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Pop-Up Shop
Chelsea Nabergall Mimi Patten Yasamin Rahmanparast Taylor Ruparel FASM410 Professor Alessandro Cannata
EXECUTIVE SUMMARY
Founded on the anti-Parisian establishment Left Bank of Paris in the 1960’s, Saint Laurent was --- and continues to be, a brand truly connected to the zeitgeist of the times. Yves Saint Laurent created both couture and ready-to-wear collections inspired by the music, art, and culture of his era. As a particularly avid lover and collector of fine art himself, Yves created his famous Autumn 1965 couture collection, inspired by the abstract paintings of the Dutch De Stijl artist Piet Mondrian. The collection’s simple A-line, tidy shift silhouette was typical of the mid-sixties. The hand-crafted technique in construction, though, set Saint Laurent apart as a master of couture, while recording the importance of Mondrian’s work during the period of the 1960s. This Saint Laurent x Art Basel Miami Beach pop-up shop aims to pay homage to this famous collection, in a setting most-appropriately reflecting today’s zeitgeist. This event aims to also raise brand awareness to the market of Art Basel Miami Beach attendees, especially focusing on the Latin American cluster, predicting an 80% sell-through rate on the limited edition Saint Laurent products exclusive to this pop-up. This location in South Florida provides a tremendous opportunity, as a haven for Latin American tourists who either visit at a high frequency, or have second homes there. This raise in brand awareness will then be measured post-launch in Latin media coverage. Art Basel itself, which will host this pop-up, is ironically its greatest competitor. As a vehicle to both raise brand awareness to a new market and pay homage to lover of art Yves Saint Laurent himself, this pop-up will surely leave a lasting impression on the new and old customers of Saint Laurent.
COMPANY
SUMMARY
COMPANY HISTORY Yves Mathieu-Saint-Laurent was born in the French Algerian port town of Oran in 1936. At the age of 18, Saint Laurent journeyed to Paris to begin a career as a clothing designer. Success was immediate: in November 1954 Saint Laurent was awarded his first prize, the Prix Robe (dress), in a competition held by the Secretariat. Less than a year after his arrival in Paris, Saint Laurent entered the prestigious house of Christian Dior as Dior's assistant designer and designated heir-apparent. Two years later at Dior’s death, Saint Laurent assumed direction of the Christian Dior line. Saint Laurent (also known as Saint Laurent Paris) is a luxury fashion house founded by Yves Saint Laurent and his partner, Pierre Bergé in 1961, three years after his time at Dior. Today Saint Laurent Paris markets a broad range of women’s and men’s ready-to-wear products, leather goods, shoes, and jewellery. Yves Saint Laurent Beauty also has a notable presence in the luxury beauty market, although this is run independently through L'Oreal Paris that licenses the name. During the 1960s and 1970s, the firm popularized fashion trends such as the beatnik look, safari jackets for men and women, tight pants and tall, thigh-high boots, including the creation of arguably the most famous classic tuxedo suit for women in 1966, Le Smoking suit. Some of his most memorable collections include the Pop Art, Ballet Russes, Picasso, and Mondrian ones. He also started mainstreaming the idea of wearing silhouettes from the 1920s, 1930s and 1940s. He was the first, in 1966, to popularize ready-to-wear in an attempt to democratize fashion, with Rive Gauche and a boutique of the same name. The brand continued to expand in the 1980s and early 1990s with fragrances for both men and women, having launched its cosmetic line in 1978. In 1993, the Saint Laurent fashion house was sold to the pharmaceuticals company Sanofi. In the 1998–1999 seasons, Alber Elbaz, currently of Lanvin, designed three ready-to-wear collections. Pierre Bergé appointed Hedi Slimane as collections and art director in 1997, and they relaunched YSL Rive Gauche Homme. Hedi Slimane decided to leave the house two years later. In 1999, Gucci (owned by Kering) bought the YSL brand and asked Tom Ford to design the ready-to-wear collection while Saint Laurent would design the haute couture collection. In 2002, dogged by years of poor health, drug abuse, depression, alcoholism, and criticisms of YSL designs, Saint Laurent closed the couture house of YSL. The prêt-à-porter line was produced under the direction of Stefano Pilati after Tom Ford left in 2004. His style was decidedly more French than the overtly sexy image that Tom Ford perpetuated. In 2012, Kering (previously known as PPR) announced that Hedi Slimane replaced Stefano Pilati as the creative director. Slimane had previously worked with Dior Homme until 2007. Despite the fact that Hedi Slimane had previously worked with the house, there was much controversy following his appointment, particularly after it was announced the ready-to-wear line would be rebranded as Saint Laurent. However, the Yves Saint Laurent name and iconic YSL logo have been retained for accessories such as handbags and shoes, and cosmetics (which are licensed to L'Oréal). It was also announced that the design studio would move to Los Angeles, California, Slimane's adopted home, while the couture atelier would remain in France. Hedi Slimane stated that he drew inspiration from when the ready-to-wear line was first launched as Saint Laurent Rive Gauche, with a particular connection to the music industry. Designed by Slimane, the Paris flagship boutique opened in May 2013. The previous deep red and gold color scheme was replaced by a monochrome interior, with varying materials, including marble and nickel plated bars. Under Slimane Saint Laurent plans to continue to expand its presence in the United States, opening new stores in the resort location of Bal Harbour, Florida as well as a planned store for Washington, D.C. International locations includes a strong presence in Europe, the Middle East, Africa, and Asia, with an especially strong presence in Japan (Vogue.com).
