

THICKNESS

1.8-‐2 MM

LEATHER WEIGHT

4.5-‐5 OZ

COMMENTS

1. CALF SKIN LEATHER / COGNAC -‐ USED FOR EXTERIOR 2. NATURAL CALF SKIN -‐ USED FOR LINING

THREAD: NYLON 69 BLACK

Tech Pack

Ottössöns Detail / Construction Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

Garment Label Season Buyer

Ottössöns FW 2014 Ottössöns Inc

17 East Jones Street Savannah, GA 31401 USA Fabric Content Colorway Description

1 (813) 690 1524

CALF LEATHER COGNAC JODPHUR BOOT

COMMENTS ON DETAILS A.LEATHER WIDTH -‐ 1.5 CM

B. LEATHER LENGTH -‐ 40 CM

C. BUCKLE LENGTH -‐ 1.7 CM

D. BUCKLE WIDTH -‐ 1 CM / BRASS

E. SOLE: 3-‐SOLE BEND LEATHER -‐ LOGO DETAIL -‐ LOGO IS PLACED DIRECTLY AT THE ARCH OF THE SHOE. EMBOSSED.

Tech Pack

Ottössöns Non-Leather Materials Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

17 East Jones Street Savannah, GA 31401 USA

Garment Label Season Buyer

COMMENTS ON DETAILS A.LEATHER: CALF LEATHER / WIDTH -‐ 1.5 CM

THREAD: NYLON 69 BLACK

C. BUCKLE: BRASS -‐ LENGTH -‐ 1.7 CM

Ottössöns FW 2014 Ottössöns Inc

Fabric Content Colorway Description

1 (813) 690 1524

CALF LEATHER COGNAC JODPHUR BOOT

Tech Pack

Ottössöns Packaging Sheet Company Classification Period

17 East Jones Street Savannah, GA 31401 USA Garment Label

Ottössöns MEN'S SHOES

10/1/13

Season Buyer

Ottössöns FW 2014 Ottössöns Inc

PACKING INFORMATION FOR SHIPPING

CARE INSTRUCTIONS A. ALWAYS USE A SHOE HORN SO LEATHER WILL NOT COLLAPSE. B. BRUSH WITH HORSE HAIR BRUSH. C. CHAMOIS BUFF D. AFTER WEAR, ALLOW SHOES TO BREATH, THEN INSERT SHOE TREES E. COVER WITH SHOE BAG.

Fabric Content

1 (813) 690 1524

CALF LEATHER

Colorway Description

COGNAC JODPHUR BOOT

SHOE BOX DIMENSIONS A B C D E F G H I J

DIMENSIONS (CM) 28.4 38.2 37.5 28 14.5 4 28.4 38.2 24 3

COMMENTS SHOE BOX SHOE BOX SHOE BOX SHOE BOX SHOE BOX SHOE BOX SHOE BOX DUST BAG (DB) DUST BAG (DB) SAME ON DB & BOX

LOGO EMBOSSED ON BOX / PRINTED ON DUST BAG

PACKAGING INFORMATION SHOES WILL BE SHIPPED IN STANDARD SHOE BOX ) WITH SHOE HORN (STANDARD SIZE / WOOD) AND DUST BAG. SEE SIZING ABOVE.

TISSUE INFORMATION Black / One SHEET PER BOX / SIZE: (L) 75CM x (W) 56 CM

Tech Pack

Ottössöns Component Sheet Company Classification Period

Ottössöns

Garment Label

MEN'S SHOES

Season

10/1/13

Pair / Size

Color/ Material

Material/ Reference

Lining / Color

Sock Lining / Color

Pair / Size

Color/ Material

Material/ Reference

Lining / Color

Sock Lining / Color

COGNAC / CALF

CALFSKIN

GENUINE LEATHER

Name A B C D E F G H I J K L M N O P

NATURAL

Dimensions (Inch) 32 CM

SHOE HEIGHT (LEATHER)

16 CM

HEEL HEIGHT

3 CM

HEIGHT

19 CM

SHOE OPENING

14 CM

BOTTOM HEEL SOLE

9.2 CM

WIDTH OF STRETCH (TOP)

6.5 CM

WIDTH OF STRETCH (BOTTOM)

11 CM

SHOE TAB (LENGTH)

2 CM

SHOE TAB (WIDTH)

1.4 CM

SHOE LENGTH SHOE OPEING LENGTH TOE WIDTH SHOE OPENING WIDTH HEEL WIDTH

32 CM 14 CM 11 CM 11 CM 8.3 CM

LENGTH FROM LOGO TO TOE

21 CM

Q R S T U

LENGTH FROM LOGO TO HEEL

2 CM

WIDTH FROM LOGO TO OUTER SHOE EDGE

.5 CM

V W

WIDTH OF HEEL

3.2 CM

LENGTH OF HEEL

9.3 CM

LENGTH FROM HEEL TO TOE

23 CM

WIDTH OF TOE SHAPE

11.5 CM

WIDTH OF LOGO

2 CM

Ottössöns FW 2014

Buyer

Ottössöns Inc

Insole Binding Insole Binding SOFTCAME

Sole / Sole Color

ENTIRE BOTTOM SHOE SOLE

302 W Park Ave. Savannah, GA 31401 USA

Sole / Sole Color TR DK / BROWN

Comments

1 (313 )910 8745

Fabric Content CALF LEATHER Colorway

CHESTNUT

Description CHELSEA BOOT Edge Color / Mid Ornaments / Sole Color Finish / Edge Color / Mid Ornaments Sole Color Finish WOOD BRASS

Heel Heel

HEEL HEIGHT Column1

STACK MATCH SOLE

Tech Pack

Ottössöns Fabric Sheet Company Classification Period

302 W PARK AVE. Savannah, GA 31401 USA Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

1 (313) 910 8745

Fabric Content CALF LEATHER

Ottössöns

Colorway

FW 2014

CHESTNUT

Description CHELSEA BOOT

Ottössöns Inc

LEATHER INFORMATION

COGNAC CALF

STYLE # WIDTH

SIZE RANGES

EU 38.5-‐45

DELIVERY DATE

TBD

COGNAC CALF SKIN

COMMENTS EMERALD FABRIC SWATCH IS A STRETCH FABRIC COGNAC CALF SKIN WILL BE THE EXTERIOR LEATHER OF THE BOOT NATURAL CALFSKIN WILL BE USED FOR THE INTERIOR LINING OF THE LEATHER BOOT STRETCH EMARLD THREAD:needle eg 47 needle for 50 awl

SEE OUR Ottössöns SOURCHING GUIDELINES

NATURAL CALF SKIN NON LEATHER MATERIAL: 3'' GORE STRETCH EMERALD

Tech Pack

Ottössöns Detail / Construction Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

Garment Label Season Buyer

302 W PARK AVE. Savannah, GA 31401 USA Ottössöns FW 2014 Ottössöns Inc

1 (313) 910 8745

Fabric Content CALF LEATHER Colorway

CHESTNUT

Description CHELSEA BOOT

Detail(s)

COMMENTS ON DETAILS A) Logo will be placed directly at the arch of the shoe

B) Ottössöns logo will be embossed at the bottom of the shoe

C) Thread: NYLON 69 BLACK

D) Sole: 3-‐ Sole Bend Leather Stacked

THE DETAILED MEASUREMENTS HIGHLIGHT WHERE THE LOGO PLACE MENT WILL BE LOCATED ON THE SHOE. The sample size is U.S. 10.5 And the European sizing is a 44

Tech Pack

Ottössöns Company Classification Period

302 W PARK AVE. Savannah, GA 31401 USA Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

Fabric Content

Ottössöns

Colorway

FW 2014

1 (313) 910 8745

CALF LEATHER CHESTNUT

Description JODPHUR BOOT

Ottössöns Inc

Sketch

SIZE CHART (MENS)

COLORS

* Please Note: Colors shown are for reference only. For closest match, see material page, samples are available. CARE INSTRUCTIONS A) ALWAYS USE A SHOREHORN ( LEATHER WILL NOT COLLAPSE) B) BRUSH WITH A HORSEHAIR BRUSH C) CHAMOIS BUFF D) AFTER WEAR ALLOW SHOES TO BREATHE, THEN INSERT SHOETREES E) COVER WITH SHOE BAG

OTHER INFORMATION / COMMENTS

EUROPEAN 38.5 39 40 41 42 43 43.5 44 44 44.5 45

USA 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 12 SAMPLE SIZE

JAPAN 24.5 25 25.5 26 27.5 27.5 28 27.5 28.5 29 29.5

PACKAGING INFORMATION

SHOES WILL BE SHIPPED IN BOX WITH SHOE HORN AND DUST BAG STANDARD SHOE BOX AND STANDARD SHOE HORN A) BOX DIMENSIONS: B) DUST BAG DIMENSIONS: C) STANDARD SHOE HORN SEE OUR Ottössöns SOURCHING GUIDELINES FOR ANY ADDITONAL CONCERNS

