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Spring/Summer 2014 Elva Jiang & Lauren Springett Retail Buying Stimulation Savannah College of Art and Design


CONTENT Brand Description Brand Identity Core Mission Scope & Size Target Customer Demographics Psychographics Attitudes SWOT Analysis Competitors Cultural Trends Fashion Trends Brand Vision Six Month Buying Plan Assortment Plan Individual Store: Miami, FL Individual Store: Grand Rapids, MI


BRAND DESCRIPTION

Forever 21 is an American based clothing retailer that has branches spread out worldwide. Its core mission to provide shoppers with an unprecedented selection of today’s fashions, always changing and always in style. Celebrated by many style conscious and trend-savvy shoppers, Forever 21 has quickly become the source for the most current fashions at the greatest value.


HISTORY OF FOREVER 21 1984: Korean-American Do Won Chang and his wife Jin Sook open their first store, Fashion 21, in Los Angeles, measuring 900 square feet. Sales at the end of the first year total $700,000. The Changs open a new store every six months, changing the chain’s name to Forever 21. 2001: Four 24,000 square feet XXI flagship stores open in Texas, Miami, LA, Chicago and Canada. Larry Meyer joins as chief financial officer, becoming executive vice-president in 2006. 2008: Chang daughters Linda and Esther join the fashion empire as chief marketing officer and chief visual officer, respectively. 2010: Forever 21 opens its first European store in Birmingham, followed by its second in Dublin. 2011: London flagship stores are unveiled on Oxford Street and Westfield Stratford City, spanning 35,000 and 68,000 square feet respectively. Future UK openings are planned for Lakeside in Essex, Bluewater in Kent, Liverpool One, Glasgow and in the MetroCentre in Gateshead. European store openings this year include Brussels, Antwerp, Barcelona, Vienna and Paris. The store footprint spans around 480 outlets, with sub-brands such as Forever 21+, For Love21 and 21Men. Forbes magazine estimates the Chang family to be worth $2.2 billion. 2013: Forever 21 has increased to 500 stores worldwide with new stores entering the Asian market.


Core Mission: Forever 21 provides shoppers with an unprecedented selection of today’s fashions, always changing and always in style. Brand Identity: Celebrated by many style conscious and trend-savvy shoppers, Forever 21 has quickly become the source for the most current fashions at the greatest value. Place (Distribution) In store/Online Total of 500 stores worldwide 355 stores in United States E-Commerce: www.forever21.com


TARGET CUSTOMER

Demographics Gender: Female Age: 18-34 Education: In College/Completed HHI: $1,000+ Psychographics Highly fashionable women on a lower budget. Motivated by the trendy, fashionable and frequently changing clothing styles on the market. Wants runway looks for a reasonable price “Disposable� clothing 46% buy average quality items to save money. Like to stay informed, connected, and entertained.


TARGET CUSTOMER Lifestyle


SWOT ANALYSIS STRENGTH

LOWER PRICE RANGE Clothes: $15 ~ $45 Shoes: $10 ~$42 Jewelry: $1.50 ~ $19 Bag: $15 ~ $42 Hats: $10 ~ $20 Beauty: $2 ~ $19 Eyewear: $6 ~ $8

VARIOUS STYLE LINES

Top Left: Sophisticated Line Top Right: Underwear Line Bottom Left: Tropical Line Bottom Right: Jeans & Casual Line

HIGH TURNOVER RATE

Short Periods of 4 - 6 weeks or less

BRAND NAME

A national sample of 1,914 females 13– 29 reflects preferences among “mass” millennials; a Teen Vogue It girl reader panel sample of 1,234 respondents reveals the brands that have been adopted by fashion-savvy influentials.The Top 20 “Love List” brands ranked are: 1. Forever 21 2. Victoria’s Secret 3. Victoria’s Secret Pink 4. Sephora 5. H&M


SWOT ANALYSIS WEAKNESS QUALITY

SWOT ANALYSIS OPPORTUNITY

MILLENNIALS ON SOCIAL MEDIA

-College students spend $784 a month on discretionary expenses. Millennials are the largest demographic purchasing new technological gadgets and fashion apparel. - 63% of Millennial stay updated on brands through social networks. - 84% report that users generated content on company websites influences what they buy.


