TABLE OF CONTENTS COMPANY ANALYSIS .................................................................................................................................... 4 EXECUTIVE SUMMARY .................................................................................................................................4 MONICA HANSEN BEACHWEAR OVERVIEW ..............................................................................................4 PRODUCT OFFERING ..................................................................................................................................6 Spring/Summer 2016 Collection ...............................................................................................................6 Spring/Summer 2017 Collection .............................................................................................................10 Festival Line .............................................................................................................................................12 BUSINESS MODEL .....................................................................................................................................13 VALUE PROPOSITION .................................................................................................................................14 INDUSTRY ANALYSIS ....................................................................................................................................15 GLOBAL SWIMWEAR AND BEACHWEAR INDUSTRY OVERVIEW ............................................................15 Industry Performance ...............................................................................................................................15 Market Segmentation ...............................................................................................................................16 WOMEN’S SWIMWEAR IN THE US INDUSTRY OVERVIEW .......................................................................16 Industry Trends .........................................................................................................................................17 MARKET ANALYSIS ......................................................................................................................................18 MARKET OVERVIEW ...................................................................................................................................18 Volume of Female Swimwear Pieces Sold in US .....................................................................................19 COMPETITIVE ANALYSIS ..............................................................................................................................19 COMPETITIVE OVERVIEW ..........................................................................................................................19 MARKETING PLAN ....................................................................................................................................... 21 MARKET POSITIONING ..............................................................................................................................21 MARKETING CHANNELS ............................................................................................................................21 Public Relations .......................................................................................................................................22 Editorial Publications ...............................................................................................................................22 Website ....................................................................................................................................................23 SEO & PPC Advertising ...........................................................................................................................23 Social Media .............................................................................................................................................24 Influencers ................................................................................................................................................24
2
www.monicahansenbeachwear.com
OPERATIONS PLAN ..................................................................................................................................... 26 PROJECTED ORGANIZATIONAL STRUCTURE .........................................................................................26 MANAGEMENT TEAM ................................................................................................................................26 Monica Hansen – Founder & Chief Designer ..........................................................................................26 Brandi Young – Chief Operating Officer ..................................................................................................27 Nina Morgan Jones – Design Consultant ................................................................................................27 Michael Tang – Investor ...........................................................................................................................27 KEY HIRING NEEDS ..................................................................................................................................28 KEY OPERATIONAL MILESTONES ............................................................................................................30 FINANCIAL PLAN ......................................................................................................................................... 31 FUND USES ...............................................................................................................................................31 KEY FINANCIAL ASSUMPTIONS ...............................................................................................................31 E-Commerce ...........................................................................................................................................31 Wholesale ...............................................................................................................................................32 NON-PERSONNEL EXPENSES .................................................................................................................34 APPENDIX ................................................................................................................................................... 36 INCOME STATEMENT ................................................................................................................................36 BALANCE SHEET .......................................................................................................................................37 CASH FLOWS ............................................................................................................................................38
www.monicahansenbeachwear.com
3
EXECUTIVE SUMMARY Monica Hansen Beachwear, (“MHB”), was formed by founder and designer Monica Hansen. MHB is a women’s luxury swimwear company that is well underway in building a premier luxury women’s swimsuit brand. MHB’s initial entrance into this market has targeted fashion conscious women ranging in age from 18 to 40. Monica Hansen is a former Miss Norway and has over 20 years of experience in the industry as a supermodel and designer. MHB has made significant investments to date and created a solid foundation to build the business into an internationally recognized brand. Thus far, the following has been achieved: � Management team in place - Key personnel including product designer and director of operations are in place as are relationships with product photographers, a website developer, graphic designer, and digital marketing agency. � Product design process in place – designs have been completed for all 2016 and 2017 collection items and samples are in progress for 2018 collection all new designs scheduled to be completed by first week of June 2017. � Supply chain developed and in place - All vendors and contract manufacturing are already in place. Sourcing relationships with differentiated, high quality Italian contract manufacturing shops firmly established. � Initial key brand development activities completed - All initial branding is already in place and the product line has received widespread favorable response from fashion editors and influencers. � E-commerce enabled website in place - working e-commerce website that is generating sales on a regular basis. � Sales agent secured and product placed - the company has secured the services of a sales agency as well as PR firms in both the US and Scandinavia. Product has been placed in numerous high end boutiques. � Prominent brand recognition established - MHB has received an impressive amount of recognition in the press, being featured in the Sports Illustrated Swimsuit Edition in both its print and online formats, Cosmopolitan, Elle, People Stylewatch and others, and has been worn by numerous celebrities including Beyoncé, Kate Hudson, Ashley Simpson, Cat Sadler, Christie Brinkley, Kate Upton, Rhianna, Kim and Chloe Kardashian just to name a few. MHB is currently well positioned to profitably grow. Investment capital being sought will be used to grow the brand’s already positive reputation by spreading awareness across a much broader audience, growing sales via digital and traditional marketing efforts, and to ensure inventory is in place to respond to growing demand. With the proper financial backing the brand is already positioned to be able to grow sales at an exponential rate, with all infrastructure already firmly in place.
