COMPANY PROFILE SOURCING GUIDELINES FALL/WINTER 2018-19 SALES FORECAST COUNTRY ANALYSIS SUPPLIER SELECTION SOURCING STRATEGY PROJECT CONCLUSION
COMPANY PROFILE
LAGOM is born to provide wardrobe essentials distinguished by their quality. Satisfying the young professional in search of modern and timeless pieces.
LAGOM aims to be a national leader providing wardrobe essentials distinguished by their superior quality.
Superior Fashion Quality Timeless Wardrobe Essentials Modern and Functional Pieces Top Customer Service Brand Transparency
OPERATIONS
LAGOM is sold online at shoplagom.com Our headquarters, where all corporate and design work happens, are located in 439 Broadway, New York, NY 10012 Our warehouse, where all inventory and shipping operations occur, is located in 1445 Lower Ferry Rd, Ewing, New Jersey
LAGOM works as a corporation. This means that it acts as an independent legal and tax entity, separate from the people who own, control and manage it.
SHAREHOLDERS
BOARD OF DIRECTORS FINANCE
LEGAL DIRECTOR
SOURCING MARKETING DESIGN
CUSTOMER SERVICE OPERATIONS HUMAN RESOURCES
Women 28-38 years old, focusing especially on the women on their 30s Middle to Upper-middle class with an income ranging from 80k-120k Single, or starting a marriage/family. Higher education level, currently pursuing a full-time or part-time jobs. Our customer would ideally be more millennial oriented with their spending habits, investing more in experiences and less in clothing. Ideally, they would be conscious of buying fewer clothes with higher quality so that they last longer. We don’t intend to target to any specific religion or ethnicity. Our focused region is the United States focused, urban and suburban areas within heavily populated cities.
35 years old Upper-middle class, with an income around 105K Regional manager at a bank corporation Minneapolis, MN She is recently married thinking about children. She just moved to the suburbs and is interested in art, culture, and gardening. She has a bachelor in finance with a concentration in accounting. She is very career oriented and lives in a fast-paced environment, travels often because of her job. She isn’t much of shopper, only buys apparel when necessary. When she does shop, she looks for basics that are versatile and adjust to her constantly changing professional/casual lifestyle. She likes to invest in fabric quality, because of the durability characteristic.
LAGOM aims to find and work with the right manufacturers that work under socially responsible conditions, with outstanding quality and ideal seasonal timing.
At LAGOM we believe we are unique because of the exceptional quality of our apparel. An apparel selection that is made up of wardrobe classics with a fashion and modern orientation. We take advantage of the region our company is being developed in and how we offer the consumer a compound of what our competition is missing.
SOURCING GUIDELINES
To partner up with vendors that not only thoroughly understand and agree with LAGOM’s code of conduct, but also provide their employees with the necessary resources to understand their rights and be able to take action if they feel like they are being treated unjustly by the Code’s standards
- Provide copies of the Code of Conduct in different languages. Provisional assistance provided for any employee who needed additional help understanding the Code. - Implement educational seminars twice a year.
- 85% of the employees attended the seminars. - All business partners have been offered further information explanations through private meetings.
To act in full compliance with local environmental laws and actively search for ways in which the use of virgin resources and carbon emissions can be reduced. Diminish the amount of waste that results from production and completely avoid the contamination of rivers, lakes, and oceans as well as any land which purpose is not waste disposal.
- Audit the requirements of sustainability commitment and legal environmental laws and regulations. - Correct any unnecessary environmental strains.
- 100% of our business partners have signed the sustainability commitment. - 80% of unacceptable cases have improved and reached the requirements.
As a measure to protect the integrity and safety of LAGOM, and our business partners by extension, our suppliers must abide by the Security Policy guidelines states in the Code of Ethics section of the Code of Conduct.
- Important information is only disclosed to key individuals. - Educate employees on the legal repercussions of security breaches and policy violation.
- 8 security infringements were reported. Compared to the 11 reported in 2017. - 99% of employees received information on legal repercussions.
To respect the human rights of every employee within our network of suppliers and to cut business ties with any vendor that violates in any way the Human Rights section stated in the Supplier’s Code of Conduct.
- LAGOM reserves the right to interview or request additional information on business partners, manufacturers, suppliers or any third party employees. - Create surveys to measure employee satisfaction in the workplace.
- Fair wages were met in all our business partners. - 98% of the employees have submitted their surveys and 90% of them are satisfied with their workplaces.
LAGOM does not use real fur or any material for which an animal had to be sacrificed for. We seek to be completely knowledgeable about the sources of the animal fibers our suppliers do use, such as wool, and we expect the animals to be treated with dignity and respect.
- Insist on being completely fur-free. - Set a guideline and implement educational trainings for business partners and workers in order to make sure the requirements of animal ethics are followed. - Farm inspections twice a year.
- 100% fur-free on our products. - Business partnerships with wool farms that did not meet our standards were terminated.
To maintain health of working environment and guidelines when handling chemicals. We will conduct all operations in full compliance with all applicable laws and regulations regarding the chemical use and disposal, including maintaining valid permits.
- Eliminate all toxic and harmful chemicals that are prohibited under environmental laws and regulations. - Maintained chemical permits for product disposal.
- 84% of toxic and harmful chemicals addressed in laws and regulations. - 88% of our permits for product disposal.
(LAGOM looks to those human rights defined in the Universal Declaration of Human Rights.)
