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FASM 410 - Retail Management Alessandro Cannata J.Crew Pop-Up Shop Proposal in Bogota, Colombia Maria Brady & Ankita Patel Winter 2015

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Contents Company Summary Executive Summary Mission and Vision History Business Structure & Plans for Growth

Store Location 4 5 6 7

Competitive Analysis SWOT Analysis Brand Identity Matrix Price Accessibility Matrix Distribution

9 8 10 11

2

Store & Visual Design Cost Sheet for Fixtures

12

41

Promotional Plan Omni-Channel Marketing Plan About Francisco Ceron

15 16 17 19 20 22 26

34 40

Product Plan Merchandise Plan

Market Overview Colombia in the GRDI Colombia in Overview PESTEL Analysis Apparel Market Overview Online Retailing Overview Key Players Target Customers

30 31 31 32

Store Design

Communication & Promotion In-Store Online Catalogue

Area/Shopper Lifestyle Sales Potential Estimating Competition Area Factors/Attractions

Financial Plan

43 44

Sales Forecast Income Statement

46 49

Conclusion

50

Bibliography

51

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Executive Summary The purpose of this project is to open a pop-upshop in Bogota, Colombia. The goal is to increase brand awareness and test the market for new potential customers. J.Crew has been marketed without emphasis in the Hispanic/ Latino market, which is known to be a very prospering and profitable consumer.

Mission & Vision

The strategies that we decided to implement to successfully meet our goal are: To open a pop-up shop in Bogota, Colombia for 8 weeks starting on July 26th, and present the brand in accordance to our target consumers. Establishing a strong presence in social media through fashion bloggers and print media through advertisement before, during and after the launch of the pop-up shop. Partner with local artist, Francisco Ceron to collaborate with in-store events during “I Love Bogota� festival and to create our window displays. The key performance indicators (KPI) that we established in order to measure our rate of success are: Five reviews on five major Colombian print magazines and newspapers within six months of the launch. Attract 20% of the foot traffic in the selected area of the shopping mall we selected. Convert five percent of the weekly qualified foot traffic on the ground floor, where our shop will be located.

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5


Business Structure & Plans for Growth The brand is a private subsidiary of TGP Capital and Leonard Green. In 2011 their IPO became available and it was valued at $1.6 billion, however, in 2013 the company went private. J.Crew, is owned by parent company(ies) TGP Capital and Leonard Green who control 50% of J.Crew’s voting stock. On November 2010, after their net income had fallen by 14%, J.Crew agreed to be taken private on a $3 billion deal offered by TGP and Leonard Green. Consequently, in 2006 the company went public. J.Crew is a vertically integrated Omni-Channel specialty retailer. The brand currently generates $2.43 billion in revenues with a percentage increase of 9% compared to last fiscal year. In terms of future growth, J.Crew is looking to open stores in major capital cities after the strategic openings they had in London and Canada (2013), and Hong Kong (2014 ). Drexler’s plans are to open stores in major capital cities in Continental Europe, such as Paris. The company announced its plan to invest $135 to $145 million in opening new stores, current store renovations, corporate facilities and information technology enhancements. J.Crew’s Revenue Growth since 2011

History Formerly know as “Popular Merchandise Inc.” J.Crew was founded in 1983 by Emily Scott. The company incorporated as J.Crew in 1988 as a international multi-brand, multi channel specialty retailer that differentiates itself through quality, design and fabrics. The company offers a variety of women’s, men’s and children’s apparel, including accessories. J.Crew operates 365 store locations and it also offers products through catalogs and its e-commerce website. J.Crew’s current CEO is Millard Drexler and Jenna Lyons is the President and Executive Creative Director. 6

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SWOT Analysis STRENGTHS

WEAKNESSES

o  Presence in multiple sales channels o  Strong internal design team o  Private label credit card and loyalty program

o  Geographic concentration

S

o  Dependence on third party vendors and manufacturers

W OPPURTUNITIES

O

THREATS

o  Growing online retail sales o  Growing apparel and footwear markets in the US o  Positive outlook for the plus size apparel

T

o  Intense competition o  Increasing labor wages in the US

market in US

8

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Brand Identity Matrix

Price Accessibility Matrix

Price

BRAND AS ABRAND PRODUCT AS A PRRODUCT BRAND AS A PERSON

BRAND AS A PERSON

J.Crew Inditex SA

BRAND AS AN ORGANIZATION

BRAND AS A SYMBOL

BRAND AS A SYMBOL

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J.Crew is well known for its bold patterns and colors. The people who work at the company believe in braking the rules when it comes to fashion. They believe in wearing sneakers with suits and tussled hair, and most importantly they believe that fashion is all about a perfect mix. J.Crew’s pride lies within the fact that they are a true American brand with a focus on sustainability, community and responsible sourcing.

Accessibility

Banana Republic The Gap

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Distribution STORES $1,638,170,000 in Revenues with 65 states in U.S, Canada and London J.Crew Retail. Our J.Crew retail stores are located in upscale regional malls, lifestyle centers and street locations. Our retail stores are designed and fixtured with the goal of creating a distinctive, sophisticated and inviting atmosphere, with displays and information about product quality. We believe situating our stores in desirable locations is critical to the success of our business, and we determine store locations, as well as individual store sizes, based on several factors, including geographic location, demographic information, presence of anchor tenants in mall locations and proximity to other high-end specialty retail stores. DIRECT With $755,915,000 (2013) in revenues, our direct channel serves customers through websites for the J.Crew, factory and Madewell brands. Our websites allow customers to purchase our merchandise over the Internet and include jcrew.com, jcrewfactory.com and madewell.com. In fiscal year of 2011, we entered into an arrangement with a third party that currently gives us the ability to accept and fulfill orders from residents from over 100 countries outside of the United States and Canada. We also use the Direct channel to sell exclusive styles not available in stores, introduce and test new product offerings, offer extended sizes and colors on various products, and drive targeted marketing campaigns. Our catalogs serve as an important branding vehicle to communicate to our customers across all channels. In fiscal 2013, we circulated approximately 3.7 billion catalog pages.

