The Future of Walking Financial Strategy by Georgia Sinn

FINANCE & BUDGET STRATEGY Orion, Rene, Rami, Maxime & Georgia

INTRODUCTION

MISSION A collection that combines modern and innovative design, comfort, fashion, technology and science. A range that is suitable for performance and daily wear and focuses on versatility. Always using a sustainable approach.

TABLE OF CONTENTS 3-4 - EXECUTIVE SUMMARY 5-14 - START UP EXPENDITURES 15-35 - PRODUCT AND MANUFACTURING 36-43 -DAILY OPERATION EXPENSES 44-48 - WAREHOUSE AND LOGISTICS 49-52 - CONTRACTORS 53-66 -DISTRIBUTIONS 67-69 - SALES FIGURES 70-88- COMMUNICATION 89-93 - CONCLUSIONS

EXECUTIVE SUMMARY MISSION Our Team, Aeres offers a total business solution for the Future of Walking. We are inspired by biomorphic design concepts and driven by the values of sustainability and innovation and take these into account at every touchpoint of the business planning process. A start-up solution, originating in London, but extending to a worldwide market within the ďŹ rst year, our customer is a creative young professional, most likely a millennial, who goes to an ofďŹ ce where smart casual dressing is not just accepted but celebrated, not only that, they are environmentally conscious and want to make a difference. Whilst there are many possible business solutions for the Future of Walking, only Aeres provides a business solution that can cross seamlessly into any country, breaking down many market barriers with its minimalistic and nature inspired design.

EXECUTIVE SUMMARY FINANCE SUMMARY Based on a strategy with international market expansion, market size and our sales projections, at the end of year one TFW would generate a gross profit of € 2.300.724 After year 1 the amount of expenses will still exceed the gross revenue, resulting in a negative net income for the first year. In year two the company will still not generate any profit according to the financial statements. It is at the end of year three that the company will have a positive net income of € 8.398, for the first time generating a profit. With a bank loan or funding of 650 000€ the company will be able to cover their cash flow for the first three year, and after taking into consideration that the total expenses over the first three years, Aeres is projected to reach break even point at the end of year three.

START-UP EXPENDITURES

OFFICE SPACE In order to develop the TFW brand, the company needs to rent ofﬁce space. We decided to rent a space in the city center of London, in the Convent Area district. This with the eye on inviting prospects, manufactures, …. Given the 5 company members we decided to rent out a space of 1100 sq ft (100 sq m) to start up their business.

£65 per sq ft £65*1100 Sq Ft = £71 500/annum £71 500/12 = £5 958/month LINK

OFFICE EQUIPMENT 3 Macbook Air 13-Inch: 3*£1 000 2 IMac 4K retina 21.5 Inch: £1 040 2 Keyboard with Numeric Keypad: 2*£108 5 Mice: 5*£66 Printer/Scanner - HP PageWide Pro 477dw: £387 HP 973X Cartridge Combo pack 4-Color: £310 5 Huawei P30: 5*£699 Printer: £225 LINK

Total £10043 Ofﬁce Supplies ( pens, pencils, paper, notebooks, …) Monthly expense of: £40 (£480/year) Ink toners £352.11/4 cartridges (3500 coloured pages) LINK

OFFICE UTILITIES ELECTRICITY The average cost for a small business for a year of electricity in London is: £3,664 LINK

The average cost of water and sewage combined for the year is £415 LINK

Total £4,079

OFFICE EQUIPMENT FURNITURE 5 Desks - BEKANT Desk IKEA White: 5*£130 5 LÅNGFJÄLL chair with armrests IKEA Grey: 5*£115 Ikea Organizers & Ofﬁce decoration: £200 Plants/Greenery: £100 Total £1525

INSURANCE EXPENSE General Liability Insurance: A General Liability Insurance policy provides coverage for companies with a physical business location. SpeciďŹ cally, this insurance policy will cover instances of property damage and personal injuries that occur on your business property. Workers' Comp Insurance: ensures your business complies with the law. Employees must be covered in case of injury on the job, or illness suffered due to their work. Estimation yearly insurance cost: ÂŁ2800 LINK LINK

INTERNET & MOBILE SUBSCRIPTIONS Mobile Phone subscription: 5*£20/month Voom Fibre 3 Internet Access incl one ﬁxed phone line: £60/month Ofﬁce 365: £106/yearly (x5 employees) Total £2450

RESEARCH & DEVELOPMENT The start-up phase comes with a cost in research and development. Months of research, adjustments and improvements precede before commercialization. Besides a team that is working for months full time on turning an idea into something real they also need to take into account: Market Research: Online Survey from £1000 media-speciﬁc intelligence: £5000 In depth interviews: £1 500/day LINK

Prototyping & Sampling: Prototyping & Sampling: 10*£1000 = £10 000 LINK

Shipment: £300 LINK

MARKETING & BRANDING Logo design: £450 LINK

Business Cards: 5*100 cards // £38.99 Website development: £30 000 Developed with possibility to active e-commerce service LINK

Domain Name: £11.99/year LINK

SALARIES For the research and development phase of the brand we suggest 3 team members will work full time on the realization of the project. The other two will still keep side activities making them part-time available to work on the development of TFW. Fulltime: 2x PHD in engineering/science: £32K income/year → 2*£32K*2 = £128K (yearly staff cost company x2) LINK

1x design background: £28K income/year → 2*£28K = £56K (yearly staff cost company) LINK

Part-Time: 1x Marketing background: £17K income/year → 2*£17K = £34K (yearly staff cost company) 1x Innovation Design background: £17K income/year → 2*£17K = £34K (yearly staff cost company) LINK

PRODUCTION & MANUFACTURING

SIZE RANGE

From competitor research we have decided on a unisex size range which will range from Eur 36-45. This extensive range will be large enough to meet customers needs given the normal size range our competitors Nike and Adidas give. We have also decided not to offer half sizes. This is due to our unique design which allows the user to tighten the shoe via elastic straps. The user will decide whether they want to choose a smaller size or a bigger one.