COGNAC LEATHER PANTONE COLOR: 17-‐5641 NATURAL LEATHER

Tech Pack

Ottössöns Component Sheet Company Classification

Ottössöns MEN'S SHOES

Period

10/1/13

Pair / Size

Color/ Material COGNAC / CALF

Garment Label Season Buyer Material/ Reference Calfskin

Lining / Color Genuine Leather

Name A

Natural

Insole Binding Soft Camel

Dimensions (Inch) Length of Entire Shoe

32 cm

Length of Base Heel

8 -‐ 9/10 cm

Verticle Length of Shoe (Heel)

10-‐ 7/10 cm

Heel Height

2-‐ 1/2 cm

Length of Toe Cap

7-‐3/10 cm

Verticle Length of Toe Cap

3-‐7/10 cm

Length of Shoe (Toe Cap to Heel Cap)

15 cm

Length of Center Elastic

8 cm

Length of Shoe Insert

9-‐ 7/10 cm

Length of Heel Cap

7-‐1/2 cm

Length of Entire Shoe

32 cm

Width of Shoe Insert

7 cm

Length of Shoe Insert

9-‐7/10 cm 5 cm

Width of Center Elastic

Length of Center Elastic

8cm

Width of Toe Cap

8 cm

Length of Toe Cap

6 cm

Length from Toe to Base heel

23 cm

Length of Base Heel to Center Heel

4 cm

Width of Shoe

11 cm

Length from Toe to Company Logo

19 cm

Length of Company Logo

4 cm

Length from Heel to Logo

X Y

Sock Lining / Color

Length of outter Heel to Heel detail Width of Heel

3 cm 4 cm 7-‐1/2 cm

17 East Jones Street Savannah, GA 31401 USA

Ottössöns FW 2014 Ottössöns Inc Sole / Sole Edge Color / Mid Sole Color Color TR Dark Brown

Comments

1 (813) 690 1524

Fabric Content CALF LEATHER Colorway CHESTNUT DescriptionModified Derby Ornaments / Finish Stretch

Heel Stack Match Sole

Tech Pack

Ottössöns Fabric Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

17 East Jones Street Savannah, GA 31401 USA Garment Label Season Buyer

1 (813) 690 1524

Fabric Content CALF LEATHER

Ottössöns

Colorway

FW 2014

CHESTNUT

Description Modified Derby

Ottössöns Inc

Sketch

swatch

LEATHER INFORMATION

Leather Weight: 4.5-‐5 oz.

STYLE # WIDTH

Calf Thickness : 1.8-‐2 mm

SIZE RANGES

EU 38.5 -‐ 45

THREAD WEIGHT

NYLON 69 BLACK

COMMENTS

Please reference Sourcing Guidelines

1. Cognac Calf Skin Leather (Exterior) 1.8 -‐ 2 mm 2. Heavy Duty Gore Elastic 3" (Pantone 17-‐5641 ) -‐ Stretch Gore 3. Natural Calf Skin (interior) 1.8-‐2 mm

Tech Pack

Ottössöns Company Classification Period

17 East Jones Street Savannah, GA 31401 USA Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

Fabric Content

Ottössöns

Colorway

FW 2014

1 (813) 690 1524

CALF LEATHER CHESTNUT

Description Modified Derby

Ottössöns Inc

Sketch

COLORS

* Please Note: Colors shown are for reference only. For closest match, see material page, samples are available. CARE INSTRUCTIONS A. Always use a shoehorn (Leather will not collapse) B. Brush with horsehair brush C. Chamois Buff D. After wear, allow shoes to breathe. Then insert Shoetrees. E. Cover with Shoe bag.

OTHER INFORMATION / COMMENTS

Pantone Emerald ( 17-‐5641 TCX)

SIZE CHART (MENS) EUROPEAN 38.5 39 40 41 42 43 43.5 44 44 44.5 45

USA 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 12 SAMPLE SIZE

JAPAN 24.5 25 25.5 26 27.5 27.5 28 27.5 28.5 29 29.5

PACKAGE INFORMATION

Shoes will be shipped in standart shoe box with shoe horn and dust bag. Please reference packaging guidelines for additional information. A. Box Dimensions (L. 30cm W. 23.5cm H. 13cm) B. Dust Bag Dimensions: ( L. W. H.) C. Standard Shoe Horn (Wooden)

Tech Pack

Ottössöns Detail / Construction Sheet Company Classification Period

Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

17 East Jones Street Savannah, GA 31401 USA

Ottössöns FW 2014 Ottössöns Inc

Fabric Content CALF LEATHER Colorway

CHESTNUT

Description Modified Derby

COMMENTS ON DETAILS A. Ottossons Logo will be embossed in the bottom of the sole.

B. Logo is placed directly at the Arch of the shoe.

C. Heavy Duty Gore Elastic 3" Pantone Emerald ( 17-‐5641 TCX) -‐ Stretch Gore

D. Cognac Calf Skin Leather (Exterior) 1.8 -‐ 2 mm ; Approximate Weight -‐ 4.5-‐5 oz.

E. Thread: Black Nylon #69

Tech Pack

Ottössöns Component Sheet Company Classification Period Pair / Size 44

Name A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Ottössöns

Garment Label

MEN'S SHOES

Season

10/1/13

Buyer

Color/ Material COGNAC / CALF

Material/ Reference CALF SKIN

Lining / Color GENUINE LEATHER

FULL HEIGHT OF COUNTER HEIGHT OF BACK EXCLUDING HEEL HEIGHT OF HEEL LENGTH FROM LOGO TO BACK OF SHOE LOWER HEIGHT OF HEEL WELT HEIGHT LENGTH OF LOGO LENGTH OF TOE CAP WIDTH OF OPENING UPPER LENGTH TOP LINE LENGTH TONGUE LENGTH LENGTH OF TOP DETAIL WIDTH OF TOP DETAIL TONGUE WIDTH WIDTH OF HEEL LENGTH OF HEEL MIDDLE OF HEEL TO BACK END OF HEELTO CENTER LENGTH BETWEEN LOGO AND HEEL LENGTH FROM HEEL TO TOE LOGO LENGTH LOGO DISTANCE FROM EDGE OF SHOE DISTANCE FROM LOGO TO TOE SOLE WIDTH LENGTH OF SHOE

Sock Lining / Color NATURAL

Dimensions (cm) 8.5 6.5 2 2 1.5 0.3 5.5 8 6.5 20.5 10 8.5 10 4 3 6.5 7.5 4.5 3 4 21 5.5 2.5 16 8.5 30.5

17 East Jones Street Savannah, GA 31401 USA Ottössöns FW 2014 Ottössöns Inc

Insole Sole / Sole Color Binding SOFT CAMEL TR DK BROWN

1 (813) 690 1524

Fabric Content CALF LEATHER Colorway

CHESTNUT

Description LOAFER FLAT Edge Color / Mid Ornaments / Sole Color Finish TASSEL

Heel 2 CM

Comments

Length between top stitching

Leather detailing that will hold tassel

Centered in middle

Style # #FWLF14

Tech Pack

Ottössöns Fabric Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

17 East Jones Street Savannah, GA 31401 USA Garment Label Season Buyer

1 (813) 690 1524

Fabric Content CALF LEATHER

Ottössöns

Colorway

FW 2014 Ottössöns Inc

CHESTNUT

Description LOAFER FLAT

Sketch

swatch

LEATHER INFORMATION

FINISHED COGNAC / CALF

STYLE # WIDTH

SIZE RANGES

EU 38.5-‐ 45

THREAD

NYLON 69 BLACK

COMMENTS

1. CALF SKIN LEATHER-‐ COGNAC -‐ USED FOR EXTERIOR

2. NATURAL CALF SKIN-‐ USED FOR LINING 2

SOLE: 3-‐SOLE BEND LEATHER -‐ LOGO DETAIL -‐ LOGO IS PLACED DIRECTLY AT THE ARCH OF THE SHOE. EMBOSSED.

Tech Pack

Ottössöns Company Classification Period

17 East Jones Street Savannah, GA 31401 USA Garment Label

Ottössöns

Season

MEN'S SHOES

10/1/13

Buyer

COLORS

* Please Note: Colors shown are for reference only. For closest match, see material page, samples are available. CARE INSTRUCTIONS A. ALWAYS USE A SHOREHORN SO LEATHER WILL NOT COLLAPSE B. BRUSH WITH A HORSEHAIR BRUSH C. CHAMOIS BUFF D. AFTER WEAR ALLOW SHOES TO BREATHE, THEN INSERT SHOETREES E. COVER WITH SHOE BAG.