CURRENT STATUS Saint Laurent draws inspiration from youth, freedom, and modernity for its brand identity from the concept of “Rive Gauche” catered to high fashion conscious men and women in the age group of 25 to 45. Their identity is forged through innovative collections that “marry elegance, refinement, French chic and timeless style.” Saint Laurent currently offers both women’s and men’s ready-to-wear collections as well as accessories, fragrances, and cosmetics. The men’s and women’s ready-to-wear collections are showcased each season at Paris Fashion Week. Services include an international e-commerce site (YSL.com) and a highly attentive sales staff.
GROWTH PLANS Current Ownership Structure
Saint Laurent is currently owned and operated by Kering. Kering is governed by an executive committee; Francois-Henri Pinault is currently the chairman and CEO of Kering. The board of directors is Kering’s principal governing body which collectively represents all the shareholders. The board of directors has taken the view of the recommendations of the FEP-MEDEF Code of corporate governance. As of May 6, 2014, eleven directors comprise the board: four women and seven men, of various nationalities (five of them independent). The new director is Daniela Riccardi. The board has set up five specialist corporate governance committees: audit, remuneration, appointments, strategy and development, and sustainable development committees. Under Saint Laurent itself, Francesca Bellettini is the current CEO and Hedi Slimane is the current creative director. The Saint Laurent retail network comprises directly-operated boutiques, including flagships in Paris, New York and Hong Kong, select multi-brand boutiques and department stores.
Revenue
In 2013, Saint Laurent’s revenue reached €557 million in revenue, growing from 2012’s €473 million revenue. In 2013, 44% of revenue came from Leather Goods; 24% from Ready-to-Wear; 22% from shoes; and 10% from other.
Future Growth Projections
Saint Laurent is increasingly growing with 1,445 average number of employees and 115 directly-operated stores as of 2013, compared to 1,208 average number of employees and 89 directly-operated stores at the end of 2012. Future growth plans include a particular focus on new product launches across all the main categories. Customers reacted positively to the all-new lines of shoes and handbags, such as the Sac de Jour and Paris shoes. Since June 2013, 30 countries have been added to the e-commerce website ysl.com (total is 60 now), and further growth in emerging markets will continue. Social media efforts on Facebook and Twitter will continue to be pushed. The company is heavily pursuing retail expansion since the launch of its new store concept in 2012. The focus will be on emerging markets, though there will be further development in mature ones. Existing stores will be progressively refurbished with the new concept (Kering Report, 2013).
MISSION STATEMENT
“Saint Laurent Paris aims to create and market highly desirable products through innovation and unparalleled quality and design” (Kering Report, 2013).
SWOT ANALYSIS STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Strong creative vision and innovative products
Branding unclear due to logo, label, and promotional changes have created identity qualms with customers as of Slimane’s branding of 2012
Mobile smart phone app initiatives for not only e-commerce, but educational or co-creational experiences
Intense competition from Gucci from its parent brand, which makes up 55% of Kering’s entire revenue
Employ a promotional sales initiative
Rock n roll promotional ambassadors received with mixed reviews
Diversified product categories including footwear and accessories, which have developed their own brand identity Strong international brand presence with over 110 directly-operated stores worldwide Good partnership with L’Oreal Financial backing by Kering renders stability to the brand Sustainability efforts by Kering The ongoing Music Project showcases rock stars and artists in emblematic Saint Laurent pieces, garnering much media attention
Not competitive digitally No app for Saint Laurent products
Collaborations with high street to appeal to younger consumer Green initiatives and new CSR activities Expanding in emerging markets of Asia, and other countries outside of Western Europe, North America, and Japan, as growth in revenue from these other countries has increased since 2012
Product integrity damaged from counterfeiting Art Basel and satellite shows of Design Week Miami may attract attendees away from pop-up
BRAND IDENTITY MATRIX
t
SIGNATURE
CURRENT DISTRIBUTION YSL has two main distribution channels. The first channel is directly through the company to the consumer. This channel is for consumers to purchase YSL products from YSL.com or one of the YSL directly operated stores. The second distribution channel includes a retailer as an intermediary between YSL and the customer. The retailer may be a solely online entity such as Net-a‐Porter.com or a more traditional luxury store such as Saks Fifth Avenue which offers products both in store and online. In the case of the first distribution channel, YSL is solely responsible for deciding which YSL products are offered on YSL.com and in particular directly operated stores. An excellent example of this is the YSL New Vintage III collection that was available in only 3 of YSL’s 78 directly operated stores (Economist, 2014). In the second distribution channel, YSL has some control of what products they will offer to certain retailers. However, the majority of the decision lies in the hands of the buyers and merchandisers for a particular retailer. The decisions made by such buyers highly impact what YSL products are available to customers to help shape brand image.
CURRENT COMMUNICATION & PROMOTIONAL ACTIVITIES Annual spending figures
Typically large companies spend 8-10% of total revenue on marketing (Forbes.com, 2014). Saint Laurent’s 2012 annual revenue was €473,000,000 (Kering Annual Report, 2012) making their annual spending figures on marketing around €37,840,000 (8%).
Current advertising activities (traditional and digital)
Saint Laurent creates advertising material which can be found in fashion magazine such as i-D, V Magazine, W Magazine and Vogue to name a few. Advertisements can also be found on their website, on online banner advertisements and on their social media platforms (Facebook and Twitter). The advertisements usually feature celebrity endorsements. Recently (April 2013), Saint Laurent released a music project campaign that featured Courtney Love, Marilyn Manson and Daft Punk to reference the brand’s heritage and image of rock and roll. In addition to advertisements, Saint Laurent also creates seasonal catwalk shows.