OVERVIEW

COLOUR PALETTE

#Pantone 16-1212 TPG

#Pantone 17-1512 TPG

#Pantone 13-1008 TPG

#Pantone 15-1906 TPG

#Pantone 13-0513 TPG

#Pantone 15-2706 TPG

#Pantone 17-4402 TPG

#Pantone 18-0108 TPG

#Pantone 19-3933 TPG

#Pantone 11-4800 TPG

#Pantone 14-6319 TPG

#Pantone 16-4021 TPG

#Pantone 13-4108 TPG

#Pantone 12-0312 TPG

#Pantone 14-4210 TPG

OVERVIEW SPORTY RANGE

COLLECTION PLAN

Cost: £61 Wholesale price: £121 Retail price: £330

Cost: £48 Wholesale price: £95 Retail price: £260

Cost: £26 Wholesale price: £80 Retail price: £220

Cost: £48 Wholesale price: £95 Retail price: £260

OVERVIEW CASUAL RANGE

COLLECTION PLAN

Cost: £47 Wholesale price: £95 Retail price: £260

Cost: £35 Wholesale price: £78 Retail price: £220

Cost: £47 Wholesale price: £95 Retail price: £260

Cost: £61 Wholesale price: £121 Retail price: £330

Cost: £35 Wholesale price: £78 Retail price: £220

MATERIAL//FABRIC OVERVIEW

Elastomeric Polyurethane

Biosteel Mesh

Eco Elastic

Apple Leather

(EPU)

Usage: Upper part sport line

Usage: shoe straps

Usage: Upper part classic line

Usage: 3D printed soles

LINK

Average cost of Biosteel:

Average cost of eco elastic:

Average cost of leather: between

15-25£ per kilo

80p a metre when buying

20-30£ per metre

LINK

Average cost of EPU : 39£ per kilo when buying 50+ kilos

1000-1999 metres

MATERIAL//FABRIC OVERVIEW

EVA

Silicone

Metal

Cotton

Usage: Sole

Usage: shoe skeleton detail

Usage: Lace Buckles

Usage: Shoe Laces

LINK

Average cost of EVA : around 1£

Average cost of silicone

per kilo

ﬁlament: 5-6£ per kilo

Cost per buckle: 0,18 £

Cost per pair: 0,15 £

ELASTOMERIC POLYURETHANE (EPU)

BIOSTEEL

ECO ELASTIC

APPLE LEATHER

ETHYLENE VINYL ACETATE (EVA)

SILICONE FILAMENT

MATERIAL//MANUFACTURING COST Cost of raw materials//manufacturing for below shoe (estimated quantities needed for a pair): EPU: 400g (0.4kg) = 15.6£ BioSteel: 300g (0.3kg) = 7.5£ Silicone: 100g (0.1kg) = 0.6£ Eco Elastic: 60cm (0.6m) = 0.08£ Apple Leather: 2cm x 10cm = 20cm2 (0.2m) = 6£ Metal Buckles: 2x 0,18 £ = 0,36 £ Shoelaces pair: 0,15 £ TOTAL COST RAW MATERIALS: 30,29£ With Insole: (+2,50£ per pair) 32,79£ + 28,21£ (PRODUCTION//MANUFACTURING//SHIPPING)= 61£

PERSONALISATION With our shoe collection designed around biomorphism, our shoes are designed in a way they can morph. Morhing = undergo process of transformation // change. Customer will be able to personalise their pair of shoes to their own needs with:

1. Interchangeable straps 2. Changeable insoles These insoles will be injector mold silicone printed and will cater to the different needs of our customer. These insoles are designed differently according to the activity they want to use it for. Example: Walking, Long time standing, Running, Cross training, .... This concept ﬁts into TFW sustainable approach, where one shoe can be used for multiple activities. Cost per pair insoles: £5 Wholesale price: £10 Retail price: £30

PERSONALISATION Straps: Cost per pair straps £2,5 Wholesale price: £5 Retail price: £15

Estimation Revenue Straps: Year 1: 4000 Straps sold Revenue: 60 000 £/12 = 5000 £/month COGS: 10000 £ Estimation Revenue Insoles: Year 1: 4500 Insoles sold Revenue: 135 000 £/12 = 11250 £/month COGS: 22500 £

CASH FLOW FOR PRODUCTION Wholesale buyers Wholesaler deposits will fund part of our cash ďŹ&#x201A;ow. Pre Orders Public pre orders will be available online and marketed through social media platforms and via trade show booths, Collaboration In collaboration with a designer a new limited edition strap will be introduced for the public to pre order. A percentage of the money generated will be given to a chosen environment charity.

COLLABORATION PRE ORDER In order to spark interest in AERES and persuade customers to pre order our shoes in order to fund production we will collaborate with famous british designer Vivienne Westwood. Vivienne westwood is a known environmental activist with involvement in many charities. In partnership together a uniquely designed limited edition strap will be produced and given free with pre ordered shoes. All money from the sales will go to funding production as well as 10% of all proceeds at the end of pre orders will be donated to British environment charity Cool Earth. This collaboration aims to cement Aeres in the market as a brand with purpose and a credible product endorsed by a leading designer.