Legal Compliance Human Rights Policy Environmental Commitment Sustainability Commitment Chemical Restrictions Health and Safety Responsible Marketing Animal Welfare Child Labor Forced Labor Human Trafficking and Slavery Recognized Employment Wages, Hours and Home Working Freedom of Association and Collective Bargaining Discrimination, Diversity, and Equality Subcontracting Code of Ethics Community Involvement Philanthropic Activities
Better Works Program (BWP) A partnership between the ILO and the WTO . They bring diverse groups together to improve working conditions in the garment industry. Their approach creates lasting, positive change through assessments, training, advocacy and research that changes policies, attitudes, as well as behavior. Worldwide Responsible Accredited Production (WRAP) Is an independent, objective, non-proďŹ t team of global social compliance experts dedicated to promoting safe, lawful, humane and ethical manufacturing around the world through certiďŹ cation and education.
Goal is to achieve 89% placement to shipment ratio Minimum of 89% of all placements must be shipped Compliance with LAGOM’s 4% short shipment tolerance Minimal shipment delivery delays Goal is 87% on time shipments Overall compliance with LAGOM policies and procedures including ticketing errors and defects, hanger ready, Incorrect tickets and accurate and complete documentation Goal 98% compliance Compliance with all LAGOM policies and procedures Full compliance with carton label program Goal 100% compliance Incorrect prepacks,short shipments, sets that do not match, incorrect bundled packs and compliance of no mis-assorted prepacks Goal 83% compliance Color lab dip and bulk submits according to TNA Fit approval samples submitted according to TNA. Compliance with fit corrections and a goal of 3 fit samples with a fit approval within 20 days AD Sample submits 3 weeks prior to ex factory and a goal 88% compliance
FALL WINTER 2018-19
Based on WGSN forecast for FW 18-19, our capsule collection goes along with their vision of “The Thinker.� It focuses on intelligent new classics that cross over from Summer into the Autumn Transitional drop. The color palette is characterized by colors that feel familiar, but also modern. With an essence of retro and mid-century vibes Comfort dress becomes more luxe, as flexible home-work lifestyles become more common, comfort dressing becomes more elevated. Loungewear is more refined, and basics appear with luxury fabrics
LAGOM is named after a Swedish word, that explains an entire lifestyle where moderation, balance, and simplicity are the keywords. Our founders felt the that transmitting this into clothing will create something unique. A perfect mix of simple but modern silhouettes with exceptional fabrics. We are an apparel choice that will allow women to revolutionize the way they dress. Transforming all closets into spaces with just the right amount of clothes. We draw our inspiration from classic pieces and gave them a modern spin.
Our current product categories are Coats & Jackets, Skirts, Trousers, and Knitwear. Depending on the category our size range varies from XS-XL or 0-14. Numeric size range corresponds to Skirts and Trousers. LAGOM prices vary from $89.00 USD to $275.00 USD. The less expensive product is our cropped sweater, ant the most expensive product is our wool coat.
SKU: #001562, #001563 Cropped Sweater - Target Retail $89.00 Target Cost $26.48 - Target Markup 70% SKU: #001552, #001553 Long-Sleeve Sweater - Target Retail $125.00 Target Cost $30.90 - Target Markup 75% SKU: #268372, #268373 Asymmetrical Skirt - Target Retail $115.00 Target Cost $23.62 - Target Markup 79%
SKU: #370124, #370125 Wide Leg Trousers - Target Retail $115.00 Target Cost $34.04 - Target Markup 70% SKU: #157923 Wool Coat - Target Retail $275.00 Target Cost $74.39 - Target Markup 73%
TECH PACK VENDOR:
LAGOM CORP.
ADDRESS:
439 BROADWAY, NEW YORK, NY 10012
PRODUCT:
LONG-SLEEVE SWEATER
PHONE:
+1 912 658 2730
PRODUCT MANAGER:
VIVIAN LEE
DELIVERY 1:
15 1511 PANTONE TCX/TPX
SEASON:
FALL/WINTER 2018-19
DESCRIPTION:
A LONG SLEEVE CREWNECK SWEATER IN A LIGHTWEIGHT RELAXED FIT STYLE.
DELIVERY 2:
18 1442 PANTONE TCX/TPX
TARGET PRICE:
$125.00 USD
SIZE RANGE:
XS, S, M, L , XL
INFORMATION
SPEC INFORMATION
XS
S
M
L
XL
A. SHOULDER
16”
16.5”
17”
18.5”
19”
B. CHEST HALF CIRCUMFERENCE (1” BELOW ARMHOLE)
16.5”
17”
18.5”
19.5”
21.25”
C. HEM HALF CIRCUMFERENCE
14.5”
15.5”
16.5”
17.5”
18.5”
D. CENTRE FRONT LENGTH
23”
24”
25”
25.5”
26.25”
E. CENTRE BACK LENGTH
24”
25”
26”
26.5”
27.25”
F. SLEEVE LENGTH
29.5”
30.25”
31”
31.75”
32.5”
G. NECK OPENING
6”
6.25”
6.5”
6.75”
7”
H. SLEEVE OPENING HALF CIRCM.
2.75”
2.75”
3”
3”
3”
FABRIC CONTENT SHELL: 100% CASHMERE TRIMMINGS: 90% CASHMERE, 9% NYLON, 1% ELASTANE
FRONT
BACK
COST SHEET AGENT:
NINGXIA ZHONGYIN CASHMERE INDUSTRY CO. LTD.