OTHER INFORMATION / COMMENTS

1 (813) 690 1524

Fabric Content CALF LEATHER

Ottössöns

Colorway

FW 2014

CHESTNUT

Description LOAFER FLAT

Ottössöns Inc

SIZE CHART (MENS) EUROPEAN 38.5 39 40 41 42 43 43.5 44 44 44.5 45

USA 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 12 SAMPLE SIZE

JAPAN 24.5 25 25.5 26 27.5 27.5 28 27.5 28.5 29 29.5

PACKAGING INFORMATION SHOES WILL BE SHIPPED IN STANDARD SHOE BOX WITH SHOEHORN (STANDARD SIZE WOOD) AND DUST BAG

Tech Pack

Ottössöns Detail / Construction Sheet Company Classification Period

Ottössöns MEN'S SHOES

10/1/13

Garment Label Season Buyer

17 East Jones Street Savannah, GA 31401 USA Ottössöns FW 2014 Ottössöns Inc

1 (813) 690 1524

Fabric Content CALF LEATHER Colorway

CHESTNUT

Description LOAFER FLAT

COMMENTS ON DETAILS A. TASSEL MEASURES 4CM IN LENGTH-‐ 2CM IN WIDTH.

B. STITCH-‐ 4MM THICK.

C. TOP TOE BOX DETAILING-‐ HARD EMBOSSED.

D. LEATHER STRING ATTACHING TASSELS.

E. SOLE: 3-‐SOLE BEND LEATHER -‐ LOGO DETAIL -‐ LOGO IS PLACED DIRECTLY AT THE ARCH OF THE SHOE. EMBOSSED.

italy final costs

Perri Rothenberg | 220 Manhatten Ave. NY, New York +1 212 690 1524

Style: Jodhpur Description: Cognac Calf Leather Boot with Brass Buckle LEATHER Upper - Calf Skin 4.5-5oz Lining: Calf Skin Natural 3 Sole Bend Leather Insole Wrap Leather

Season: FW13 Ottossonsgroup.com contact@ottossons.com Sq. Ft/ Unit 3 2 2 2 2

Yield 1.03 1.03 1.03 1.03 1.03

COMPONENTS: Unit Per Pair Thread Nylon #69 (Black) (1spoon = 15 pairs) 0.66 Brass Buckle 2 Stiffener (Cow) 2 Toe (Cow) 2 Shanks 2

Yield 1.03 1.03 1.03 1.03 1.03

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

OTHER Freight Broker Insurance

Total Cost: Wholesale Price (Total Cost x 1.9) Retail Price (WS x 220%) GROSS PROFIT MARKUP % GROSS MARGIN %

TOTAL: Cost Per Unit

Units 1 1 2 2

LABOR: Min Wage: $8 Per Hour Cutting Closing Insole Prep Lasting / Stretching Sole Heel Building Finishing Edges and Sole Total Min Per Pair Total Hours Per Pair PACKING Cartons (36x36'' box @ 250lb max) Tape Labels

Min. / Pair 5 7 5 10 5 5 5 42 0.70 $/ Unit $7.11 0.020 0.080

$ $ $

$ $ $ $

$/Unit 1.50 0.09 0.03

113.44 215.54 474.19 360.75 318% 76%

Cost Per Sq. Ft/ Unit 14.00 $ 4.00 $ 4.00 $ 2.00 $ 2.00 $ TOTAL LEATHER: $ Cost Per Unit $ 0.33 $ $ 0.20 $ $ 2.50 $ $ 2.25 $ $ 2.00 $ $ $ $ $ $

$ $ $ $

$ 0.75 0.70 0.10 1.20

$ $ $ $

TOTAL PACKAGING: $ Cost Per Min $ 0.20 $ $ 0.20 $ $ 0.20 $ $ 0.20 $ $ 0.20 $ $ 0.20 $ $ 0.20 $

Quantity 1 4 1 Unit 1 1 1

TOTAL LABOR: Waste 0.01 0.01 TOTAL PACKING: Units Per Container 2952 2952 2952 TOTAL :

Total Cost 43.26 8.00 8.00 4.00 4.00 67.26 Amount 0.23 0.41 5.15 4.64 4.12 14.54 Amount 0.75 0.70 0.20 2.40 4.05 Amount 1.00 1.40 1.00 2.00 1.00 1.00 1.00

8.40 Amount

$ $ $ $

7.11 0.06 0.09 7.26 Total Amount $ 4,428.00 $ 262.73 $ 82.66 $ 103.13

Invoice Subtotal Duty Rate % Duty Rate $

$ $

103.13 10.0% 10.31

TOTAL

113.44

italy final costs

Perri Rothenberg | 220 Manhatten Ave. NY, New York +1 212 690 1524

Style: Loafer Description: Cognac Calf skin loafer with Tassle LEATHER Upper - Calf Skin 4.5-5oz Lining: Calf Skin Natural 3 Sole Bend Leather Insole

Season: FW13 Ottossonsgroup.com contact@ottossons.com Sq. Ft/ Unit 3 2 2 2

Yield 1.03 1.03 1.03 1.03

COMPONENTS: Unit Per Pair Thread Nylon #69 (Black) (1spoon = 15 pairs) 0.66 Brass Buckle 2 Stiffener (Cow) 2 Toe (Cow) 2 Shanks 2 Tassle 4 Tassle Holder 2

Yield 1.03 1.03 1.03 1.03 1.03 1.03 1.03

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

Units 1 1 2 2

LABOR: Min Wage: $8 Per Hour Cutting Closing Insole Prep Lasting / Stretching Sole Heel Building Finishing Edges and Sole Total Min Per Pair Total Hours Per Pair PACKING Cartons Tape Labels OTHER Freight Broker Insurance

Total Cost: Wholesale Price (Total Cost x 2) Retail Price (WS x 220%) GROSS PROFIT MARKUP % GROSS MARGIN %

Min. / Pair 5 7 5 10 5 5 5 42 0.70 $/ Unit $7.11 0.020 0.080

$ $ $

$ $ $ $

$/Unit 1.50 0.09 0.03

122.64 233.02 512.63 389.99 318% 76%

$ $ $ $

$ $ $ $ $ $ $

$ $ $ $

Cost Per Sq. Ft/ Unit 14.00 4.00 4.00 2.00 TOTAL LEATHER: Cost Per Unit 0.33 0.20 2.50 2.25 2.00 2.00 2.00 TOTAL: Cost Per Unit 0.75 0.70 0.10 1.20

TOTAL PACKAGING: Cost Per Min $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20

Quantity 1 4 1 Unit 1 1 1

TOTAL LABOR: Waste 0.01 0.01 TOTAL PACKING: Units Per Container 2952 2952 2952 TOTAL :

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total Cost 43.26 8.00 8.00 4.00 63.26 Amount 0.23 0.41 5.15 4.64 4.12 8.24 4.12 26.90 Amount 0.75 0.70 0.20 2.40

4.05 Amount

$ $ $ $ $ $ $

1.00 1.40 1.00 2.00 1.00 1.00 1.00

8.40 Amount

$ $ $ $

7.11 0.06 0.09 7.26 Total Amount $ 4,428.00 $ 262.73 $ 82.66 $ 111.49

Invoice Subtotal Duty Rate % Duty Rate $

$ $

111.49 10.0% 11.15

TOTAL

122.64

italy final costs

Perri Rothenberg | 220 Manhatten Ave. NY, New York +1 212 690 1524 Style: Chelsea Description: Cognac Calf skin Chelsea Boot with Nylon Stretch LEATHER Upper - Calf Skin 4.5-5oz Lining: Calf Skin Natural 3 Sole Bend Leather Insole

Season: FW13 Ottossonsgroup.com contact@ottossons.com Sq. Ft/ Unit 3 2 2 2

Yield 1.03 1.03 1.03 1.03

COMPONENTS: Unit Per Pair Thread Nylon #69 (Black) (1spoon = 15 pairs) 0.66 Brass Buckle 2 Stiffener (Cow) 2 Toe (Cow) 2 Shanks 2 3'' Nylon Stretch 4 Tab 2

Yield 1.03 1.03 1.03 1.03 1.03 1.03 1.03

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

Units 1 1 2 2

Total Cost: Wholesale Price (Total Cost x 2) Retail Price (WS x 220%) GROSS PROFIT MARKUP % GROSS MARGIN % 90

Min. / Pair 5 7 5 10 5 5 5 42 0.70 $/ Unit $7.11 0.020 0.080

$ $ $

$ $ $ $

$/Unit 1.50 0.09 0.03

113.12 214.93 472.85 359.73 318% 76%

$ $ $ $

$ $ $ $ $ $ $

$ $ $ $

Cost Per Sq. Ft/ Unit 14.00 4.00 4.00 2.00 TOTAL LEATHER: Cost Per Unit 0.33 0.20 2.50 2.25 2.00 0.75 0.30 TOTAL: Cost Per Unit 0.75 0.70 0.10 1.20

TOTAL PACKAGING: Cost Per Min $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20

Quantity 1 4 1 Unit 1 1 1

TOTAL LABOR: Waste 0.01 0.01 TOTAL PACKING: Units Per Container 2952 2952 2952 TOTAL :

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Total Cost 43.26 8.00 8.00 4.00 63.26 Amount 0.23 0.41 5.15 4.64 4.12 3.09 0.62 18.25 Amount 0.75 0.70 0.20 2.40

