Bergdorf Goodman - 6 Month Buying Plan

BG BERGDORF GOODMAN 6 MONTH BUYING PLAN

table of contents

CHAPTER ONE Brand Identity ..................................... 6 Mission & Vision .............................. 7 Brand History ..................................... 8

CHAPTER TWO SWOT Analysis .................................. 12 Scope & Size ......................................... 14 Target Customer ............................... 16

CHAPTER THREE Product Category ......................... 25 Competitors ........................................ 26 Trend Forecasting ........................... 32

CHAPTER FOUR Corporate Plan ................................... 40 Assortment Plan ............................... 42 Final Statement ................................. 44

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CHAPTER ONE

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chapter one

BRAND IDENTITY THERE IS ONLY ONE BERGDORF GOODMAN Bergdorf Goodman represents the pinnacle of style, service, and modern luxury. It is the leading fashion authority and a singular destination for the most discerning customers from around the world.

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MISSION & VISION Our mission is to be the leading specialty retailer of fine merchandise to discerning, fashion-conscious consumers from around the world. We will strive to exceed customer expectations for service, quality and value as we build upon our longstanding tradition of excellence.

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chapter one

BRAND HISTORY

In 1899, Herman Bergdorf opened a tailor shop in downtown Manhattan.

In 1901 Edwin Goodman purchases an interest in the business. It was then renamed Bergdorf Goodman.

In 1928, Bergdorf Goodman opened its doors at its current location on the west side of 5th Avenue in New York.

Over the course of the 1930's, Edwin Goodman acquired mortgages of surrounding businesses and eventually owned the entire block.

In 1951, Goodman’s son, Andrew, takes over as president of Bergdorf Goodman.

In 1972, Andrew sold the company to Broadway-Hale Stores.

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In 1987, Bergdorf Goodman, Neiman Marcus and Contempo Casuals break off and become the Neiman Marcus Group.

In 1990, Bergdorf Goodman’s Men’s Store opened on the East side of 5th Avenue.

In the late 1990's, they opened their “5F Contemporary” department.

In the early 2000's, Bergdorf Goodman began its E-commerce platform and underwent a major main floor renovation.

In 2015, they opened their e-commerce channel to international clients.

CHAPTER TWO

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chapter two // swot analysis

WEAKNESSES Only Two Brick-and-Mortar Stores

STRENGTHS Legacy of Leadership and Luxury

Attraction to Younger Customers No Shopping App

Customer Service

OPPORTUNITIES

Product Selection

Expand Contemporary Section in Men’s Store

InCircle Program

Create Bergdorf Goodman App

Visual Merchandising

Appeal to Millennial Consumers

Store Design Manhattan Locations Portfolio of Leading Designers

THREATS

Separate Men’s Store

Leading E-commerce Retailer Precarious State of Department Stores Expansion of Other Stores into New York City Weakness of Global Luxury Market

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chapter two

SCOPE & SIZE Bergdorf operates from two stores located across the street from each other on Fifth Avenue between 57th and 58th streets. Bergdorf Goodman's main store, which opened at its current location in 1928, is located on the west side of Fifth Avenue. A separate men's store, established in 1990, is located on the east side of Fifth Avenue, directly across the street. E-Commerce makes up 20% of Bergorf Goodmans business. Bergdorf earns an estimated $600 million annually in sales, with a 3-5% growth in size.

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chapter two // target customer

NAME: Deborah Veronica Warren AGE: 68 MARTIAL STATUS: Married EDUCATION: Barnard College, B.A. English OCCUPATION: Magazine Editor-in-Chief INCOME: $200,000 + Family Hedge Fund LOCATION: Old Westbury, New York LIFESTYLE: Enjoys visits from her 9 grandchildren, loves being made up, never leaves the house without her lipstick, enjoys jewelry shopping, doesn’t travel without her Cocker Spaniel companion Hazel, looks forward to her dinner reservations with her husband of 47 years, Carl PERSONALITY: Can be intimidating, demands respect, sweetheart (with her family and friends)

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NAME: George Willington III AGE: 57 MARTIAL STATUS: Divorced EDUCATION: Political Science Undergraduate, Masters in Real Estate, Real Estate License OCCUPATION: Commercial Real Estate Executive INCOME: $550,276/yr LOCATION: Port Washington, New York LIFESTYLE: His work now, play later mentality afforded him the lavish lifestyle he lives, loves spending his vacations in tropical waters, prides himself as a very well dressed man, golfing on the weekends with his buddies is routine, never leaves the house without his pair of Maison Margiela sunglasses on PERSONALITY: Serious businessman, knows how to have a good time, straight to the point

