Crytal Water Business Plan

1

Business Concept

1.1 Mission Statement Crystal Water is a multi-brand retailer supplying organic, sustainable and green lifestyle clothing. Located in Los Angeles, Santa Monica, we provide merchandise to those who love outdoor activities and are passionate about eco-friendly issues.

1.2 Vision Statement “Every purchase matters.”

Along with this fast-paced fashion industry, cheaper price and faster productions are vital goals for most of manufacturers. Therefore, severe environmental pollution and sweat factory issue have become human being’s troublesome topics. Crystal Water hopes to protect environment and improving lives through providing green, sustainable and organic merchandise.

Crystal Water is aiming to educate customers that we are allowed to make this world better through ethical shopping. In the future, unfair working environment and unqualified products will no longer exist.

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Market Background 2.1 County Overview •

Los Angeles is the second largest county in the U.S

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Most populous in the U.S of California.

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Also a leading county of diverse industries.

Size Population

4,084 square miles 13 Million

Tourists

44.2 Million

Hispanic or Latino 48.3% White, non-Hispanic 27.2% Asian/Pacific Islander 14.6% African-American 9.2% American Indian/Others 1.5%

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Visitors in Los Angeles have been growing year by year.

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The top 5 markets that generate visitor spending in Los Angeles were Mexico, China, Canada, Australia, and the UK.

2.2 Location

2.4 Outdoor Recreation Industry Size

Outdoor Recreation is Essential to the American Economy The impact of outdoor recreation reaches far beyond the outdoor industry, directly fueling major traditional American economic sectors.

INFORMATION 3% MANUFACTURING 20%

PROFESSIONAL, SCIENTIFIC & TECHNICAL SERVICES 4% TRANSPORTATION & WAREHOUSING 4%

ACCOMMODATION & FOOD SERVICES 12%

REAL ESTATE, RENTAL & LEASING 5% FINANCE & INSURANCE 6%

RETAIL TRADE 10%

ARTS, ENTERTAINMENT & RECREATION 8%

OTHER 21%

WHOLESALE TRADE 7%

2.5 Current Situation of the Outdoor Recreation and Apparel Industry •

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Sales of all outdoor products within US outdoor retail business increased 6.4 percent to $6.9 billion in 2013.

There are almost 198 million adults living in United States who define themselves as outdoor consumers.

Outdoor consumers spend $465 annually for their clothing, shoes, gear and electronic equipments for outdoor activities in average.

2.6 Relevant Industry Trend •

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Bicycle market has increase 300 million compared to previous year, and it is estimated 6.1 billion of the U.S bicycle (including bicycle and accessories) market size.

The number of cyclists and bike riders increased between the year 2012 and2014.

Number of cyclists/bike riders: Number of people who have been cycling within the last 12 months in the United States (USA) from spring 2008 to spring 2015 (in millions)

3.1 Target customer overview

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About half of outdoorsy customers are female and between the ages of 25-44 years old.

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198 million adults between the ages of 18-65 and 60 percent consider themselves as outdoorsy consumers.

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Target Customer

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Executive Summary October 2014

The market

FIGURE 1: POPULATION BY HISPANIC ORIGIN, 2009-19

Growth in the fitness clothing market is driven by an

of the growth of Hispanic overarching trend toward casualization as consumers are 3.2 The opportunity shifting expenditures from other categories into activewear, causing the market boundaries to blur as activewear for exercising blends into daywear for leisure purposes.

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Fitness clothing is also becoming more fashionable, and retailers continue to provide consumers with more options across styles, colors, patterns, fabrics and technology.

17% of outdoor customers are Hispanic.

The “athleisure-wear” trend should prevail for some time Hispanics comprise bigobesity segment of population in Los although rising rates and an aging population represent threats to the industry.

Angeles.

Market drivers Hispanic will keep growing in the future.

Rising Hispanic population will impact fitness clothing market FITNESS CLOTHING Executive Summary

Several macroeconomic factors like theOctober growing2014 Hispanic population, declining unemployment rates, increasing FIGURE 1: POPULATION BY HISPANIC ORIGIN, 2009-19 consumer confidence, and a rise in online and mobile shopping will positively influence the fitness clothing market. The US population is expected to grow 4% between 2014 and 2019, but Boomers, the consumer group that will experience the greatest growth rates, is the least likely segment to purchase fitness clothing.

Conversely, younger adults, especially 18-34-year-olds, are more likely to purchase fitness clothing but will experience growth rates that are less than half that of Boomers. (See Figure 1)

SOURCE: US CENSUS BUREAU, INTERIM POPULATION PROJECTIONS RELEASED 2012 AND ANNUAL POPULATION ESTIMATES/MINTEL

FIGURE 2: FITNESS CLOTHING PURCHASES BY TYPE OF ACTIVITY – ANY, BY RACE/HISPANIC ORIGIN, 2014 “Have you bought any clothes that are primarily for sports or exercise in the past 12 months?”