4.05 Amount

$ $ $ $ $ $ $

1.00 1.40 1.00 2.00 1.00 1.00 1.00

8.40 Amount

$ $ $ $

7.11 0.06 0.09 7.26 Total Amount $ 4,428.00 $ 262.73 $ 82.66 $ 102.84

Invoice Subtotal Duty Rate % Duty Rate $

$ $

102.84 10.0% 10.28

TOTAL

113.12

italy final costs

Perri Rothenberg | 220 Manhatten Ave. NY, New York +1 212 690 1524

Style: Derby Description: Cognac Calf skin Derby with Stretch

LEATHER Upper - Calf Skin 4.5-5oz Lining: Calf Skin Natural 3 Sole Bend Leather Insole

Season: FW13 Ottossonsgroup.com contact@ottossons.com

Sq. Ft/ Unit 3 2 2 2

Yield 1.03 1.03 1.03 1.03

COMPONENTS: Unit Per Pair Thread Nylon #69 (Black) (1spoon = 15 pairs) 0.66 Brass Buckle 2 Stiffener (Cow) 2 Toe (Cow) 2 Shanks 2 3'' Nylon Stretch 4 Tab 2

Yield 1.03 1.03 1.03 1.03 1.03 1.03 1.03

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

Units 1 1 2 2

Total Cost: Wholesale Price (Total Cost x 2) Retail Price (WS x 220%) GROSS PROFIT MARKUP % GROSS MARGIN %

Min. / Pair 5 7 5 10 5 5 5 42 0.70 $/ Unit $7.11 0.020 0.080

$ $ $

$ $ $ $

$/Unit 1.50 0.09 0.03

113.69 216.01 475.22 361.53 318% 76%

$ $ $ $

$ $ $ $ $ $ $

$ $ $ $

Quantity 1 4 1 Unit 1 1 1

Cost Per Sq. Ft/ Unit 14.00 4.00 4.00 2.00 TOTAL LEATHER: Cost Per Unit 0.33 0.20 2.50 2.25 2.25 0.75 0.30 TOTAL: Cost Per Unit 0.75 0.70 0.10 1.20

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

TOTAL PACKAGING: Cost Per Min $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20

TOTAL LABOR: Waste

0.01 0.01 TOTAL PACKING: Units Per Container 2952 2952 2952 TOTAL :

Total Cost 43.26 8.00 8.00 4.00 63.26 Amount 0.23 0.41 5.15 4.64 4.64 3.09 0.62 18.77 Amount 0.75 0.70 0.20 2.40 4.05 Amount

$ $ $ $ $ $ $

1.00 1.40 1.00 2.00 1.00 1.00 1.00 8.40 Amount

$ $ $ $

7.11 0.06 0.09 7.26 Total Amount $ 4,428.00 $ 262.73 $ 82.66 $ 103.35

Invoice Subtotal Duty Rate % Duty Rate $

$ $

103.35 10.0% 10.34

TOTAL

91 113.69

brazil final costs

" Redefining the art in footwear"

Style #: 00000 Style Name: Chelsea Boot

220 Manhatten Avenue New York, New York

Description: Boot with gore elastic upper Season: Fall

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

Date:

LEATHER

Sq ft./ Units

Yield

Amount

24.00

1.03

74.16

6.25

1.03

12.88

Sole: Cow

3.00

1.03

3.09

Insole: Cow - Natural- Thickness 1.2

3.50

1.03

3.61

95.13

Upper: Cognac Calf 4.5-5 oz (finished)

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

TOTAL LEATHER: COMPONENTS:

Yards/Units

Thread Nylon #69 (Black) Leather Shoe Tab Heavy Duty Gore Elastic 3" (Per Yard)

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

0.08

0.15

9.00

1.35

Shanks

1.25

Toe Cap: Cow

0.70

Stiffner: Cow

0.70

TOTAL COMPONENTS:

6.16

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.75

Printed Dust Bag

0.15

Black Tissue Paper

0.03

0.06

Shoe Horn

0.08

TOTAL PACKAGING:

1.04

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole) TOTAL TIME: PACKING: Box (36 W, 36 H, 36 L) Tape Labels

Minutes 3 5.0 2 2 4 2 2.0 3 23

Cost/Minute 0.023 0.023 0.023 0.023 0.023 0.023 0.023 0.023 TOTAL LABOR:

$/Unit 7.11 0.02

Quantity

0.08

1 4

Amount $ 7.11 $ 0.08

0.08

7.27

TOTAL PACKING: OTHER: Freight Broker

UNIT/Container 2952 2952

Insurance

2952

TOTAL AMOUNT 1,924.86 250.00 39.36 TOTAL :

Amount $ 0.07 $ 0.12 $ 0.05 $ 0.05 $ 0.09 $ 0.05 $ 0.05 $ 0.07 $ 0.53

Amount $ 0.65 $ 0.08 $

0.01

0.75

Invoice Subtotal Duty Rate

$ 110.88 8.5%

DUTY DOLLAR AMOUNT TOTAL COST PER SHOE:

$ 9.42 $ 120.30

brazil final costs

" Redefining the art in footwear"

Style #: 00000 Style Name: Modern Derby

220 Manhatten Avenue New York, New York

Description:leather shoe with gore elastic upper Season: Fall

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

Date:

LEATHER

Sq ft./ Units

Yield

Amount

24.00

1.03

74.16

6.00

1.03

12.36

Sole: Cow

3.00

1.03

3.09

Insole: Cow - Natural- Thickness 1.2

3.50

1.03

3.61

94.62

Upper: Cognac Calf 4.5-5 oz (finished)

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

TOTAL LEATHER: COMPONENTS:

Yards/Units

Thread Nylon #69 (Black)

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

0.08

0.15

9.00

1.35

1.25

Toe Cap: Cow

0.70

Stiffner: Cow

0.70

TOTAL COMPONENTS:

6.16

Leather Shoe Tab Heavy Duty Gore Elastic 3" (Per Yard) Shanks

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.75

Printed Dust Bag

0.15

Black Tissue Paper

0.03

0.06

Shoe Horn

0.08

TOTAL PACKAGING:

1.04

LABOR:

Minutes

Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole) TOTAL TIME:

PACKING: Box (36 W, 36 H, 36 L) Tape Labels

Cost/Minute

3 5.0 2 2 4 2 2.0 3 23

Amount

0.023 0.023 0.023 0.023 0.023 0.023 0.023 0.023 TOTAL LABOR:

$/Unit 7.11 0.02

Quantity

0.08

UNIT/Container 2952 2952

Insurance

2952

0.07 0.12 0.05 0.05 0.09 0.05 0.05 0.07 0.53

1 4

Amount $ 7.11 $ 0.08

0.08

7.27

TOTAL PACKING: OTHER: Freight Broker

$ $ $ $ $ $ $ $ $

TOTAL AMOUNT 1,924.86 250.00 39.36 TOTAL :

Amount $ 0.65 $ 0.08 $

0.01

0.75

Invoice Subtotal Duty Rate

$ 110.36 8.5%

DUTY DOLLAR AMOUNT TOTAL COST PER SHOE:

$ 9.32 $ 119.68

brazil final costs

" Redefining the art in footwear"

Style #: 00000 Style Name: Joper Boot

220 Manhatten Avenue New York, New York

Description:leather boot with buckle Season: Fall

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date:

Sq ft./ Units

Yield

Amount

25.00

1.03

77.25

6.25

1.03

12.88

Sole: Cow

3.00

1.03

3.09

Insole: Cow - Natural- Thickness 1.2

4.00

1.03

4.12

98.74

Upper: Cognac Calf 4.5-5 oz (finished)

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

TOTAL LEATHER: COMPONENTS: Thread Nylon #69 (Black)

Yards/Units

Cost Per Yard/Unit

Amount

0.66

3.15

Buckle

0.75

Shanks

1.25

Toe Cap: Cow

0.70

Stiffner: Cow

0.70

TOTAL COMPONENTS:

5.48

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.75

Printed Dust Bag

0.15

Black Tissue Paper

0.03

0.06

Shoe Horn

0.08

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole) TOTAL TIME:

Minutes 3 5.0 2 2 4 2 2.0 3 23

PACKING: Box (36 W, 36 H, 36 L) Tape

$/Unit 7.11 0.02

Labels

TOTAL PACKAGING: Cost/Minute 0.023 0.023 0.023 0.023 0.023 0.023 0.023 0.023 TOTAL LABOR:

$ 1.04 Amount $ 0.07 $ 0.12 $ 0.05 $ 0.05 $ 0.09 $ 0.05 $ 0.05 $ 0.07 $ 0.53

Quantity 1 4

Amount $ 7.11 $ 0.08

0.08

7.27

0.08 TOTAL PACKING:

OTHER: Freight Broker

UNIT/Container 2952 2952

Insurance

2952

TOTAL AMOUNT 1,924.86 250.00 39.36 TOTAL :

2.08

Amount $ 0.65 $ 0.08 $

0.01

0.75

Invoice Subtotal Duty Rate

$ 113.80 8.5%

DUTY DOLLAR AMOUNT TOTAL COST PER SHOE:

$ 9.67 $ 123.48

brazil final costs

" Redefining the art in footwear"