ALLOWANCE:
4000 UNITS
COO:
CHINA
SKU #:
#001552, #001553
PRODUCT:
LONG-SLEEVED SWEATER
SIZE RANGES:
XS, S, M, L, XL
COMPANY:
LAGOM CORP.
SELLING PRICE:
$125.00 USD
TEXTILE:
SHELL: 100% CASHMERE TRIMMINGS: 90% CASHMERE, 9% NYLON, 1% ELASTANE
COLORS:
15 1511 PANTONE TCX/TPX MAHOGANY ROSE 18 1442 PANTONE TCX/TPX PALE RED OCHRE
ITEM
QUANTITY
PRICE
PRELIMINARY
FABRIC: CASHMERE
300G (0.3KG)
85/KG
$25.500
TRIMMINGS: NYLON, ELASTANE
10G (0.01KG)
1.85/KG
$0.0185
LABELS
2
$0.1850/PIECE
$0.3700
POLY BAGS
1
$0.0225/PIECE
$0.0225
HANG TAGS
1
$0.1500/PIECE
$0.1500
CMT
1
$1.9630/PIECE
$1.9630
AGENT’S COMMISSION
--
4%
$1.1210
DUTY (HTS CODE 6110.90.9242)
--
6%
$1.6814
FREIGHT
--
--
$0.0720
MARKUP %
--
--
75%
MARKUP $
--
--
$93.7500
TOTAL
--
--
$124.6484
SUGGESTED RETAIL PRICE
--
--
$125
$25.5185 TOTAL TEXTILES
$28.0240 TOTAL COST
$30.8984 TOTAL COG
TECH PACK VENDOR:
LAGOM CORP.
ADDRESS:
439 BROADWAY, NEW YORK, NY 10012
PRODUCT:
CROPPED SWEATER
PHONE:
+1 912 658 2730
PRODUCT MANAGER:
VIVIAN LEE
DELIVERY 1:
11 0601 PANTONE TCX/TPX
SEASON:
FALL/WINTER 2018-19
DESCRIPTION:
A CROPPED SLEEVELESS SWEATER WITH FLIPPED TURTLENECK
DELIVERY 2:
16 1345 PANTONE TCX/TPX
TARGET PRICE:
$89.00 USD
SIZE RANGE:
XS, S, M, L , XL
INFORMATION
SPEC INFORMATION
XS
S
M
L
XL
A. SHOULDER
15”
15.5”
16”
16.5”
17”
B. CHEST HALF CIRCUMFERENCE (1” BELOW ARMHOLE)
15”
16”
17”
18”
19”
C. HEM HALF CIRCUMFERENCE
12.5”
13.5”
14.5”
15.5”
16.5”
D. CENTRE FRONT LENGTH
16”
16.5”
17”
17.5”
17.5”
E. CENTRE BACK LENGTH
16.5”
17”
17.5”
18”
18”
F. ARMHOLE CURVED
9”
9.25”
9.75”
10”
10.25”
G. NECK OPENING
6”
6.25”
6.5”
6.75”
7”
H. HEIGHT OF THE COLLAR
2”
2”
2”
2”
2”
FABRIC CONTENT SHELL: 100% CASHMERE TRIMMINGS: 90% CASHMERE, 9% NYLON, 1% ELASTANE
FRONT
BACK
COST SHEET AGENT:
NINGXIA ZHONGYIN CASHMERE INDUSTRY CO. LTD.
ALLOWANCE:
3680 UNITS
COO:
CHINA
SKU #:
#001562, #001563
PRODUCT:
CROPPED SWEATER
SIZE RANGES:
XS, S, M, L, XL
COMPANY:
LAGOM CORP.
SELLING PRICE:
$89.00 USD
TEXTILE:
SHELL: 100% CASHMERE TRIMMINGS: 90% CASHMERE, 9% NYLON, 1% ELASTANE
COLORS:
11 0601 PANTONE TCX/TPX BRIGHT WHITE 16 1345 PANTONE TCX/TPX DEEP SUN BAKED
ITEM
QUANTITY
PRICE
PRELIMINARY
FABRIC: CASHMERE
250G (0.25KG)
85/KG
$21.2500
TRIMMINGS: NYLON, ELASTANE
15G (0.015KG)
1.85/KG
$0.2775
LABELS
2
$0.1850/PIECE
$0.3700
POLY BAGS
1
$0.0225/PIECE
$0.0225
HANG TAGS
1
$0.1500/PIECE
$0.1500
CMT
1
$1.9630/PIECE
$1.9630
AGENT’S COMMISSION
--
4%
$0.9613
DUTY (HTS CODE 6110.90.9242)
--
6%
$1.4420
FREIGHT
--
--
$0.0430
MARKUP %
--
--
70%
MARKUP $
--
--
$62.3000
TOTAL
--
--
$88.7793
SUGGESTED RETAIL PRICE
--
--
$89
$21.5275 TOTAL TEXTILES
$24.0330 TOTAL COST
$26.4793 TOTAL COG
TECH PACK VENDOR:
LAGOM CORP.
ADDRESS:
439 BROADWAY, NEW YORK, NY 10012
PRODUCT:
WOOL COAT
PHONE:
+1 912 658 2730
PRODUCT MANAGER:
VIVIAN LEE
DELIVERY 1&2:
18 1442 PANTONE TCX/TPX
SEASON:
FALL/WINTER 2018-19
DESCRIPTION:
A MID LENGTH WOOL COAT WITH A PUFFY HIGH COLLAR.