4
www.monicahansenbeachwear.com
COMPANY ANALYSIS MONICA HANSEN BEACHWEAR OVERVIEW Monica Hansen Beachwear, LLC (‘MHB’) is a luxury swimwear and beachwear brand, offering numerous styles of luxury bikinis available for purchase by individual piece for consumers to mixand-match or as a complete set. The Company was founded by Monica Hansen, an international swimwear supermodel with over 20 years of industry experience, who is currently looking to expand her operations and solidify her brand within the global luxury swimwear marketplace. Hansen began her modeling career at 14 years old, and, inspired by the fabrics, designs and materials she often wore, sought to create a high-end swimwear brand using the finest Italian-made fabrics. The result was the Monica Hansen Beachwear brand, launched at the Miami Swim Week 2016 with the collection designed by Hansen. The full Monica Hansen Beachwear product line offers over 45 different styles, all crafted in Italy using the most comfortable, elegant and graceful materials. Italy is globally-renowned for its good quality textiles and manufacturers, and MHB has the most sought-after, fashionable pieces due to its trendy and well fitted cuts and shape. The Company’s swimwear line is currently focused on swimsuits, but MHB intends to add more beachwear items such as cover ups, shorts, pants and dresses in the coming months. To date, the Company is generating revenue through sales via its e-commerce platform and through Hansen’s own personal social media influence. Further, the Company’s products are available in numerous independent beachwear boutiques across the United States and Europe. Monica Hansen Beachwear is seeking $2.5 Million to exponentially propel operations forward, with funds allocated toward inventory, marketing and working capital.
COMPANY Monica Hansen Beachwear, LLC
FOUNDED 2016
HEADQUARTERS Los Angeles, California
MANAGEMENT Monica Hansen Brandi Young
PRODUCTS Luxury Swimwear & Beachwear
CAPITAL ASK $2,500,000
FUND USES Inventory Marketing Working Capital
www.monicahansenbeachwear.com
5
PRODUCT OFFERING To date, Monica Hansen Beachwear has released two collections of swimwear: Spring/Summer 2016 and Spring/Summer 2017. The Company’s products range from $160 - $480, but on average, each piece retails around $200. The Company product line boasts 45 different styles in various colors, allowing customers to mix and match to create their own favorite combination. Although the Company’s focus is currently on swimwear, Monica Hansen will be expanding her product line to include cover ups, shorts, pants and dresses, categorized as ‘beachwear’. Further, the Company will design and produce a black label editorial and ready-to-wear lines that are more sport and fitness-oriented.
SPRING/SUMMER 2016 COLLECTION Below are some of the most popular styles and designs from the Spring/Summer 2016 collection. SWIMWEAR
Figure 1: California Dreaming Product Line
6
www.monicahansenbeachwear.com
www.monicahansenbeachwear.com
7
Figure 2: Leather & Lace Product Line
8
www.monicahansenbeachwear.com
Figure 3: Forever Pearl Product Line
www.monicahansenbeachwear.com
9
Figure 4: That Sporty Vibe Product Line
SPRING/SUMMER 2017 COLLECTION The 2017 Collection is inspired by the 1990’s minimalism with a return to the 90’s supermodel. The cuts are increasingly focused on athletic and sportswear geared toward a population that is increasingly fitness- conscious and desires the pursuit of a healthy body while still showing lots of skin. At the same time, the colors and fabrics lend a softer touch with colors that tend toward skin tones, pale blush pinks, nude, black and white, and the fabrics are all very soft and, in some cases, textured, which keeps the collection sensual and feminine.
10
www.monicahansenbeachwear.com
Figure 5: Bombshell Product Line
www.monicahansenbeachwear.com
11
FESTIVAL LINE MHB has produced a Festival Product Line that targets specifically women attending music and arts festivals in the summer. Below are some examples.
Figure 6: Coachella Bella Product Line
12
www.monicahansenbeachwear.com
BUSINESS MODEL Monica Hansen Beachwear’s products can be found on its e-commerce store, www.monicahansenbeachwear. com, and in numerous boutique stores across the country. The Company seeks to implement a variety of paid digital marketing initiatives and expand the number of boutiques carrying its products. Current boutiques include: � The Edition Hotel Miami (Miami Beach, FL) � Glam Boutique (Los Angeles, CA) � Le Bra Lingerie & Swimwear (Beverly Hills, CA) � SOL Candy (Miami Beach, FL) � Nikki Bikinis (Miami Beach, FL) � Maui Girl (Maui, HI) � Nikki Beach St Tropez (Ramatuelle, France) � MagMaLou (Oslo, Norway) Wholesale markups are around 1.8x direct cost, while retail markups are around 2.2x wholesale. Wholesale orders are projected at 4,000-5,000 units per order, while e-commerce consumer purchases are projected at 1 unit per order. Swimwear refers to the Company’s bikinis and swimsuits, while beachwear refers to the Company’s ancillary products, including shorts, cover-ups, pants and dresses.
Figure 7: Price Points & Direct Costs
Direct Cost
Avarage Wholesale price
Swimwear
$51
$91
$200
Beachwear
$51
$1
$200
www.monicahansenbeachwear.com
Avarage Retail price
13
VALUE PROPOSITION Monica Hansen Beachwear offers a robust value proposition as seen below: Figure 8: Monica Hansen Value Proposition
Monica Hansen: Monica Hansen is an industry veteran having worked as an international swimwear model for over 20 years. She brings extensive knowledge of the fashion industry, which is reflected in the sleek cuts, vintage design and overall aesthetic of her products. Fascinated by fashion, drawing and painting throughout her life, designing her own swimwear brand is the ultimate expression of her knowledge.