Style #: 00000 Style Name: Loafer Flat

220 Manhatten Avenue New York, New York

Description: classic leather shoe with Tassel Season: Fall

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date:

Sq ft./ Units

Yield

Amount

26.00

1.03

80.34

6.00

1.03

12.36

Sole: Cow

3.00

1.03

3.09

Insole: Cow - Natural- Thickness 1.2

3.50

1.03

3.61

Upper: Cognac Calf 4.5-5 oz (finished)

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

TOTAL LEATHER: COMPONENTS: Thread Nylon #69 (Black) Leather Shoe Tab

Yards/Units

$ 100.80

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

0.08

Leather Tassel with String

0.63

Shanks

1.25

Toe Cap: Cow

0.70

Stiffner: Cow

0.70

Facing leather Tassel

0.08

TOTAL COMPONENTS:

5.52

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.75

Printed Dust Bag

0.15

Black Tissue Paper

0.03

0.06

Shoe Horn

0.08

TOTAL PACKAGING:

1.04

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole) TOTAL TIME

Minutes 3 5 2 2 4 2 2 3 23

PACKING: Box (36 W, 36 H, 36 L) Tape

$/Unit 7.11 0.02

Labels

Cost/Minute 0.023 0.023 0.023 0.023 0.023 0.023 0.023 0.023 TOTAL LABOR: Quantity

0.08

1 4

Amount $ 7.11 $ 0.08

0.08

7.27

TOTAL PACKING: OTHER: Freight Broker

UNIT/Container 2952 2952

Insurance

2952

Amount $ 0.07 $ 0.12 $ 0.05 $ 0.05 $ 0.09 $ 0.05 $ 0.05 $ 0.07 $ 0.53

TOTAL AMOUNT 1,924.86 250.00 39.36 TOTAL :

Amount $ 0.65 $ 0.08 $

0.01

0.75

Invoice Subtotal Duty Rate

$ 115.90 8.5%

DUTY DOLLAR AMOUNT TOTAL COST PER SHOE:

$ 9.79 $ 125.69

portugal final costs

" Redefining the art in footwear"

Style #: #FWMD14 Style Name: Chelsea Boot

220 Manhatten Avenue New York, New York

Description: Men's classic leather boot with gore elastic Season: FW 2014

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date: October 2013

Sq ft./ UnitsCost Per Sq. ft/Unit

Yield

Amount

13.00

1.03

$ 40.17

4.50

1.03

9.27

Sole: Cow

2.50

1.03

5.15

Insole: Cow - Natural- Thickness 1.2

3.00

1.03

3.09

Upper: Cognac Calf 4.5-5 oz

Lining: Calf - Natural

COMPONENTS: Thread Nylon #69 (Black)

TOTAL LEATHER:

$ 57.68

Yards/Units Cost Per Yard/Unit

Amount

0.66

3.15

Leather Shoe Tab

0.07

0.14

Heavy Duty Gore Elastic 3" (/ Yard)

6.00

0.90

Shanks

1.25

2.50

Toe Cap: Cow

0.70

1.40

Stiffner: Cow

0.70

1.40

8.42

TOTAL:

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.65

Printed Dust Bag

0.11

Black Tissue Paper

0.02

0.04

Shoe Horn

0.20

1.00

TOTAL PACKAGING: LABOR:

Minutes

Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building

1 5 4 1 1 2 4

Finishing (Edges & sole)

Cost/Minute

Amount

0.070 0.070 0.070 0.070 0.070 0.070 0.070

$ $ $ $ $ $ $

0.07 0.35 0.28 0.07 0.07 0.14 0.28

0.070

0.14

1.40

TOTAL LABOR:

PACKING: Box (36 x 36 x 36) Tape Labels

$/Unit 7 0.02

Quanity

0.08

Waste 1 4

0.03

0.01

TOTAL PACKING: OTHER: Freight Broker

U/Space 2952 2952

Insurance

2952

Total $3,777.19 $250

Amount $ 7.00 $ 0.08 $

0.08

7.16

Amount $ 1.28 $ 0.08

$74.06

0.03

TOTAL :

1.39

Invoice Subtotal Duty Rate

2.08

$ 77.05 8.50%

Duty Total Coast/ Shoe

6.43

$ 83.48

portugal final costs

" Redefining the art in footwear"

Style #: #FWMD14 Style Name: Modern Derby

220 Manhatten Avenue New York, New York

Description: Men's classic leather shoe with gore elastic upper Season: FW 2014

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date: October 2013

Sq ft./ Units

Upper: Cognac Calf 4.5-5 oz

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

Yield

Amount

13.00

1.03

40.17

4.50

1.03

9.27

Sole: Cow

2.50

1.03

5.15

Insole: Cow - Natural- Thickness 1.2

2.00

1.03

2.06

56.65

TOTAL LEATHER:

COMPONENTS: Thread Nylon #69 (Black) Leather Shoe Tab

Yards/Units

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

0.07

0.14

Heavy Duty Gore Elastic 3" (/ Yard)

6.00

0.90

Shanks

1.25

2.50

Toe Cap: Cow

0.70

1.40

Stiffner: Cow

0.70

1.40

8.42

TOTAL:

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.65

Printed Dust Bag

0.11

Black Tissue Paper

0.02

0.04

Shoe Horn

0.20

LABOR:

Minutes

TOTAL PACKAGING:

Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building

1 5 4 1 1 2 4

Finishing (Edges & sole)

Cost/Minute 0.070 0.070 0.070 0.070 0.070 0.070 0.070

$ $ $ $ $ $ $

0.07 0.35 0.28 0.07 0.07 0.14 0.28

0.070

0.14

1.40

TOTAL LABOR:

PACKING: Box (36 x 36 x 36) Tape Labels

$/Unit 7 0.02

Quanity

0.08

OTHER: Freight Broker

U/Space 2952 2952

Insurance

2952

1.00 Amount

Waste 1 4 1

Amount 0.03

$ $

7.00 0.08

0.01

0.08

TOTAL PACKING:

7.16

Total $3,777.19 $250

$ $

1.28 0.08

Amount

$74.06

0.03

TOTAL :

1.39

Invoice Subtotal Duty Rate

76.02 8.50%

Duty

6.34

Total Coast/ Shoe

82.36

portugal final costs

" Redefining the art in footwear"

Style #: #FWCB14 Style Name: Jodhpur Boot

220 Manhatten Avenue New York, New York

Description: Men's classic leather Jodhpur Boot with buckle Season: FW 2014

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date: October 2013

Sq ft./ Units

Upper: Cognac Calf 4.5-5 oz

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

Yield

Amount

13.00

1.03

40.17

4.50

1.03

9.27

Sole: Cow

2.50

1.03

5.15

Insole: Cow - Natural- Thickness 1.2

2.00

1.03

2.06

56.65

TOTAL LEATHER:

COMPONENTS: Thread Nylon #69 (Black)

Yards/Units

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

Accessory Buckle

0.11

0.22

Shanks

1.25

2.50

Toe Cap: Cow

0.70

1.40

Stiffner: Cow

0.70

1.40

7.60

TOTAL:

PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.65

Printed Dust Bag

0.11

Black Tissue Paper

0.02

0.04

Shoe Horn

0.20

TOTAL PACKAGING:

LABOR:

Minutes

Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building

1 5 4 1 1 2 4

Finishing (Edges & sole)

Cost/Minute 0.070 0.070 0.070 0.070 0.070 0.070 0.070

$ $ $ $ $ $ $

0.07 0.35 0.28 0.07 0.07 0.14 0.28

0.070

0.14

1.40

Amount 7.00 0.08

TOTAL LABOR:

PACKING: Box (36 x 36 x 36) Tape Labels

$/Unit 7 0.02

Quanity

0.08

OTHER: Freight Broker

U/Space 2952 2952

Insurance

2952

1.00 Amount

Waste 1 4

0.03

$ $

0.01

0.08

TOTAL PACKING:

7.16

Total $3,777.19 $250

$ $

Amount 1.28 0.08

$74.06

0.03

TOTAL :

1.39

Invoice Subtotal Duty Rate

75.20 8.50%

Duty

6.27

Total Coast/ Shoe

81.47

portugal final costs

" Redefining the art in footwear"

Style #: #FWLF14 Style Name: Loafer Flat

220 Manhatten Avenue New York, New York

Description: Men's leather loafer flat with tassels Season: FW 2014

912.222.2222 Ottossonsgroup.com contact@ottossons.com 912.222.2222

LEATHER

Date: October 2013

Sq ft./ Units

Upper: Cognac Calf 4.5-5 oz

Lining: Calf - Natural

Cost Per Sq. ft/Unit $

Yield

Amount

14.00

1.03

43.26

4.50

1.03

9.27

Sole: Cow

2.50

1.03

5.15

Insole: Cow - Natural- Thickness 1.2

2.00

1.03

2.06

59.74

TOTAL LEATHER: COMPONENTS: Thread Nylon #69 (Black)