Direct Marketing initiatives
Currently, Saint Laurent creates a monthly newsletter that is sent to customers email addresses which are captured in store or from their website. The newsletter features the latest Saint Laurent news, styling tips and promotions (ysl.com).
Current Sale promotion activities (sales initiatives)
Through Saint Laurent’s newsletters they offer promotion codes. Typically the promotion codes are not valid for their Ready-to-wear collection but are used for their cosmetic products.
MARKET
ANALYSIS
P.E.S.T.E.L. POLITICAL
ECONOMIC
SOCIAL
Hong Kong, the Middle East, Latin America and Ukraine rising geopolitical concerns
Very low interest rates has allowed the consumer to purchase more
Social media platforms Facebook and Twitter popular to access promotions, facilitate discussions, and provide links to company info
Top international travelers to US: Canada, Mexico, UK, Japan, Brasil, Germany, China combined make up 73% of US international visitors US making visa for Chinese tourists easier Low Florida sales (6%) and use tax & corporate income tax (5.5%) Florida has No. 2 Foreign Trade Zone (FTZ) Network in US: tariff-free value can be added to foreign goods before shipped to other countries
North American GDP growth is doing better with a moderate growth (expanded at 4.6% growth in 2nd quarter) and conditions are expected to increase the following year US Inflation rate is 1.6% which is very low (people have incentive to borrow money) However unemployment fell to 5.9%, which means inflation may increase Disposable income has increased, but savings rate has decreased Retailers in America have a substantial bias toward growing revenue and investing cash, over lowering costs and returning cash Improving conditions in US and Europe have moved attention from Asian market growth Retail sales up 4.7% from 2013 Wages domestically have not been rising, though
Consumers crave a personalized experience, either in welcome messages online or in co-creation Customers are increasingly comfortable sharing more data about themselves, their preferences, and purchases through social media Customers will listen to 90% of their colleagues’ reviews online and up to 70% of strangers’ reviews online still More than 5 million foreign language speaking workers in Florida
TECHNOLOGIC
ECOLOGICAL
LEGAL
Linking inventory across channels to show customers online what is available in-store aids in seeing which products are of most interest to consumers (ex: online wishlists)
There are no ecological factors affecting this particular popup shop
Building codes for allotting space in convention center
Mobile Point of Sale (POS) devices reduce square footage dedicated to checkout and gives associates an additional opportunity to service customers and provide product recommendations ‘Clienteling’ by collecting data of frequent shoppers facilitates personalized product recommendations Store as a showroom has increased in popularity as retailers benefit demo smaller store footprints and reduction in inventory carrying costs In showroom or online environments, retailers offerings shipping flexibility and transparency to fulfillment status are well-received Cyber security still not strong 3d printing offer a unique store experience
Strict laws against counterfeiting efforts protect the integrity of the brand
SIZE OF THE FASHION RETAIL MARKET OF THE MIAMI BEACH AREA
FACTORS AFFECTING SALES VOLUME
Very large Aventura Mall houses about 300 retailers as one of Miami’s premier fashion destinations. It is currently conducting a 241,000 sq ft expansion.
Miami’s 4th consecutive year of record tourism fueled the retail boom with 14.2 million overnight visitors in 2013, boosting consumer spending by 4.6%.
Classic luxury hub Bal Harbour hosts over 50 luxury brands including Saint Laurent and Piaget, but has tremendous space limitations and a “radius clause” that prohibits tenants from opening another store within a certain distance. It is currently in a 250,000 sq ft expansion process.
Direct vacancy rates declined to 3.8%.
On the other hand, a once worn-area known as the Design District has at least 30 disclosed luxury retailers including Maison Martin Margiela, Rick Owens, and Christian Louboutin. Another 15 have signed leases. LVMH shops are shifting from Bal Harbour to the new Design District. This district offers innovation, and much less regulation to new luxury storefronts.
LOCALIZATION STRATEGY
Price per square foot of retail space increased. Over 4 million sq ft of retail space are either currently under construction or are planned to.
This Pop-Up will Localise into the Art Basel Miami environment and showcase classic Saint Laurent aesthetics in fixtures and content, with a Miami flare in custom products that appeals to both the Miami natives and Basel tourists --- particularly those from Latin America.
KEY PLAYERS (DIRECT COMPETITION) Saint Laurent’s competition can be broken down into three categories: competition from fellow Kering brands, brands which are owned by conglomerate competitor LVMH as well as other established fashion houses.
COMPETITION IN MIAMI Competition in the luxury market in Miami, Florida is extremely high. Saint Laurent’s Miami location directly competes with many of the brand’s competitors on a retail level. Based on Saint Laurent’s target customer as well as the demographic that attends Art Basel Miami, Alexander McQueen, Gucci and Versace are Saint Laurent’s direct competitors. All of the following mentioned brands cater towards a modern, chic customer.
COMPETITIVE STRENGTH ASSESSMENT
Product quality rating is based on the average price of a ready-to-wear piece from each brand. Brand image scores were based on observations made when viewing the brands through multiple platforms, paying close attention to cohesion. Product assortment scores were given based on the variety of product categories each brand offers. Store size scores are given based on the square footage of each brands store in Miami, Florida. Alexander McQueen’s stores range from 2,000 sqft to 9,999 sqft. Gucci and Versace’s average store size ranged from 10,000 sqft to 39,000 sqft. Saint Laurent has the largest retail stores at 40,000+ sqft. Social media scores were assigned based on each brands’ upkeep of their social media platforms as well as which avenues they exist in.
