Prada Pop Up Shop by Rachel Lauren Hickman

Pop Up Shop Prada reaching into the Latin American market

FASM 410 Retail Management Prof Alessandro Cannata Final Project

Paige Homberg Rachel Hickman Ardeen Samuels Amanda Liffers

TABLE OF CONTENTS Executive Summary...............................4 Company Summary................................5 Store Location......................................14 Market Analysis....................................18 Competitive Analysis............................20 Store Design..........................................36 Product Plan..........................................41 Promotional Plan..................................44 Financial Plan........................................46 Conclusion.............................................48 Bibliography......................................... 51

P R O F I L E C O M P A N Y

Executive Summary

The Prada pop up shop in Peru was an idea created by students for their Retail Management class. The goal of this pop up shop was not only to leverage Prada’s sales and growth within Latin America, but to also create an art installation piece that will create buzz and excitement in Peru. Peru is an attractive location for Prada to build their pop up shop because of the amount of growth the country has been taking on and the high amount of tourism traffic. With currently no locations in Peru, Prada has the ability to be creative and innovative when penetrating into the Peruvian luxury market. An art installation will be a successful design solution for Prada’s pop up shop because it creates an experience leaving Peruvians wanting more. A pop up shop running for strictly a week time span will give Prada the chance to test out the market in Peru without losing too many sales and profits, causing financial risk. The Peruvian Prada pop up shop will be held in the Jockey Plaza in Lima, Peru. This places the pop up shop in the same location as most of its luxury competitors. The design of the shop will be minimal, modern, and clean, to portray the current futuristic aesthetic that the brand is displaying in it’s product lines and marketing. The team thinks that with a mysterious exterior and a short selling period, this will leave consumers feeling curious and acting with a sense of urgency. Prada will be able to get a quick analysis for if the market in Peru and if it is the right choice for them.

The PRADA Group is one of the world’s leaders in design, production and distribution of luxury handbags, small leather goods, footwear, ready-to-wear, accessories, eyewear and fragrances. The Group owns some of the most prestigious international brands: Prada, Miu Miu, Car Shoe and Church’s.

COMPANY ANALYSIS Prada currently sells footwear, perfumes, accessories, apparel, leather goods, and travel accessories. Prada is not only a product or brand but an entire experience when buying/ purchasing the product. Their business is defined as a multi-product luxury brand that manufactures their own products and distributes them through their own retail stores, as well as through multi brand third party retailers and its e-commerce site.

“Prada’s engagement in the world of ideas and innovation, as it has always considered fashion, luxury, and style as an overarching project beyond the continuous production of clothes, shoes, and bags. Careful observation of and curiosity about the world, society, and culture are at the core of Prada’s creativity and modernity. This pursuit has pushed Prada beyond the physical limitations of boutiques and showrooms, provoked an interaction with different and seemingly distant worlds, and introduced a new way to create a natural, almost fashionless fashion” (Prada, 2016) Miuccia Prada and Patrizio Bertelli

Prada was founded in 1913 by Mario Prada and his brother Martino. It was originally a leather goods shop named Fratelli Prada, meaning Prada Brothers. Mario’s daughter Lucia took over the company after his son showed no interested in the family business. Lucia’s own daughter, Miuccia, would follow, taking over the business in 1978. Miuccia and her business manager and now husband, Bertelli, evolved the company into what you see today. They ceased the importing of English goods, and began selling back packs and totes. With Bertelli aiding the business aspect of the company, Miuccia was able to focus on creative. Prada released it’s first set of backpacks and totes in 1979, while they were not an immediate success, they would become Prada’s iconic turning point. Miuccia and Bertelli then sought out wholesale department stores and boutiques to sell Prada. In 1989, Prada released its first women’s ready-to-wear collection. The 90’s solidified Prada as one of the top luxury houses in the world. They expanded their market into the US, and opened the high fashion brand Miu Miu, courtesy of Miuccia’s nickname. Mid-90s, they launched their Men’s ready-to-wear collection. Prada had grown into a multimillion dollar global company. By the end of the 90’s Prada was purchasing over 50% stakes in emerging designers such as Helmut Lang, and Jill Sanders, thus tripling their revenue. Today, Prada is a multibillion dollar company, with a reported revenue of 3.91 billion and approximately 11,500 employees.