Yards/Units

Cost Per Yard/Unit

Amount

0.66

3.15

2.08

Accessory Attaching Tassels

0.15

0.30

Leather Tassel with String

0.45

1.80

Shanks

1.25

2.50

Toe Cap: Cow

0.70

1.40

Stiffner: Cow

0.70

1.40

9.48

TOTAL: PACKAGING:

Units

Cost Per Unit

Amount

Black Box

0.65

Printed Dust Bag

0.11

Black Tissue Paper

0.02

0.04

Shoe Horn

0.20

TOTAL PACKAGING:

LABOR:

Minutes

Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building

1 5 4 1 1 2 4

Finishing (Edges & sole)

Cost/Minute 0.070 0.070 0.070 0.070 0.070 0.070 0.070

$ $ $ $ $ $ $

0.07 0.35 0.28 0.07 0.07 0.14 0.28

0.070

0.14

1.40

Amount 7.00 0.08

TOTAL LABOR:

PACKING: Box (36 x 36 x 36) Tape Labels

$/Unit 7 0.02

Quanity

0.08

OTHER: Freight Broker

U/Space 2952 2952

Insurance

2952

1.00 Amount

Waste 1 4

0.03

$ $

0.01

0.08

TOTAL PACKING:

7.16

Total $3,777.19 $250

$ $

Amount 1.28 0.08

$74.06

0.03

TOTAL :

1.39

Invoice Subtotal Duty Rate

80.17 8.50%

$ $

6.70 86.86

99 Duty Total Cost/ Shoe

Turkey final costs

" Redefining the art in footwear"

Style #: 00901 Style Name: Chelsea Description: Men's classic leather shoe with gore elastic

220 Manhatten Avenue New York, New York

Season: Fall 13 Date: Oct 2013

Ottossonsgroup.com contact@ottossons.com 313.910.8745

TURKEY

LEATHER Upper: Cognac Calf 4.5-5 oz (finished) Lining: Calf - Natural Sole: Cow Insole: Cow - Natural- Thickness 1.2

Sq ft./ Units 3 2 2 2

COMPONENTS: Thread Nylon #69 (Black) Leather Shoe Tab Heavy Duty Gore Elastic 3" (Per Yard) Shanks Toe Cap: Cow Stiffner: Cow

Yards/Units 0.66 2 0.15 2 2 2

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole)

PACKING: Cartons Tape Labels

Units 1 1 2 1

Minutes 4 6 3 3 4 3 4 3

$/unit 0.10 0.002 0.08

$ $ $ $ $

Amount 31.21 20.09 8.24 8.24 67.77

$ $ $ $ $ $ $

Amount 2.55 0.16 0.15 2.06 1.44 1.44 7.81

$ $ $ $ $

Amount 0.60 0.15 0.06 0.50 1.31

$ $ $ $ $ $ $ $ $

Amount 0.39 0.59 0.29 0.29 0.39 0.29 0.39 0.29 2.94

$ $ $ $

Amount 0.10 0.01 0.08 0.19

$ $ $ $

Amount 1.39 0.08 0.03 1.50

Invoice Subtotal Duty Rate 10% of freight Other:

$ $ $

80.03 8.00 1.50

TOTAL

89.53

Cost Per Sq. ft/Unit 10.10 9.75 4.00 4.00 TOTAL LEATHER:

Yield 1.03 1.03 1.03 1.03

Cost Per Yard/Unit 3.75 0.08 1.00 1.00 0.70 0.70 TOTAL:

Yield

Cost Per Unit 0.60 0.15 0.03 0.50 TOTAL PACKAGING: Cost/Minute 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098 TOTAL LABOR: Quantity

Quality + Waste 1 4 1

TOTAL PACKING: OTHER: Freight Broker Insurance

100

per Container/tri 4098 250 81

1.03 1.03 1.03 1.03 1.03 1.03

Units per container 2,952.00 TOTAL:

1.01 1.01

Turkey final costs

" Redefining the art in footwear"

Style #: 00903 Style Name: Modified Derby Description: Men's classic leather shoe with gore elastic

220 Manhatten Avenue New York, New York

Season: Fall 2013 Date: October 2013

Ottossonsgroup.com contact@ottossons.com 313.910.8745

TURKEY

LEATHER Upper: Cognac Calf 4.5-5 oz (finished) Lining: Calf - Natural Sole: Cow Insole: Cow - Natural- Thickness 1.2

Sq ft./ Units 2.5 2 2 2

COMPONENTS: Thread Nylon #69 (Black) Leather Shoe Tab Heavy Duty Gore Elastic 3" (Per Yard) Shanks Toe Cap: Cow Stiffner: Cow

Yards/Units 0.66 2 0.15 2 2 2

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole)

PACKING: Cartons Tape Labels

OTHER: Freight Broker Insurance

Units 1 1 2 1

Minutes 4 6 3 3 4 3 4 3

$/unit 0.10 0.002 0.08

per Container/tri 4098 250 81

$ $ $ $ $

Amount 26.01 20.09 8.24 8.24 62.57

$ $ $ $ $ $ $

Amount 2.55 0.16 0.15 2.58 1.44 1.44 8.33

$ $ $ $ $

Amount 0.60 0.15 0.06 0.50 1.31

$ $ $ $ $ $ $ $ $

Amount 0.39 0.59 0.29 0.29 0.39 0.29 0.39 0.29 2.94

TOTAL PACKING:

$ $ $ $

Amount 0.10 0.01 0.08 0.19

Units per Container 2,952.00 Total:

$ $ $ $

Amount 1.39 0.08 0.03 1.50

Invoice Subtotal Duty Rate 10% of freight Other

$ $ $

75.34 7.53 1.50

TOTAL

84.37

Cost Per Sq. ft/Unit 10.10 9.75 4.00 4.00 TOTAL LEATHER: Cost Per Yard/Unit 3.75 0.08 1.00 1.25 0.70 0.70 TOTAL:

Yield 1.03 1.03 1.03 1.03

Yeild 1.03 1.03 1.03 1.03 1.03 1.03

Cost Per Unit 0.60 0.15 0.03 0.50 TOTAL PACKAGING: Cost/Minute 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098 TOTAL LABOR: Quantity

Quality + Wast 1 4 1

1.01 1.01

101

Turkey final costs

" Redefining the art in footwear"

Style #: 00902 Style Name: Jodphur Boot Description:Men's classic leather shoe with buckle

220 Manhatten Avenue New York, New York

Season: Fall 13 Date: Oct 2013

Ottossonsgroup.com contact@ottossons.com 313.910.8745

TURKEY

LEATHER Sq ft./ Units Upper: Cognac Calf 4.5-5 oz (finished) 3 Lining: Calf - Natural 2 Sole: Cow 2 Insole: Cow - Natural- Thickness 1.2 2

COMPONENTS: Thread Nylon #69 (Black) Shanks Toe Cap: Cow Stiffner: Cow Buckle

PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole)

Yards/Units 0.66 2 2 2 2

Units 1 1 2 1

Minutes 4 6 3 3 4 3 4 3

Cost Per Sq. ft/Unit 10.10 9.75 4.00 4.00 TOTAL LEATHER:

Yield 1.03 1.03 1.03 1.03

Cost Per Yard/Unit 3.75 1.25 0.70 0.70 1.00 TOTAL:

Yeild 1.03 1.03 1.03 1.03 1.03

$/unit 0.10 0.00 0.08

0.60 0.15 0.03 0.50 TOTAL PACKAGING:

102

$ per Container/trip 4098 250 81

$ $ $ $ $ $

Amount 2.55 2.58 1.44 1.44 2.06 10.07

$ $ $ $ $

Amount 0.60 0.15 0.06 0.50 1.31

$ $ $ $ $ $ $ $ $

Amount 0.39 0.59 0.29 0.29 0.39 0.29 0.39 0.29 2.94

Cost/Minute 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098

Quantity

Quality + Waste 1 4 1

TOTAL PACKING: OTHER: Freight Broker Insurance

Amount 31.21 20.09 8.24 8.24 67.77

Cost Per Unit

TOTAL LABOR: PACKING: Cartons Tape Labels

$ $ $ $ $

Units per container 2,952.00 TOTAL :

1.01 1.01

Amount 0.10 $ 0.01 $ 0.08 $ 0.19

$ $ $ $

Amount 1.39 0.08 0.03 1.50

Invoice Subtotal Duty Rate 10% of freight Other

$ $ $

82.28 8.23 1.50

TOTAL

92.01

Turkey final costs

" Redefining the art in footwear"

Style #: 00904 Style Name: Loafer

Description: Men's classic leather Loafer Flat with Tassel

220 Manhatten Avenue New York, New York

Season: Fall 13 Date: Oct. 2013

Ottossonsgroup.com contact@ottossons.com 313.910.8745 LEATHER Upper: Cognac Calf 4.5-5 oz (finished) Lining: Calf - Natural Sole: Cow Insole: Cow - Natural- Thickness 1.2

TURKEY Sq ft./ Units 2.75 2 2 2

Cost Per Sq. ft/Unit 10.10 9.75 4.00 4.00

Yield 1.03 1.03 1.03 1.03

TOTAL LEATHER: COMPONENTS: Thread Nylon #69 (Black) Facing Accessory Attaching Tassel Tassel Shanks Toe Cap: Cow Stiffner: Cow