Communication & Promotion With an average expenditure of $4 million, our brand projects itself through consistent creative messaging in our store environments, websites and catalogs and with our superior customer service. We maintain our brand image by exercising substantial control over the design, production, presentation and pricing of our merchandise and by selling our products ourselves. Senior management is extensively involved in all phases of our business including product design and sourcing, assortment planning, store selection and design, website experience and the selection of photography for each catalog. We communicate our brand message to customers through all channels, including our websites, catalogs, e-mail marketing, online advertising, and our social media presence. Our core marketing objectives are structured to drive awareness and differentiation of our brands, increase new customer acquisition, maintain and build customer retention and loyalty, and build brand awareness internationally. DIRECT MARKETING Digital marketing and social media have played an important part of our strategy in our recent history and are among our most effective marketing tools. We have found that J.Crew customers who engage with us via our social media outlets (Facebook, Twitter, Pinterest or Instagram) generally spend approximately two times more than the average J.Crew customer. Facebook is the current leading player in terms of size and time spent on site, but there are significant growth opportunities in our new visual platforms, such as Pinterest and Instagram. For many years J.Crew has had a catalogue, and like any catalogue, its original purpose was to drive direct sales and promote the season’s products.

OTHER

CREDIT CARD

$34,172,000 in revenue is primarily generated from shipping and handling fees and revenues from third-party re-sellers.

We offer a private-label credit card which is owned and operated by a third-party bank. In the fiscal year of 2013, sales on J.Crew credit cards made up to approximately 16% of our total net sales. We believe that our credit card program encourages frequent store and website visits and catalog sales and promotes multiple-item purchases, thereby cultivating customer loyalty to the J.Crew brand and increasing sales. The J.Crew credit card offers reward cards based on customer spending.

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Retail Market Overview

Even though Colombia dropped three spots in this year’s GRDI, its fundamentals are still strong and there is a lot of room for opportunity with a strengthening middle class and an increasing GDP growth of 4% in 2013. There has also been a development and increase in credit card spending that strengthens the consumer spending power in products that they couldn’t have otherwise afford. (atkearney) 14

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Colombia in Overview

PESTEL Analysis POLITICAL

In recent years, Colombia has undergone a remarkable transformation – turning the tide on a long running terrorist insurgency, making great strides in restoring security and stability, and advancing policies that have led to significant social progress and economic growth. While considerable work remains to be done, the nation is now firmly on the path to peace and prosperity. With more than 46 million citizens, Colombia has the second largest population in South America, after Brazil, and the 28th largest in the world. Colombia is also home to the third largest Spanish-speaking population in the world, after Mexico and Spain. (Indexmundi) Colombia is Latin America’s oldest and most stable democracy. For more than a century, the country has experienced peaceful changes of government every four years as citizens have elected government representatives in free and fair elections in a political environment that proudly supports full freedom of the press. (worldbank.com) Colombia is a free market economy with major commercial and investment ties to countries around the world, including the United States. A country with modern cities, diverse cultures and colonial charm, Colombia’s economy has grown steadily over the past decade, becoming both a top Latin American center for business and an increasingly popular tourist destination. (export.gov) 16

ECONOMIC

STRENGTHS

STRENGTHS

Free Trade Agreement with U.S.

GDP 526.5 Billion

Oldest and most stable democracy in Latin America

Growth Rate 4.2%

Free market economy States monopoly on the use of force has been extended CHALLENGES Territorial wars Paramilitary

Exchange Rate 369.2 Billion Interest Rate 4.5% Average disposable income $18.5k CHALLENGES

with

Guerrilla

and

Almost 2/3 earn less than $15k à 2/3 population lives under the poverty line

Political reforms have overhauled the political party system

SOCIAL STRENGTHS 4.4 % of GDP on education expenditures 67.5% of the Colombian population belongs to the 15-64 age group Median age is 27 years this indicates that country has demographic advantage in terms of the number of people of working age Colombia is divided into 6 different Social Stratus, with Strata 6 being the highest and 1 the lowest. CHALLENGES Colombian society is highly inequitable, 1% of the population holds 40% of the country’s wealth. Nearly 34% Colombians live below the poverty line. 17


TECHNOLOGY

ENVIRONMENTAL

STRENGTHS

STRENGTHS

Number of people that have cellphones per every hundred : 103

Colombia has been developing important capacities to face the challenges

Number of people that have Internet access per every hundred: 49

Have a plan and grants in place to improve air and water quality to the efforts

Massachusetts – Colombia Innovation Partnership Mission

CHALLENGES

Now considered developed and matured country In march 2012 Colombia became the 74th member of the Information Technology Agreements of the WTO CHALLENGES According to the Colombian manufacturing innovation survey, only 9% of manufacturing firms have an internal R&D department

Apparel Market Overview

Colombia is at high risk from climate change impacts Water shortages and land instability are an recurring issue for those in the Elevated Andes Impacts of climate change will affect the quality of life of all Colombians, but will especially affect the means of living of the rural population

MARKET SIZE ($ billion)

SALES (CAGR)

APPAREL SALES AS % OF RETAIL

The country has a high incidence of extreme events with growing emergencies associated with climate conditions. Colombia has been developing important capacities to face the challenges

LEGAL STRENGTHS In order to bring the product into a supply chain or market place product must comply with product safety regulations Trade is often dependent on proof of compliance On 13 September the Colombian senate’s plenary approved a new consumer protection act Foreign companies in Colombia can always operate as long as they are legally constituted as companies in the country In 2013, Colombia made a significant advancement in efforts to eliminate the worst forms of child labor.