Charity link

PRODUCTION FACTORY LOCATION ARLITO - PORTUGAL Arlitó was created in 1980 in Portugal as a family business and still remains so to this date. Their aim is to provide customers with the highest grade of quality in footwear manufacturing, sharp delivery timings and ﬂexible re-order lead times. Recognized for its ﬂexibility in introducing new developments at short notice, Arlitó is a reference of quality and innovation in the industry. Estimated production cost per shoe: 28,21£

DAILY OPERATION EXPENSES

TRY ON SPACE LONDON TFW will open a try-on space in Boxpark Shoreditch London, fusing the concepts of modern street food and placing local and global brands side by side to create a unique shopping and dining destination. This space will communicate the brands values/univers and will offer visitors to try on their favorite styles. From our Boxpark Try-on they will be able to order their pair of sneaker through the online webschop. This Try on space requires minimal space and no storage warehouse. It is a user friendly and allows for customers to have a physical interaction with the product. POP-UP RENTALS 1 WEEK – £1K + VAT 12+ MONTHS – £20K Base Rent + VAT. *Excludes service charge and utilities. This try-on space comes with the cost of a sales assistant that will deal with customers questions/needs. Salary: £1700/Month

PACKAGING Shoes will be protected by recycled cardboard shoe boxes. These boxes will be logo printed. To meet high standards the product will be raped into logo printed tissue paper. Dimensions box: 11 in * 7 in * 4 in Cost: ÂŁ12 608 /8000 BOXES LINK

1 color logo printed tissue paper dimensions: 20in * 30in Cost: ÂŁ419 /9000 sheets LINK

SALARIES DAILY OPERATIONS Fulltime: 1x Marketing & communication: £23K/year → 2*£23K = £46K (yearly staff cost company x2) link

1x Sales Manager: £26K/year → 2*£26K = £52K (yearly staff cost company x2) link

1x Sales Person: £18K/year → 2*£18K = £36K (yearly staff cost company x2) link

1x Logistics coordinator: £25K/year → 2*£25K = £50K (yearly staff cost company x2) link

Part Time: 1x Designer: £17K/year → 2*£17K = £34K (yearly staff cost company x2) link

1x Engineer: £18K/year → 2*£18K = £36K (yearly staff cost company x2) link

SALARIES DEPARTMENT STORES 2 Sales assistant part time per department stores (£ 18K /year) link link

Season 1 year 1: total 8 department stores 2 sales assistants/department store 18 000 £ x 8 stores =144,000£ Season 2 year 1: total 13 department stores 2 sales assistants/department stores 18 000 £ x 13 stores = 234 000£ Year 2: total 19 department stores 2 sales assistants/department store 36 000 £ x 19 = 684 000£ Year 3: total of 25 department stores 2 sales assistants/department store 36 000 £ x 25 = 900 000£ Employee beneﬁts (salary x2)

SHOWROOMING

Twice a year, TFW will present their latest collection in a showroom in London. A space will be hired where the collection can be viewed and where buyers of our wholesale partners can compose their orders. 800 sq ft → £660.00/day Location: London City Center near Soho Area Total rent: £660.00*6 days = £3 960 link

DEPARTMENT STORE RENT

TFW will be represent in department stores. Department stores not just offer their space for free. Having your own corner comes with a cost. £4000 / 4 sqm / Month Season 1 year 1: 8*£4000*6 months = £192 000 Season 2 year 1: 13*£4000*6 months = £312 000 link

PATENT

According to the UK Innovate product design the application for a Patent request is between 230-280 pounds for the ďŹ lter patent. An annual payment is needed every 12 months to ensure the patent is still relevant. 280ÂŁ per annum. link

WAREHOUSING & LOGISTICS

WAREHOUSING Our goods will be stored in with Spainbox warehousing and distribution. They will directly take care of all shipment of both B2B as B2C clients. Our pricing consists of three elements: 1. Warehouse Storage fees. Price associated with how much space is used in warehouses and unique products stored.

£16/cbm/month 1 cbm = 135 shoe boxes SEASON 1 ESTIMATED COST: → Temporary stockage of B2B clients 5540 boxes / 135 = 41 cbm needed 41 cbm * £16 = £656/month → Stockage B2C 860 boxes /135 = 6 cbm needed 6 cbm* £16 = £96/ month LINK

WAREHOUSING 2. Order Handling fees – Price associated with the order volume of picking and handling items B2B season 1: 5540 pairs / 31 retailers = 180 pairs / retailer 18 pairs/ style (total of 10 styles) (1* £1.7 + 17*£0.6)*10 = £ 11.9 / retailer £ 11.9 * 31 retailers = £ 368 overall handling fees B2B season 1 B2C: 860 pairs * £1.7 handling fee = £ 1462 maximum season 1

LOGISTICS 3. Shipping cost – Price of shipping your products to customers, distributors, or suppliers. We suggest one pair of sneakers cost around 350 grams // 12 ounces. B2B cost: 180 pairs / retailer → 180 * 350 grams = estimated total weight 60 kg Germany: 2* £ 70 = £ 140 Italy: 2* £ 70 = £ 140 Netherlands: 2* £ 70 = £ 140 France: 5* £ 63 = £ 315 South Korea: 3* £ 200 = £ 600 Belgium: 2* £ 70 = £ 140 Spain: 2* £ 70 = £ 140 Asia: 5* £ 200 = £ 1000 UK: 3* £ 70 = £ 210 US: 5* £ 200 = £ 1000 TOTAL B2B SHIPPING COST SEASON 1: £ 3 825 LINK

