Page 1

CHAKRA Where Fashion Meets Sustainability

Financial Planning MA Contemporary Fashion Buying Anjini V Dugal MBX172036152 12th March 2018


1. INTRODUCTION 2.

ABOUT THE STORE 2.1 Type of products 2.2 Type of Customer 2.3 Location 2.4 Store Look 2.5 opening hours, organizational structure, job description for staff 2.6 opening activities (advertising, marketing initiatives…)

3. PROFIT & PROFITABILITY 3.1 Initial investment 3.2 Period Fixed Costs 3.3 Unit selling price and the unit variable cost of goods sold 3.4 Break even point in revenues in Euro 4.

REFERENCES


1. INTRODUCTION The following report documents the planning of a new fashion store based on the principle of sustainability in Meharchand market located in New Delhi, India focusing on its spring summer collection.

The Store, designed to eliminate bad habits and turn shoppers into 100% green consumers would be recycling and up cycling in every way possible. From packaging to e- receipts it would be aimed at creating zero waists. 2. ABOUT THE STORE The store named “Chakra”, the Hindi word for circle symbolising the ongoing life cycle of a garment by recycling, up cycling or any other sustainable measure combined with the Japanese aesthetic of Wabi – Sabi i.e. imperfection is beauty would be the core essence of the brand as well as the store.


2.1 Type of products The product offering would include a range of sustainable - and ethically-produced clothing and organic beauty products at affordable prices. One could find brands focused on reusing discarded buttons, broken beads, old rags and so on to weave them into a coherent and wearable design, at the store. A section of the store would be dedicated to Vintage clothes, where people could leave unwanted garments still in good condition. The team of stylist would then choose a selected few pieces and once they go through all necessary precautions they would be put up for sale. Creating something beautiful from something once thought of as worthless is a skill truly reserved for a passionate and artistic few, and the following Indian up cycling brands making environmental consciousness chic would formulate the brand mix

Ka•Sha

Price Range €30 – €400

Kama Ayurveda

Price Range €25 +

Nicobar

Price Range €20 – €200

BRAND MIX Bodice

Price Range €20 – €200+

SkinYoga

Price Range €25 +

Pero

Price Range €25 +


TABLE 1: Product Mix S.NO

BRAND

UNIT SELLING PRICE

UNIT VARIABLE COST

UNITS IN THE PACKAGE

TOTAL REVENUES FOR THE PACKAGE

MIX

Frida Sari Hand-Woven Cotton Sari with Resist Clamp Dyed Pleated Border

ka-sha

€ 276.81

€ 112.13

2

€ 553.62

8%

Culo Jumpsuit .

ka-sha

€ 77.58

€ 33.76

5

€ 388.00

5%

Nicobar

€ 81.57

€ 35.33

5

€ 407.85

6%

Weekend Trouser

Nicobar

€ 60.24

€ 26.94

4

Twill Tape Binding Top

BODICE

€ 47.30

10

PRODUCT

1.

2.

3.

Trapeze Check Dress

4.

€ 240.96

3%

5.

€112

€ 1,120.00

16%


S.NO

BRAND

UNIT SELLING PRICE

UNIT VARIABLE COST

UNITS IN THE PACKAGE

TOTAL REVENUES FOR THE PACKAGE

MIX

BODICE

€229

€93.32

4

€ 916.00

13%

Pero

€873.

€346.63

3

€ 2,619.00

37%

Pero

€112

€47.30

5

€ 560.00

8%

Floral Mist Box

Kama Ayurveda

€ 25.00

€13.08

5

€ 125.00

5%

Assorted Gift Box

SkinYoga

€25

€13.08

5

€ 125.00

5%

6

€1872.20

€768.87

48

€ 7,055.33

100

PRODUCT

6.

Black And White Binding Skirt

7.

White Dress

8.

Cotton Shirt with Embroidery

9.

10.