$5.0 Billion

7.8% CAGR

Sales per Capita = $36

According to Euromonitor, the apparel retail industry will generate $870 million between 2013 and 2018. The Colombian apparel retail industry had total revenues of $5.0 billion in 2013, representing a compound annual growth rate (CAGR) of 7.8% between 2009 and 2013.The Womenswear segment was the industry's most lucrative in 2013, with total revenues of $3.8 billion, equivalent to 75.5% of the industry's overall value. (Datamonitor)

CHALLENGES According to Transparency International, the country ranked 94th out 176 in the 2102 Corruption Perception Index, which focuses on bribery, payment of kickbacks and embezzlement. 18

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Apparel Spending Overview

Online Retail Market Overview Colombia, like much of Latin America, has also lagged behind Europe in terms of fashion e-commerce. Even with online shopping still in its infancy in Colombia, there has been a sizeable shift in the influence of the Internet on clothing shopping. In 2012, roughly 11% of Colombian shoppers cited the Internet as a source of clothing ideas, compared to only 4% in 2008. Shoppers ages 15–34 are significantly more likely than their older counterparts to shop for clothing online (25% versus 9%), but actual online expenditures have remained relatively low in Colombia (www.emarketer.com).

Source: www.cottoninc.com

This chart depicts the forecast on consumer spending in the apparel sector in Colombia for 2020. The sales are projected to increase 34% which makes it a positive environment for a potential permanent J.Crew store opening in the future.

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Colombian brands and retailers recognize this trend and are tailoring their sites to function as communication and advertising avenues rather than solely as retail sales channels. Colombian consumers, like their counterparts around the world, are becoming more tech-savvy and want to use the Internet as a means to drive personal style choices and become more knowledgeable clothing shoppers (www.emarketer.com). Online transactions brought a record $3.5 billion into the country during 2014, $900 million more than in 2013, according to PayU Latam.

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Key Players

Key Players

History and Description

Scope and Size

History and Description

Scope and Size

Part of the Inditex Group

$1.45 billion in Sales as of 2014 (inditex.com)

Founded in 1985 in Spain

685 Stores worldwide, 4 permanent stores in Colombia

Founded in 1969 by Donald and Doris Fisher

The Gap Inc. has sales were $6.3 billion in 2014 (gap.com)

Operates 6 Divisions

1700 stores worldwide, 1 permanent (franchise) in Colombia

Brick-and-mortar and worldwide e-commerce “Urban, cosmopolitan for the well rounded individual”

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In employs around 4000 employees Carries Womenswear, Menswear, Children, Accessories, Personal Tailoring and Fragrances

“Modern and youthful interpretation of basics and Classics.”

Carries Womenswear, Menswear, Accessories, Jewelry and Shoes

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Key Players

Key Players

History and Description

Scope and Size

History and Description

Scope and Size

Originally founded in 1978 by Mel and Patricia Ziegler

$2.9 billion in sales during fiscal year 2015

Founded in 1975 by Armando Ortega and Rosalia Mera

As of 2014, they had sales of $12.1 billion

Bought by The Gap Inc in 1983 “Mainstream luxury clothing.” After the acquisition the product offering was changed.

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642 stores worldwide, 1 permanent (franchise) in Colombia Carries Womenswear, Menswear, Accessories, Jewelry and Shoes

Considered the Flagship store of the Inditex group. Vertically Integrated Zero Advertising Policy, They would rather invest the money in new stores.

2000 stores worldwide, with 11 permanent (franchise) in Colombia Carries Womenswear and Menswear, TRF (younger consumer), Shoes, Cosmetics and Complements, as well as children’s clothing (Zara Kids) and Home Decor

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Target Customer - Mariana

Target Customer - Andres

Gender: Female

Gender: Male

Age: 15-20

Age: 21-28

Income: $3 Million Pesos (allowance from her parents)

Income: $6 Million pesos. Disposable $800k Pesos

Education: student Size of family: 4 to 5 Stratum: 4 to 6 Occupation: student from a fairly privileged family Religion: Catholic Mariana is an avid movie goer. She spends a significant amount of time on the internet, and especially social media. She invests a fair amount of her allowance on music downloads and paid apps for entertainment. With her free time from school she goes out to eat and drink with friends and most likely goes clubbing. She has a boyfriend, whom she spends money on for gifts and outings. She goes to the gym consistently and is continuously looking to invest in the newest smartphone.

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Education: Master’s degree Size of family: 4 to 5 Stratum: 4 to 6 Occupation: Engineer for 3M Religion: Catholic Andres is a hard working engineer who makes the best out of his free time. He enjoys going out to dinner and drinks with his girlfriend in which he also invests a considerable amount of money. When at home, he is connected on social media and shops online on websites such as Amazon. com or Mercadoenlinea.com or watching Netflix or Hulu. He is also is saving up to buy his dream car and a couple of trips to Europe with his girlfriend. Additionally, he is an Apple product fan and has purchased the newest iPhone, MacBook pro and iPad in order to be able to work on the go. He is very invested in his looks and goes to the gym on a daily basis. He is considering cosmetic surgery to fix a part of his nose he doesn’t like.