H I S T O R Y

C O M P ANY STRUCTURE Prada is a luxury brand which was founded in 1913 by Mario Prada. Their headquarters are currently located in Milan, Italy. Today Prada has the Chairperson, Carlo Mazzi, CEO & Executive Directors, Miuccia Prada and Patrizio Bertelli, and their Chief Financial Officer Alessandra Cozzani. Prada has Subsidiaries in Miu Miu, Churchâ&#x20AC;&#x2122;s, Car shoe, Pasticceria Marchesi, Luna Rossa, Fondazione Prada.

DISTRIBUTION Prada is distributed in over 618 boutiques in 70 different countries. These boutiques include wholesale locations such as Saks Fifth Avenue, Neiman Marcus, etc, along with Prada’s own brick and mortar stores. There are 388 directly operated Prada boutiques, these single brand boutiques represent approximately 77% of Prada’s over all sales. Prada is sold through their own ecommerce site and all wholesale retailers sites. Prada has various licenses and joint ventures through their perfumes and eyewear lines. For their eyewear, Prada and its subsidiary Miu Miu signed a license with Luxottica Group, a leader in eyewear production. In 2003, Prada signed an agreement with Puig Beauty & Fashion Group to produce and distribute the Prada perfumes. In 2006, Prada signed an agreement with LG Electronics to develop an “innovative and iconic” cell phone. This partnership resulted in the “Prada Phone by LG” which sold over 1,000,000 units. Prada has continued to release phones through this agreement. Prada has full creative direction and communication in all licensed ventures they enter into.

BRAND IDENTITY matrix Produc t Leather goods Fragrances Footwear Travel Accessories

O RG ANI Z ATI O N Italian Luxury Goods Market Value Quality and Craftmanship Innovative

Ready to Wear Clothing PE RSO N

SYmbo l

Confident

Prada Logo

Sophisticated Trend Setter Status Driven

Miuccia Prada Vintage Leather Tags Coat of Arms

High Pricing

Low Accessibility

High Accessibility

Low Pricing

MARKET POSITIONING The above map shows a comparison of Prada with itâ&#x20AC;&#x2122;s top five competitors. This perceptual map was created based on pricing and number of locations world wide. Pradaâ&#x20AC;&#x2122;s competitors all sell products ranging from accessories, leather bags, ready to wear clothing, eye-wear and shoes. Although Guess is not considered to be in the luxury market, they do pose some competition. According to research and findings, Prada has a very low accessibility and a high price point. Their prestige pricing keeps them in line with Chanel, Louis Vuitton, and Gucci. While Hermes, Coach, Burberry and Guess still have niche markets that can possibly take sales away from the Prada brand.

C OMMU N I C ATI O N &promotion In 2015, Prada spent $191.695 million dollars on advertising. Prada’s traditional advertising includes magazine ads, fashion shows, in-store events. Prada’s Digital Marketing include social media platforms, bloggers and celebrities are pictured online wearing the clothes, giving the brand instant status and reputation, and their website features a select view of their product lines where you can purchase a few of their goods. and also an insider’s look into their latest fashion runways. In 2012 Prada launched an app for the iPad where customers could view latest runway shows and product lines. Prada’s current direct marketing initiatives are to collaborate with photographers, creative directors, and stylists to create exciting and innovative visuals that inspire their customer and help communicate the brand’s aesthetic.

SWOT ANALYSIS STRENGTHS

Weaknesses

- Top luxury fashion house

- E-commerce offers small selection

- Large global presence

- Not an omni-channel retailer

- Strong brand heritage

- Weak environmental policies

- Multichannel retailer

- Behind in social media

- Made in Italy: craftsmanship and

- More than 42% of sales come from

raw materials specifically produced

Asia, specifically China.

- Owns 11 production facilities - Owns and manages 5 distribution - Vertically integrated

Opportunities

THREATs

- Collaborate and feature artists in

- Similar and attainable competitors

stores and online

- Cheaper brands creating knock-

- Create engaging social media

offs

content

- Counterfeit

- Expand into the global market,

- High prices + weak economy

specifically in Latin America - Introduce exclusive product lines to new demographics

PLANS FOR GROWTH In order to stay ahead of their competitors, it is important that Prada breaks into the Latin American market. Through collaboration with South American artists, Prada can create content that is innovative and resonate with their new target demographic. In an effort to enhance their relationship with consumers, Prada will work to balance social media and exclusive luxury services to cater to all of their target age ranges. Prada will also work to offer exclusive product lines to give their customers a personalized experience while also creating high demand for unique pieces.