TOTAL

10


TABLE 2: Unit variable cost


2.2 Type of Customer Geographical Variables • Global reach • Mainly Urban areas Demographic Variables • Mainly women • 25 years and above • Upper middle class and High Class • From the Fashion, Arts or any other creative Industry Psychographic Variables • Mature individualistic individual • Eclectic taste, unfazed by trends • Women who are not looking for costumes or high maintenance but who are modern yet rooted with their culture and are conscious about the environment • Highly aware and opinionated • Boho, easy going style • Love to travel


2.3 Location Mehar Chand Market, a bustling stretch of road in the heart of New Delhi, India’s capital, has recently emerged as a popular shopping area in the city among shoppers on the hunt for one-of-a-kind finds. Earlier, known for its drugstores, tailors and small groceries that catered to nearby residents, many of them government workers. Now has transformed with many young designers opening their boutiques along this half-mile strip on Lodhi Road, selling everything from home goods to the latest fashions. The wares all have a distinct Indian touch, whether it’s a silk sari fashioned in bright colors or a bright pillowcase shot through with an ethnic pattern. And their reasonable prices compared with other upscale retail districts in town stand out. The market today has a feel of a European boutique market and also serves as an attraction for various restaurateurs.

The growth & transformation of Meherchand Market is directly related to the transformation of Lodhi Road. With time, Lodhi Road became the residence of bureaucrats, artists and political heavyweights. Also a number of international and national organizations came to have their offices here at India Habitat Centre and Lodhi Estate. Ensuring a refined and well aware set of customer base. Also, the nearby Khan Market (also in Lodhi road) became the most sought after shopping hangout in Delhi and rental prices hit the roof. So, business which could not afford to pay up rent in Khan Market (most expensive retail space in India, 24th position globally) slowly started moving to Mehar Chand Market and got a good response from customers given that it is located on a very visible road and cannot possibly be missed. And from then on, there was no looking back for Mehar Chand market as one by one, chic businesses opened up and are still opening.


No doubt Mehar Chand would have allot of “healthy� compotation for the store (it is one of the rare markets that can boast of a very strong bond within the retailers' community. All store owners meet once a month and come up with ways in which we can work together, be it for a Christmas fair or for common promotions). Further the store could benefit with the conscientious customer base as it is also the grocery stop for the health-conscious in the city with its organic food stores In short the market enjoys a sufficient amount of foot fall given that the area is clean, upscale residential colonies are close by to provide a ready supply of customers. Flanked by many popular monuments it also attracts allot of tourists and is well connected with sufficient parking as the market is not overcrowded with stores as yet like the rest of the city.


2.4 Store Layout The store, a single storey i.e ground floor only as basement and top floors built or used would be violation of civic norms and are against the law, being sealed at the moment. Less is more is the core essence of the store , with only a few products displayed at a time giving it enough breathing space.


Furniture Up cycled/pre used wooden furniture and plants would decorate and give life to the store.

€ 72 Cane Chairs € 12 4x2 feet table – Cash Counter € 72

3 Shop Racks(8 x 12,8x8,8x8) + Counter € 350

TABLE 3 : Furniture Furniture

Amount

Price

Total

Tables for display

4

€72

€288

Cash counter

1

€ 72

€72

Rack for display

2

€ 350

€700

Chairs

4

€ 12

€48

TOTAL

11

€506

€1,108.00


Size And Amenities Basic Details Detail

Size

Commercial Details Specification

Specification

Detail

Specification

Rent

€3.00/sqft 1350 x 3 = €4,050.00

Major Railway Station

7KM

Security Deposit

6 Months = €4,050.00 x 6 = €24,300.00

Airport

17KM

Taxi/Auto Stand

Yes

Advance Rent

One Month €4,050.00

Metro

Yes

Local Bus Stand

Yes

Chargeable Area 1350 sqft. Carpet Area 1250 sqft.

Floor

Ground

Location

Main Road Facing

Lease Type

Fixed Rent

Water

Yes

Cleaning Facility

Yes

Security Guard

Location

Detail

Half & Half

Yes

Stamp Duty & Registration Charges to be Paid by

Parking

Yes, Included

Lock in Period

2 Years

Unfurnished

No plumbing

Washroom

Inside Premises

Loading /Unloading point

Yes

TABLE 4: Rent and other


2.5 opening hours, organizational structure, job description for staff Operating hours would be a Monday – Saturday 11AM – 8PM. A total of five personal to be hired including a store manager.They Must measure how many people enter the store, how many people purchase on a daily bases and also report best & worst selling products on a monthly basis. Staff must be well informed and be able to speak both Hindi & English fluently. 2.6 opening activities (advertising, marketing initiatives…) Social media will play a major role in marketing and creating awareness about the store. Further promotional activities such as – • Donate 10 old garments in good condition and get a gift voucher for €20, and even swap and trade events. • Monthly workshops to make guests try their hand at DIY activities such as learn to make your own natural cosmetics, sewing workshops to enable clients to extend the life of old clothes. • Collaborations with other organic stores. • Monthly Emails to be sent out. • Ads on Facebook, Instagram and some workout, health related apps. • PR gift boxes to be sent out to magazines, influencers on specials occasions i.e festivals. • Collaborations with bloggers.