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chapter two

NAME: Meiying Brown AGE: 34 MARTIAL STATUS: Married EDUCATION: Peking University, B.F.A. in Art History OCCUPATION: Family Business, Metropolitan Polo Club in Northeast China INCOME: Family Inheritance, Husband is well off LOCATION: Tianjin, China LIFESTYLE: Family owns the Metropolitan Polo Club In northeast China, looks forward to attending social events especially alongside her husband, enjoys riding horses, she likes to learn new things about the places she travels to, regularly takes shopping trips to New York, vacations in Thailand with her husband in the summer, she would never be seen with chipped nail polish PERSONALITY: A social butterfly, loves conversing with new people

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NAME: Jake Archer AGE: 27 MARTIAL STATUS: Single EDUCATION: B.S. and M.B.A. in Finance from Boston College, C.P.A. degree OCCUPATION: Stockbroker INCOME: $120,000/yr LOCATION: Greenwich Village LIFESTYLE: Travels on the weekends with his friends to the Hamptons or Las Vegas, attends sailboat racing events in summer, enjoys getting drinks with his co-workers at their favorite bar ‘Employees Only’, often treats himself to a good suit, he gets a haircut at least once every other week, never leaves the house without his hair in place PERSONALITY: The life of the party, spontaneous, self absorbed, hard worker

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chapter two

NAME: Lily Speckman AGE: 28 MARTIAL STATUS: In a Relationship EDUCATION: Harvard Law School OCCUPATION: Lawyer INCOME: $176,291/yr LOCATION: Upper East Side, New York LIFESTYLE: Enjoys her afternoon classes at soul cycle 3 times a week, she loves keeping up with what’s going on at her alma mater, on her days off she like to grab lunch with her boyfriend of 3 years at their favorite restaurant “Scarpetta” in West Village, she loves to plan getaways with her friends, she would never leave the house in sweats PERSONALITY: Career driven, great sense of humor, go-getter attitude

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CHAPTER THREE

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chapter three

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PRODUCT CATEGORY Womens Designer Handbags are a big source of revenue for Bergdorf Goodman.Women who shop at Bergdorf Goodman, have different handbags for each occassion. Handbags are not limited to one kind of woman. The various styles allow this product category to be a big purchasing power for customers. A quality purse is on the list of many customers making the selection of handbags important and a great opportunity for Bergdorf Goodman.

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chapter three // competitors

Saks Fifth Avenue operates 41 stores. Saks offers customers exceptional E-commerce customer service and a wide network of stores with 8 international stores. They have their own hashtag on social media, #saksstyle that allows customers to showcase their style. This competitor also has a more developed private label.

Neiman Marcus operates 42 stores worldwide. They plan to open a new flagship store in Hudson Yard, New York.

This competitor offers a wider network of stores.

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Barneys New York operates 27 stores worldwide. Along with their cutting edge fashion, Barneys continuing support of emerging designers, exclusive collaborations and own private label keeps them popular and makes them a competitor for Bergdorf Goodman.

Bloomingdales operates 37 stores worldwide. Their advantage over Bergdorf Goodman is the wide selection of contemporary collections they provide customers with.

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chapter three

Nordstrom is the largest in scale with 326 stores and 121 full-line stores, exceptional customer service, forefront of E-commerce and omni-channel retail. This competitor benefits a lot from synergies across their channels.

FarFetch was founded in 2008 . This competitor is a global community of over 400 visionary fashion boutiques offering an inspirational shoppping experience to fashion forward consumers. Offering customers a selection of unique pieces from up-and-coming designers.

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Net-a-Porter was founded in June 2000.

They have a following of over 6 million via a global multi-channel ecosystem.

Net-a-Porter offers excellent customer service with express worldwide shipping to more than 170 countries.

ShopBop was founded in 2000 and has grown into one of the worlds leading fashion authorities. They were acquired

by Amazon.com , the world's largest internet retailer in 2006. This competitor offers customers the access to cutting edge contemporary designers. The advantage this online retailer has over Bergdorf Goodman is their Amazon Prime shipping.

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chapter three // trend forecasting

BOWLING BAG

The bowling bag is a style that has been returning season after season. The tool case shape and aesthetic has grown in popularity. There are a few key colors that are most popular. These colors include shades of neutrals , black and color blocking. Color blocking is becoming more and more popular within this style of handbag. We feel this bag will keep sales steady since it is sought after season after season.

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SHOULDER STRAPS

The shoulder strap for a handbag is becoming customizable, detachable, and interchangeable. The straps are embellished with jewels, embroidery, patches, etc. We believe this will encourage customers to purchase more since they now have the option to add to customize their handbag shoulder straps.