PRADA IN P ER U

Prada plans to expand and grow into the luxury market sector in Latin America. Latin America is currently an area where Prada lacks the most customers and number of physical retail locations. When thinking of a country that would be the best location for a Prada pop up shop, Colombia, Cuba, and Peru were explored. After much consideration, Peru was found to be the most promising. Political Risk factors state that Peru had low percentage of political risk. Peru also has a fairly high economic growth forecast at 6.33%. Peruâ&#x20AC;&#x2122;s growth is something that Prada can capitalize on. Peruâ&#x20AC;&#x2122;s new president has been creating great potential for growth, investing billions in technology and resolving socials issues.

Political

Economic

social

Pros:

- The new President predicted to bring stability / economic growth - Peruvians now able to travel to Europe without a visa - Peruâ&#x20AC;&#x2122;s government is working on fighting corruption

- Economy predicted to rise 3.8% this year - Inflation Rate declined from 4.41 to 3.13 in year. - Poverty decreased 56% to 23.9% - Peru ranked 35 out of 189

- Rich history creating booming tourist industry - Lima has 9.897 million residents - 42 B invested in fixing social issues - Top gastronomic destination of South America.

Cons:

- Peru is still dealing with their two-decade conflict from 19802000 - Largest producer of cocoa in the world, used to make cocaine - 92% of 1,800 mayors in office investigated for criminal activity.

- Retail sales decreased by 4.7% in the past 5 years. - Economy unstable due to dependence on copper and coffee, which prices swing worldwide - Underemployment 41%

- Protests that can turn deadly - Journalists investigating corruption targets of physical attack/ threats. - Undeveloped infrastructure, poverty - Poor public transit system

Technology

Legal

Enviromental

Pros:

- Invested in building a second international airport in Cusco - Government invested 400 M in science and technology developments

- GOP has signed various trade agreements with 49 counties to integrate with global economy, in first year, trade between US and Peru totaled in 16 B dollars, - 15% tariff on imports

Cons:

- Technology is one of the countryâ&#x20AC;&#x2122;s weakest areas, scoring 3 out of a possible 7 points, and below an average of 3.5 among other large Latin American economies

- Law passed providing immunity from prosecution to police officers

Pros: -Peruâ&#x20AC;&#x2122;s government is working on creating a reserved zoneâ&#x20AC;? of 116,000 hectares to protect their tropic sea -Various protection programs for the Amazon, bringing in wealthy tourism

Cons: - Concern for effect of cocoa leaves industry, deforestation and chemical spilling in Amazon - Main issues are water pollution, soil erosion, pollution and deforestation

2011 8.6

Retail Sales %

Retail Sales Index

2012 8.5

2013 2014 2015 6.0 4.6 3.9

2010 2011 2012 2013 2014 2015 100.0 119.7 137.0 155.2 168.7 176.6

Market Size 5600 5400 5200 5000 4800 4600 4400 4200 4000 3800

2016

2017

2018

2019

Designer Retail Goods

2020

2021

STATE OF INDUSTRY Luxury retailers expanding by opening outlets and stores that target the upper and upper middle class customers. While luxury brands are affordable to a small number of population, some customers are using credit cards and purchasing luxury goods for aspirational reasons. Internet retailing has not shown a significant impact on sales in Peru, most local consumers prefer to shop in store. Rising disposable income levels enable consumers to purchase more often and spend on luxury items. Local manufacturers being approached by brands to create product locally and reduce cost, this has presented some issues as manufacturers are not equip to this type of demand. Local manufacturers should improve their production system in order to offer competitive prices. Key factors that are likely to be used by brands as competition grows in area are geographic expansion, periodical promotional activity, and improvements to customer service levels.

MARKET SIZE These numbers demonstrate the current retail industry state in Peru. While the past 5 years the retail sales percentage have seen a decrease, the retail sales index has increased. The market size is predicted to grow by monumental amounts within the next 5 years, making this an ideal time for Prada to test the waters in Peru.

DIRECT COMPETITORS

History

Assortment

Ferragamo opened its first

Women and Men’s shoes, Women

mono-brand franchise in 2011

and

in Peru, in the capital city of

Sunglasses,

Lima.

Men’s Ready to Wear, Fragrance,

Men’s

Leather Men’s

Goods,

accessories,

Watches, Silk Products

Current Location Ferragamo currently has one

Savatore Ferragamo currently does

store at the Jockey Plaza in

not have any pop up shops currently in Peru.