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Target Customer - Maria Camila Gender: Female Age: 29-35 Income: Husband earns $12 Million Pesos. Disposable $3M pesos Education: undergraduate degree Size of family: 4 to 5 Stratum: 4 to 6 Occupation: Housewife Religion: Catholic Maria is a stay home mom with a one year old daughter. She invests a good portion of her disposable income in activities and toys for her daughter. She also spends time searching for unique furniture and art pieces to decorate her house. She believes in sustainability and organic products hence, she is willing to spend the money to get those features in the products she buys. She invests a good portion of her time and money on beauty products and yoga classes. Her husband and her enjoy at home entertainment with their friends therefore, they invest on home theaters options such as Netflix and Hulu subscriptions. However, they still enjoy going out to dinner, drinks and brunches with family and friends. 28

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Store Location

Store Location

Map of Downtown Bogota Centro Santa Fe

Area Lifestyle

Estimating Competition

We have decided to place our pop-up shop in the city of Bogota, Colombia. For security reasons and an aspiration for bigger exposure, we decided to place the store in the Centro Comercial Santa Fe located in Calle 185 # 45-03 Santa Fe, Calle 185. The mall is the second biggest in Latin America and it also houses the majority of our direct competitors. Around this area we can find some medium to high-end restaurants, bars and clubs that cater to our target customer. Social Strata 4 and 5 and 6 are prominent around the area where the mall is located, increasing the chances of successfully exposing the brand and achieve our project’s goal.

In terms of competition our direct competitors, Zara and Massimo Dutti, are both already present at the mall. The Gap and Banana Republic are located in a nearby mall, which could represent a threat for our pop-up shop. Area Attractions inside and outside the mall are a form of indirect competition, since our target consumer’s disposable income might be disposed somewhere else.

Sales Potential Because our pop-up shop will be located in the mall there is a higher chance for our store to be seen and visited. Yearly, the mall receives 35 million visitors, at an average rate of 404,000 visitors per week. The amount of footfall that the location receives increases our sales potential and chances for brand awareness for the period of time that the shop will be there. During the month of August the “I Love Bogota” festival will be taking place for a week, which will increase the number of visitors and hence become a positive factor since we have decided to open our pop-up shop on the last week of July for 8 weeks. 30

Area Attractions/Factors The mall is 698,400 sqft, and it houses 484 retail stores, 68 different restaurants, 10 movie theaters and a casino distributed amongst 3 levels. Santa Fe also offers other services such as Wi-Fi, a carwash, shoeshine stations, a taxi service, and a Weekly Catholic mass (important to out target consumer because their religions are predominantly Catholic). Santa Fe mall is conveniently located in downtown Bogota, The strata 4, 5 and 6 (our target customer) who lives around the area does not usually take public transportation that is the one of the reasons why the mall has 3,200 parking spaces and two annex parking decks to satisfy the demand. The mall is accessible by the “AutoNorte” or main highway that crosses the town in its entirety, Transmilenio (the local tram service) and the public bus service have stops conveniently placed at the mall. 31


Store Location

Availability of Human Resources and Physical Space The pop-up shop will be a direct control operation for the 8 weeks that we will be present. We selected a location inside the mall given that is key to the success of our goal, for that reason we have chosen a physical space on first floor, near the “183 Street� Entrance and also near to Massimo Dutti (competitor) which increases the chances of capturing a greater amount of qualified footfall. The space we chose is 1,077 Sqft and has a monthly lease of 18,000,000 COP including utilities (water/electric).This location also eliminates the need for any commercial permits, given that this already is a commercial space. We have also identified a human resources agency to help us recruit sales associates. However, we will have two members of our headquarters office travel for the first two weeks of the venture to train the staff and make sure that both the store and human resources meet the J.Crew standards. In terms of wages, we have researched and determined that the minimum wage is 672,000 COP, however, the Colombian government demands that employees are given a 70,000 COP transportation allowance. In addition to wages and transportation fee, we will also offer the same perks as our employees in the United States offices, this includes: 50% off five full-price items each month to wear to work, 30% off full price merchandise, 50% off sale merchandise and 60% off selected slow-selling items. 32

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Store Design

Store Design Floor Plan

Main Entrance

Cash Register

Facade

34

35


Store Design Jewelry Bar

Fitting Rooms

36

Center Display (Right View)

Center Display (Left View)

37


Store Design

Store Design Mannequin Display Area

Mannequin Display Area

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Merchandise Display Area

Merchandise Display Area

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Cost Sheet for Store Design Item

Interior Fixtures # of Items

Practik Rug

Traditional Silk Area Rug Jackson Rug Acura Rug

Talitha Rug

Gems Black Rug Luzern Rug

House By John Lewis Stand Wide Bookcase John Lewis Lacock Round Dining Table Ashley Mesa De Centro Coylin Geometrie Laurna