SIZE RANGE:
XS. S. M, L, XL
TARGET PRICE:
$275.00 USD
INFORMATION
SPEC INFORMATION
XS
S
M
L
XL
A. SHOULDER
17”
17.5”
18”
18.5”
19”
B. CHEST HALF CIRCUMFERENCE (1” BELOW ARMHOLE)
22.5”
23.5”
24.5”
25.5”
27”
C. HEM HALF CIRCUMFERENCE
22.5”
23.5”
24.5”
25.5”
27”
D. CENTRE FRONT LENGTH
35.5”
36.25”
37”
37.75”
38.5”
E. CENTRE BACK LENGTH
36.5”
37.25”
38”
38.75”
38.5”
F. SLEEVE LENGTH
31.25”
32”
32.75”
33.5”
34.25”
G. SLEEVE OPENING HALF CIRCM.
5”
5.5”
6”
6.5”
7”
H. NECK OPENING
6”
6.25”
6.5”
6.75”
7”
I. ARMHOLE CURVED
6”
6.25”
6.5”
6.75”
7”
J. HEIGHT OF THE COLLAR
6”
6.25”
6.5”
6.75”
7”
K. HEM OF FRONT OPENING
6”
6.25”
6.5”
6.75”
7”
FABRIC CONTENT SHELL: 100% WOOL LINING: 100% POLYESTER
FRONT
BACK
COST SHEET AGENT:
SHAOXING MEIPIN GARMENT CO. LTD.
ALLOWANCE:
2400 UNITS
COO:
CHINA
SKU #:
#157923
PRODUCT:
WOOL COAT
SIZE RANGES:
XS, S, M, L, XL
COMPANY:
LAGOM CORP.
SELLING PRICE:
$275.00 USD
TEXTILE:
SHELL: 100% WOOL LINING: 100% POLYESTER
COLORS:
18 1442 PANTONE TCX/TPX PALE RED OCHRE NO SECOND COLOR
ITEM
QUANTITY
PRICE
PRELIMINARY
FABRIC: WOOL
3 YARDS
$18/YARD
$54.0000
FABRIC: POLYESTER
2.1 YARDS
$0.9/YARD
$1.8900
LABELS
2
$0.1850/PIECE
$0.3700
POLY BAGS
1
$0.0225/PIECE
$0.0225
HANG TAGS
1
$0.1500/PIECE
$0.1500
CMT
1
$3.4200/PIECE
$3.4200
AGENT’S COMMISSION
--
5%
$2.9926
DUTY (HTS CODE 6202.11.0010)
--
0.43 PER KG + 16.3%
$10.1860
FREIGHT
--
--
$0.3570
MARKUP %
--
--
73%
MARKUP $
--
--
$200.7500
TOTAL
--
--
$274.1381
SUGGESTED RETAIL PRICE
--
--
$275
$55.8900 TOTAL TEXTILES
$59.8525 TOTAL COST
$73.3881 TOTAL COG
TECH PACK VENDOR:
LAGOM CORP.
ADDRESS:
439 BROADWAY, NEW YORK, NY 10012
PRODUCT:
ASYMMETRICAL SKIRT
PHONE:
+1 912 658 2730
PRODUCT MANAGER:
VIVIAN LEE
DELIVERY 1:
12 4302 PANTONE TCX/TPX
SEASON:
FALL/WINTER 2018-19
DESCRIPTION:
AN ASYMMETRICAL MIDLENGTH PENCIL SKIRT WITH A TIGHT FITTED STYLE.
DELIVERY 2:
15 1511 PANTONE TCX/TPX
TARGET PRICE:
$115.00 USD
SIZE RANGE:
0, 2, 4, 6, 8, 10, 12, 14
INFORMATION
SPEC INFORMATION
0
2
4
6
8
10
12
14
A. WAIST HALF CIRCUMFERENCE
12”
12.25”
12.75”
13”
13.5”
14”
14.5”
14.75”
B. HIP HALF CIRCUMFERENCE
15.5”
16”
16.25”
16.5”
16.75”
17”
17.25”
17.75”
C. HEM HALF CIRCUMFERENCE
15”
15.5”
15.75”
16”
16.25”
16.5”
16.75”
17.25”
D. CENTRE FRONT LENGTH
22.5”
22.5”
22.5”
22.5”
23.25”
23.25”
24”
24”
E. CENTRE BACK LENGTH
23.5”
23.5”
23.5”
23.5”
24.25”
24.25”
25”
25”
F. LENGTH OF SIDE ZIPPER
7”
7”
7”
7”
7.25”
7.25”
7.5”
7.75”
G. HEIGHT OF SIDE SLIT
11”
11”
11”
11”
11.75”
11.75”
12”
12”
H. LENGTH OF DART
4”
4”
4”
4”
4.5”
4.5”
4.75”
4.75”
I. HEM OF FRONT OPENING
12.5”
13”
13.25”
13.5”
13.5”
14”
14.25”
14.75”
FABRIC CONTENT SHELL: 65% POLYESTER, 30% VISCOSE, 5% ELASTANE LINING: 100% POLYESTER
FRONT
BACK
COST SHEET AGENT:
JIANGMEN HENGHAO SUPPLY CHAIN
ALLOWANCE:
2720 UNITS
COO:
CHINA
SKU #:
#268372, #268373
PRODUCT:
ASYMMETRICAL SKIRT
SIZE RANGES:
0, 2, 4, 6, 8, 10, 12, 14
COMPANY:
LAGOM CORP.