3. PROFIT & PROFITABILITY 3.1 Initial investment Initial investment is based upon the money needed to start the new store. NOTES: Rent - refer table 4 Furniture - refer table 3 Restoring costs - @ €2.48/sqft (Rough estimate taken from a construction company) Purchasing order – refer table 1 Salary/month – 4 staff - €400/month = 1600 1 manager - €600/month = 600 € 2200 TABLE 5: Initial Investment S.NO DETAIL

AMOUNT

1.

Advance payment for the rent

€ 28,350.00

2.

Furniture

€ 1,108.00

3.

Restoring costs (painting, wiring…)

€ 3,358.00

4.

Initial payment for the first purchasing order

€ 7,055.00

5.

3 months for the salary

€ 6,600.00

6.

Money needed to pay for the promotional activities

€ 3000

TOTAL

€ 49,471.00


3.2 Period Fixed costs

NOTES

External Services - CA, IT personnel, Depreciation costs for furniture - Every 5 years Depreciation costs for restoring - Every 3 years

Salvatore Ferragamo

TABLE 6: Period Cost S.NO

DETAIL

PER MONTH

PER SEASON

PER YEAR

1.

Salary

€2,200.00

€13,200.00

€26,400.00

2.

External services

€ 150.00

€900.00

€ 1,800.00

3.

Depreciation costs for furniture

€18.46.00

€110.80

€221.60

4.

Depreciation costs for restoring the store

93.28

€559.67

€1,119.33

5.

Rent

€4,050.00

€24,300.00

€48,600.00

6.

Utilities

Included in rent

-

Included in rent

7.

Promotional cost

€1000.00

€6,000.00

€12,000.00

TOTAL

€ 7,511.74

€ 45,070.47

€ 90,140.93


3.3 Unit selling price and the unit variable cost of goods sold

TABLE 7: Contribution Margins


3.4 Break even point in revenues in Euro

Initial Investment

€ 49,471.00

Target Operating Profit ROI 20%

€ 9,894.20

Period Fixed Cost (one season)

€ 45,070.47

Contribution Margin%

53.79%

Break even point in revenues = Total Fixed Cost + Target Operating Profit Contribution Margin% = € 45,070.47 + € 9,894.20 53.79 % BREAK EVEN POINT = € 1,02,183.80 Thus, the company must cover € 1,02,183.80 in sales to reach break even and cover costs.


4. References • Bhuyan, A. (2014). Khan Market's poor cousin? Not any more. [online] Business-standard.com. Available at: http://www.business-standard.com/article/beyond-business/khan-market-s-poor-cousin-not-any-more114022101233_1.html [Accessed 1 Mar. 2018]. • Creindia (2018). CREINDIA. [online] Creindia.com. Available at: http://www.creindia.com/prime-retail-space-available-forrent-in-mehar-chand-market-lodhi-road-creinvtd-35-RLease [Accessed 4 Mar. 2018]. • thehindu (2017). ‘Khan Market in Delhi is India’s most expensive retail location’. [online] @businessline. Available at: https://www.thehindubusinessline.com/companies/khan-market-in-delhi-is-indias-most-expensive-retaillocation/article9962616.ece [Accessed 1 Mar. 2018]. • Vora, S. (2014). A New Delhi Market for Savvy Shoppers. [online] Nytimes.com. Available at: https://www.nytimes.com/2014/02/02/travel/a-new-delhi-market-for-savvyshoppers.html?mtrref=www.google.it&gwh=657F2ACBB6A53D24ABD3AB49227A3D9C&gwt=pay [Accessed 28 Feb. 2018].

Financial Planning for the opening of a new store  
Financial Planning for the opening of a new store  
Advertisement