Lima, Peru.

History

Assortment

Through a joint venture, Coach

Womenâ&#x20AC;&#x2122;s

Inc. opened retail locations in Latin

Goods, and Shoes

Bags,

Small

Leather

America beginning in 2011.

Current Location Coach Inc. currently has one store

Coach Inc. currently does not have

at the Jockey Plaza in Lima, Peru.

any pop up shops currently in Peru.

History In

2001

Carolina

Assortment Herrera

introduces

Herrera,

Women’s

and

lifestyle

Women’s

Bags,

collection with ready-to-wear and

Men’s Small

Clothing, Leather

Goods, and Shoes

accessories for men, women and children

Current Location

Carolina Herrera currently does not

Carolina Herrera currently has one

have any pop up shops currently in Peru.

store at the Jockey Plaza in Lima, Peru.

History

Assortment

Trafton Cole and Eddie Haan

Women and Menâ&#x20AC;&#x2122;s shoes, Women

began Cole Haan in 1928,

and

focusing

craftsmanship

and

Menâ&#x20AC;&#x2122;s

Leather

Goods,

Sunglasses

quality. Cole Haan currently does not have

Current Location Cole Haan currently has one store at the Jockey Plaza and one at Ripley-Miraflores in Lima, Peru.

any pop up shops currently in Peru.

History

Assortment

Longchamp is a French luxury

Women’s

leather goods company, founded

Goods, and Travel Accessories

Bags,

Men’s

Leather

in Paris in 1948 by Jean Cassegrain. Jean Cassegrain produced the world’s first luxury leather-covered

Longchamp

pipes, then expanded into small

have any pop up shops currently in Peru.

leather goods.

currently

does

not

Current Location Longchamp currently has one store at the Jockey Plaza and one at Jorge Chávez International Airport. 25

INDIRECT COMPETITORS

Indirect Competitors of a Prada Pop Up Shop are other luxury brands currently in Peru. These luxury brands include Max Mara, Moschino, Versace, Bvlgari, TAG Heuer, and Dior. Brands specifically in the Jockey Plaza shopping mall that pose a threat include, BCBG,Armani, Calvin Klein, Hugo Boss, Swarovski, Chanel Beauty, and Brooks Brothers. Online retailers that impose a threat to Pradaâ&#x20AC;&#x2122;s business in Peru are Bag Borrow or Steal, which is an online platform where customers can rent luxury brandsâ&#x20AC;&#x2122; bags , such as Prada. An indirect competitor that is not a luxury retailers are luxury spas, such as Peru Wellbeing Spa . Another thing that could threaten the business of a Prada Pop up Shop is Peruvians able to travel to Europe without a visa. This makes it easy for Peruvians to spend their money on travel rather than luxury goods. It has been reported that luxury brands like Louis Vuitton, Dolce & Gabbana, and Burberry have been poking around in the Peruvian market. Gucci, which is currently present in the country only in the form of a watch boutique, is looking to enter with the help of a Panamanian group

LIMA, PERU MIRAFLORES AND SAN ISIDRO Lima has a population of 9 million people. 20% of people live in the residential area of the Inner Conos, including Miraflores and San Isidro. The population growth rate is1%. Miraflores is an exclusive residential and upscale shopping district. San Isidro is the financial and residential district. An apartment in these areas costs between 500-1000 sol per month.

TARGET MARKET GABRIEL GARCIA

Age: 28 years old Relationship Status: Married to a Finance Executive Income: Income via husband, 300,000 sol/yr Location: Lives in penthouse in San Isidora Education: Studied Art History at University of Lima Occupation: Stay at home mom to her son Active board member of her sons PTA Hobbies: She loves Fashion, cocktail parties with friends, and tennis Reads Vogue and Porter magazine and WWD she also loves Instagram and Pinterest Shopping Habits: Shops luxury goods online from Net a Porter and when traveling

MARIA RODRIGUEZ

Age: 53 years old Relationship Status: Married to Account Executive Income: Income via husband, 600,000 sol/yr Location: Lives in mansion in San Juan De Miraflores Occupation: Mother to 3 children who are all nearly finished/ finished college President of Charity ‘Smiles in Peru’ Hobbies: Enjoys traveling with her husband on his business trips, tea with friends, fashion and golf Reads Vogue and Elle magazine Doesn’t use Social Media other than Facebook Shopping Habits: Shops luxury goods mainly on trips with her husband and sometimes locally