SELLING PRICE:
$115.00 USD
TEXTILE:
SHELL: 65% POLYESTER, 30% VISCOSE, 5% ELASTANE LINING: 100% POLYESTER
COLORS:
12 4302 PANTONE TCX/TPX VAPOROUS GRAY 15 1511 PANTONE TCX/TPX MAHOGANY ROSE
ITEM
QUANTITY
PRICE
PRELIMINARY
FABRIC: POLYESTER BLEND
1.5 YARDS
$10.80/YARD
$16.2000
FABRIC: POLYESTER
1.25 YARDS
$0.9/YARD
$1.1250
LABELS
2
$0.1850/PIECE
$0.3700
POLY BAGS
1
$0.0225/PIECE
$0.0225
HANG TAGS
1
$0.1500/PIECE
$0.1500
CMT
1
$1.6024/PIECE
$1.6024
AGENT’S COMMISSION
--
5%
$0.9735
DUTY (HTS CODE 6204.53.3010)
--
16%
$3.1152
FREIGHT
--
--
$0.0610
MARKUP %
--
--
79%
MARKUP $
--
--
$90.8500
TOTAL
--
--
$114.4696
SUGGESTED RETAIL PRICE
--
--
$115.00
$17.3250 TOTAL TEXTILES
$19.4699 TOTAL COST
$23.6196 TOTAL COG
TECH PACK VENDOR:
LAGOM CORP.
ADDRESS:
439 BROADWAY, NEW YORK, NY 10012
PRODUCT:
WIDE LEG TROUSERS
PHONE:
+1 912 658 2730
PRODUCT MANAGER:
VIVIAN LEE
DELIVERY 1:
16 1345 PANTONE TCX/TPX
SEASON:
FALL/WINTER 2018-19
DESCRIPTION:
A CLASSIC HIGH-RISE FULL LENGTH WIDE LEG TROUSERS.
DELIVERY 2:
12 4302 PANTONE TCX/TPX
TARGET PRICE:
$115.00 USD
SIZE RANGE:
0, 2, 4, 6, 8, 10, 12, 14
INFORMATION
SPEC INFORMATION
0
2
4
6
8
10
12
14
A. WAIST HALF CIRCUMFERENCE
11.75”
12”
12.25”
12.5”
13”
13.5”
14.25”
15”
B. HIP HALF CIRCUMFERENCE
17”
17.25”
17.5”
17.75”
18”
18.5”
19”
19.5”
C. THIGH HALF CIRCUMFERENCE
8.5”
9”
9.25”
9.75”
10”
10.25”
10.5”
11”
D. CUFF HALF CIRCUMFERENCE
10.5”
11”
11.25”
11.75”
12.25”
13”
13.5”
14”
E. OUTSEAM
32.5”
33”
33.5”
34”
34.5”
35”
35.5”
36”
F. INSEAM
24”
24.5”
24.75”
25”
25.25”
25.5”
26”
26.5”
G. RISE
11”
11.9”
11.9”
11.9”
12”
12”
12.5”
12.5”
H. HEIGHT OF FLY
6.75”
7”
7”
7.25”
7.25”
7.5”
7.5”
7.75”
I. HEIGHT OF BELT LOOP
2.5”
2.5”
2.5”
2.5”
2.4”
2.5”
2.5”
2.5”
J. HEIGHT OF FRONT POCKET
6.5”
6.5”
6.5”
6.5”
6.5”
6.5”
6.5”
14.75”
K. WIDTH OF BACK POCKET
4”
4”
4”
4”
4”
4”
4”
14.75”
FABRIC CONTENT SHELL: 95% MERINO, 5% ELASTANE LINING: N/A
FRONT
BACK
COST SHEET AGENT:
JIANGMEN HENGHAO SUPPLY CHAIN
ALLOWANCE:
3200 UNITS
COO:
CHINA
SKU #:
#370124, #370125
PRODUCT:
WIDE LEG TROUSERS
SIZE RANGES:
0, 2, 4, 6, 8, 10, 12, 14
COMPANY:
LAGOM CORP.