Yards/Units 0.66 2 4 2 2 2

Cost Per Yard/Unit 3.75 0.20 0.45 1.25 0.70 0.70

LABOR: Cutting (Clicking) Closing (Sewing) Insole Preperation Stiffeners Preperation Lasting/Stretching Sole Heel Building Finishing (Edges & sole)

PACKING: Cartons Tape Labels

Units 1 1 2 1

Minutes 4 6 3 3 4 3 4 3

$/unit 0.10 0.002 0.08

$ per Container/trip 4098 250 81

65.17

1.03 1.03 1.03 1.03 1.03 1.03

$ $ $ $ $ $

Amount 2.55 0.41 1.85 2.58 1.44 1.44

10.27

$ $ $ $ $

Amount 0.60 0.15 0.06 0.50 1.31

$ $ $ $ $ $ $ $ $

Amount 0.39 0.59 0.29 0.29 0.39 0.29 0.39 0.29 2.94

Cost Per Unit 0.60 0.15 0.03 0.50 TOTAL PACKAGING: Cost/Minute 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098 TOTAL LABOR: Quantity

Quality + Waste 1 4 1

TOTAL PACKING: OTHER: Freight Broker Insurance

Amount 28.61 20.09 8.24 8.24

Yield

TOTAL: PACKAGING: Black Box Printed Dust Bag Black Tissue Paper Shoe Horn

$ $ $ $

Units per container 2,952.00 TOTAL:

1.01 1.01

Amount 0.10 $ 0.01 $ 0.08 $ 0.19

$ $ $ $

Amount 1.39 0.08 0.03 1.50

Invoice Subtotal Duty Rate 10% of freight Other

$ $ $

79.89 7.99 1.50

TOTAL

89.38

103

, sourcing guidelines

23333333333333333334 Established A Few Weeks Ago

Sourcing Strategy.

Global Sourcing Perri Rothenberg | Blair Barba | Nikki Capizzo | Sara Donahue

104

the ottรถssรถns philosophy Our Mission & Vision Ottรถssรถns strives to design for the established man with a creative style. We create a rare premium product that redefines the idea of art in footwear.

EXCLUSIVE PRODUCTION BESPOKE DESIGNS PREMIUM MANUFACTURING

2 105

content STRATEGY ENVIRONMENTAL IMPACT PRODUCT SOURCING ANIMAL SKINS POLICY CODE OF CONDUCT COMMUNITY INVOLVEMENT

THE INFORMATION CONTAINED IN THIS DOCUMENT IS THE CONFIDENTIAL AND PROPRIETARY INFORMATION OF OTTOSSONS, INC. REPRODUCTION OR DISTRIBUTION 106INFORMATION, IN WHOLE OR IN PART, WITHOUT PRIOR WRITTEN CONSENT OF OTTOSSONS, INC IS STRICTLY PROHIBITED. OF THIS

the ottössöns strategy

ttössöns strives to design for the estab-

We offer selective production in which we distribute a

lished man with a creative style. We cre-

rare product that demonstrates creativity, individuality

ate a rare premium product that redefines the idea of

and passion to create a timeless one of a kind piece. Our

art in footwear. Our goal is to use design to redefine

shoes are handcrafted with the finest leathers and fabri-

business. Our objective is to conduct business to the

cations for an authentic shoe with a redefined style.

highest level of ethical standards while being socially responsible. We have made it our mission to develop

Our bespoke designs range from our signature Chel-

long term partnerships with vendors who are commit-

sea Boot to our redefined Classics are made with the

ted to meeting the uppermost environmental, product,

customer in mind. Our core collection is designed by

and community standards while treating our employees

our Ottössöns design team, but it is the customer that

with the concept of family in mind. To fulfill our poten-

decides the details. We offer a variety of vibrant color

tial we need to operate in ways that keeps our compet-

combinations and embellishments to redefine the art of

itors on edge while making sustainability integral to our

men’s footwear.

advancements as a company. We are an active member of Greenpeace’s “Commit or Cancel” policy for halting

Finally we offer premium manufacturing while re-in-

deforestation for cattle ranching in the Amazon Biome

venting the supply chain. We skip the traditional retail

and we believe the best practice for supporting the de-

channels to build a direct relationship with our clients.

velopment and implementation of a traceability system

Our showroom stores allow our customers to see, feel,

for our leather products is to ensure our leather within

touch and try on the product and purchase Online. This

our supply chain is traceable back to where it originated

reduces costs and our carbon footprint by eliminating

by abiding by the Leather Working Group guidelines. Our

steps in the overall supply chain.

customers are our business, they have the opportunity to design personalized shoes custom to their style and taste levels.

107

Environmental Impact: Key objectives Social Responsibility

Ottössöns believes in resource efficiency and a strong responsibility for the care of environmental issues. Not only will the

products and practices undergo in a way that energy, natural resources and materials be used efficiently, but that waste and remaining products are also reduced. Ottössöns is in constant evaluation of strategies to help better suit the needs of the world around us.

Product Impacts- Materials & Methods

As a precautionary act, when there exists appropriate replacements for materials that cause environmental risks, Ottössöns will make alterations to use those materials and methods. The evaluation of potential risks of present and future operations and materials in order to minimize the negative impact on the environment will be conducted on a routine bases. The activities of Ottössöns are to be executed in full respect of appropriate legislation governing prevention and environmental protection. The Ottössöns ethic of transparency will be strongly implemented in the environmental sector of the company. As a global company, awareness and concern for climate change, energy use, resource consumption, and pollution is increasingly high. Quarterly, environmental profit and loss accounts will be drawn out, the measuring of water and pollution, waste, and greenhouse gasses will be reported.

Packaging

Ottössöns uses paper and packaging that is environmentally responsible. The paper purchased is monitored by volume and recycled certified content. Ottössöns is strongly committed to recycling and reusing to keep within our focus of responsible packaging.

Suppliers

Ottössöns believes in a set of core sustainability targets to achieve across its business model. The evaluation of our key suppliers must adhere to Ottössöns code of conduct. Our suppliers must be in collaboration with our environmental views and understand and improve their performances and practices. Not only must they abide to the environmental views of Ottössöns, but their country of operation. They must have a written environmental policy, and engage in a system to minimize and even eliminate negative impacts on their surrounding environment. Ottössöns partners must report on their environmental impacts and activities regularly. Just as Ottössöns operates, the elimination of toxic and hazardous substances from materials and methods must be implemented. Natural resources and raw materials used should be at a minimal, while responsibility for waste management should be at most concern. 6

108

Sustainably & Humanely Sourced Leather

As a result of leather being Ottössöns mainly used material, 100% of the Ottössöns leather will be from domestic livestock

that is from responsible and verified sources. These will not result in converting sensitive ecosystems into grazing lands or agricultural lands for food production.

Creating a Balance

The balance of market expansion and environmental growth is not an easy equilibrium, although Ottössöns believes that the two are connected. With climate-change regulation increasing and the development of new sustainable technologies and green opportunities, this balance is not only completely necessary to the prosperity and quality of life for generations to come, but also most important to the lasting competitiveness of our business.

Internal & Eternal Awareness

Ottössöns strives to be the demonstrator of how a business can succeed with respect and care for the environment in which it operates. To complete our environmental message, Ottössöns seeks to raise internal and external awareness about our efforts to our employees and customers.

Product Sourcing Where We Stand

Italy, Brazil & Portugal using the finest cutting edge leather textiles. The We manufacture our products in three countries- ______,_______,_______ truth in outsourcing our manufacturing is due to the modern textiles and technologies used in the production, in addition the quality workmanship. For many of the products we are producing (some of the most highly tailored and technical advances on the market) the required skill sets and technologies that no longer exist in the U. S. Thankfully our team has created lasting and established relationships with foreign manufacturers whose practices and integrity we know and trust. Sure there are always road bumps, but if approached with honesty and transparency, and monitored by a system of checks and balances, we believe it can actually benefit the people and countries where work is done.

What We Are Doing

Besides working with manufactures, creating lasting relationships and producing a design that redefines our business, we have created a code of conduct with which we have committed to meet.

Where We will Go

We will continue to evaluate all our manufacturing partners and practices. We will remain committed to producing our goods with integrity. Continuing to learn from: Fair labor Association (www.fairlabor.org) We find value in partnering with a diverse supplier base. It is vital to have partnerships with viable suppliers that provide us with a competitive advantage and provide our customers with the products, services and experiences they want.

109

Animal Skins Policy

The following policy applies to Ottössöns brand products or Ottössöns Affiliate brand products that contain animal skin materials (“Animal Skins”)

Permitted Animal Skins:

The following Animal Skins are permitted to use in Products: •

Sheep

•

Cow / calf (leather + hair on hides)

•

Goat

•

Pig

•

Antelope

•

Horse

•

Exotics (examples include but are not limited to alligator, crocodile, lizard, snake, ostrich, fish, marine mammals, etc.)