Prada is currently looking to reach more customers in Latin America and expand into the luxury market in that area. Peru’s low political risk factor and high percentage of growth makes it the perfect place for Prada to open a Pop up shop within Latin America. Prada’s pop up shop in Peru will be held in the Jockey Plaza shopping center, because of the high number of foot traffic and the number of luxury competitors that are already selling in that market place. We chose to place the shop on the first floor of the Jockey Plaza to localize ourselves with our luxury competitors. This pop up shop will be held from May 27 - June 2nd, to coincide with Lima Design Week (held from May 27 - June 01). Because Prada’s pop up shop will be designed as an art installation, taking place at the same time as Lima Design Week will only further enhance the gratitude of this new retail space. We chose to create Prada’s Peru pop up shop in a futuristic design to match the aesthetic of their current product line. The pop up shop will feature Prada’s Robot collection which is being sold for the months of June, July and August. Along with their staple selling pieces such as the Galleria Bag. Their current advertising with space filled backgrounds and a futuristic feel was the inspiration behind the store design and product category. The store will feel clean, minimalistic, and bold to match the aesthetic of the brand and their new products.

JUSTIFICATION OF THE LOCATION

SALES POTENTIAL Sat

Sun

Mon

Tues

Wed

Thurs

Fri

LOCATION FOOT TRAFFIC PER DAY

83,300

86,000

75,500

80,000

82,000

85,000

PERCENTAGE OF CONVERSION TRAFFIC/FALL

0.005

0.008

0.005

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Footfall

417

688

378

400

410

425

Conv %

0.05

0.07

0.08

Avr. Basket

PEN 5,123.00

TOT REV

PEN PEN PEN 106,686.48 176,231.20 135,375.28

PEN 143,444.00

PEN PEN 163,936.00 168,034.40

PEN PEN 174,182.00 1,067,889.35

PEN 42,674.59

PEN 70,492.48

PEN 54,150.11

PEN 57,377.60

PEN 65,574.40

PEN 67,213.76

PEN 69,672.80

(MK 60%)

COGS

PRODCUT

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Handbag

0.3

PEN 32,005.94

PEN 52,869.36

PEN 40,612.58

PEN 43,033.20

PEN 49,180.80

PEN 50,410.32

PEN 52,254.60

Wallets

0.2

PEN 21,337.30

PEN 35,246.24

PEN 27,075.06

PEN 28,688.80

PEN 32,787.20

PEN 33,606.88

PEN 34,836.40

Shoes

0.2

PEN 21,337.30

PEN 35,246.24

PEN 27,075.06

PEN 28,688.80

PEN 32,787.20

PEN 33,606.88

PEN 34,836.40

Sunglasses

0.2

PEN 21,337.30

PEN 35,246.24

PEN 27,075.06

PEN 28,688.80

PEN 32,787.20

PEN 33,606.88

PEN 34,836.40

Small Acces

0.1

PEN 10,668.65

PEN 17,623.12

PEN 13,537.53

PEN 14,344.40

PEN 16,393.60

PEN 16,803.44

PEN 17,418.20

TOT.

PEN 427,155.74

Peru has 31 million inhabitants and Lima, Peru have a population of 9.1 million. Modern Lima has a population of 1.2 million and per capita income is US $8.647 per year. The Jockey Plaza is the leader in Peru for the last 17 years Mall. It is frequented by many affluent people from La Molina, Santiago de Surco, and other parts of Lima This is located in Lima, capital of Peru. The Jockey Plaza Shopping Center has an area of 174.821 m2 development where the leasable area is 152.028 m2. It has 3 Department Stores, 2 Hypermarkets, 1 Home-store, 481 stores. It also has 1 Patio dining with seating for 1,500 people, 12 cinemas 1 Convention Center 1 Medical Center and 5,120 parking spaces. The Jockey Plaza is the market leader in the Peruvian commercial centers, with a monthly traffic of 2.5 million people per month (83,333 people per day), reaching 30 million a year. The mall has an excellent location and accessibility from more affluent districts of Lima. There are 5,120 parking spaces parking spots at the plaza, but visitors have to pay for parking. The cost for parking is S /. 10 the first 4 hours and S /. 2 per hour or part thereof. There are also Valet Parking Services provided by the mall and the Paradero Jockey Plaza bus station located in front of the Jockey Plaza.