Steelwood Table White Cassina Lc10-P

Driade Monseigneur Pouf Babette Chair

Multi Divider Bookcase Mutu Storage Unit Besta Tv Storage

Expedit Tv Storage Besta Tv Storage Clothes Rack

Regent Arm Chair Albert Arm Chair Louis Side Table Cash Wrap

Ashley Mesa Lateral Coylin

Tema Domino 27" H Six Piece Shelving Vittsjo Nest Of Tables

Console Table With Display Area Charotte Large Sofa Fairfax Coffee Table

Bottna Ottoman Table Barcelona Ottoman Paper Chandelier

Peony Table Center Trousers Rack

Barell Table Lamp

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Cost in COP

2

14,390,000.00 $

2

357,500.00 $

3 2 4 1 1

1

547,500.00 $ 577,500.00 $ 625,000.00 $ 267,500.00 $ 232,500.00 $

505,000.00 $

3

1,137,500.00 $

1

575,000.00 $

2

1

2

3

10

2

2

2

2

4

322,500.00 $

875,000.00 $

445,000.00 $

500,000.00 $

1,080,000.00 $ 425,000.00 $

392,500.00 $

1,672,500.00 $

1,207,500.00 $ 912,500.00 $

2

1,207,500.00 $

4

450,000.00 $

1

2

2

1

4

1

12

3

1

1

1

2

3

3

1

2

187,500.00 $

515,000.00 $

235,000.00 $

8,750,000.00 $ 222,500.00 $

245,000.00 $

1,190,000.00 $

Basement Home Estante Snake Ivar Wall Shelf

Tetra 7 Pice Cube Shelf

Wall Mounted Clothes Rack

Cash Register

195,000.00 $

Eicholtz

225,000.00 $

80,000.00 $

4

11

4

3

Curtains

8

Mannequins

11

Ipads

112,500.00 $

125,000.00 $

6

Wall Light

750,000.00 $

1,950,000.00 $

14

4

Angelo Large Hanging Chandelier

282,500.00 $

800,000.00 $

4

Bellatto Xl Windows

472,500.00 $

1,680,000.00 $

3

2

100,000.00 $

172,500.00 $

192,500.00 $

600,000.00 $

447,500.00 $

275,000.00 $

2,475,000.00 $ 172,500.00 $

500,000.00 $

1,000,000.00 $

Exterior Fixtures J.Crew Store-Front Sign

TOTAL

7,500,000.00 $

60,157,500.00 $ 41


Product Assortment

Product Assortment

See Appendix for complete Product Assortment List

See Appendix for complete Product Assortment List

Nylon hooded Jacket # B9074

Tropical Wool Jumpsuit # C0935

Lace circle skirt # C1961 42

Stadium-Cloth

Cocoon

Coat

Woodsman Sweater # B6247

#

Looped-Sequin Sweater Skirt # C1358 Textured Cotton Tie in Gingham #C8419 Broken-in Chino # 19488

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Promotional Plan J. Crew Pop Up Shop- Colombia Billboards Newspapers Magazines Catalogs Facebook Instagram Twitter Youtube Blogs E-mail PR

Print

Social

Launch Party Juan Valdez Café DJ Mario Ochoa Brand Ambassador Window Display Canvas Bag Giveaway Appearances

Pre Launch Week 1 Week 2 Week 3

Promotional Plan Cost

LAUNCH POST LAUNCH LAUNCH Week 4 Week 01 Week 02 Week 03 Week 04 Week 05 Week 06 Week 07 Week 08 $ $ $ $

31,250,000 18,000,000 56,300,000 23,700,000

$ 37,500,000 $ 5,187,500 $ 7,500,000 $ 16,250,000 $8,750,000 $17,500,000 $ 5,000,000 $ 1,500,000 $ 25,000,000 $ 6,250,000 $ 4,500,000 $ 3,750,000 Total $ 267,937,500 Total

J. Crew Colombia’s promotional plan is spread through a three-month schedule. We will start promoting the shop via social and paper media a month before opening. The month prior we will also partner with prestigious Colombian painter, Francisco Ceron, to make window displays and also paint canvas bags that we will hand out the fist week of opening. We will also have bloggers promoting us through mentions on their blogs. The final week of pre launch we will also post a video to our YouTube showing the making of the shop.

As part of our promotional plan we decided to collaborate with famous Colombian artist Francisco Cerón to create our window displays and also to participate in the “I Love Bogota” event that we will be taking place at our pop-up shop.

For the grand opening we will have a launch party at Juan Valdez Café. Francisco Ceron and musical stylings by DJ Mario Ochoa will host this party. After the grand opening we will continue promoting through social media and print media to keep the consumer hyped about the short duration of the J. Crew’s presence in Bogota. After we have built a sturdy presence in Bogota we will start passing out catalogs with every purchase and also collecting e-mails to have a more direct promotional effort with the consumer.

His artwork has a lot of different elements that include Pop-Art, Cubism with classic and modern techniques. He uses Pre-Colombian symbols, Pre-Hispanic and Ancient icons from different cultures and he mixes these references to create his own. With these techniques he creates unique pieces that are multi-cultural, Post-Modern, Urban, a mix between classic & modern, rich in symbols and messages. His art is like a new language, full of vibrant colors, that along with its multicolored characters, grasps the attention of the observer.

For post launch promotions we will continue e-mailing the consumer and also sending catalogs. Our other social media efforts will also continue so that we can keep the new customer base updated on all things J. Crew. 44

Francisco Cerón is a Colombian artist, he started painting at a very young age. To improve and expand his skills he went to a very prestigious school of arts, Antonio María Valencia, in Santiago de Design Cali, Colombia to earn a Masters Degree in graphic Design. Later on, he specialized in Business & Marketing at the University of Miami in Florida.

We believe Ceron matches the aesthetic of J.Crew in terms of colors and bold prints and patterns, and that is the reason we decided to collaborate with him for both our window displays and in-store event.

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Sales Forecast Location Foot Traffic Per Year 35,000,000 Location Foot Traffic Per Week 673077 Foot Traffic at Ground Floor Per Week 403846 60% Percentage of Conversion 20,192 5%

Footfall Conv. % Avr.Basket

COGS

Note: Numbers Shown are in Colombian Pesos

Footfall Conv. % Avr.Basket

COGS Product Category Dresses Skirts Bottoms Women's Tops Outerwear Men's Tops Outerwear Men's Bottoms Jewelry Shoes Ties Bags Scarfs Total

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%

14% 12% 11% 10% 10% 10% 7% 7% 6% 5% 3% 3% 2% 100%

Sales Forecast

Week 1 15000

0.05 450,000 $ Total Rev. in COP 337,500,000 $ 135,000,000 $ Week 1 47,250,000 $ 40,500,000 $ 37,125,000 $ 33,750,000 $ 33,750,000 $ 33,750,000 $ 23,625,000 $ 23,625,000 $ 20,250,000 $ 16,875,000 $ 10,125,000 $ 10,125,000 $ 6,750,000 $ 337,500,000 $