SELLING PRICE:
$115.00 USD
TEXTILE:
SHELL: 95% MERINO, 5% ELASTANE LINING: N/A
COLORS:
16 1345 PANTONE TCX/TPX DEEP SUN BAKED 12 4302 PANTONE TCX/TPX VAPOROUS GRAY
ITEM
QUANTITY
PRICE
PRELIMINARY
FABRIC: MERINO BLEND
2 YARDS
$12.80/YARD
$25.6000
LABELS
2
$0.1850/PIECE
$0.3700
POLY BAGS
1
$0.0225/PIECE
$0.0225
HANG TAGS
1
$0.1500/PIECE
$0.1500
CMT
1
$1.9630/PIECE
$1.9630
AGENT’S COMMISSION
--
4.5%
$1.2600
DUTY (HTS CODE 6204.53.3010)
--
16.60%
$4.6600
FREIGHT
--
--
$0.0720
MARKUP %
--
--
70%
MARKUP $
--
--
$80.5000
TOTAL
--
--
$114.5358
SUGGESTED RETAIL PRICE
--
--
$115.00
$25.6000 TOTAL TEXTILES
$28.0461 TOTAL COST
$34.0358 TOTAL COG
SALES FORECAST
Cropped Sweater Cost $24.68 Retail $89.00 USD
Long-Sleeve Sweater Cost $30.90 Retail $125.00 USD
Asymmetrical Skirt Cost $23.62 Retail $115.00 USD
Wide Leg Trousers Cost $34.04 Retail $115.00 USD
Wool Coat Cost $74.39 Retail $275.00 USD
SKU# 001562 11 0601 PANTONE TCX/TPX
SKU# 001552 15 1511 PANTONE TCX/TPX
SKU# 268372 12 4302 PANTONE TCX/TPX
SKU# 370124 16 1345 PANTONE TCX/TPX
SKU# 157923 18 1442 PANTONE TCX/TPX
SKU# 001563 16 1345 PANTONE TCX/TPX
SKU# 001553 18 1442 PANTONE TCX/TPX
SKU# 268373 15 1511 PANTONE TCX/TPX
SKU# 370125 12 4302 PANTONE TCX/TPX
SKU# 157923 18 1442 PANTONE TCX/TPX
UNIT BREAKDOWN FALL/WINTER 2018-19
DESCRIPTION
% TO TOTAL
TOTAL UNITS
MONTHLY AVERAGE
RETAIL PER UNIT
TOTAL RETAIL
COST PER UNIT
TOTAL COST
TOTAL MARGIN
MARKUP $
MARKUP %
CROPPED SWEATER
23%
3,680
613
$89.00
$327,520.00
$26.48
$97,446.40
$230,073.60
$62.52
70%
LONG-SLEEVE SWEATER
25%
4,000
667
$125.00
$500,000.00
$30.90
$123,600.00
$376,400.00
$94.10
75%
WOOL COAT
15%
2,400
400
$275.00
$660,000.00
$74.39
$178,536.00
$481,464.00
$200.61
73%
ASYMMETRICAL SKIRT
17%
2,720
453
$115.00
$312,800.00
$23.62
$64,246.40
$248,553.00
$91.38
79%
WIDE LEG TROUSERS
20%
3,200
533
$115.00
$368,000.00
$34.04
$108,928.00
$259,072.00
$80.96
70%
AVERAGE
--
--
--
--
$143.80
--
37.89
--
--
$105.91
73.40%
TOTAL
--
100%
16,000
--
--
$2,168,320.00
--
$572,756.80
$1,595,563.20
--
--
SKU# #001562 #001563 #001552 #001553 #157923 #268372 #268373 #370124 #370125
MONTHLY LINE PLAN FALL/WINTER 2018-19 SKU# #001562 #001563 #001552 #001553 #157923 #268372 #268373 #370124 #370125
DESCRIPTION CROPPED SWEATER LONG-SLEEVE SWEATER WOOL COAT ASYMMETRICAL SKIRT WIDE LEG TROUSERS
COLOR
AUG
SEP
OCT
NOV
DEC
JAN
11 0601 PANTONE TCX/TPX
450
510
320
370
350
300
16 1345 PANTONE TCX/TPX
--
--
350
370
360
300
15 1511 PANTONE TCX/TPX
500
600
330
390
350
350
18 1442 PANTONE TCX/TPX
--
--
330
400
400
350
18 1442 PANTONE TCX/TPX
250
300
360
500
520
470
12 4302 PANTONE TCX/TPX
450
450
225
220
220
245
12 1511 PANTONE TCX/TPX
--
--
225
220
220
245
16 1245 PANTONE TCX/TPX
500
550
275
275
250
275
12 4302 PANTONE TCX/TPX
--
--
275
275
250
275
TOTAL
AVERAGE
3,680
613
4,000
667
2,400
400
2,720
453
3,200
533
AVERAGE
--
--
430
482
299
336
324
312
--
--
TOTAL
--
--
2,150
2,410
2,690
3,020
2,920
2,810
16,000
--
COUNTRY ANALYSIS
When evaluating location we looked at factors like lead time, ports, proximity to the sea and other countries, infrastructure status, and trading laws. When evaluating sustainability we looked for countries that meet the basic environmental compliance and had a structured law regarding this matter. We took into account matters such as waste disposal, water contamination, alternative energies, chemical safety, etc. When evaluating fair labor laws we looked for countries that meet the basic laws on international labor and human rights.
When evaluating technology we looked for countries that have competitive manufacturing machinery and that are constantly aiming to improve and innovate in their apparel and textile industry. When evaluating trade agreements we looked for countries that have current trade agreements with the United States, this will clearly beneďŹ t our costs and overall operations. When evaluating cost we looked at countries that have an overall low cost of production/manufacturing. We analyzed all production line from manufacturing to transportation and duty rates.
Port cost from Ningbo-NY/NJ $1,570-$1,7321in 29 to 34 days. Main Apparel Exports 1. Non-Knit Women’s Suits 2. Knit Sweaters 3. Knit Women’s Suits 4. Non-Knit Men’s Suits 5. Knit T-Shirts
Location East Asia Shares international land and maritime borders with 20 countries.