Peru has 31 million inhabitants and Lima, Peru have a population of 9.1 million. Modern Lima has a population of 1.2 million and per capita income iss US $8.647 per year. The Jockey Plaza is the leader in Peru for the last 17 years Mall. It is frequented by many affluent people from La Molina, Santiago de Surco, and other parts of Lima This is located in Lima, capital of Peru. The Jockey Plaza Shopping Center has an area of 174.821 â&#x20AC;&#x2039;â&#x20AC;&#x2039; m2 development where the leasable area is 152.028 m2. It has 3 Department Stores, 2 Hypermarkets, 1 Homestore, 481 stores. It also has 1 Patio dining with seating for 1,500 people, 12 cinemas 1 Convention Center 1 Medical Center and 5,120 parking spaces. The Jockey Plaza is the market leader in the Peruvian commercial centers, with a monthly traffic of 2.5 million people per month (83,333 people per day), reaching 30 million a year. The mall has an excellent location and accessibility from more affluent districts of Lima. There are 5,120 parking spaces parking spots at the plaza, but visitors have to pay for parking. The cost for parking is S /. 10 the first 4 hours and S /. 2 per hour or part thereof. There are also Valet Parking Services provided by the mall and the Paradero Jockey Plaza bus station located in front of the Jockey Plaza.

AREA ATTRACTIONS

HUMAN RESOURCES This shop will require a mix of experienced Prada employees and local staffing. The store Manager and an Assistant Manager will be sent over from Prada’s corporate office to help set up, hire, and train for the shop. They will train prior to leaving and consult with a Merchandising Manager about the products that will be featured, their display and information. The Manager and Assistant Manager will be compensated for their flights, hotels, food and other expenses. They will also receive a bonus along with their usual yearly salary, which for Managers at Prada is around 95K per year, and for Assistant Managers is 62K per year. Prior to arriving in Lima, the Prada corporate hiring team will research local competitors like Carolina Herrera, Coach and Ferragamo, Max Mara reaching out to their current sales associates and informing them of this opportunity. Once the Prada representatives arrive, they will interview the narrowed list of candidates and hire 6 Sales Associates, and 2 Loss Prevention Agents and 2 Janitors. Sales Associates will make a competitive salary 1000 S/ per week, and employee discount of 20%. Loss Prevention Agents will make 850 S/ per week along with the 20% employee discount. Janitors will make 250 S/ week and will work 1 lunch and 1 evening hour each day. These will work a 40 hour week long training session along with 40 hours during the exhibit’s week of opening. The shop’s KPI’s of focus will be managing sales and customer service. Since this shop is a test for further Prada expansion in Latin America, these performance indicators will be extremely important. The shop will have a camera that tracks the number of people that enter the store each day, that will then be crossed with the number of transactions each day to find the conversion rate. Staff training will also be an important factor that will be measured by the Manager and Assistant Manager, to evaluate how these top sales associates perform and if they would be suited to work for Prada if they decide to pursue Lima.

Trade Regulations Peruâ&#x20AC;&#x2122;s strategy to attract foreign private investment has been particularly successful. Peru still uses tariffs as its main instrument of border protection. As of 2015, Peru has received imports of $US 41.948 billion. They have a real GDP Growth Rate of %2.246 and an Inflation Rate of % 2.316. Payment The consumer price index has exhibited moderation in recent months. Peru expects consumer prices to converge toward the central bankâ&#x20AC;&#x2122;s goal range in the coming months. It is predicted that exchangerate volatility will remain intense in the coming months. All major cities have an abundance of ATMs so withdrawing money is not a problem within the country. Debit and credit cards are widely accepted in Peru. Building Peru does not have an energy code, but has a code sections on mechanical and electrical equipment and insulation. Peru has a national mandatory code, the National Building Regulation or RNE. The RNE covers administrative requirements, the regulation of the conversion of rustic or rural areas to urban areas, and the regulation of all type of buildings, addressing standards and standards for architecture, structures, sanitation, and mechanical and electrical installations. Health and Safety One of the most important regulations is the Law on Safety and Health at Work, which has been recently enforced. Regulations are upheld by training and education in occupational safety and health.