TOTAL B2C SHIPPING COST SEASON 1: EU: £7 AVERAGE REST OF WORLD: £14 TOTAL: 550*£7 + 310* £14 = £8190

CONTRACTORS

CONTRACTORS Legal Advice Lawyer -how to run your business, how to micromanage and business procedures within legal limits. → 400 £ x 12 = 4800 £/ YEAR Link HR contractor For the recruitment of staff, a HR ﬁrm will be hired. a general rule is that you should be spending around 20 percent of the employee’s starting annual salary. Cost around £3600/recruited sales assistant LINK

Pr Agencies ( Communication) Digital strategy, Media Relations,Crisis management, Financial advice → 6250 £ x 12 = 75 000 £/ YEAR

PR AGENCY: THE PR OFFICE PR OfďŹ ce is a UK based PR agency which handles accounts for many leading brands. They pride themselves on communication between brand and consumer. This Pr company will cover -

Media Relations Crisis management -

Technology Digital strategy

Investor relations

Financial services

ANNUAL COST - 75,000 POUNDS link

ECOMMERCE In order to grow our business internationally we have also implemented an online store. Through the popular platform Shopify, an easy to use and navigate international website platform we will build a website ourselves using their hosting platform. This includes

Domain name Hosting Safe Checkout/ Paypal and Bank Cards Unlimited products Tech support Analytics Starting with the moderate plan for £60 a month. £60 x 12 = £720 per annum Shopify transaction fees 1,2% each purchase Season 1: total of £2290 Season 2: £2519

Website support: £150/month LINK

DISTRIBUTION STRATEGY//SALES PROJECTION

CHOSEN DISTRIBUTION CHANNELS

CONCEPT//MULTI BRAND STORES

DEPARTMENT STORES

E-COMMERCE

TFW will target concept/multi brand

TFW will be represent in department stores,

TFW will distribute from their own

stores with their niche, innovate idea

offering a variety of goods under one roof.

webshop, directly to the consumer.

yet fashionable sneaker as wholesale partners.

Advantages:

1. Located in renown/convenient city areas

1. Highest Margin

Advantages:

2. Lots of passage/trafďŹ c

2. Always open for business (24/7)

1. Take stock risk

3. Ads legitimacy to the brand when

3. Worldwide reach

2. Deposit payment

represent in prestige department stores

4. Provides the company with useful data.

4. Niche, unique product portfolio

Disadvantages:

6. In control of brand image

5. Free Marketing/communication

1. Commission on sales

6. Add legitimacy/prestige to the brand

2. High space rent

Disadvantages:

3. Highly competitive environment

1. Finance own stock levels

3. Often offering experiences

5. Opportunity to scale

Disadvantages:

2. No try before the buy

1. Wholesale revenue

3. Highly competitive

2. Smaller margin

4. Shipment costs

3. No control on brand image

14%

OF TOTAL DISTRIBUTION FOR E-COMMERCE

20%

OF TOTAL DISTRIBUTION FOR DEPARTMENT STORES

DISTRIBUTION STRATEGY With TFW being a start-up company, money has to be available for production. Therefore, we decided to partner with wholesalers to ensure cash ﬂow for production. Wholesalers deposits will cover the cost related to production and manufacturing. Department, concept and multi brand stores will be chosen according to the brands values and image. Being represented in renown stores, adds legitimacy to the brand, it increases brand awareness and grows brand image. With shoes, being a difﬁcult accessory to buy online and own retail spaces coming with high investment, wholesalers seem the best option to launch TFW. In today's society, everyone is connected 24/7 which brings with the rise of e-commerce.

66%

OF TOTAL DISTRIBUTION FOR CONCEPT/MULTI-BRAND STORES

TFW will therefore have their own webshop in which they are able to cater to everyone worldwide 24/7. Shoes are not the most easy product to sell online, as well does TFW need to ﬁnance the production and take the risk on them. Only operating through ecommerce would ask for high cost in marketing and communication to create enough awareness to generate the same amount of revenue that will be generated partnership with wholesalers.

NOTE: STRATEGY SEASON 1 YEAR 1

WORLD DISTRIBUTION YEAR 1 // SEASON 1

CONCEPT STORES (23) BERLIN - VOOSTORE (Y1) BERLIN - COMPACT STORE MILAN - SLAM JAM (Y1) MILAN - 10 CORSO COMO

DEPARTMENT STORES (8)

LA - UNDEFEATED (Y1) AMSTERDAM - HUTSPOT (Y1)

RETAIL (1)

ROTTERDAM - HUTSPOT PARIS - CENTRE COMMERCIAL PARIS - MERCI

PARIS - GALERIES LAFAYETTE

BORDEAUX - LE RAYON FRAIS

CHAMPS (Y1)

LYON - POP AND SHOES

NEW YORK - BARNEYS (Y1)

SEOUL - 10 CORSO COMO SEOUL - RARE MARKET

LA - BARNEYS (Y1)

NEW YORK - FIVE STORY

TOKYO - TOKYU (Y1)

LONDON - DOVER STREET MARKET BRUSSELS - HUNTING & COLLECTING

LONDON - SELFRIDGES (Y1)