Source Country

Permitted Animal Skins may be sources in all countries except for China, India, or the Amazon Biome. Animal skins must not be derived from any species of domesticated or feral dog or cat

Amazon Biome Leather Sourcing Policy

The Amazon Biome relates to the Amazon Rainforest and its related ecosystems. The boundary of the Amazon Biome within Brazil is defined by the IBGE. The map is available at tp://geoftp.ibge.gov.br/mapas/tematicos/mapas_murais/biomas.pdf Raw hides/leather used in our products will not be produced from cattle raised in the Amazon Biome as defined by Brazil’s National Institute of Geography and Statistics. Brazilian hide / leather suppliers are required to certify, in writing, that they are supplying hides / leather for our products from cattle raised outside of the Amazon Biome.

Animal Welfare: •

Our suppliers must source Animal Skins from processors that use sound animal farming, and humane animal treat-

ment and slaughtering practices whether farmed, domesticated or wild. •

According to The Leather Working Group (LWG) (www.leatherworkinggroup.com) Leather suppliers must screen

tanning processes against the LWG Protocol to ensure adherence to best environmental practices. •

Suppliers must have the ability to trace raw hides/skins back to country of origin.

•

The Integrity of our products are very important to us. Our animal skins’ identification of species must be very accu-

rate (scientific or Latin or common names) as appropriate for the legal import or export of these materials and product. •

All of our suppliers must meet all applicable global legislative standards that apply to animal skins. They also must

comply with country specific import/export trade regulations that apply to all Animal Skins. 8

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Voluntary Employment

Code of Conduct

Ottössöns will not conduct business with any Supplier that uses involuntary labor of any kind, including prison labor, indentured labor, bonded labor, or labor obtained through human trafficking or slavery. Employee’s presence must be voluntary.

Child Labor

No workers under the age of 15 will be employed at any Ottössöns warehouse or manufacturing location, both nationally and internationally. If a specific Country has a minimum working age greater than 15, workers must be that age. All additional suppliers must comply with all other applicable child labor laws. Workers under the age of 18 shall not perform work that may jeopardize their health or safety.

Fair and Equal Treatment

Work environments must be free of physical, sexual, psychological and verbal harassment and abuse, retribution for grievances, and corporal punishment. No person shall be subject to any discrimination in employment including hiring, salary, benefits, advancement, discipline, termination or retirement on the basis of gender, race, religion, age, disability, sexual orientation, political opinion, nationality, social or ethnic origin, marital status, capacity to bear children, gender identity and or transition, genetic features or other status of the individual unrelated to the ability to perform the job.

Harassment and Abuse

Ottössöns suppliers must treat all workers and those involved with respect and dignity. No corporal punishment or physical, sexual, physiological, or verbal harassment will be present in the work environment.

Wages and Benefits

Ottössöns suppliers must comply with all applicable laws and regulations relating to wages and benefits. Workers will be paid at least the minimum wage or higher. Overtime work shall be compensated at the premium rate as is legally required. Compensation is provided on a monthly basis without illegal or inappropriate deductions or penalties. Benefits will be provided to all workers, including but not limited to health, dental, and life. Ottössöns provides its workers with a family-like environment which insures a trustworthy, educational, and honest atmosphere.

Nondiscrimination

Ottössöns suppliers must not discriminate in employment practices including, but not limited to, recruitment, hiring, compensation, training, benefits, advancement, termination, or retirement on the basis of race, color, ancestry, national or social origin, religion, gender, marital status, age, sexual orientation, gender identity or expression, disability, political opinion or any other personal characteristics of beliefs.

Health and Safety

Ottössöns suppliers must comply with all applicable laws and regulations governing workplace health & safety. Work environ9

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ments will be clean, safe, and healthy to work in. The same applies to any other facilities associated with the Ottössöns brand. Hours of Work/Overtime Ottössöns suppliers must comply with all applicable laws and regulations relating to hours of work. Workers shall not work more than 60 hours per week (including overtime). During the 7 day work week, workers are required to take at least 1 day off and encouraged to use their provided vacation time.

U.S. Customs

Vendors will implement and maintain all areas of our Code of Conduct. Suppliers will comply with applicable U.S. Customs importing laws and, in particular, will establish and maintain programs and documentation to support country of origin production verification, to avoid illegal transshipping.Suppliers shall seek ongoing education regarding Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security requirements, establish an action plan for compliance, be prepared for supply chain security audits by Ottössöns and/or third party auditor, and maintain standards set therein.

Routine auditing

Our team takes routine audits of partners seriously and works to ensure that our Partnership Guidelines are followed. During an audit, we join with independent, third party monitoring companies to review and assess physical surroundings, compensation, and working-hour documentation. We also gather input from workers and managers. New vendors are reviewed and compliance levels are assessed before we approve any facility for production of Ottössöns. Once the auditors have reported their findings, our program managers and partners work together to address any compliance issues.

Documentation and Inspection

Ottössöns intends to monitor compliance with our Partnership Guidelines and to undertake on-site inspections of Suppliers’ facilities. Suppliers will maintain on file all accurate documentation necessary to demonstrate compliance and will authorize Ottössöns and its designated agents (including third parties) to engage in announced and unannounced monitoring activities to ensure compliance, including confidential employee interviews. Ottössöns will review and may terminate its relationship with any Supplier found to be in violation of the Partnership Guidelines.

Developing remediation plans

We believe compliance is an ongoing process—and we begin the process with an extensive assessment to identify potential labor, health and safety, and environmental issues. From these findings, we create a corrective action plan and assist our factory partners in addressing any challenges. Transparency and continuous improvement is our goal. We will provide in-depth training and planning for factory management to address complex compliance issues.

Sub-contracting

Our vendors are not permitted to sub-contract any part of the work (all goods and services) without the written consent of Ottössöns and only after the subcontractor have agreed to comply with the Partnership Guidelines. Suppliers will not change manufacturers, factories, subcontractors or vendors for the production of Ottössöns products without written approval and 10

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authorization from Ottössöns, and only after the new factory, subcontractor, or vendor has agreed in writing to comply with the Partnership Guidelines. Any Vendors proposed, as sub-contractors must also meet the standards outlined in the Code of Conduct.

Environment

Suppliers must demonstrate a regard for the environment, as well as compliance with applicable environmental laws. Further, Ottössöns actively seeks Suppliers who demonstrate a commitment to progressive environmental practices and to preserving the earth’s resources

Community Involvement Ottössöns is very active in protecting our ecosphere’s resources. In 2009, Greenpeace highlighted the environmental impact of the increasing level of deforestation in the Amazon rainforest. Ottössöns shares these concerns in regard to the ecological impact of the leather industry on the Amazon Rainforest in direct effect on biodiversity and the changing of the world’s climate. We promise to work with Non-Governmental Organizations such as The Leather Working Group, and Government authorities to support and promote a

long-term strategy towards achieving zero deforestation in the Amazon

Biome. We will contribute to the “Forest Footprint Disclosure” report. This initiative prides itself on sustainable and sound business practice in the key commodities that, if managed badly, can encourage deforestation: soy, timber, cattle products, palm oil and bio-fuels. http://www.globalcanopy.org/

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“Industrial Relations in Turkey.” Industrial Relations in Turkey. SOCIAL DIALOGUE ISSUES, n.d. Web. 21 Oct. 2013. <http://industrialrelationsinturkey.com/regulation-legislation/act-no6356-trade-unions-and-collective-bargaining/law-2821-the-trade-union-law/>. “Marketplace.” Leather Business Contacts – Hides and Skins – Leatherline. EXPORT IMPACT FOR GOOD, n.d. Web. 21 Oct. 2013. <http://www.dmoz.org/search?q=turkey&cat=all&all=no>. “Portugal.” ILAB- Portugal. United States Department of Labor, 2013. Web. 07 Oct. 2013. <http:/www.dol.gov/ilab/media/reports/iclp/sweat/portugal.htm>. “Portugal Country Profile April 2012.” AICEP Portugal Global Trade and Investment Agency (2012): -77. AICEP. Web. 12 Oct. 2013. <http://www.portugalglobal.pt/EN/Biblioteca/Documents PortugalCountryProfile.pdf>. “Portuguese Footwear Industry Represents Portugal.” World Footwear. APICCAPS, 14 Oct. 2013. Web. 17 Oct. 2013. <http://www.worldfootwear.com/about.asp?idp=2>. “Trade Unions.” / Italy / Countries / National Industrial Relations / Home. Worker Participation, 2013. Web. 20 Oct. 2013. “Transportation.” Transportation. Embassy of Brazil in Wellington, 2013. Web. 12 Oct. 2013. <http://www.brazil.org.nz/page/transportation.aspx>. “Turkish Leather Council.” Turkish Leather Council. N.p., n.d. Web. 21 Oct. 2013. <http://www.turkishleather.com/dtgeng/StaticPages/showpage.aspx?fname=altsektor r4.htm>.

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Ottรถssรถns Leatherworks Savannah, GA FASM 420 | Fall 2013

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