LEGAL ISSUES 35

STORE DESIGN Details of the Physical Structure The physical structure of the shop is a smooth white sphere with a large oculus that is contained with a flat glass top. There is one main entrance with two glass doors, and one back entrance that leads to the storage room. The shop is an open floor plan. The products are displayed neatly along the walls, and two couches are arranged in the middle of the shop. The couches are 150.3in w x 19.6 d x 31.5 h, and seat 15 people. They can be broke up into three smaller sectionals as well. Traffic will flow in a circular manner around the shop and the product follows the same circular motion. Space Allocation and Productivity The merchandise will be displayed on the wrap around floating shelves, leaving the floor plan open for customers to move about. There will also be two Cloverleaf sofas for customer to relax with side tables next to it. The check out counter will be located in the back to force customers to walk all the way through the store. Fixtures There will be very minimal fixtures in the Pop up shop. The store will have shelving units to display the items as well as sofas that also have a display section. The sofa will be Cloverleaf Sofa by Verpan that has been seen in several Prada stores across the world. Ambiance The ambiance in the store will be very calming, minimal and cutting edge. There will be no distinct smells and the music will be soft yet futuristic. Visual Merchandising Merchandise will be displayed neatly and in an organized fashion. The product itself is technically the art pieces that create this installation. Windows There will be no windows in this pop up shop to separate the space from the rest of the mall. The ceiling will be made of glass to provide natural light. Safety and Security The main body of the shop will be made of solid ceramic material, with a thick glass top and thick glass doors like typical Prada stores. There will be 2 loss prevention agents who pose as typical shoppers to prevent theft. In the evenings, the front doors will be locked with the lights off. Four cameras will be inside the shop, to view all angles of the store.

FLOOR PLAN

MIRROR

MIRROR COUNTER/ STORAGE

CHASIER CASHIER DIVIDER FOR CHECK OUT SHELVING DISPLAY DISPLAY

DISPLAY

SEATING

DISPLAY

COUNTER/ STORAGE

ENTRY/ EXIT FLOOR PLAN WITH TEXT

Interior Designs and Renderings by Skye Moire 37

ENTRY VIEW

Interior Designs and Renderings by Skye Moire

SPACE COSTING Fixture Type Custom Shelving Cloverleaf Sofa Display Case Key Chain Display Custom Mirror Metal Trash Bins iMac Retail Counter Security System Cameras Under Cabinet Lighting Logo Metal Letters TOTAL

# 4 2 4 1 1 2 1 1 4 100 5

Price PEN 36,936 PEN 267,820 PEN 13,680 PEN 274 PEN 19,084 PEN 4,104 PEN 5,571 PEN 8,995 PEN 7,702 PEN 40,698 PEN 2,702 PEN 393,368

Product Categories Robot Collection Galleria Handbag Shoulder Bags Backpacks Clutches Wallets Card Holders Coin Purses Sunglasses Small Accessories Loafers Lace Up Shoes Ankle Boots Sneakers Pumps

SKUS 8 5 8 3 1 15 9 2 20 10 8 5 4 3 7

Retail Price PEN 5,061 PEN 8,436 PEN 6,749 PEN 4,049 PEN 8,436 PEN 2,025 PEN 850 PEN 1,115 PEN 1,349 PEN 1,012 PEN 2,000 PEN 3,205 PEN 3,036 PEN 2,024 PEN 2,193

PRODUCT PRICING

CAPSULE COLLECTION

REGULAR STYLES

PROMOTIONAL PLAN

GANTT CHART May 1st Social Media Glitch Projection Email Survey

May 27

June 2nd

June 5th

Pre Launch While the structure is being built, Prada will hire a videographer to create a glitch video that will project on screens covering the construction site. Once the shop is completely, Prada will post a video on their Social Media (Instagram, Youtube, Facebook, Twitter) to introduce the shop to their new target customers in Peru. Prada will hire a social media manager to post every few hours about the up and coming pop up shop. This video will feature a glitch, much like the one being of their newest collection ending with the words “PRADA pop up shop...Coming Soon to Peru”. Launch To launch the pop up shop Prada will host exclusive Launch Party including cocktails, hors d’oeuvres at the Jockey Plaza. The guest list will include socialites, dignitaries and their wives, Peruvian celebrities, and executives. Attendees will get an exclusive look into the new location and will be the first ones to buy the products. When an attendee of the launch event purchases a product they will receive an exclusive gift of Prada Candy Set. Post Launch Prada will reach out to customers who purchased at the pop up shop via email, thanking them for their business while also encouraging them to respond to the survey linked below with their thoughts on whether Prada should invest in a permanent location at the Jockey Plaza. 45

Financial Plan The financial statement gives an overview of the operational costs versus the potential net profit. While Prada will endure a loss at the expense of the shop, it will enable the company to test this new market with an ultimately lower investment cost. Through evaluation of sales, customer responses, and employee success factor reviews, Prada will have a clear view on the potential success of opening a full line store in Peru. The Distribution Prada has seven distribution centers, six being in Italy and one being in Britain. This shop will be stocked via the British distribution center. The products will be shipped to the local Lima port and stocked in the back room of the pop up shop. This method of stocking product is made possible by the fact that this shop will only be open a week, making their inventory small enough to be held in store.