Product Category % Dresses 14% Skirts 12% Bottoms 11% Week 1 4 Week 2 Week 3Week 2 Week 4Week 3 WeekWeek 5 Women's Tops 10% 16000 16000 15000 30192 30192 30192 2519230192 Outerwear 10% 0.05 0.05 0.08 0.09 0.09 0.09 Men's Tops 0.05 10%0.08 $ 450,000450,000 $ 450,000 $ 450,000 450,000450,000 $ 450,000 $ 450,000 $ $ Outerwear 7% $ Total Rev. in Total COP Rev. Total TotalinRev. Totalin Rev. Total Rev. in COP inRev. COPin COP Total Rev. COPin COP Total Rev. COPin COP Men's Bottoms 7% 337,500,000 $ 360,000,000 $ 1,086,912,000 $ 1,222,776,000 360,000,000 $ 1,086,912,000 $ 1,222,776,000 $ 1,020,276,000 $ $ Jewelry 6% 135,000,000 $434,764,800 144,000,000 $489,110,400 434,764,800 $ 408,110,400 489,110,400 144,000,000 $ $ $ $ $ Shoes 5% 4 Week 2 Week 1 Week 3Week 2 Week 4Week 3 WeekWeek 5 Ties 50,400,000 3% 47,250,000 $152,167,680 50,400,000 $171,188,640 152,167,680 $ 142,838,640 171,188,640 $ $ $ $ $ Bags43,200,000 3% 40,500,000 $130,429,440 43,200,000 $146,733,120 130,429,440 $ 122,433,120 146,733,120 $ $ $ $ $ Scarfs39,600,000 2% 37,125,000 $119,560,320 39,600,000 $134,505,360 119,560,320 $ 112,230,360 134,505,360 $ $ $ $ $ Total36,000,000 100% $ $ $ $ $ 33,750,000 $108,691,200 36,000,000 $122,277,600 108,691,200 $ 102,027,600 122,277,600 36,000,000 $ $ $ $ 33,750,000 $108,691,200 36,000,000 $122,277,600 108,691,200 $ 102,027,600 122,277,600 36,000,000 $ $ $ $ 33,750,000 $108,691,200 36,000,000 $122,277,600 108,691,200 $ 102,027,600 122,277,600 25,200,000 $ $ $ $ 23,625,000 $ 76,083,840 25,200,000 $ 85,594,320 76,083,840 $ 71,419,320 85,594,320 25,200,000 $ $ $ $ 23,625,000 $ 76,083,840 25,200,000 $ 85,594,320 76,083,840 $ 71,419,320 85,594,320 21,600,000 $ 65,214,720 $ 73,366,560 $ 61,216,560 $ 20,250,000 $ 21,600,000 $ 65,214,720 $ 73,366,560 18,000,000 $ $ $ $ 16,875,000 $ 54,345,600 18,000,000 $ 61,138,800 54,345,600 $ 51,013,800 61,138,800 10,800,000 $ $ $ $ 10,125,000 $ 32,607,360 10,800,000 $ 36,683,280 32,607,360 $ 30,608,280 36,683,280 10,800,000 $ 32,607,360 $ 36,683,280 $ 30,608,280 $ 10,125,000 $ 10,800,000 $ 32,607,360 $ 36,683,280 7,200,000 $ $ $ $ 6,750,000 $ 21,738,240 7,200,000 $ 24,455,520 21,738,240 $ 20,405,520 24,455,520 360,000,000 $ 1,086,912,000 $ 1,222,776,000 $ 1,020,276,000 $ 337,500,000 $ 360,000,000 $ 1,086,912,000 $ 1,222,776,000

$ $ $ $ $ $ $ $ $ $

Week 5 25192

0.09 450,000 $ Total Rev. in COP 1,020,276,000 $ 408,110,400 $ Week 5 142,838,640 $ 122,433,120 $ 112,230,360 $ 102,027,600 $ 102,027,600 $ 102,027,600 $ 71,419,320 $ 71,419,320 $ 61,216,560 $ 51,013,800 $ 30,608,280 $ 30,608,280 $ 20,405,520 $ 1,020,276,000 $

Week 6 20192

Week 7 12768

Week 8 12000

Total

161536 0.08 0.08 0.06 450,000 $ 450,000 $ 450,000 $ Total Rev. in COP Total Rev. in COP Total Rev. in COP Total 726,912,000 $ 459,648,000 $ 324,000,000 $ 5,538,024,000 $ 290,764,800 $ 183,859,200 $ 129,600,000 $ 2,215,209,600 $ Week 6 Week 7 Week 8 Total 101,767,680 $ 64,350,720 $ 45,360,000 $ 775,323,360 $ 87,229,440 $ 55,157,760 $ 38,880,000 $ 664,562,880 $ 79,960,320 $ 50,561,280 $ 35,640,000 $ 609,182,640 $ 72,691,200 $ 45,964,800 $ 32,400,000 $ 553,802,400 $ 72,691,200 $ 45,964,800 $ 32,400,000 $ 553,802,400 $ 72,691,200 $ 45,964,800 $ 32,400,000 $ 553,802,400 $ 50,883,840 $ 32,175,360 $ 22,680,000 $ 387,661,680 $ 50,883,840 $ 32,175,360 $ 22,680,000 $ 387,661,680 $ 43,614,720 $ 27,578,880 $ 19,440,000 $ 332,281,440 $ 36,345,600 $ 22,982,400 $ 16,200,000 $ 276,901,200 $ 21,807,360 $ 13,789,440 $ 9,720,000 $ 166,140,720 $ 21,807,360 $ 13,789,440 $ 9,720,000 $ 166,140,720 $ 14,538,240 $ 9,192,960 $ 6,480,000 $ 110,760,480 $ 726,912,000 $ 459,648,000 $ 324,000,000 $ 5,538,024,000 $