ANTWERP - GRAANMARKT 13

SEOUL - SHINSEGAE

MADRID - D-ESPACIO

BEIJING - SKP

BARCELONA - MUNICH BANGKOK - SIWILAI HONG KONG - KAPOK DALLAS - FORTY FIVE TEN LONDON - LN-CC

LANE CRAWFORD - SHANGHAI

E-COMMERCE

SALES PROJECTIONS

CONCEPT STORES

DEPARTMENT STORES

RETAIL

Total of 23 wholesalers

Total of 8 department stores

The online e-commerce channel

Total projected shoe buys: 4250 pairs

Total projected shoe buys: 1290 pairs

Total projected shoe buys: 860 pairs

Total estimated revenue: € 481.250

Total estimated revenue: € 280.621

Total estimated revenue: € 220.095

Total estimated gross proﬁt: € 254.500

Total estimated gross proﬁt: € 211.171

Total estimated gross proﬁt: € 173.795

Pairs per wholesaler: 185 pairs

Pairs per wholesaler: 161 pairs

Pairs available online: 860

(Pairs/wholesaler)/size: 18 pairs

(Pairs/department)/size: 16 pairs

Pairs/size: 86 pairs

((Pairs/wholesaler)/size)/styles: 2 pairs

((Pairs/department)/size)/styles: 2 pairs

(Pairs/size)/styles: 9 pairs

Sizing 36-45

TOTAL GROSS PROFIT SEASON 1 YEAR 1 € 639.466

SALES PROJECTIONS

WORLD DISTRIBUTION YEAR 1 // SEASON 1 YEAR 1 // SEASON 2

CONCEPT STORES (35) BERLIN - VOOSTORE (Y1)

OSLO - YME

BERLIN - COMPACT STORE (Y1)

SEOUL - BOONTHESHOP

MILAN - SLAM JAM (Y1)

TOKYO - EN ROUTE

MILAN - 10 CORSO COMO (Y1)

SHANGHAI - ALTER

LA - UNDEFEATED (Y1)

COPENHAGEN - STORM

AMSTERDAM - HUTSPOT (Y1)

COPENHAGEN - NAKED

ROTTERDAM - HUTSPOT (Y1)

MALMÖ - TRES BIEN

PARIS - CENTRE COMMERCIAL (Y1)

AARHUS - STOY

PARIS - MERCI (Y1)

ISTANBUL - 290SQM

BORDEAUX - LE RAYON FRAIS (Y1)

SAN FRANCISCO - LE POINT

LYON - POP AND SHOES (Y1)

NEW YORK - HENRIK VIBSKOV

SEOUL - 10 CORSO COMO (Y1)

NEW YORK - MARYAM NASSIR ZADEH

SEOUL - RARE MARKET (Y1) NEW YORK - FIVE STORY (Y1) LONDON - DOVER STREET MARKET (Y1) BRUSSELS - HUNTING & COLLECTING (Y1) ANTWERP - GRAANMARKT 13 (Y1) MADRID - D-ESPACIO (Y1) BARCELONA - MUNICH (Y1) BANGKOK - SIWILAI (Y1) HONG KONG - KAPOK (Y1) DALLAS - FORTY FIVE TEN (Y1) LONDON - LN-CC (Y1)

DEPARTMENT STORES (13) PARIS - GALERIES LAFAYETTE CHAMPS (Y1) NEW YORK - BARNEYS (Y1) LA - BARNEYS (Y1)

RETAIL (1)

TOKYO - TOKYU (Y1) LONDON - SELFRIDGES (Y1) SEOUL - SHINSEGAE (Y1) BEIJING - SKP (Y1) LANE CRAWFORD - SHANGHAI (Y1) ROME - LA RINASCENTE MILAN - LA RINASCENTE BERLIN - KADEWE PARIS - LE BON MARCHÉ COPENHAGEN - ILLUM

E-COMMERCE

SALES PROJECTIONS

DEPARTMENT STORES

RETAIL

Total of 35 wholesalers

Total of 13 department stores

The online e-commerce channel

Total projected shoe buys: 6800 pairs

Total projected shoe buys: 2240 pairs

Total projected shoe buys: 946 pairs

Total estimated revenue: € 770.000

Total estimated revenue: € 505.118

Total estimated revenue: € 242.105

Total estimated gross proﬁt: € 407.200

Total estimated gross proﬁt: € 380.108

Total estimated gross proﬁt: € 191.175

Pairs per wholesaler: 194 pairs

Pairs per wholesaler: 172 pairs

Pairs available online: 946

(Pairs/wholesaler)/size: 19 pairs

(Pairs/department)/size: 17 pairs

Pairs/size: 94 pairs

((Pairs/wholesaler)/size)/styles: 2 pairs

((Pairs/department)/size)/styles: 2 pairs

(Pairs/size)/styles: 9 pairs

Sizing 36-45

CONCEPT STORES

TOTAL GROSS PROFIT SEASON 2 YEAR 1 € 978.483

WORLD DISTRIBUTION YEAR 1 // SEASON 1 YEAR 1 // SEASON 2 YEAR 2

CONCEPT STORES (50) BERLIN - VOOSTORE (Y1)

OSLO - YME (Y1)

BERLIN - COMPACT STORE (Y1)

SEOUL - BOONTHESHOP (Y1)

MILAN - SLAM JAM (Y1)

TOKYO - EN ROUTE (Y1)

DEPARTMENT STORES (19)