Italian Fabrics & Production: All of MHB’s products are finely crafted from top factories in Italy. Italy is world-renowned for its fabrics that feature heavily in the Company’s product lines. The Company has a certificate of authenticity to confirm the legitimacy of each product manufactured in Italy.
Quality Trim Materials: Monica Hansen Beachwear products feature some of the finest materials sourced from around the world. In addition to Italian fabrics, the Company uses silk from India and freshwater pearls from China in their products. This attention to detail has earned MHB the reputation as one of the most luxurious swimwear brands in the world today.
Multi-Channel Distribution: Unlike most e-commerce platforms, MHB will generate sales through both online and wholesale channels. This allows the Company to maximise revenues, and has allowed foreign retailers to carry MHB products, exposing the brand to a wider, global audience.
14
www.monicahansenbeachwear.com
INDUSTRY ANALYSIS GLOBAL SWIMWEAR AND BEACHWEAR INDUSTRY OVERVIEW Monica Hansen Beachwear will sell luxury swimwear through an e-commerce platform as well as wholesaling to fashion retail boutiques. As such, MHB operates within the global swimwear and beachwear industry. Operators in this industry design, produce and sell bikinis, one-piece swimsuits, cover-ups and accessories through retail stores and an online format.
INDUSTRY PERFORMANCE The global swimwear and beachwear industry has grown robustly in recent years, with the industry’s revenue totaling at $13.25 billion, according to the NPD Group¹. This growth can be attributed to a more global approach for the sale of swimwear, with industry operators meeting the demand for a greater range of swimwear, including luxury pieces, plus-sized and modest swimsuits around the world. Figure 9: Global Swimwear and Beachwear Industry– Key Industry Metrics
Total Industry Revenue (‘16)
$13.25bn
Est. Total Revenue (‘22)
$22.7bn
CAGR (‘16-20)
5.97%
MHB currently sells its collection to a retailer in Oslo, Norway and Ramatuelle, France, and will continue to promote its products to the global market. As Monica Hansen is Norwegian, she has strong personal connections within the fashion industry, and will continue to solidfy her brand presence in Europe and abroad. The global swimwear and beachwear industry’s revenue is expected to total at $22.7 billion by 2022, according to Global Industry Analytics², benefiting from the increased demand for thermal swimwear and swimsuits that provide UV protection. Moreover, recent years have seen the launching of a plethora of e- commerce platforms specializing in the sale of female swimwear, which has massively contributed to this growth. Further, BusinessWire³ forecasts the global swimwear industry to grow at a CAGR of 5.97% in the five years leading to 2022, which benefits the Company as they plan to capitalize on this growth.
¹ The NPD Groyp, Inc. is a Global market research company ² The NPD Industry Analysts,Inc. is a reputed publisher of off-the-shelf market research. ³ BusinessWire is the global leader in the press release distribution and regulatory disclosure.
www.monicahansenbeachwear.com
15
MARKET SEGMENTATION In 2015, the overwhelming majority of swimwear sales were dominated by women’s swimwear, accounting for roughly 68% of the overall market revenue, or roughly $9.1 billion worldwide. Children’s swimwear comprised the smallest market segment, making up only 14% of the revenue. Figure 10: Global Swimwear Market Share (2015) Source: Technavio
Men´s Swimwear 18%
Children´s Swimwear 14%
Women´s Swimwear 68%
Men’s swimwear accounted for 18% of total swimwear sales, roughly $2 billion. MHB currently does not produce or design men’s swimwear, but their focus will be on swimwear for women. Based on the total market spend on women’s swimwear in 2015, the Company will have ample opportunity to generate profits.
WOMEN’S SWIMWEAR IN THE US INDUSTRY OVERVIEW While MHB will cater to a global audience, and will actively encourage international customers to buy products, the Company’s main focus will be on fashion-conscious women in the US. As such, the industry revenues of the women’s swimwear industry directly affect the Company’s market potential. In 2016, the US Women’s Swimwear industry totaled $3.1 billion, an increase from $3.05 billion the previous year. According to Statista⁴, industry revenue is projected to continue to increase to $3.68 billion by 2020. These figures suggest a huge market for the Company to capitalize on in its operations.
⁴ Statista is a leading research and statistics database.
16
www.monicahansenbeachwear.com
Figure 11: US Women’s Swimwear Industry Revenue
$4,000.00
$3,390.50
$3,500.00 $3,000.00 $2,500.00
$2,840.78
$3,028.64
2013
2015
$3,684.65
$2,376.83
$2,000.00 $1,500.00 $1,000.00 $500.00 $0.00
2010
2011
2012
2014
2016
2017
2018
2019
2020
Revenue ($ Millions)
This steady increase can be attributed to several factors, including a positive body-image trend that sees women less shunned by society, and more encouragement of different body shapes and sizes. Moreover, an increased number of online platforms specializing in women’s swimwear have launched in the past five years, boosting swimwear sales across the country. It is clear from the figure above that the swimwear market is large enough for Monica Hansen Beachwear to enter and to grow exponentially.