COMPETITORS FAST FASHION RETAILERS

H&M is successful at having a substantial online presence in the form of social media. The company has developed a smartphone app, which allows loyal customers to receive newsletters on latest collections and sales promotions. H&M has become a multinational fast fashion retailer and continues to grow globally. The company opened 350 new stores in Chine alone in 2013. “Fashion and Quality at the best price.”

Wet Seal is successful in targeting a focused target market -the young, teenage girl, who has limited budget, but desires to express individuality through fashion. Wet Seal provides the styles at the right price point that matches the needs of their target customer. “We use the power of fashion and fun to help our girl express her individuality and fit in -- while standing out. We always listen closely, keep it real, and offer our product at a great price.”

Similar to Wet Seal, Charlotte Russe has a focused target market-- the California teenage girls. They provide trendy styles in reasonable prices. However, the brand is known for the poor quality of their products, which has been the reason that hinders their growth. “Charlotte Russe delivers style in clothing and accessories, providing an exciting, fashionable assortment of merchandise that compliments virtually every facet of our customers’ lifestyle. Charlotte Russe provides fashion and lifestyle needs of young, fashion-conscious women in their teens and early twenties, offering trendright apparel and accessories at value prices.”


COMPETITORS ACTIVE WEAR RETAILERS Pink utilizes celebrity endorsement as the main promotional strategy to strengthen customer loyalty and increase brand equity. Victoria’s Secret holds a fashion show annually as their biggest promotional function. Their strong product development chain allows them to provide quality products, which leads to a large customer base among women who value the luxurious products and shopping experience.

The mission statement of Lululemon athletica is really “the lululemon manifesto,” which is a list of 31 ideas and life philosophies for healthy and posistive living. Their unique brand identity leads to a strong base of customer loyalty, which allows them to maintain high profit margins.

Under Armour strives to make all athletes better through passion, design and relentless pursuit of innovation. They provide a range of innovative products, using high-tech fabrics that allow athletes to perform at their highest potential. The company is also known for sponsoring college athletes as their promotional strategy.


CULTURAL TREND The lines of differentiation between fitness clothing used for casual, business, every day or street wear are being blurred. As dressing casually becomes more acceptable, women sense the increasing value of active wear.

Part of the reason active wear apparel is growing faster than the overall business is attributed to the consumer’s passion to get more fit and desire to look active. Additionally, changing lifestyle, increase in sports participation, increasing aging but active population, growing popularity of adventure traveling, and increasing number of women participation in sports are all contributing factors in the growth of the active wear business. Also, the lines of differentiation between sports fitness clothing used for casual, business, every day or street wear are being further blurred. As dressing casually becomes more acceptable, women feel they are getting value when investing in active wear.


URBAN BICYCLING Cycling is becoming an increasingly popular form of urban transportation. 55 major metropolitan areas in the United States have built the bikeshare system. New York City is in the process of launching the system. In China, there are 435 million bicycles, suggesting the potential market of active wear globally.

COLOR RUN


FASHION TREND

Active wear inspired fashion has been in the air for the past couple seasons but with so many designers embracing the sporty looks, spring 2014 seemed to be its official kickoff. Athletic staples like track pants, sports bras and even cricket knits made their way down the runways of the major fashion capitals. At DKNY track pants, racer tanks and windbreakers raced down the runway. VPL showed running tights, sporty t-shirts and workout gear constructed from water repellant wicking fabrics. Prada gave their active inspired looks a dose of luxury by adorning them with jewels. Even ultra-feminine Vera Wang played her had at sport chic with crop tops, mesh fabrics and zip-up track jackets. Also, fashionistas have been frequently seen swapped their heals for sneakers. Amongst the trends within active wear intended for active purposes, neon colors, cut out shapes, and edgy prints are becoming increasingly popular.