Sustainability As many as thirty environmental laws regarding prevention and control of pollution, resource utilization, and ecological protection in China have been implemented. A few of these challenges include flaws in the design system, imbalance between rights and obligations, lack of cooperation from factory administrators, unclear responsibilities, lack of accountability, and government corruption. Law on Prevention and Control of Desertification, Law on the Administration of the Use of Sea Areas, Law on Promotion of Cleaner Production, Law on Evaluation of Environmental Effects, Law on Prevention and Control of Radioactive Pollution, and Renewable Energy Law
Labor Laws In China, the primary source of labor law is the Labor Contract Law of the People’s Republic of China, which went into effect in 2008. The Contract covers important topics regarding the workers’ rights, such as protection against dismissal, protection against discrimination, employee privacy, statutory employment protection rights. It also establishes minimum wages, working hours, and a minimum age for employees. Technology Made in China 2025: 10-year plan launched in 2015 to modernize factories with advanced manufacturing technologies such as robotics and 3D printing. China has invested $150 billion in their main production areas to equip its factories with industrial robots and create two centers dedicated to automation. Internet Plus: a plan to integrate mobile Internet, cloud computing, big data and the internet of things with modern manufacturing.
Cost Chinese factory workers are receiving higher wages than ever. Hourly wages are now $3.60. Since 2014 wages have been increasing 11% annually. Since higher wages equal higher manufacturing costs, companies are now looking to take their business somewhere more cost effective such as Sri Lanka or Bangladesh. Trade Agreements China-Maldives FTA China-Georgia FTA China-Australia FTA China-Korea FTA China-Switzerland FTA China-Iceland FTA
China-Costa Rica FTA China-Peru FTA China-Singapore FTA China-New Zealand FTA China-Chile FTA China-Pakistan FTA
China-ASEAN FTA Mainland and Hong Kong Closer Economic and Partnership Arrangement Mainland and Macau Closer Economic and Partnership Arrangement China-ASEAN FTA Upgrade Negotiations China-Chile Upgrade FTA Preferential Trade Agreement: Asia Pacific Trade Agreement
Port cost from Hong Kong-NY/NJ $1,732-$1,991 in 33 to 39 days. Main Apparel Exports 1. Knit Sweaters 2. Non-Knit Women’s Suits 3. Women’s Undergarments 4. Non-Knit Men’s Suits 5. Knit Women’s Suits
Location East Asia Special Administrative Region of the People’s Republic of China Along with Macau, Guangzhou, Shenzhen, Zhuhai, and several other major cities in Guangdong, the territory forms a core part of the Pearl River Delta metropolitan region.
Sustainability -Working hard to keep up with the demand of companies environmental laws and regulations -Work in cleaning up the waterways by 2020 -Starting to invest in greener machinery and technologies -Being to embrace sustainability -TPASSION programs in digital printing, natural dyeing, organic cotton farming
Labor Laws -Follow international and nation rules/regulations. -Employment ordinances, protection against anti-union discrimination. -Currently, no minimum wage prescribed by statute. -They are no statutory provisions which prescribe maximum working hours. -The employee is entitled to no less than one rest day in every period of seven days. -BeneďŹ ts include annual leave pay, holiday pay, sickness allowance and maternity leave. - Acts are present to protect employers from matters like discrimination on the grounds of sex, pregnancy, marital status, disability, family status, race, and trade union membership. Trade Agreements -Closer Economic Partnership Arrangement CEPA -European Free Trade Association EFTA -World Trade Agreement -General Agreement on Tariffs and Trade
Cost Manufacturing is $4.43 UDF per hour. Their currency the Hong Kong Dollar, it is pretty stable but in the last years has been declining and causing some headlines. The corresponding exchange rate is $1.00 USD is equal to $7.84 HKD. Technology -Hong Kong stays updated with technological trends -Present availability of new computer systems and machinery. -446 manufacturing companies are employing 2,569 workers or 2.7% of the local manufacturing workforce. -Present skilled workers in fabric procurement, quality control, logistic arrangements. -Hong Kong is declining in the amount of manufacturing and workers willing to work in this industry. -Hong Kong Research Institute of Textiles and Apparel (HKRITA)
Port cost from Manila-NY/NJ $1,960 - $2,583 in 35 to 42 days. Main Apparel Exports 1. Knit Women’s Suits 2. Non-Knit Women’s Suits 3. Knit Women’s Shirts 4. Knit Sweaters 5. Knit Women’s Undergarments
Location Archipelago in Southeast Asia Bounded by the China Sea, the Philippine Sea and Celebes Sea. Maritime borders with Taiwan, Vietnam, Palau, Malaysia and Indonesia.
Sustainability The Philippines focuses on niche and value-adding markets, enclave industrial parks. They promote green growth: green industry, use of clean technologies in industrial production, greater resource, and energy efficiency, improved water and waste management. They are also creating and aiming for a manufacturing innovation ecosystem. Cost The minimum wage in the Philippines is of $340.00 Pesos, which is equivalent to $6.62 USD per day. The current exchange rate is of $1 USD = $52.02 Peso. Recently, there has been an increase in the cost of labor and electricity, but overall the country lacked a clear data on up-to-date industry information.
Trade Agreements FREE TRADE AGREEMENTS (FTAS) ASEAN Free Trade Area (AFTA) ASEAN Plus Six (ASEAN +6) European Free Trade Association (EFTA) Philippine-Japan Economic Partnership Agreement (PJEPA) Trade and Investment Framework Agreement (TIFA) Labor Laws Clothing and Textile Industry Tripartite Council (CTITC) Generalized System of Preferences (GSP) The Philippines presents different agencies that oversee the implementation of rightful labor laws in the country, some of this deďŹ nitely needs some adjusting and progress like the Department Administrative Order-Set minimum labor standards. Technology The Philippines presents high-skilled labor and abundance of native natural ďŹ bers.