INDIRECT COMPETITION
With Saint Laurent’s pop up shop opening for the duration of Art Basel, Art Basel itself is Saint Laurent’s biggest indirect competitor. People attending the event will be spending money on art pieces and memorabilia. Art Basel’s 250 galleries host the works of art created by over 4,000 artists from around the globe. In addition to buy art, Art Basel go-ers will also be spending money on dining as well as on nightlife.
TARGET
CONSUMER
TARGET DEMOGRAPHIC INFORMATION
PSYCHOGRAPHIC INFORMATION
Miami native
Confident self-image
Miami tourist, especially Latin
Purchasing motives: Fashion forward
Gender: Women
Art as a hobby
Age: 25-55
Enjoys traveling
High level of education: university
Cultural
Income $65,000+
Not a price sensitive customer Independent Enjoys designer and luxury items Loyal to the brand- buys different items across the product range
Europe: France, Germany, Italy, Monaco, Poland, Russia, Spain, Turkey, Ukraine, United Kindom North America: Florida, California, New York, Texas Hawaii, Las Vegas, Los Angeles, New York, Jersey
GEOGRAPHIC SPAN
Asia: China, Hong Kong, Indonesia, Japan, Macau, Malaysia, Singapore, South Korea, Taiwan, Thailand Africa and Middle East: Kuwait, Lebanon, Morocco, Saudi Arabia, United Arab Emirates, Azerbaijan
ADDITIONAL DEMOGRAPHICS
According to Modern Luxury- “The Luxury Consumer,” the average luxury household income in Miami is $372,800. Seventy percent of them hold college degrees and 26% have post-grad degrees. Direct Economic Impact of overnight visitors to Miami is estimated by a monthly profile study or visitor-reported spending. $18.8 billion in direct expenditures was generated in 2010 in Miami, and if the industry accepted a multiplier of 1.5, the economy of Greater Miami expenditures would exceed $28.2 billion through the direct and indirect impact. In 2010, the visitor industry showed improvement with a 5.6% increase in overnight visitors in to Miami. An estimated 12.6 million visitors stayed at least one night in Miami. The most popular visitors to Miami ages ranged from 35-54. Tourist-wise, the weather and cultural attractions like Art Basel attract visitors to Miami. According to the source Synovate, a graph states that domestic visitors ‘definitely’ or would ‘very likely return.’ Specifically, the return rate is set at 96.1% -- a consistent range of return percentage from 2006-2010. International visitors in 2010 stated most were ‘likely to return,’ at a 97.5% return rate. Canada, Brazil, Argentina, Columbia, Germany, and Venezuela are the countries with the most popular international visitors to Miami. The overall total amount of foreign visitors increased from 6.6% from 2009 - 2010. International travelerS on average spent $121.1 billion in Miami in 2009. Miami is the second most popular city to visit by international visitors (Greater Miami Conventions and Visitor’s Bureau Annual Report, 2010).
LIFESTYLE/ PSYCHOGRAPHICS This segment of target Saint Laurent consumers can be broken down into three categories. Luxury as functional: This segment is composed of consumers who buy luxury products for their superior functionality and quality. They usually involve themselves in a longer decision making process in order to make rational and logical decisions, rather than emotional or impulsive ones. Luxury as reward: This segment purchases luxury goods in order to showcase their achievements. They are motivated by their desire to be successful and demonstrate this to others. They usually purchase ‘smart’ luxury that demonstrates importance while not leaving them open to criticism. Luxury as indulgence: This group’s purpose for luxury goods is to self-indulge. They are willing to pay a premium for goods that express their individuality. They enjoy luxury for the way it makes them feel, and therefore have a more emotional approach to purchases. Luxury consumer’s leisurely activities include sports such as tennis and golf, going shopping and fine dining. They also enjoy cooking at home, wine tastings and going to concerts. They are likely to play tennis and golf and indulge in spa treatments. Traveling and enjoying the arts through various activities are important to this segment, as well. These consumers recognize the ethical values of the brands they frequent. Quality and exclusivity are also very important to these customers, who appreciate uniqueness. Because of this, they have a loyalty to their favorite brands (Milken Institute, 2010).
Latin Americans come a couple times a year with suitcases to avoid heavy taxes in their home countries. Shopping is usually an all-day affair.
BEHAVIORAL INFORMATION
Miami is all about Luxury shopping and designer brands. The Miami Luxury is tech-savvy and uses social media platforms such as: Instagram, Twitter, Facebook, Pinterest, and designer apps. Instagram in particular is popular in sharing and posting Miami fashion.