MILAN - 10 CORSO COMO (Y1)

SHANGHAI - ALTER (Y1)

PARIS - GALERIES LAFAYETTE CHAMPS (Y1)

LA - UNDEFEATED (Y1)

COPENHAGEN - STORM (Y1)

NEW YORK - BARNEYS (Y1)

AMSTERDAM - HUTSPOT (Y1)

COPENHAGEN - NAKED (Y1)

LA - BARNEYS (Y1)

ROTTERDAM - HUTSPOT (Y1)

MALMÖ - TRES BIEN (Y1)

TOKYO - TOKYU (Y1)

PARIS - CENTRE COMMERCIAL (Y1)

AARHUS - STOY (Y1)

LONDON - SELFRIDGES (Y1)

PARIS - MERCI (Y1)

ISTANBUL - 290SQM (Y1)

SEOUL - SHINSEGAE (Y1)

BORDEAUX - LE RAYON FRAIS (Y1)

SAN FRANCISCO - LE POINT (Y1)

BEIJING - SKP (Y1)

LYON - POP AND SHOES (Y1)

NEW YORK - HENRIK VIBSKOV (Y1)

LANE CRAWFORD - SHANGHAI (Y1)

SEOUL - 10 CORSO COMO (Y1)

NEW YORK - MARYAM NASSIR ZADEH(Y1)

ROME - LA RINASCENTE (Y1)

SEOUL - RARE MARKET (Y1)

SINGAPORE - MANIFESTO

MILAN - LA RINASCENTE (Y1)

NEW YORK - FIVE STORY (Y1)

VANCOUVER - J2

BERLIN - KADEWE (Y1)

LONDON - DOVER STREET MARKET (Y1)

VANCOUVER - SECRET LOCATION

PARIS - LE BON MARCHÉ (Y1)

BRUSSELS - HUNTING & COLLECTING (Y1)

BARCELONA - FOOT DISTRICT

COPENHAGEN - ILLUM (Y1)

ANTWERP - GRAANMARKT 13 (Y1)

MOSCOW - KM20

STOCKHOLM - NK

MADRID - D-ESPACIO (Y1)

SYDNEY - SNEAKER BOY

SAN FRANCISCO - BARNEYS

BARCELONA - MUNICH (Y1)

….

BANGKOK - SIWILAI (Y1)

SEATTLE - BARNEYS MELBOURNE - DAVID JONES

HONG KONG - KAPOK (Y1)

SYDNEY - DAVID JONES

DALLAS - FORTY FIVE TEN (Y1)

BRISBANE - DAVID JONES

LONDON - LN-CC (Y1)

RETAIL (1) E-COMMERCE

SALES PROJECTIONS

CONCEPT STORES Total of 45 wholesalers Total projected shoe buys: 16575 pairs Total estimated revenue: € 1.876.875 Total estimated gross proﬁt: € 992.550 Pairs per wholesaler: 386 pairs (Pairs/wholesaler)/size: 36 pairs ((Pairs/wholesaler)/size)/styles: 4 pairs Sizing 36-45

SALES PROJECTIONS

DEPARTMENT STORES

RETAIL

Total of 19 department stores

The online e-commerce channel

Total projected shoe buys: 6502 pairs

Total projected shoe buys: 2348 pairs

Total estimated revenue: € 1.414.330

Total estimated revenue: € 600.859

Total estimated gross proﬁt: € 1.064.302

Total estimated gross proﬁt: € 474.460

Pairs per wholesaler: 342 pairs

Pairs available online: 2348

(Pairs/department)/size: 34 pairs

Pairs/size: 235 pairs

((Pairs/department)/size)/styles: 3 pairs

(Pairs/size)/styles: 23 pairs

Sizing 36-45

TOTAL GROSS PROFIT YEAR 2 € 2.531.313

WORLD DISTRIBUTION YEAR 1 // SEASON 1 YEAR 1 // SEASON 2 YEAR 2 YEAR 3 CONCEPT STORES (55) DEPARTMENT STORES (25) RETAIL (1)

SALES PROJECTIONS

DEPARTMENT STORES

RETAIL

Total of 55 wholesalers

Total of 25 department stores

The online e-commerce channel

Total projected shoe buys: 23205 pairs

Total projected shoe buys: 8452 pairs

Total projected shoe buys: 2817 pairs

Total estimated revenue: € 2.627.625

Total estimated revenue: € 1.838.630

Total estimated revenue: € 721.031

Total estimated gross proﬁt: € 1.389.570

Total estimated gross proﬁt: € 1.383.593

Total estimated gross proﬁt: € 569.352

Pairs per wholesaler: 421 pairs

Pairs per Department: 338 pairs

Pairs available online: 2817

(Pairs/wholesaler)/size: 42 pairs

(Pairs/department)/size: 34 pairs

Pairs/size: 281 pairs

((Pairs/wholesaler)/size)/styles: 4 pairs

((Pairs/department)/size)/styles: 3 pairs

(Pairs/size)/styles: 28 pairs

Sizing 36-45

CONCEPT STORES

TOTAL GROSS PROFIT YEAR 3 € 3.342.516

YEAR 1 Department store retail wholesale

revenue

gross proﬁt

nb pairs

€ 785.739

€ 591.279

3612

€ 462.200

€ 364.970

1806

€ 1.251.250

€ 661.700

11050

€ 2.499.189

€ 1.617.949

16468

revenue

gross proﬁt

nb pairs

€ 1.414.330

€ 1.064.302

6502

€ 600.859

€ 474.460

2348

€ 1.876.875

€ 992.550

16575

€ 3.892.065

€ 2.531.313

25424

revenue

gross proﬁt

nb pairs

€ 1.838.630

€ 1.383.593

8452

€ 721.031

€ 569.352

2817

€ 2.627.625

€ 1.389.570

23205

€ 5.187.286

€ 3.342.516

34474

YEAR 2

SHOE SALES

Department store retail wholesale YEAR TOTAL YEAR 3 Department store retail wholesale YEAR TOTAL TOTAL YEAR 1-3 Department store retail wholesale YEAR TOTAL