INDUSTRY TRENDS According to e-commerce fashion giant Polyvore, women will be looking for daring beach-ready styles that make a big statement in 2017. This year, high-leg silhouettes and skin-revealing fabrics like mesh and crochet will dominate the marketplace. In addition, nude colors will be the most preferred color scheme among swimwear, as the natural shade can be customized to cater for every complexion. MHB is ahead and aware of all these trends, and has produced pieces that reflect the upcoming demands in its upcoming collection.
www.monicahansenbeachwear.com
17
MARKET ANALYSIS MARKET OVERVIEW Monica Hansen Beachwear will market its products to fashion-conscious women aged 18-45 with significant disposable income. The average women in the US owns 4 swimsuits, and the average price per swimsuit is $24.26, according to research conducted by the NPD Group. Based on these statistics, Monica Hansen Beachwear can tap into a huge market throughout the country and will focus on the niche luxury segment. Even for budget conscious women, MHB’s products can serve as the one go-to luxury piece in their closet fit for any beach or swimming occasion.
VOLUME OF FEMALE SWIMWEAR PIECES SOLD IN US According to research database Statista, 207.4 million units of female swimwear were sold in 2016, an increase from 2015 when 203.9 million pieces were sold throughout the US. The growing population and media campaigns which focus on positive body image and stress that women of all sizes are beautiful should support a further continuation in growth for the swimwear industry as increasingly greater numbers of women feel comfortable wearing swimwear in public. Figure 12: Volume of Female Swimwear Pieces sold in US (in Millions)
250 200
174
187
192
198
204
207
2013
2014
2015
2016
218
220
2017
2018
225
231
2019
2020
183
150 100 50 0
2010
2011
2012
Revenue ($ Millions) The volume of total female swimwear pieces sold is expected to increase in the years leading up to 2020, to result in 231 million pieces sold. This represents ample opportunity for the Company to capitalize on. Further, Statista expects the industry’s sales to grow by 5.3% in 2017 alone. As the Company enters the marketplace this year, it will capitalize on these growing sales by positioning Monica Hansen Beachwear as the ultimate luxury swimwear brand.
18
www.monicahansenbeachwear.com
WOMEN IN THE US – ADDRESSABLE MARKET Today, there are roughly 156 million women in the United States. This figure represents the total market size for the Company. Of this 126 million, roughly 70 million are between the ages of 18 and 45, and thus qualify as the Company’s target market.
COMPETITIVE ANALYSIS COMPETITIVE OVERVIEW Monica Hansen Beachwear will compete with other online high-end swimwear companies. Information on some of the Company’s primary competitors is listed below.
Company Name
Minimale Animale
Website
www.minimale-animale.com
Stockist
Domestic -13 International - 3
Price Range
$70 - $250
Social Media Influence
Instagram – 313K Followers Facebook – 319 Likes Pinterest – 2,172 Followers Twitter – 3,511 Followers
Company Name
Beach Riot
Website
www.beachriot.com
Stockist
Domestic -104 International - 2
Price Range
$45 - $428
Social Media Influence
Instagram – 193K Followers Facebook – 6,872 Likes Pinterest – 4,363 Followers Twitter – 2,970 Followers
www.monicahansenbeachwear.com
19
20
Company Name
Beach Bunny Swimwear, LLC
Website
www.beachbunnyswimwear.com
Stockist
Domestic -6 International - 1
Price Range
$50 - $400
Social Media Influence
Instagram – 426K Followers Facebook – 270,992 Likes Pinterest – 3,142 Followers Twitter – 31.5K Followers YouTube – 6,865 Subscribers
Company Name
Vitamin A Enterprises, Inc.
Website
www.vitaminaswim.com
Price Range
$50 - $500
Social Media Influence
Instagram – 107K Followers Facebook – 11,592 Likes Pinterest – 1,079 Followers Twitter – 2,054 Followers YouTube – 101 Subscribers
www.monicahansenbeachwear.com
MARKETING PLAN MARKET POSITIONING Monica Hansen Beachwear is committed to producing the highest quality beach and swimwear for women around the world. In order to achieve this goal, the Company’s marketing plan will create a platform for longterm success and brand awareness, promoting Monica Hansen Beachwear as the ultimate swimwear fashion line. Positioning initiatives include: � Establishment of the MHB brand identity within the global swimwear marketplace. � Creation of desire and demand for its wide range of luxury, authentic swimwear pieces along with complementary products. � Construction of a strong customer base through excellent referrals, word of mouth and customer service. � Solidification of customers through the use of social media and key promotional influencers.
MARKETING CHANNELS Monica Hansen Beachwear will use the following marketing channels and tactics to position itself as the ultimate luxury swimwear brand. These strategies will ensure that the Company builds desirable brand recognition within while building supporters, customers and advocates of the brand. Figure 13: Monica Hansen Beachwear Marketing Plan
Marketing Strategy Office Channels Public Relations
Online Channels
Editorial Publications
Website
Influencers
SEO & PPC
Social Media Marketing
Emailing Lists
www.monicahansenbeachwear.com
21
PUBLIC RELATIONS Monica Hansen Beachwear has currently partnered with CLD PR firm, which is responsible for promoting the brand at swimsuit weeks and in relevant fashion publications. CLD PR is a full service PR Agency with extensive experience in overall brand development, PR, communications, celebrity placement, media placement, influencer relations, events, social media, branding and all other PR-related disciplines. Moving forward, the Company will continue to work with its PR firm to achieve the following objectives: � Support the overall brand promotion strategy for MHB throughout the swimsuit industry. � Create a strategic media relations plan to position Monica Hansen Beachwear as the premier luxury swimwear brand. � Build awareness of the brand through creative programming and promotional tactics.