3
STORE LOCATION,
DESIGN & PRODUCT
JUSTIFICATION FOR LOCATION SELECTION
PRIZM SEGMENTATION Art Basel Attendees/ Pop-Up Customers 01 - Upper Crust: The nation’s most exclusive address, Upper Crust is the wealthiest lifestyle in America haven for empty-nesting couples over 55 years old. No segment has a higher concentration of residents earning over $200,000 a year or possessing a postgraduate degree. 04 - Young Digerati: Young Digerati are the nation’s tech-savvy singles and couples living in fashionable neighborhoods on the urban fringe. Affluent, highly educated and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars-from juice to coffee to microbrew. 07 - Money & Brains: The residents of Money & Brains seem to have it all: high incomes, advanced degrees and sophisticated tastes to match their credentials. Many of these citydwellers, predominantly white with a high concentration of Asian Americans, are married couples with few children who live in fashionable homes on small, manicured lots. 16 - Bohemian Mix: A collection of young, mobile urbanites, Bohemian Mix represents the nation’s most liberal lifestyles. Its residents are a progressive mix of young singles and couples, students and professionals, Hispanics, Asians, African-Americans and whites. In their funky rowhouses and apartments, Bohemian Mixers are the early adopters who are quick to check out the latest movie, nightclub, laptop and microbrew. 26 - The Cosmopolitans: Educated, midscale and multi-ethnic, The Cosmopolitans are urbane couples in America’s fast-growing cities. Concentrated in a handful of metros-such as Las Vegas, Miami and Albuquerque-these households feature older home-owners, empty-nesters and college graduates. A vibrant social scene surrounds their older homes and apartments, and residents love the nightlife and enjoy leisure-intensive lifestyles (Claritas, 2014).
ESTIMATING COMPETITION From December 1 - 7, 2014, a week long arts festivity called Miami Art Week takes places. Approximately twenty art fairs participate, positioned in the area between Miami’s Wynwood Art District, Downtown Miami and Miami Beach. Miami Beach Art Fairs outside of Art Basel include: Aqua Art Miami, Design Miami, Ink Miami, NADA Art Fair, PULSE Miami, SELECT Fair, Scope Miami, and Untitled. Additional Miami Art Fairs include: Art Miami, ArtSpot, Concept-Fair, CONTEXT, Fridge Art Fair, Miami Photo Salon, Miami Project, Miami River Art Fair, Pinta, PRIZM, Red Dot Art Fair, Sculpt Miami, Spectrum
SALES POTENTIAL In 2013, a total of 75,000 visitors visited Basel over five days, with more projected in 2014. Basel currently has nearly 500,000 sq feet of exhibition space. The space offers more than $3 billion of art (Claritas, 2014).
AREA ATTRACTIONS: EVOLUTION OF MIAMI’S DESIGN DISTRICT Craig Robins, the developer responsible for bringing to life a good portion of the rehabilitation of South Beach, was also responsible for the overhaul of the Design District in Miami. Starting with his real estate development company, Dacra, in the late ‘80s, Robins renovated Art Deco hotels on Ocean Drive and helped transform Lincoln Road in South Beach. Along with Sam Keller, he convinced Art Basel to come to Miami, and in 2005 he founded Design Miami with Ambra Medda. Both events helped put Miami on the map as an art and design center, and the latter has been the catalyst in the overhaul of the Design District. The Design District is the area north of Miami’s downtown core, near Northeast 40th Street and Northeast Second Avenue, earning its design moniker many years ago in the 1920s, when Theodore Moore built the first furniture showroom, Moore & Sons, there. Fast-forward to the early 1990’s when Robins realized the vacancy rate topped 50% and buildings sold for $20 to $30 per square foot there — today, land there sells for more than $1,000 per square foot. In 2011, Louis Vuitton announced their conglomerate shops would abandon their Bal Harbour Shops in favour of a building in the Design District. Louis Vuitton says it is part of their “pioneering spirit” to make such a move. Robins envisioned a neighborhood advocating creativity in all lifestyle aspects, and this move has propelled that push forward. Robins then brought arts and culture events like Art Basel to ripen the area as a new hot spot. After working to bring Design Miami to the Design District, Robins came into contact with Michael Burke, at the time CEO of Fendi. Burke then brought Fendi Casa to the area, thus bringing the rest of LVMH there. Luxury real estate from L Real Estate soon followed as the fast-burgeoning market from the post-recession influx of Brasilian, Venezuelan, Mexican and Russian money. The Design District offered luxury retailers a way to stand out in Miami’s fashion market, away from established retail markets such as Aventura and Bal Harbour. Now, luxury retailers outside of LVMH including Hermes, Ermenegildo Zegna, and Maison Martin Margiela have become drawn to the area and opened new retail spaces there since it offers both dining and retail: the total luxury experience. Another advantage of the Design District is that retailers are free to design whichever space they choose. Robins has given retailers the freedom to build elaborate and unique storefronts to imprint their brand identities. The district draws the artisan vibe of Saint Germain in Paris and luxury retail district of Midtown Manhattan, bringing together the influx of Latin American and European markets (MiamiDesignDistrict.net, 2014).
AREA FACTORS Pedestrian traffic
In 2013, 75,000 visitors came through Art Basel, and that number is expected to increase by at least another 5,000 visitors.
Public Transportation
Free shuttle buses from the Miami Beach Convention Center (hosting Art Basel) transfer to major cultural institutions in Miami. Metro rail or MetroMover can be taken to the Adrienne Arscht Center/Omni Terminal Station, and then a bus to Wynwood can be taken. City of Miami Trolley will have a special route going to the Art Basel Miami Week Loop, operating from 11am to 10pm. Bus routes including the C, S, M and 120 to MacArthur Causeway, Miami Beach. Tri Rail from Broward or Palm Beach goes to Miami Beach.
Parking at Basel
Parking passes are valid for the parking garage on the corner of 17th Street and Convention Center Drive, ordered at a price of $150. Metered street parking in Miami Beach is taken on a first-come basis.
Dates and rates of Basel
There are two types of showings at Art Basel. The first is the Private view: Wednesday, December 3, 2014, 11am to 8pm (by invitation only). Afterwards, the Public days run from December 4 - 7, 2014. A Day ticket rate is $45 and a Permanent ticket is $100 (Artbasel.com, 2014).