revenue

gross profit

nb pairs

€ 4.038.699

€ 3.039.175

18566

€ 1.784.090

€ 1.408.782

6971

€ 5.755.750

€ 3.043.820

50830

€ 11.578.539

€ 7.491.777

76367

REVENUE ANNUAL GROWTH 56%

REVENUE ANNUAL GROWTH 33%

STRAPS//INSOLES SALES Revenue Straps Revenue/YEAR

COGS/YEAR

Revenue/...

COGS/...

UNITS

year 1

Retail

€ 69.000

€ 11.500

€ 5.750

€ 958

4000

year 2

Retail

€ 89.700

€ 14.950

€ 22.425

€ 3.738

5200

year 3

Retail

€ 116.610

€ 19.435

€ 29.153

€ 4.859

6760

€ 275.310

€ 45.885

€ 57.328

€ 9.555

15960

TOTAL

Revenue Insoles

Revenue/YEAR

COGS/YEAR

Revenue/...

COGS/...

UNITS

year 1

Retail

€ 155.000

€ 26.000

€ 12.917

€ 2.167

4500

year 2

Retail

€ 201.500

€ 33.800

€ 50.375

€ 8.450

5850

year 3

Retail

€ 261.950

€ 43.940

€ 65.488

€ 10.985

7605

€ 618.450

€ 103.740

€ 128.779

€ 21.602

17955

TOTAL REVENUE ANNUAL GROWTH 30% YEAR 1

REVENUE ANNUAL GROWTH 30% YEAR 2

YEAR 3

COMMUNICATION

SOCIAL MEDIA ADVERTISEMENT

YEAR 0 CPM: £5,6/1000 views → £5,6*1000 = £5600/ 1 million views (desired reach) YEAR 1: September: CPM: £5,6/1000 views → £5,6*100 = £560/ 100 000 views October CPM: £5,6/1000 views → £5,6*100 = £560/ 100 000 views November CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views December CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views Januari CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views Februari CPM: £5,6/1000 views → £5,6*100 = £560/ 100 000 views March CPM: £5,6/1000 views → £5,6*100 = £560/ 100 000 views April CPM: £5,6/1000 views → £5,6*100 = £560/ 100 000 views May CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views June CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views July CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views August CPM: £5,6/1000 views → £5,6*50 = £280/50 000 views TOTAL YEAR 1: £4 760 - 850,000 views

SOCIAL MEDIA ADVERTISEMENT

LINK

BOOTH EXPENSES Exhibitor Fee: £450 sqm // £450*9 = £4 050 link

Materials//Production Led Screens 2x2: £1450/4 days link

Porous skeleton: £4000 link

Star Mirror Floor: £20/sqm → 9sqm for £180 link

Natural Latex Balloons: £100 link

Xbox Kinect: £600 Sneaker Sample/Prototype: / Photo//video booth: £299/day (£299*3 days = £897) link

Bubble machine: £30/day (£120/4 days) link

Service/Staff: 3 people will represent the brand, one person of TFW itself and two hostess that deals with needs of our visitors (provides help/info with different activities, welcomes visitors) Hourly rate £9 + recruitment agency fee + transport Estimation 2 hostesses £450/3 days TOTAL: £11 847

BOOTH MARKETING ACTIONS

GUERILLA TAKE OVER Aeres will take over streets in the form of guerrilla communication, where posters will be applied on eye catching locations around the city. This to trigger people's curiosity and to make them familiar with the brand AERES by TFW. These stickers just before the opening of the exhibition. By scanning the QR code, people will unlock a free shopper bag voucher, as well brand information and and invitation to the booth. Cost for 250 posters: 124£ Cost for 350 ﬂyers: 92£ link

BOOTH MARKETING ACTIONS

REWARD TOTE BAGS Organic eco friendly tote bags, will be given for free to the ones, who managed to ﬁnd the hidden QR code mentioned on our posters across the city. With interactive and rewarding action we hope to drive more people to our booth. Cost: 2.80£ per bag 280£ per 100

BOOTH MARKETING ACTIONS

BUBBLE ROAD The bubble road will occur close to the exhibition space, creating awareness and generating interest in the brand and the booth. With this we hope to stimulate people's curiosity, with the aim to drive trafﬁc. Floor Vinyl Stickers Cost: 6.99£ each X 12 = 83.88 £

BOOTH MARKETING ACTIONS

BUBBLE BLOWING The bubble blowers will be found on the bubble road, creating large air bubbles. This to integrate a certain form of spectacle, a fun-factor. It again sparks curiosity and creates brand awareness. It aims to deliver an experience to both children and adults. Cost: Â£200/day link