EDITORIAL PUBLICATIONS To date, the Company has been featured in several key publications, such as Sports Illustrated, Elle, Cosmopolitan, People, Galore, Femina, Fit Diva, SKON, Star Magazine, Modeliste, XIOX, Factice Magazine, Runway Magazine, TREATS, and more. Monica Hansen Beachwear will seek to be featured in the most popular fashion magazines, including Vogue, Sports Illustrated and Maxim. Figure 14: Monica Hansen Beachwear Publication Features
22
www.monicahansenbeachwear.com
By being featured in and purchasing advertising space in these magazines, the Company strives to focus on reaching the right target market for their products - namely fashion conscious women. The Company has already begun featuring in editorial publications, which has resulted in increased web traffic for Monica Hansen Beachwear. After featuring in an issue of Sports Illustrated magazine, for example, web traffic shot up from 50 views a day to 600 a day. This success only highlights further the importance of advertising space in editorial publications, which the Company will continue to do.
WEBSITE MHB has developed an easy-to-use, clean website that highlights the full range of its products in an aesthetically pleasing manner. The website allows users to purchase products based on recent collections, by sale or ‘online exclusives.’ Further, the Company allows potential buyers to shop with particular events in mind, including a ‘Festival’ section as well as an option for buyers to shop for items based on the Company’s Instagram account. Figure 15: Monica Hansen Beachwear Website
The website features a blog that includes all the Monica Hansen beachwear features in publications, giving potential buyers a sense of legitimacy surrounding the brand. This blog will be continuously updated and will provide potential buyers the extra incentive to purchase a product from the website.
SEO & PPC ADVERTISING Monica Hansen Beachwear is currently working with a digital marketing firm to optimize their online presence in search engines. The Company will implement an aggressive search engine optimization (SEO) strategy, whereby the Company will optimize content using keywords related to swimwear. By optimizing the website’s content, MHB will organically aggregate higher on Google, Bing, and Yahoo search engines.
www.monicahansenbeachwear.com
23
Further, the Company will utilize Google, Yahoo, and Bing paid search campaigns to target customers. This will include pay-per-click (PPC) campaigns that target high search volume terms to drive traffic to the website. Monica Hansen Beachwear will analyze and opt for keywords that are the most cost effective, such as ‘luxury bikini’, ‘beachwear minimal’ and ‘women’s swimwear.’
SOCIAL MEDIA In today’s online world, social media optimization is a key component to SEO and in enabling internet users to find a particular website. These social media marketing tools allow the Company to create great exposure and play a significant role in establishing Monica Hansen Beachwear as a luxury swimwear brand.
Figure 16: Monica Hansen Beachwear Instagram
In the swimwear industry in particular, maintaining a social media account with updated content encourages followers to make purchases. Currently, the Monica Hansen Beachwear Instagram account boasts over 7,000 followers.
INFLUENCERS Monica Hansen Beachwear will use social media influencers to promote their brand, targeting various different audiences with ease. Most influencers are given free products in exchange for posting a picture of themselves wearing the product, allowing the Company to reach huge markets unavailable to them through their own social media accounts.
24
www.monicahansenbeachwear.com
Figure 17: Celebrities Wearing MHB
Celebrities have already started to wear Monica Hansen Beachwear’s products, as pictured below. The Company will seek to use these models and celebrities’ influence in order to further promote their brand.
Beyoncé wore the pineapple lovers one piece by Monica Hansen Beachwear while making her visual album, Lemonade. Beyoncé posted the attached behind-the-scenes photo from ‘daddy lessons’ to her website (http://www.Beyonce.Com) on august 20, 2016.
Actress, kate hudson was spotted wearing the california dreaming very sexy one piece in blue by Monica Hansen Beachwear while vacationing in ibiza, spain
Monica Hansen Beachwear shot on actress bella thorne for cover of galore magazine and also published in people and star and seen on TMZ
Iconic model christie brinkley wears Monica Hansen Beachwear in both the online and the print versions of the Sports illustrated swimsuit edition february 2017
Victoria’s secret model Shanina shaik wears Monica Hansen Beachwear in miami and posts photos on instagram
www.monicahansenbeachwear.com
25
OPERATIONS PLAN PROJECTED ORGANIZATIONAL STRUCTURE Monica Hansen Beachwear will operate with a lean team and outsource marketing and other relevant functions are necessary. MHB’s projected organizational structure is highlighted below.
Monica Hansen Beachwear
Figure 18: Projected Organizational Structure
Chief Designer & Marketing Monica Hansen
Assistant Designer
Customer Service
Director of Operations Brandi Young
Account Manager
Sales Reps
MANAGEMENT TEAM Monica Hansen Beachwear is comprised of an expert management team of experienced professionals, committed to the success of the brand. Led by industry veteran Monica Hansen, the management team has vast experience in the fashion and swimwear industry, qualifying them to be the optimal candidates to lead the Company and establish the brand.