REQUIRED HUMAN RESOURCES Four (4) bi-lingual (Spanish and English) full-time sales staff members from Saint Laurent stores must be present at all times during selling time. Four (4) additional construction crew from Tom Fruin (artist commissioned to build external structure; crew fee accounted in commission price). One (1) security guard.
DESIGN OF PHYSICAL SPACE
Promotion Rational DETAILS OF PHYSICAL SPACE This retail space itself becomes an art piece that also symbolizes the brand of Saint Laurent through the accents incorporated in the design. The structure was a commissioned to artist Tom Fruin and is comprised of glass and iron in a de stijl design similar to Mondrian’s work, Composition with Large Red Plane, Yellow, Black, Gray, and Blue. Similar to stained glass, each square is colored and slightly opaque, creating an open feeling. Nickel and marble, as well as the logo are featured throughout the space, reflecting the designs of Saint Laurent stores. The ambiance is created as homage to Saint Laurent through the large framed portrait, bouquets of roses on tall votives, and luxurious Persian rugs. A white marble table sits below the portrait of Saint Laurent holding candles, also adding to the ambiance. The visual merchandising features a large marble cube in the center of the shop representing both Saint Laurent and Mondrian, and presents the merchandise in a way that allows the customers to handle the products. Our merchandise assortment will include a limited edition Saint Laurent beach tote bag made of canvas and leather, a leather business card holder, a key chain, and a silk scarf, all incorporating a Mondrian-inspired print. Other fixtures include the 10 hanging light fixtures, as well as the nickel plated frames holding four screens along the walls of the shop, running footage of Saint Laurent and his iconic works. These screens provide an educational experience of the brand to unfamiliar customers. Two transaction stations on either side of the shop hold four iPads, which will be used to complete customer transactions. These stations are also used to hold merchandise behind the counters. We will also have one security guard at the pop-up-shop during operating hours.
OUTSIDE OF POP-UP
INSIDE OF POP-UP
STYLE
TOTE BAG
COLOR SIZE
RETAIL SIZE PRICE
Mondrian print
Mondrian N/A print
N/A $1,500
$1,500 100
100
Mondrian N/A print
N/A $245
$245 300
300
Mondrian N/A print
N/A $195
$195 1,000
1,000
Mondrian N/A print
N/A $325
$325 1,000
1,000
CARD HOLDER CARD HOLDER
Mondrian print
KEYCHAIN
Mondrian print
SCARF
# OF UNITS
TOTE BAG
Mondrian print
KEYCHAIN
RETAIL # OF UNITS PRICE
STYLE COLOR
SCARF
COMMUNICATION &
PROMOTIONAL PLAN
SCHEDULE OF PROMOTIONAL ACTIVITIES PRE-‐LAUNCH
MEDIA
Invitations sent to magazine Inventations editors, and high profile customers
Key Chain giveaway to bloggers In-‐store flyers Reusable bag giveaway Mentions & features in prominent Latin lifestyle magazines Saint Laurent Social Media
18-‐Nov
25-‐Nov
DURING 2-‐Dec
3-‐Dec
4-‐Dec
5-‐Dec
POST LAUNCH 6-‐Dec
7-‐Dec
14-‐Dec
21-‐Dec
Promotion Rational RATIONALE FOR PROMOTIONAL ACTIVITIES
The pre-launch promotion for the pop-up shop begins two weeks prior to the launch of the event. Inventions for the pop-up will be sent out to the editors of prominent Latin lifestyle and fashion magazines, high net worth individuals who attend Art Basel, and VIP customers of Saint Laurent. A select number of key chains will be sent to online bloggers in order to gain hype for the limited edition merchandise. Flyers promoting the event will also be place in Saint Laurent’s Miami retail location. On the first public day of Art Basel, attendees have the opportunity to receive one of five hundred reusable shopping bags with a unique design relating to the pop-up shop. The reusable bags allow for patrons of Art Basel to carry the numerous amount of literature received from the many art galleries. The reusable bags also act as constant promotion for the pop-up shop as people carry them around the event. Post-launch promotion for the pop-up shop takes place within the Latin lifestyle and fashion magazines, such as Vogue Mexico, Harper’s Bazaar Mexico and Vanity Fair Spain. In addition to the activities mentioned above, Saint Laurent will be posting promotional material about the pop-up shop through social media platforms such as Instagram, Facebook and Twitter. Due to the short time frame of the event and the limited product assortment, the return on investment for the Saint Laurent pop-up shop is extremely high. Marketing and promotion initiatives total $4,569 out of goaled revenue of $587,000.