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chapter three

SOFT FOLD OVER CLUTCH

The soft fold over clutch is a style of handbag that never goes out of style. In this market, it is becoming more and more popular. With its minimalistic undertones and emphasis on material and trim, these handbags make for a beautiful accessory.

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BUCKET BAG

The bucket bag is another style of handbag that returns season after season.

The drawstring compliments the soft construction and silhouette that this bag is known for. The soft sleek material is very popular, but the bucket bag is also coming with embellishments and embroidery. Customers can buy this trend in both the traditional over the shoulder style or as a backpack, both are equally popular.

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chapter three

POCKET BAG BELT

The pocket bag belt is an up and coming trend. The handbag accessory is a fusion between a fanny pack and a tool belt but more stylish and fashionable.

Brands such as Chanel, Kenzo and Fendi are making this style very popular.

We believe this trend will be hot but will come and go quickly.

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"DOUBLE BAG"

The "double bag" trend is employing micro bag attachments or simply wearing two bags at once. What makes this trend so unique is the size and silhouette differences and the colors that are paired together. Like the shoulder straps, we believe this trend will encourage more purchases.

CHAPTER FOUR

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chapter four // corporate buying plan

CORPORATE BUYING PLAN Buying Season: FALL 2016 Focus Product Category: WOMEN'S DESIGNER HANDBAGS Plan Net Sales Fall 2016 Est. Net Sales Fall 2015

49,500.0 45,000.0 10%

Plan % Last Year Average Stock Retail

25,917.0 1.91 9,900.0 20% 60%

Inventory Turnover Planned Reductions, $ Reductions % Sales Plan IMU %

August

September

October

November

December

January

Fall 2016

5,840.0

8,415.0

7,425.0

9,900.0

11,880.0

5,940.0

49,500.0

12%

17%

15%

20%

24%

12%

100%

Plan BOM Stock

25,542.0

28,611.0

27,472.5

28,710.0

29,700.0

21,384.0

25,917.1

Stock/Sale Ratio

4.3

3.4

3.7

2.9

2.5

3.6

Plan EOM Stock

28,611.0

27,472.5

28,710.0

29,700.0

21,384.0

20,000.0

Plan Reductions

990.0

1,485.0

1,485.0

1,980.0

2,475.0

1,485.0

9,900.0

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15%

15%

20%

25%

15%

100%

Purchases, Retail

9,999.0

8,761.5

10,147.5

12,870.0

6,039.0

6,041.0

53,858.0

Purchases, Cost

4,399.6

3,855.1

4,464.9

5,662.8

2,657.2

2,658.0

23,697.0

Net Sales % Fall

% Fall

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chapter four // assortment plan

ASSORTMENT PLAN Buying Season: FALL 2016 Focus Product Category: WOMEN'S DESIGNER HANDBAGS

Planned Purchases at Retail

53,858.0 % Total

$ Purchases

Bowling Bag Embellished Shoulder Bag

20%

10,771.6

20%

10,771.6

Fold Over Clutch Bucket Bag

15%

8,078.7

25%

13,464.5

Pocket Bag Belt Micro-Bag

10%

5,385.8

10%

5,385.8

100%

53,858.0

% Total

$ Purchases

Celine Alexander McQueen

25%

13,464.5

10%

5,385.8

Yves Saint Laurent Valentino

20%

10,771.6

25%

13,464.5

Fendi

20%

10,771.6

100%

53,858.8

STYLE

DESIGNER

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chapter four // final statement

FINAL STATEMENT This buying plan for Bergdorf Goodman may present an element of risk.

This is due to several factors: The current state of the global economy, the plateau being experienced in this sector of the accessories market and general over-supply of handbags each season. The international retail economy is relatively weak due to the strength of the U.S. dollar compared to other currencies. For example, as of May 2016, one HKD is worth 0.13 USD. This conversion rate is a disincentive for international customers to shop in America. What’s more, according to Krystina Gustafson of CNBC, Boston Consulting projects a slowdown in luxury handbag market growth over the next three years, compared to the strong annual growth rate of 14% from 2002 to 2012.1 There has also been a notable increase in endof-season sales at department stores due to a surplus of inventory, which suggests an ongoing softening of the market. According to Chase Purdy of Quartz, Credit Suisse compared fourth quarter markdowns from 2014 to 2015 and the number of promotions went up by 5%. We believe our projected 10% revenue increase 2 for Fall 2016 is cautiously optimistic, keeping in mind that today’s market is in a somewhat precarious state.

Bergdorf Goodman Buying Team:

Catherine Batres Courtney Lucido Aisha Shawky

FASM 245- RETAIL BUYING SIMULATION PROFESSOR DAN GREEN SPRING 2016