47


Sales Forecast

Financial Plan Location Foot Traffic Per Year 35,000,000 Location Foot Traffic Per Week 673077 Foot Traffic at Ground Floor Per Week 403846 60% Percentage of Conversion 20,192 5%

Average Number of Units Sold Per Week Product Category Women's Tops Ties Skirts Shoes Scarfs Outerwear Outerwear Men's Tops Men's Bottoms Jewelry Dresses Bottoms Bags

$ 212,143 118,000 438,571 195,833 157,500 385,000 290,000 121,923 142,500 182,200 511,875 239,444 262,143

$ $ $ $ $ $ $ $ $ $ $ $ $

Week 1 223 154 190 277 237 286 99 130 40 44 64 23 23 1789

Week 2 Week 3 238 717 165 498 202 611 295 891 253 763 305 921 105 318 138 418 42 127 47 141 69 207 25 74 25 75 1908 5761

Week 4 807 560 687 1003 858 1036 357 470 143 159 233 84 84 6481

Week 5 673 467 573 837 716 865 298 392 120 133 194 70 70 5408

Week 6 480 333 408 596 510 616 213 279 85 94 138 50 50 3853

Location Foot Traffic Per Year

Week 7 Week 8 Total35,000,000 Foot Traffic Per Week 303 214 Location3655 673077 at Ground Floor Per Week 210 148 Foot Traffic2535 403846 60% 258 182 3111 Percentage of Conversion 377 266 20,1924542 5% 323 227 3886 390 275 4693 134 95 1619 177 124 2128 54 38 649 60 42 719 88 62 1055 31 22 379 32 22 382 2436 1717 29353

Footfall Conv. % Avr.Basket

COGS Product Category Dresses Skirts Bottoms Women's Tops Outerwear Men's Tops Outerwear Men's Bottoms Revenues Jewelry Shoes in COP Ties Expenses Bags COGS Scarfs Design of Space Total

Interior Fixtures Storage Wages (per month) Rent and Utilities Logistics Janitorial Promotional Activities Legal and Permits Hotel and Flight

%

Footfall Conv. % Avr.Basket

COGS Product Category % Dresses 14% Skirts 12% Bottoms 11% Week 6 Week 7 Week 8 Week1 1 Week22 Week 3 Week Week Week Week Week Week44 Week5 5 20192 12768 12000 15000 16000 30192 Tops 30192 15000 16000 30192 30192 25192 Women's 10%25192 0.08 0.08 0.06 0.05 0.05 0.08 0.09 0.09 0.05 0.05 0.09 0.09 10% 450,000 450,000 $ 450,000 $ 450,000 $ 450,000$ $ 450,000 $$ Outerwear 450,000 450,000 450,000 450,000 $ 450,000 $$ 450,000$ $ Total Rev.ininCOP COP Total TotalRev. Rev.ininCOP COP Total Total Rev. Rev.Tops Total Rev. in COP Total Rev. in COP Total Rev. in COP Total TotalRev. Rev.in inCOP COP Total TotalRev. Rev.ininCOP COP Total Rev. in COP Men's 10% 337,500,000$ $ 360,000,000 $$ 1,086,912,000 $ 1,222,776,000 1,020,276,000 337,500,000 360,000,000 1,086,912,000 1,222,776,000 $$ 1,020,276,000$ $ 726,912,000 $ 459,648,000 $ 324,000,000 $ Outerwear 7% 135,000,000$ $ 144,000,000 $$ 434,764,800 $ 489,110,400 408,110,400 135,000,000 144,000,000 434,764,800 489,110,400 $$ 408,110,400$ $ 290,764,800 $ 183,859,200 $ 129,600,000 $ Men's Bottoms 7% Week1 1 Week22 Week Week Week Week Week Week 3 Week44 Week5 5 Week 6 Week 7 Week 8 47,250,000$ $ 50,400,000 $$ Jewelry 152,167,680 $ 171,188,640 142,838,640 47,250,000 50,400,000 152,167,680 171,188,640 $$ 142,838,640$ $ 101,767,680 $ 64,350,720 $ 45,360,000 $ 6% 40,500,000$ $ 43,200,000 $$ 130,429,440 $ 146,733,120 122,433,120 40,500,000 43,200,000 130,429,440 146,733,120 $$ 122,433,120$ $ 87,229,440 $ 55,157,760 $ 38,880,000 $ Shoes 5% 37,125,000$ $ 39,600,000 $$ 119,560,320 $ 134,505,360 112,230,360 37,125,000 39,600,000 119,560,320 134,505,360 $$ 112,230,360$ $ 79,960,320 $ 50,561,280 $ 35,640,000 $ 3% 33,750,000$ $ 36,000,000 $$ Ties 108,691,200 $ 122,277,600 102,027,600 33,750,000 36,000,000 108,691,200 122,277,600 $$ 102,027,600$ $ 72,691,200 $ 45,964,800 $ 32,400,000 $ 33,750,000$ $ 36,000,000 $$ Bags 108,691,200 $ 122,277,600 102,027,600 33,750,000 36,000,000 108,691,200 122,277,600 $$ 102,027,600$ $ 72,691,200 $ 45,964,800 $ 32,400,000 $ 3% Income Statement 33,750,000$ $ 36,000,000 $$ 108,691,200 $ 122,277,600 102,027,600 33,750,000 36,000,000 108,691,200 122,277,600 $$ 102,027,600$ $ 72,691,200 $ 45,964,800 $ 32,400,000 $ Scarfs 2% 23,625,000$ $ 25,200,000 $$ 76,083,840 $ 85,594,320 71,419,320 23,625,000 25,200,000 76,083,840 85,594,320 $$ 71,419,320$ $ 50,883,840 $ 32,175,360 $ 22,680,000 $ 23,625,000$ $ 25,200,000 $$ Total 76,083,840 $ 85,594,320 23,625,000 25,200,000 76,083,840 85,594,320 $$ 100%71,419,320 71,419,320$ $ 50,883,840 $ 32,175,360 $ 22,680,000 $ Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 20,250,000$ $ 21,600,000 $$ 65,214,720 $ 73,366,560 61,216,560 20,250,000 21,600,000 65,214,720 73,366,560 $$ 61,216,560$ $ 43,614,720 $ 27,578,880 $ 19,440,000 $