LAUNCH EVENT To launch AERES by TFW we will hold an event at Boxpark, the same location as our main try on space in London. This space allows potential customers and VIP invited guests to witness the concept ďŹ rst hand. Special guest and collaborator Vivienne Westwood will be in attendance which gives the event an aura of prestige and professionalism. This event will be an opportunity for the public to see the prototypes and place pre orders as well as viewing the limited edition strap designed by Vivienne Westwood. 1,500ÂŁ for one night 60-90 guests approx. link to boxpark

LAUNCH EVENT Catering service (staff/food/drinks): £30 / person → £2700/90 invites DJ → £2000 Link

Photobooth → £299/day Link

Invitations: Design → £250 Print//envelope//sending → £800/100 invitations link

Photographer: £600/5 hours photography link

Total: £7 900

LAUNCH EVENT COMMUNICATION To communicate the collaboration with Vivienne Westwood a range of guerilla marketing and print media will ensure the public know about it. Guerilla Marketing- London tube/ city PR Agency included. Print Media Eco magazine- (full page, month.) /link - £1000 Stylist UK- ( featured for 3 weeks prior to event) - £7000

Total - £8,000

LAUNCH EVENT COMMUNICATION Going hand in hand with the guerilla marketing strategy in order to promote the event, the brand will also take to social media in order to increase the visibility of the launch event. On platforms such as Instagram and Twitter, the brand will announce the launch event as well as any logistics associated with it ( Time, date, venue). Simultaneously, interactive campaigns and imagery content will be posted in order to drive up the hype and get people an idea for what they can expect. Social Media Budget - 83 ÂŁ x 2 = 166 ÂŁ ( Included in social media budget) Creative Campaign Costs - Included in PR Agency Fees

LAUNCH EVENT COMMUNICATION In order to further increase visibility and expand their reach, the launch event will have influencers who both market and attend the event. Prior to the event, they will advertise the launch event on their social media platforms, and during the event, they will post images of what is happening at the event. Influencers - 1000 £ p/influencer 1000 £ x 10 = 10 000 £ Total : 10 000 £

link

LAUNCH EVENT & COMMUNICATION TOTAL Venue - 1,500 £ Speciﬁcs of event ( Catering, Food) - 7 900 £ OffLine Marketing - Total - 8000 £ Inﬂuencers - 10 000 £ Social Media - 166 £

Total Communication for Launch event : 27 566 £

VENDING MACHINES

Privately owned and stocked vending machines to be distributed around london. We will start with 6 Machines stocking various interchangeable products in our chosen cities. £1000 pounds per unit. £1000 x 6= £ 6,000 link

INFLUENCER STRATEGY To maximise on global reach, and increase relevance with the millennial market that currently exist predominately on Instagram, influencers will be chosen from the major existing target markets such as Europe, the US, Australia, to post about the shoes on their accounts. Both macro and micro influencers will be used in the mix, however only influencers that reflect our brand values of sustainability will be used, communicating once again the brand message. The month budget allocated to this marketing expense is 3000£ per month in year one.

YOUR TITLE HERE A company is an association or collection of individuals, whether natural persons, legal persons, or a

@marta_canga

@trashisfortossers

@theconsciouscut

Laura Singer was an environmental

Spanish born Belge, currently living

Amber Boye of Brisbane, Australia

studies major in college who made the

in the UK, Marta Canga is a green

business owner of swimwear label

conscious decision to live “zero waste” in

beauty, wellness, and eco fashion

Baiia creating swimsuits made

2012. She started The Package Free

blogger who currently holds 16.8k

from recycled ﬁshing nets. Number

Shop, a store that is as the name

followers on her Instagram account.

of followers: 20.9k

suggests - promotes a package free lifestyle. Number of followers: 330k

YOUR TITLE HERE A company is an association or collection of individuals, whether natural persons, legal persons, or

@emmawatson

@thediscreningbrute

Well known celebrity, women’s rights and

Joshua Katcher, NY, is a fashion

sustainable fashion activist Emma Watson

designer, author, activist and educator

currently has 50.6 million followers on

who has lectured internationally on

Instagram. Normally targeting someone of

sustainable and ethical fashion. He

this spectrum would be impossible, but

wrote ﬁrst book in 2018, Fashion

because of her vested interest in the cause

Animals, dedicated to understanding

of the brand, it is more likely that she will

how and why animals are exploited in

want to promote them.

the fashion industry. Followers: 13.6k

@jackharries English ﬁlmmaker and active environmental activist Jack Harries currently has 1.5 million followers on Instagram.

CONCLUSIONS

BREAK EVEN POINT The break even point was calculated for the brand based on revenue/sales projections. In order to calculate the break even point as accurate as possible the average gross profit/unit was found for both shoe sales as well the independent strap/insole (add-ons) unit buys based on the unit buy ratio add-ons/shoes (1/3) Average gross profit shoes: 92/unit Average gross profit add-ons: 21/unit Total company cost to cover over 3 years = 9 228 184 Break Even units = 9 228 184 / ((¼)*21 + (¾)*92) = 124 285 units across shoes/add-ons Looking at sales projections in the financial statements this amount of units will be reached in year 3 Q4

CONCLUSION The Financial statements were pulled together based on all above mentioned information. These show us that according to the AERES financial strategy the brand will be profitable at the end of year 3, generating a profit of € 8.398. From year four, the brand will be able to grow further. With a bank loan/funding of 650 000 Euro the company will be able to cover their cash flow for the first three years. Note that at the end of year 3 corporation taxes will be deducted.

APPENDIX

Full list of expenses over 3 year â&#x2020;&#x2019; see Excel document

Complete Balance Sheet, Income Statement, Cash ﬂow statement → see Excel document