MONICA HANSEN – FOUNDER & CHIEF DESIGNER Monica Hansen started her modeling career at 14 years old. Blessed with an exotic genetic combination of Brazilian and Norwegian parents, Monica was signed and contracted by the top fashion agencies Elite, FORD and Wilhelmina. Throughout her career, Hansen graced over 100 covers of world famous magazines. Today, Hansen is one of the most sought-after swimwear models in the world.
26
www.monicahansenbeachwear.com
Monica Hansen won the 1997 ‘Miss Norway’ competition, and was Inspired by her career in swimwear fashion. As a result Hansen established Monica Hansen Beachwear, which she launched at Miami Swim Week in 2016, having invested $250,000 into the Company.
BRANDI YOUNG – DIRECTOR OF OPERATIONS Brandi Young handles correspondence with manufacturers, vendors, graphic designers, photographers, modeling agencies, printers, PR agencies, sales agencies and customers, as well as tracking company performance in Quickbooks. Brandi earned a B.A in Political Science and International Relations from USC, where she earned a J.D shortly after. Prior to joining Monica Hansen Beachwear, she was involved in business management consulting for financially-distressed companies in the hospitality industry, taking at-risk restaurant, hotel and casino clients from near bankruptcy to profitability by restructuring their employee scheduling, purchasing, sales, staffing and budgets and tracking all metrics to show improvements on a weekly basis. This experience makes Brandi uniquely qualified to spearhead all operations under MHB.
NINA MORGAN JONES – DESIGN CONSULTANT Nine Morgan Jones will serve as the Design Consultant for MHB. Morgan-Jones is based in both London and Hollywood, and is most renowned for co-founding the fashion company ROMP.
MICHAEL TANG – INVESTOR Michael Tang is acting as an investor and advisor for MHB. He has over 30 years of broad experience with the building and founding of dozens of companies as principle owner and funder. He is familiar with many business segments including, consumer, industrial, biotech, and energy sectors. Prior to his business involvement Mr. Tang practiced law.
www.monicahansenbeachwear.com
27
KEY HIRING NEEDS To operate and grow the business, the management team will need to hire the following employees to ensure efficient and effective operations as the Company begins to ramp-up operations. Most immediate key hires include an assistant designer along with sales representatives. The following figure shows the detailed key hiring needs schedule based on level of priority and time to hiring.
Figure 19: Headcount
Year 1
Year 2
Year 3
Year 4
Year 5
Chief Designer & Marketing - Monica Hansen
1
1
1
1
1
Operations - Brandi Young
1
1
1
1
1
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
$166,000
$174,300
$183,015
$192,166
$201,774
Management Team
Total Management Team Compensation
28
www.monicahansenbeachwear.com
Figure 20: Salary Assumptions
Year 1
Year 2
Year 3
Year 4
Year 5
Sales Reps
2
2
3
3
3
Customer Service
1
1
1,5
1,5
2
Account Manager
0
1
1,5
1,5
3
Assistant Designer
0,5
0,5
1
2
2
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
Other
0
0
0
0
0
$60,500
$150,150
$246,409
$300,404
$440,013
5
6,5
9
10
12
Total Headcount Compensation
$226,500
$324,450
$429,424
$492,569
$641,787
Payroll Taxes and Other Benefits
$27,520
$39,421
$52,175
$59,847
$77,977
Total Headcount Cost
$254,020
$363,871
$481,599
$552,417
$719,764
Support
Total Support Team Compensation Total Headcount
www.monicahansenbeachwear.com
29
KEY OPERATIONAL MILESTONES The management team has identified the immediate milestones necessary for Monica Hansen Beachwear to fully reach its goals within the next year. The following figure shows each of these operational milestones, as well as their deployment schedule.
Figure 21: Milestones
Milestone
Deployment
� Complete strategic business plan
� Q3 2017
� Identify initial investors/partners
� Q3 2017
� Secure & raise capital required
� Q3 2017
� Key Vendors place orders for coming years � Initiate Marketing Campaign
� Complete � Ongoing
� Online Marketing Execution
� Ongoing
� Promote at Swimsuit Fashion Shows
� Ongoing
� Continued Marketing Plan Implementation & Execution
� Ongoing
30
www.monicahansenbeachwear.com
FINANCIAL PLAN FUND USES Monica Hansen Beachwear seeks funding to be allocated toward inventory, marketing, operating capital and working capital.