14% 12% 11% 10% 10% 10% 7% 7% 6%Week 1 337,500,000 $ 16,875,000 360,000,000 1,086,912,000 $ 54,345,600 1,222,776,000 $ 1,020,276,000 $ 726,912,000 $ 459,648,000 $ 5% 16,875,000 18,000,000 54,345,600 $ 61,138,800 $$ 51,013,800 $$ $ $ $ 18,000,000 $$ 61,138,800 51,013,800 36,345,600 $ 22,982,400 3% 10,125,000$ $ 10,800,000 $$ 32,607,360 $ 36,683,280 30,608,280 10,125,000 10,800,000 32,607,360 36,683,280 $$ 30,608,280$ $ 21,807,360 $ 13,789,440 3% 10,125,000 10,800,000 32,607,360 $ 36,683,280 $$ 30,608,280 $$ $ $ $ 10,800,000 $$ 36,683,280 30,608,280 21,807,360 $ 13,789,440 135,000,000 $ 10,125,000 144,000,000 434,764,800 $ 32,607,360 489,110,400 $ 408,110,400 $ 290,764,800 $ 183,859,200 $ 2% 6,750,000$ $ 0 7,200,000 7,200,000 $$ 21,738,240 $ 24,455,520 $$ 20,405,520 $$ 24,455,520 20,405,520 14,538,240 $ 9,192,960 0 0 0 15,000,000 6,750,000 0 21,738,240 0 100% 337,500,000$ $ 360,000,000 360,000,000 $$ 1,086,912,000 1,086,912,000 $ 1,222,776,000 337,500,000 1,222,776,000 $$ 1,020,276,000 1,020,276,000$ $ 726,912,000 $ 459,648,000

84,945,430 750,000 1,113,000 2,250,000 5,853,353 375,000 0 0 16,036,505

0 750,000 1,113,000 2,250,000 0 375,000 0 0 0

0 750,000 1,113,000 2,250,000 0 375,000 0 0 0

0 750,000 1,113,000 2,250,000 0 375,000 0 0 0

0 750,000 1,113,000 2,250,000 0 375,000 0 0 0

0 750,000 1,113,000 2,250,000 0 375,000 0 0 0

$ $324,000,000 16,200,000 $ 9,720,000 $129,600,000 9,720,000 $ $ 6,480,000 0 $ 324,000,000

$ $ $ $ $

Total

161536

Total 5,538,024,000 2,215,209,600 Total 775,323,360 664,562,880 609,182,640 553,802,400 553,802,400 553,802,400 387,661,680 387,661,680 Total 332,281,440 5,538,024,000 276,901,200 166,140,720 166,140,720 2,215,209,600 110,760,480 15,000,000 5,538,024,000

0 0 84,945,430 750,000 750,000 6,000,000 1,113,000 1,113,000 8,904,000 2,250,000 2,250,000 18,000,000 0 0 5,853,353 375,000 375,000 3,000,000 0 0 267,937,500 0 0 0 0 16,036,505 Total Expenses in COP 2,640,886,388

$ $ $ $ $ $ $ $ $ $ $ $$ $ $ $$ $

$ $ $ $ $ $ $ $ $ $

Earnings (Before Tax) in COP 2,897,137,612 $

48

49


Conclusion

Bibliography http://cottonusa.files.cms-plus.com/Sourcing/FileDownloads/Esteban%20Bowles%20presentation%20Sourcing%20Fair%20Bogota%202012%2005%2002%2012.pdf

Colombia and its people’s culture have proven to be receptive and knowledgable of American Culture, so the introduction of J.Crew (American brand) to their market would not be a shock to them. There are certain aspects of politics that are concerning however, the Colombian government seems to be taken steps to solve them. Moreover, the apparel market and retail sector are strong and growing positively and those are positive factors in our favor. Also, after analyzing J.Crew’s competitive strengths in terms of brand image/perception and sales potential in the country and particularly Bogota, we can agree that there is an opportunity to expand and grow into Latin American countries and Therefore, we believe that not only our pop-up shop venture will be successful but also there is potential for a future permanent store.

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Latin%20 America.pdf http://colombiareports.co/category/colombia-news/economy/page/13/ http://colombiareports.co/colombia-begins-taking-internet-shopping-seriously-industry-grows-40/ http://colombiareports.co/colombia-just-among-upper-middle-countries-2014-prosperity-index/ http://colombiareports.co/colombia-1-7-promising-global-economies-fortune/ http://www.centrocomercialsantafe.com/ http://www.gapinc.com//content/gapinc/html/media/pressrelease/2011/med_pr_Gap_Inc_Expands_in_Latin_America101211. html

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51


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52

See Appendix for complete Bibliography.

53


54

FASM 410 - Retail Management Alessandro Cannata J.Crew Pop-Up Shop Proposal in Bogota, Colombia Maria Brady & Ankita Patel Winter 2015

J Crew Pop-Up Shop  

A J. Crew pop-up shop in Bogota, Colombia

J Crew Pop-Up Shop  

A J. Crew pop-up shop in Bogota, Colombia

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