FINANCIAL
PLAN
INTERIOR FIXTURES
UNIT COST
Screen Fixtures Ceiling Lights Custom Merch. Cube Custom Transaction tables
$300.00 INTERIOR FIXTURES $20.00 Screen F ixtures $1,000.00 Ceiling L ights $2,000.00 Custom Merch. Cube $3,000.00 Custom Transaction tables
Marble Altar
EXTERIOR FIXTURES Structure
EXPENSES
TOTAL
Marble Altar $100,000.00
EXTERIOR FIXTURES
UNIT COST
Structure
UNITS
UNITS
COSTS
4 10 1 2
$1,200.00 UNIT COST $200.00 $1,000.00$300.00 $4,000.00 $20.00 $1,000.00 $3,000.00 $2,000.00
1
$3,000.00 $100,000.00
1
TOTAL
$ 109,400.00 $100,000.00
x EXPENSES 2400 $92,949.00 UNIT COST $65.00 1 $65.00 x Cost of Goods Sold Employee Wages $30/hr 4 $6,360.00 Inventory Storage $65.00 Art Basel Fee $43,000.00 1 $43,000.00 Employee Wages $30/hr Large Bags $3.62 110 $398.20 Art Basel Fee $43,000.00 Medium Bags $2.56 2000 $5,120.00 Tissue $0.05 Large Bags 8880 $444.00$3.62 Medium B ags Business Card Box $2.00 310 $620.00$2.56 Tissue $0.05 Keychain Box $1.80 1030 $1,854.00 Business C ard B ox $2.00 Scarf Box $4.00 1030 $4,120.00 Keychain B ox Tote Dust Bag $0.60 110 $66.00 $1.80 Scarf Dust Bag $0.45 Scarf Box 1030 $463.50$4.00 Small dust bag $0.35Tote Dust Bag 1340 $469.00$0.60 Scarf D ust B ag $0.45 Boxed Water $1.25 1500 $1,875.00 Small dust bag $0.35 iPads $500.00 4 $2,000.00 Boxed W ater Flower Votives $100.00 2 $200.00$1.25 iPads $500.00 Framed Large Print $500.00 1 $500.00 External iPad Chargers $20.00Flower Votives 4 $80.00$100.00 Framed Large Print 1 $500.00 Sound System $1,000.00 $1,000.00 External i Pad C hargers Candles $2.00 250 $500.00$20.00 Sound System $1,000.00 Flowers 500/day 2/bouquets day $2,500.00 Candles Wire to hang picture $30.00 1 $30.00 $2.00 Flowers iPad Stands $10.00 2 $20.00500/day Wire to hang picture 2 Custom Water box $100.00 $200.00$30.00 Small persian rugs $50.00 iPad Stands 4 $200.00$10.00 Custom W ater b ox $100.00 Content Screens $500.00 4 $2,000.00 Small persian rugs Security Guard Wage $20/hr 1 $1,060$50.00 Content Screens $500.00 ADVERTISING/MARKETING EXPENSES UNIT Security COST Guard WageUNITS COST$20/hr Invitations $4.00 500 ADVERTISING/MARKETING EXPENSES $2,000.00 UNIT COST Giveaway Keychains $24.38 50 $1,219.00 Invitations Giveaway Reusable Bags $0.70 Invitations 500 $350.00$4.00 Giveaway Keychains 1000 $24.38 In-‐store Flyers $1.00 $1,000.00 Giveaway Reusable Bags $0.70 TOTAL $172,662.70 In-‐store Flyers $1.00
$282,062.70 TOTAL TOTAL EXPENSES
4 10 1 2
$172,662.70
$282,062.70
Footfall
COSTS Conversion Rate
$1,200.00 Average Basket $200.00 Revenues (80% of total merchendise) $1,000.00 $4,000.00TOTAL
1
PRODUCTS $3,000.00 Beach Tote
1
Business Card Holder $100,000.00 Keychain
$ 109,400.00
COST
Cost of Goods Sold Inventory Storage
TOTAL EXPENSES
UNITS
Scarf
UNITS
COST
EARNINGS (BEFORE TAX)
2400 1
$92,949.00 $65.00
SELL THROUGH %
4 1
$6,360.00 $43,000.00
80% (Goaled)
110 2000 8880 310 1030 1030 110 1030 1340 1500 4 2 1 4 1 250 2/bouquets day 1 2 2 4 4 1
$398.20 $5,120.00 $444.00 $620.00 $1,854.00 $4,120.00 $66.00 $463.50 $469.00 $1,875.00 $2,000.00 $200.00 $500.00 $80.00 $1,000.00 $500.00 $2,500.00 $30.00 $20.00 $200.00 $200.00 $2,000.00 $1,060
UNITS
COST
500 50 500 1000
$2,000.00 $1,219.00 $350.00 $1,000.00
100%
Footfall Conversion Rate Average Basket Revenues (80% of total merchendise)
3-‐Dec
4-‐Dec
5-‐Dec
6-‐Dec
7-‐Dec
5000 40% $919.00 $234,800.00
75,000 5% $823.00 $29,350.00
75,000 5% $823.00 $29,350.00
75,000 5% $823.00 $29,350.00
75,000 5% $823.00 $29,350.00
TOTAL PRODUCTS
$587,000.00 UNITS
%
PRICE
3-‐Dec
4-‐Dec
5-‐Dec
6-‐Dec
Beach Tote
100
4%
$1,500.00
20
20
20
20
20
Business Card Holder Keychain
300 950
13% 40%
$245.00 $195.00
60 190
60 190
60 190
60 190
60 190
Scarf
1000
43%
$325.00
200
200
200
200
200
EARNINGS (BEFORE TAX)
2350
100%
$733,750.00
SELL THROUGH %
REVENUE
EXPENSES
NET PROFIT
$587,000.00 $282,062.70
$304,937.30
100%
80% (Goaled)
$733,750.00
$282,062.70
$451,687.30
RATIONALE The first step in creating the financial plan for the Saint Laurent pop-up shop was finding the cost of fixtures needed. Type of fixtures included interior and exterior fixtures such as lights, transaction tables, and the structure itself. Then, we found the cost of the expenses of the store and marketing initiatives: wages for employees, Art Basel fee, invitations, give away bags etc. In addition to the expenses, we estimated the cost of production for the limited edition merchandise based on an 800% mark up (Business of Fashion, 2014). We then estimated the average foot traffic, conversion rate and the average basket of our potential customers at Art Basel. We figured that foot traffic at the event would be 5,000 people on the first day, which is only open for VIP people and 75,000 people for the rest of the event, the expected attendance rate for the event as a whole. Since the pop-up shop is located directly outside of the event, we have potential to reach customers who did not purchase Art Basel tickets, but show up for the festivities. The conversion rate of customers was based on our objective of selling though 80% of the total merchandise produced. We estimated that 40%, or half of the 80%, of merchandise would be sold on the VIP day of the event leveraging on a higher average basket than the remainder of the days. 5% of the remaining 40% of merchandise left will be sold each day of the event. Average basket figures were determined through a list of possible transaction outcomes with the average price paid from those possible transactions. The average basket is higher on the first day due to more affluent and high profile people attending.