FINANCIAL PLAN

Saturday

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Total

PEN

72,877.50

120,400.00

92,487.50

98,00.00

112,000.00

114,800.00 119,000.00 1,067,889.35

PEN

29,155.00

48,160.00

36,995.00

39,200.00

44,800.00

45,920.00

47,600.00

427,115.74

Gross

PEN

Margin

43,722.50

72,240.00

55,492.50

58,800.00

67,200.00

68,880.00

1,400.00

640,773.61

Net Sales

Cost of Goods

Expenses Construction of

PEN

Space

163,699.00

Interior Design

PEN

Space

393,368.00

Shipping fees

PEN

23,081.00

Wages

PEN

1,531.29

10,719.03

Rent & Utilities

PEN 900.00

Janitorial

PEN 35.71

PEN 35.71 PEN 35.71 PEN 35.71

PEN 35.71

PEN 249.97

Promotional

PEN

Activities

127,433.00

Hotel &

PEN

Flight

3,653.00

25,571.00

Total

PEN

Expenses

745,021.00 Total Earn-

PEN

ings

-104,247.39

CONCLUSION After conducting research on the luxury market in Peru, we think that Pradaâ&#x20AC;&#x2122;s pop up shop in Jockey Plaza will be successful. The shop will be placed in line with other luxury retailers, providing the competition that is necessary to thrive. The growth in Lima, Peru is evident through research, and we hope that our shop experiences similar growth and expansion. The futuristic design of the shop will capture the eye of high class Peruvians looking to shop locally for Pradaâ&#x20AC;&#x2122;s goods. The attention that this store will capture can help leverage the brand in Latin America and provide Prada with a way to test the market.

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“Peru to Invest $400 Million in Science, Technology in 2013.” News from Peru Peruvian Times. N.p., n.d. Web. 26 Oct. 2016. FocusEconomics. “Peru Economy - GDP, Inflation, CPI and Interest Rate.” FocusEconomics | Economic Forecasts from the World’s Leading Economists. N.p., n.d. Web. 26 Oct. 2016. “Peru.” U.S. Department of State. U.S. Department of State, n.d. Web. 26 Oct. 2016. “2016 Lima Conference – Innovation & Technology as Engines of Economic Development.” Americas Society Council of the Americas. N.p., 9 Jan. 2016. Web. Oct. 2016. “Peru Proposes Increased Budget to Improve Services, Boost Economy.” Peru Reports. N.p., 2016. Web. 26 Oct. 2016. “Peru Retail Report - BMI Research.” N.p., n.d. Web. 26 Oct. 2016. “Doing Business in Peru: Peru Trade and Export Guide.” Doing Business in Peru: Peru Trade and Export Guide - GOV.UK. N.p., n.d. Web. 26 Oct. 2016. “Your Access to Independent Macroeconomic,industry and Financial Market Analysis Starts Here.” Industry Research & Data | Emerging Markets Analysis | BMI Research. N.p., n.d. Web. 26 Oct. 2016. Guy, Allison. “Facing a Murky Political Future, Peru Races to Protect a Unique Tropical Sea.” Oceana. N.p., n.d. Web. 26 Oct. 2016. “Peru’s Business & Investment Guide.” (2015): n. pag. EY Publication. Web. Landed, S.L. Just. “Using Bank Cards.” Just Landed. N.p., 2016. Web. 26 Oct. 2016. “Occupational Safety and Health in Peru.” National Center for Biotechnology Information. U.S. National Library of Medicine, n.d. Web. Nov. 2016. “Google Maps Area Calculator Tool.” Google Maps Area Calculator Tool. N.p., n.d. Web. Nov. 2016. “MoveHub.” Shipping to Lima, Peru From London, United Kingdom | MoveHub. N.p., n.d. Web. 26 Nov. 2016. 51

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