Base: 2,000 internet users aged 18+

The fastest growing consumer segment is Hispanics who will comprise nearly 19% of the total population at an estimated 62 million by 2019, up over 26% in a 10year span and nearly 12% in the next five years. This is encouraging news for fitness clothing retailers because Hispanics not only tend to purchase more fitness wear SOURCE: US CENSUS BUREAU, INTERIM POPULATION PROJECTIONS RELEASED 2012 AND ANNUAL versus any other ethnic group, with 80% buying in the POPULATION ESTIMATES/MINTEL last year, but are also more willing to pay more for it. (See Figure 2) FIGURE 2: FITNESS CLOTHING PURCHASES BY TYPE OF ACTIVITY – ANY, BY RACE/HISPANIC ORIGIN, 2014 “Have you bought any clothes that are primarily for sports or exercise in the past 12 months?”

Base: 2,000 internet users aged 18+

SOURCE: LIGHTSPEED GMI/MINTEL

3.3 Target Customer Profile

Subject

25 to 44 years

Subject

Primary 45 to 59 years

Los Angeles County Percent of TTL Estimate population 2,924,033 30%

Santa Monica city Percent of TTL Estimate population 32,243 36%

Los Angeles County Percent of TTL Target Estimate Customer population 1,947,798 20%

Santa Monica city Percent of TTL Estimate population 19,652 22%

Jane Carter Subject Los Angeles County Santa Monica city • Female Percent of TTL Percent of TTL Estimate Estimate population population • IT project coordinator 15 to 24 years 1,497,281 15% 9,134 10% • Annual income: $102,262 • Tech-savvy person • Engage in variety of outdoor activities • Exercises on a regular basis • Has tight schedule • Married and has 1 kid

Subject

Los Angeles County Percent of TTL Estimate population 2,924,033 30%

Santa Monica city Percent of TTL Estimate population 32,243 36%

Los Angeles County Percent of TTL Estimate population 1,947,798 20%

Santa Monica city Percent of TTL Estimate population 19,652 22%

3.3 Target Customer Profile 25 to 44 years

Subject

45 to 59 years Subject

Los Angeles County Santa Monica city Percent of TTL Percent of TTL Estimate Estimate population population Secondary Target Customer 15 to 24 years 1,497,281 15% 9,134 10%

Liza Jones • Female • Library service manager • Annual income: $77,000 • Gentle and generous personality • Enjoy traveling and camping with her husband • Eat organic food • Love gardening and walk her dog • Married and has 2 children

25 to 44 years

Subject

2,924,033

30%

Subject

15 to 24 years

36%

Los Angeles County Percent of TTL Estimate population 1,947,798 20%

Santa Monica city Percent of TTL Estimate population 19,652 22%

Los Angeles County Percent of TTL Estimate population 1,497,281 15%

Santa Monica city Percent of TTL Estimate population 9,134 10%

3.3 Target Customer Profile 45 to 59 years

32,243

Tertiary Target Customer Clark Brown • Female • Photography assistant • Annual income: $38,000 • Love exercises • Outgoing person • Enjoy meeting new friends • Visit a lot of places because of her job

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Competitive Analysis

S

trengths

- Unique brands

W

- Low brand awareness

- Sustainable raw materials

- Limited capital

- Busy location and high foot traffic

- New entrant

O

T

pportunities

- Large size of industry and it keep expanding

eakness

hreats

- Saturated fashion apparel industry Sector

- Large growing target market

- Risk of subsitution

- Engaging athleisure trend

- Infrequently repeated demand

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Merchandising Plan

5.2 Brands Introduction • •

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Based in West Wales, UK in 1995.

Merchandise: daily wear, shirts, denim jeans, cycling jerseys, t-shirts, bags and accessories.

Price Point: $50-$250

5.2 Brands Introduction • •

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Based in Austin, Texas.

Merchandise: jerseys, jackets, polos and accessories.

Price point: $40-$220.

5.2 Brands Introduction • •

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Started in Portland in 2007.

Merchandise: Shirts, pants and shorts, jackets, sweater and hoodies.

Price point: $100-$300

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5.2 Brands Introduction • •

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Based in British in 2009.

Merchandise: T-shirts, shirts, accessories, hoodies and sweater.

Price point: $30-$100.

5.2 Brands Introduction • •

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Started in New York.

Merchandise: Backpacks, messengers in several sizes, purses, accessories and some bicycle gears.

Price point is between $40-$250.

5.2 Brands Introduction •

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Launched in 2010, and acquired by Seventh Generation in 2013.

Merchandise: Water bottles Price point is between $10-$30.

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5.4 Product Assortment Plan

Accessries 15% Tops 21%

Jeans/Pants/ Tights 9%

T-shirts 7%

Bike Short 13%

Jerseys 23% Jacket 12%

Women % of TTL $ 74% 140290 26% 45730 100% 186020 Men 1969 50% 196031 51%

TTL 3916 100% 382051 100%

Men % of TTL 75% 25% 100%

Units 1497 472 1969

% of TTL 76% 24% 100%

$ 140494 55537 196031

% of TTL 72% 28% 100%

TTLS Units TTL % TTL $ TTL %

Lifestyle 1708 44% 164282 43%

Cycling 2208 56% 225410 59%

TTL 3916 100% 382051 100%