7-‐Dec
BIBLIOGRAPHY Art Basel Miami Beach.Web. Oct. 2014. <https://www.artbasel.com/miami-beach >. “Bac K Matter.” The Journal of Symbolic Logic 65.1 (2000): Web. <http://www.icsc.org/uploads/event_documents/2013_ICSC_Report_Interactive.pdf>. In. CFO Signals. Web. <http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/CFO_Center_FT/us_cfo_signals_3Q14_highlevel_report_092514.pdf>. Deloitte, February. February 2012Contents- US Fourth Annual E-Commerce : Web. <http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/ Documents/us_consulting_FourthAnnual_eCommerceAssessment_03292012.pdf>. “Greater Miami And The Beaches 2010 Industry Review.” 2010. Web. Oct.-Nov. 2014. <GREATER MIAMI VISITOR INDUSTRY.docx>. June 2013 Miami Dda – Population & Demographic Profile; Source September 2013 Metro Monitor - Brookings;, and 2012 Ubs Study, Ranked By Spending Power; Hoovers, June 2013; 2012 Greater Miami Convention & Visitors Bur. “Miami Dda – Population & Demographic Profile.” (n.d.): n. pag. Metro Monitor, June 2013. Web. Oct.-Nov. 2014. <http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&menuOption=ziplookup&pageName=ZIP%2BCode%2BLookup>. Magallanes, Tom. “Travel and Tourism Direct Contribution to GDP.” 2011. Web. Oct.-Nov. 2014. <TRAVEL AND TOURISM USA.pdf>. “Market Pulse | All Eyes on America - The Business of Fashion.” The Business of Fashion. Web. Nov. 2014. <http://www.businessoffashion.com/2014/09/market-pulse-eyes-america.html>. “Miami Design District’s Transformation into a Luxury Shopping Destination Is Underway.” Miamiherald. Web. Oct. 2014. <http://www.miamiherald.com/ news/business/biz-monday/article1955427.html>. PRIZM Market Segmentation Research, Tools, Market Segment Research. Web. Oct. 2014. <http://www.claritas.com/MyBestSegments/Default. jsp?ID=20&menuOption=ziplookup&pageName=ZIP%2BCode%2BLookup>. “Reference for Business.” Groupe Yves Saint Laurent. Web. Nov. 2014. <http://www.referenceforbusiness.com/history2/0/Groupe-Yves-Saint-Laurent.html>. “References.” RA KERING 2013 GB. Web. Oct. 2014. <http://www.kering.com/sites/default/files/RA2013_EN/index.htm>. “Retail Sales, Producer Prices, Wages and Exchange Rates.” The Economist. The Economist Newspaper, 07 Oct. 2014. Web. Oct. 2014. <http://www.economist. com/news/markets-and-data/21623746-retail-sales-producer-prices-wages-and-exchange-rates>. “SHOP.” List of Stores at the Miami Design District. Web. Oct. 2014. <http://www.miamidesigndistrict.net/shop/>. “Store Directory.” Store Directory. Web. Nov. 2014. <http://balharbourshops.com/shops/store-directory>. “United States Disposable Personal Income 1959-2014 | Data | Chart.” United States Disposable Personal Income. Web. Oct. 2014. <http://www.tradingeconomics.com/united-states/disposable-personal-income>. “United States GDP Growth Rate 1947-2014 | Data | Chart | Calendar.” United States GDP Growth Rate. Web. Oct. 2014. <http://www.tradingeconomics.com/ united-states/gdp-growth>. “U.S., with Help from Chinese Tourists, Boosts Global Luxury spending.” Fortune US with Help from Chinese Tourists Boosts Global Luxuryspending Comments.Web. Oct. 2014. <http://fortune.com/2014/10/14/luxury-spending-bain/>. Whitelocks, Sadie. “YSL Set for a Name Change: New Creative Head Hedi Slimane Drops Yves Name for Ready-to-wear Collection.” Mail Online. Associated Newspapers, 22 June 2012. Web. Oct. 2014. <http://www.dailymail.co.uk/femail/article-2163116/Yves-Saint-Laurent-set-change-New-YSL-creative-head-Hedi-Slimane-drops-Yves.html#ixzz2nwo2919C>. “YSL Official Website | Saint Laurent | YSL.com.” YSL Official Website | Saint Laurent | YSL.com. Web. Nov. 2014. <http://www.ysl.com/us>. “Yves Saint Laurent - Vogue.” Yves Saint Laurent Vogue.Web. Oct. 2014. <http://www.vogue.com/tag/designer/yves-saint-laurent>.
APPENDIX
x
Pop-Up Shop