KEY FINANCIAL ASSUMPTIONS E-COMMERCE The Company has made several key financial assumptions to project its revenue and direct costs over the next five years. The Company projects 7,400 monthly active visitors in Year 1 growing to 83,713 monthly visitors by Year 5. MHB also projects a 26.41% bounce rate (average across competitors). Figure 22: Web Traffic
Annual Traffic
Avg Monthly Traffic
Active Visitors Post-Bounce (Annual)
Active Visitors Post-Bounce (Monthly)
Year 1
84,350
7,029
62,077
5,173
Year 2
194,531
16,211
143,165
11,930
Year 3
399,460
33,288
293,983
24,499
Year 4
670,752
55,896
493,640
41,137
Year 5
1,004,553
83,713
739,301
61,608
The Company projects a 0.5% conversion rate from active visitors to customers in Year 1, to reach 2.0% conversion rate in Year 5. Figure 23: Customers
Annual Customers Year 1
310
Year 2
1,432
Year 3
4,410
Year 4
8,639
Year 5
14,786
www.monicahansenbeachwear.com
31
Projected product purchase breakdown is highlighted in the figure below. Figure 24: Product Utilization
Swimwear
Beachwear
Year 1
97.00%
4.00%
Year 2
95.00%
8.00%
Year 3
93.00%
12.00%
Year 4
91.00%
16.00%
Year 5
89.00%
20.00%
Price points and direct costs are highlighted below.
Figure 25: Price & Costs
Swimwear
Avg Price
Avg Direct Cost
Units Purchased
Swimwear
$200.00
$51
1.0
Beachwear
$200.00
$51
1.0
WHOLESALE The Company projects 10 total boutiques by the end of Year 1, growing to 30 total boutiques by the end of Year 5. Figure 26: Accounts
Swimwear
32
Year 1
10
Year 2
15
Year 3
21
Year 4
26
Year 5
30
www.monicahansenbeachwear.com
Projected product purchase breakdown is highlighted in the figure below. Figure 27: Product Utilization
Swimwear
Beachwear
Year 1
100%
90%
Year 2
100%
90%
Year 3
100%
90%
Year 4
100%
90%
Year 5
100%
90%
Price points and direct costs are highlighted below. Figure 28: Price & Costs
Swimwear
Avg Price
Avg Direct Cost
Units Purchased
Swimwear
$91
$51
100
Beachwear
$91
$51
50
Split between online sales and wholesale sales
Split between Direct to Consumer and wholesale revenues Online Sales
Wholesale Sales
Total Revenue
Online %
Wholesale %
Year 2
$ 294,920
$ 1,977,382
$ 2,272,302
13%
87%
Year 3
$ 926,046
$ 2,819,274
$ 3,745,320
25%
75%
Year 4
$ 1,848,683
$ 3,761,827
$ 5,610,510
33%
67%
Year 5
$ 3,223,352
$ 4,467,151
$ 7,690,504
42%
58%
www.monicahansenbeachwear.com
33
NON-PERSONNEL EXPENSES Non-personnel expenses are expected to grow from $253,690 in Y1 to $1,420,483 in Y5. Operating expenses will mostly consist of marketing and promotion, bank charges and merchant fees as well as the cost of digital advertising. Below is a complete list of the non-personnel expenses and the projected growth.
Figure 29: MHB Operating Expenses
Operating Expenses
Year 1
Year 2
Year 3
Year 4
Year 5
PR Firm CLD
$33,000
$36,300
$39,930
$43,923
$48,315
Digital Marketing
$120,000
$150,000
$187,500
$234,375
$292,969
Bank Charges & Merchant Fees
$39,648
$68,169
$112,360
$168,315
$230,715
Dues & Subscriptions
$6,000
$6,300
$6,615
$6,946
$7,293
Insurance Expenses
$2,400
$2,520
$2,646
$2,778
$2,917
$0
$0
$0
$0
$0
Office Supplies
$2,400
$2,640
$2,904
$3,194
$3,514
Professional Fees (Legal, Accounting, Consulting)
$2,100
$2,415
$2,777
$3,194
$3,673
Rent Expenses
$0
$42,000
$42,840
$43,697
$44,571
Utilities
$0
$4,200
$4,284
$4,370
$4,457
$600
$630
$662
$695
$729
Telephone / Internet Expense
$3,600
$3,780
$3,969
$4,167
$4,376
Website & Server Expenses
$2,400
$2,520
$2,646
$2,778
$2,917
Other Marketing
$12,000
$18,000
$27,000
$40,500
$60,750
Conventions and Trade Shows
$24,000
$25,200
$26,460
$27,783
$29,172
Design Samples
$36,000
$37,800
$39,690
$41,675
$43,758
$0
$0
$0
$0
$0
$284,148
$402,474
$502,282
$628,390
$780,127
Other
Sales Expense / Travel
Other
TOTAL
34
www.monicahansenbeachwear.com
IMPORTANT LEGAL DISCLAIMER This presentation contains certain “forward-looking statements” regarding business strategies, market potential, future financial performance and other matters, including without limitation statements with respect to projected cash flows, growth, balance sheets and income statements, and statements with words such as “will,”expects,” “potential,” “estimates” or “projected.” Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations at the time of this presentation. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. Except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise.