FOREVER 21 ACTIVE WEAR LINE TRENDY AFFORDABLE FUNCTIONAL To differentiate the brand from our competitors – Pink, Lululemon, and Under Armor— Forever 21 is aiming to deliver a line of active wear that is trendy, affordable, and functional. It will attract the young target customer who has limited budget, yet still desires to look stunning and stylish in her workout outfits.


SIX MONTH BUYING PLAN Project Model

FASM 245 Retail Buying Simulation 6 Month Buying Plan Spring 2014 Focus Product Category: ___________________________ Women's Activewear (000's)

Spring 2014 Plan Net Sales, Spring 2014: Est. Net Sales, Spring 2013 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's)

February 12000.0 12% 38400.0 3.2 48000.0 1000.0 5% 22600.0 9492.0

Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost

$100,000.00 $25,000.00 300% 39714.3 2.52 $20,000 20% 58.0% March 20000.0 20% 48000.0 2.4 42000.0 2000.0 10% 16000.0 6720.0

July 16000.0 16% 33600.0 2.1 33000.0 3000.0 15% 18400.0 7728.0

Spring 2014 100,000.0 100% 39714.3 20,000 100% 114600.0

ASSORTMENT PLAN

Focus Product Category: Women's Fashion Apparel Spring 2014

Spring 2014 6 Month Buying Plan April May June 15000.0 15000.0 22000.0 15% 15% 22% 42000.0 39000.0 44000.0 2.8 2.6 2 39000.0 44000.0 33600.0 4000.0 5000.0 5000.0 20% 25% 25% 16000.0 25000.0 16600.0 6720.0 10500.0 6972.0

FASM 245 Retail Buying Simulation Assortment Plans Fall 2013

assortment plan

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Focus Product Category: ______________________________ FOREVER 21 ACTIVE WEAR Planned Purchases, Retail: Average Retail Price: Sizes 2 4 6 8 10 12

% Total 15% 22% 22% 18% 13% 10% 100%

$ Purchases $17,190,000 $25,212,000 $25,212,000 $20,628,000 $14,898,000 $11,460,000 $114,600,000

$114,600,000 $16.8 Unit Purchases 1,023,214 1,500,714 1,500,714 1,227,857 886,786 682,143 6,821,429

Classification Sports Bra Top Jackets Yoga Pants Shorts

% Total 15% 25% 20% 25% 15% 100%

$ Purchases $17,190,000 $28,650,000 $22,920,000 $28,650,000 $17,190,000 $114,600,000

Avg. Retail $12.8 $13.8 $25.8 $20.8 $10.8


f

Grand Rapids, MI Grand Rapids, MI

FASM 245 Retail Buying Simulation 6 Month Buying Plan Spring 2014 Focus Product Category: ___________________________ Women's Activewear (000's)

Spring 2014 Plan Net Sales, Spring 2014: Est. Net Sales, Spring 2013 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %:

(000's)

$200.00 $59.52 236% 77.0 2.60 $40.0 20% 58.0%

February 24.0 12% 84.0 3.5 80.6 3.0 5% 23.6 9.9

Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost

March 26.0 13% 80.6 3.1 84.0 6.0 10% 35.4 14.9

April 30.0 15% 84.0 2.8 92.0 9.0 15% 47.0 19.7

Spring 2014 6 Month Buying Plan May June 40.0 44.0 20% 22% 92.0 83.6 2.3 1.9 83.6 64.8 15.0 15.0 25% 25% 46.6 40.2 19.6 16.9

July 36.0 18% 64.8 1.8 50.0 12.0 20% 33.2 13.9

Spring 2014 200.0 100% 77.0 60 100%

Planned Net Sale: $200,000.00 Average Net sales $ 238.1

Due to the geographic nature of Grand Rapids, Ml, a large portion of the net sales is Grand Rapids, MI = $200.0 planned towards later of the season.