www.monicahansenbeachwear.com
35
APPENDIX INCOME STATEMENT Income Statement
Year 1
Year 2
Year 3
Year 4
Year 5
Total Revenue
$1,321,598
$2,272,302
$3,745,320
$5,610,510
$7,690,504
Total Revenue
$1,321,598
$2,272,302
$3,745,320
$5,610,510
$7,690,504
Total Cost
$880,760
$1,438,928
$2,194,400
$3,101,241
$3,973,159
Total Cost of Goods Sold
$880,760
$1,438,928
$2,194,400
$3,101,241
$3,973,159
Gross Profit
$440,838
$833,374
$1,550,919
$2,509,269
$3,717,345
33%
37%
41%
45%
48%
General & Administrative Costs
$284,148
$402,474
$502,282
$628,390
$780,127
Salary & Wage Costs
$254,020
$363,871
$481,599
$552,417
$719,764
Total Operational Costs
$538,168
$766,345
$983,881
$1,180,807
$1,499,891
EBITDA
-$97,329
$67,030
$567,038
$1,328,462
$2,217,454
Depreciation Cost
$0
$0
$0
$0
$0
Amortization Cost
$0
$0
$0
$0
$0
Interest Cost
$0
$0
$0
$0
$0
Pre-Tax Profit
-$97,329
$67,030
$567,038
$1,328,462
$2,217,454
Retained Earnings
-$97,329
-$30,300
$536,739
$1,865,201
$4,082,655
Taxable Income
$0
$0
$567,038
$1,328,462
$2,217,454
Income Tax Cost
$0
$0
$199,159
$491,531
$820,458
-$97,329
$67,030
$367,879
$836,931
$1,396,996
-7%
3%
10%
15%
18%
Revenue
Gross Margin (%) Operational Expenses
Net Income Net Income Margin (%)
36
www.monicahansenbeachwear.com
BALANCE SHEET Balance Sheet
Year 1
Year 2
Year 3
Year 4
Year 5
$1,539,381
$1,417,320
$1,708,186
$2,338,875
Accounts Receivable
$198,077
$285,086
$406,464
$517,985
$586,539
Inventory
$450,559
$571,994
$641,930
$795,853
$886,418
Prepaid Expenses
$14,233
$22,910
$37,449
$46,754
$64,088
$2,202,250
$2,297,310
$2,794,029
$3,699,467
Accounts Payable
$37,547
$57,199
$175,072
$238,756
$295,473
Accured Expenses
$25,033
$33,410
$44,378
$49,200
$62,495
$0
$0
$0
$0
$62,579
$90,610
$219,450
$287,956
Long Term Debt
$0
$0
$0
$0
$0
Total Long Term Liabilities
$0
$0
$0
$0
$0
$62,579
$90,610
$219,450
$287,956
Common Stock
$3,274,000
$3,274,000
$3,274,000
$3,274,000
$3,274,000
Retained Earnings
-$1,134,329
-$1,067,300
-$699,421
$137,511
$1,534,506
$0
$0
$0
$0
Total Equity
$2,139,671
$2,206,700
$2,574,579
$3,411,511
$4,808,506
Total Liabilities and Equity
$2,202,250
$2,297,310
$2,794,029
$3,699,467
$5,166,474
ASSETS Current Assets Cash
Total Assets
$3,629,431
$5,166,474
LIABILITIES & EQUITY Current Liabilities
Current Portion of Debt Total Liabilities
$0 $357,968
Long Term Liabilities
Total Liabilities
$357,968
Equity
Investor Dividends Dispersed
www.monicahansenbeachwear.com
$0
37
Cash Flow Statement
Year 1
Year 2
Year 3
Year 4
Year 5
-$97,329
$67,030
$367,879
$836,931
$1,396,996
Changes in A/R
-$198,077
-$87,009
-$121,378
-$111,520
-$68,554
Changes in Inventory
-$450,559
-$121,435
-$69,936
-$153,923
-$90,565
Changes in Prepaid Costs
-$14,233
-$8,677
-$14,539
-$9,306
-$17,333
Changes in A/P
$37,547
$19,653
$117,872
$63,684
$56,717
Changes in Accrued Expenses
$25,033
$8,378
$10,967
$4,822
$13,295
Total Cash Flow From Operations
-$697,619
-$122,061
$290,866
$630,689
Total Cash Flow From Investments
$0
$0
$0
$0
$0
Paid In Capital
$2,500,000
$0
$0
$0
$0
Debt
-$263,000
$0
$0
$0
$0
Total Current Liabilities
$2,237,000
$0
$0
$0
$0
TOTAL CASH FLOW
$1,539,381
-$122,061
$290,866
$630,689
$1,290,555
$0
$1,539,381
$1,417,320
$1,708,186
$2,338,875
$1,539,381
$1,417,320
$1,708,186
$2,338,875
$3,629,431
OPERATIONS Cash Flow From Operations Net Income
Changes in Working Capital
$1,290,555
CASH FLOW FROM FINANCING Financing
Cash at the Beginning of Period Cash at the End of Period
38
www.monicahansenbeachwear.com
MONICA HANSEN BEACHWEAR CAPITALIZAION TABLE The table below shows the current capitalization of MHB with it´s existing investors, the impact of the proposed investment, and the resulting pro froma capitalization immediately after the proposed investment.
Est.Prior to New Investors Cash
Proposed Investment
Pro forma Capitalization
$2,237,000
(3)
Debt
$263,000
($263,000)
(2)
Common stock
$774,000
$2,500,000
(1)
Retained Earnings Total equily
($1,037,000) $263,000
$2,237,000
$3,274,000 ($1,037,000)
$2,500,000
$2,237,000
(1) Proposed new investor investment (2) Extinguishment of estimated debt due to a current equity investor (3) Cash to be used for general operating purposes
www.monicahansenbeachwear.com
39
www.monicahansenbeachwear.com sales@monicahansenbeachwear.com