Miami, FL Miami, Florida

FASM 245 Retail Buying Simulation 6 Month Buying Plan Spring 2014 Focus Product Category: ___________________________ Women's Activewear (000's)

Spring 2014 Plan Net Sales, Spring 2014: Est. Net Sales, Spring 2013 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's) Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost

February 51.0 17% 163.2 3.2 180.0 6.0 10% 73.8 31.0

$300.00 $59.52 404% 119.9 2.50 $60.0 20% 58.0% March 75.0 25% 180.0 2.4 134.4 15.0 25% 44.4 18.6

April 48.0 16% 134.4 2.8 117.0 12.0 20% 42.6 17.9

Spring 2014 6 Month Buying Plan May June 45.0 45.0 15% 15% 117.0 99.0 2.6 2.2 99.0 75.6 9.0 9.0 15% 15% 36.0 30.6 15.1 12.9

Planned Net Sale: $300,000.00

July 36.0 12% 75.6 2.1 70.0 9.0 15% 39.4 16.5

Spring 2014 300.0 100% 119.9 60 100%

Average Net sales $

Miami Florida = $300.0 The geographic nature of Miami, Fl, brings summer early to the area, which is why a large portion of the net sales is planned towards early in the season.

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FOREVER 21 ACTIVE WEAR LINE STATEMENT OF OPPORTUNITY

Forever 21’s current active wear line is a rather undeveloped category in the company. We believe that by introducing a new line of active wear that is trendy, affordable, and functional to the season of Spring/Summer 2014, Forever 21 will be able to take on rivals in the active wear marketplace against strong competitors such as PINK, Lululemon, and Under Armor. The affordable price, along with exciting patterns and color stories, will attract young millennials, who have limited budgets, to start filling their wardrobes with stylish Forever 21 active wear items. Forever 21’s active wear products will allow them to look stunning and confident both in the gym and on the streets. By implementing appropriate marketing strategies via the social media platforms, Forever 21 will be able to reach to their target millennial customers, and ultimately achieve the planned net sales of $100,000,000.00.


BIBLIOGRAPHY “About Us.” Pink Fire Trucks. N.p., n.d. Web. 17 Nov. 2013. <http://www.pinkfiretrucks.org/about-us/>. “Activewear Trends | Blog | Stylesight.” BlogStylesight. N.p., n.d. Web. 17 Nov. 2013. <http://blog.stylesight.com/active>. Farfan, Barbara. “Lululemon Mission Statement - A Manifesto of Healthy Ideas & Life Philosophies.” About.com Retail Industry. N.p., n.d. Web. 17 Nov. 2013. <http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/ Lululemon-Athletica-Mission-Statement.htm>. “Forever 21, Inc. Company Profile - Yahoo Finance.” Forever 21, Inc. Company Profile - Yahoo Finance. N.p., n.d. Web. 17 Nov. 2013. <http://biz.yahoo.com/ic/103/103504.html>. Schawbel, Dan. “Why You Can’t Ignore Millennials.” Forbes. Forbes Magazine, 04 Sept. 2013. Web. 07 Oct. 2013. <http://www. forbes.com/sites/danschawbel/2013/09/04/why-you-cant-ignore-millennials/>. “SWOT Analysis of H&M.” - Adrien. N.p., n.d. Web. 17 Nov. 2013. <http://en.youscribe.com/catalogue/studies-and-statistics/ professional-resources/others/swot-analysis-of-h-m-1955240>. “UA Income Statement | Under Armour, Inc. Class A Comm Stock - Yahoo! Finance.” UA Income Statement | Under Armour, Inc. Class A Comm Stock - Yahoo! Finance. N.p., n.d. Web. 17 Nov. 2013. <http://finance.yahoo.com/q/is?s=UA>. “Urban Bike Culture.” Urban Bike Culture. N.p., n.d. Web. 17 Nov. 2013. <http://www.urbanbikeculture.com/>. “WikiWealth.” Charlotte Russe (CHIC) SWOT Analysis -. N.p., n.d. Web. 17 Nov. 2013. <http://www.wikiwealth.com/swotanalysis:chic>. “WikiWealth.” Wet Seal (WTSL) SWOT Analysis -. N.p., n.d. Web. 17 Nov. 2013. <http://www.wikiwealth.com/swot-analysis:wtsl>. Wright, Michael R. “Psychographic Characteristics of the Millennial Generation.” N.p., n.d. Web. 10 Oct. 2013. <https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/7809/2006-wright.pdf>.

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