COUNTRY RANKING ITEM
HONG KONG
CHINA
PHILIPPINES
BUSINESS CLIMATE
9
8
5
COSTS
3
8
8
GOVERNMENT
8
6
3
LOCATION
8
8
8
RISKS
8
6
5
SOCIAL STABILITY
8
5
4
SOURCING GUIDELINES
7
7
5
TEXTILE INDUSTRY
4
8
6
TRADE AGREEMENTS
9
8
6
TRAINED WORKFORCE
5
6
5
AVERAGE
7
7
6
TOTAL
69
70
55
SUPPLIER SELECTION
Located in Linwu City, Ningxia Yinchuan, China This is the world's biggest manufacturer of cashmere products and also purchases the largest volume of cashmere raw material. It is known for its high quality products and it manufactures for brands such as Uniqlo, Theory, and Talbots. With cashmere being one of the main textiles used in our product line, we are focusing on ďŹ nding the manufacturers that provide the best quality products and that have the most experience working with this material. They present a good financial standing and bank relationships. The company has never had any non-performing loans or overdue loans in the past. The company complies with local environmental protection control procedures. They have implemented renewable energy technology in their buildings. The company was awarded by the International Association of Textiles Ecological Research and Testing Association.
Corporate Social Responsibility In 2012, the company developed an internal control management system, implemented internal control evaluation projects with accountability, and optimized internal control system platforms. They have implemented a plan to provide jobs for immigrants in need. All Their factories are located in rural areas, which help with the economic development of these rural communities. They comply with labor laws and provide insurance for their employees. The entire staff gets a free annual body-check and the female staff are also provided with gynecological examinations. They have also created scholarship programs and opened business administration and management courses for upper medium managers.
Located in Shaoxing, Zhejiang, China This manufacturer specializes in pants, coats, and vests. The majority of their shipments are sent to the NY/ NJ ship and they have been very active since 2014. PANJIVA ID 34089522
Located in Jiangmen, Guangdong, China This manufacturer specializes in pants and skirts. They have been active since 2013 and the majority of their shipments are to the Port of Long Beach. PANJIVA ID 39843485
Located in Kwun Tong, Kowloon, Hong Kong. They are Knit-wear manufacturers with more than 40 years of experience, their customers include Nordstrom, JC Penny, and Gap. Known for their high quality and service. They have received several awards for their quality from European, Japanese, and American customers. They are compliant with all environmental conservation legislation. All their waste disposal procedures are up to standards. They have explored new techniques of dying which reduces waste and heat consumption without harming the ďŹ bers.
Corporate Social Responsibility They have contributed to building over 150 school-buildings, which amounts over HK$160 million. They have donated over 100,000 pieces of knitwear to people living in the countryside. They have also reduced the number of ofďŹ ce supplies used in their buildings. Present Compliance with local labor laws and provide insurance for their employees. Their living quarters are regularly inspected so they can meet the appropriate standards.
This factory is located in Maguyam, Cavite, Philippines, but the headquarters of the company are in South Korea. They have factories all over south-eastern Asia It is the garment manufacturer under LG Group. Their customers include Banana Republic, Talbots, Tommy HilďŹ ger, Madewell, Karl Lagerfeld. The company specializes in wool and cotton apparel with a very high production quality and standard. Being under the umbrella of LG Group, they have implemented the latest technology in many of their manufacturing processes and they are constantly developing and testing new manufacturing technology. They take a lot of measures to reduce their waste and emissions, recycle, and keep their water usage to a minimum. Constantly they are creating new measures to reduce their waste and emissions, recycle, and keep their water usage to a minimum.
FTN follows LG Group's corporate social responsibility strategy. They engage in programs to develop and distribute vaccines, eradicated malnourishment in children, and environmental conservation. They protect their employees' basic labor/human rights and implement what they call "win-win labor-management relations". All employees rights are stated in the company's Global Labor Policy. LG Group has their own Labor Union which works closely with management to create a healthy and sustainable society.
SUPPLIER RANKING ITEM
NINGXIA ZHONGYIN CASHMERE INDUSTRY CO.
SOUTH ASIA TEXTILES LIMITED
FTN GARMENT CORPORATION
ABILITIES
7
7
8
CAPACITY
8
6
6
LEAD TIME
7
6
6
QUALITY
7
7
8
CUSTOMERS
7
7
9
SOURCING GUIDELINES
7
7
8
SERVICES OFFERED
6
5
6
STRATEGIC OUTLOOK
6
6
7
AVERAGE
7
6
7
TOTAL
55
51
58
SOURCING STRATEGY
The three suppliers we selected in China, match the requirements and expectations we have for our business partners, they also have a good reputation regarding compliance, and we have no doubt they will adhere to our code of conduct. The three countries explored offered the best options when it came to quality and experience four our specific products. When we analyzed materials, resources, cost, and transportation in these countries it matched with the key elements we were looking for. But, at the end to reduce costs in transportation and duties we decided to source only within China, making our sourcing strategy more effective.
The suppliers selected and analyzed are specialist in the materials and manufacturing techniques necessary for our collection. They met all location, cost and CSR expectations we had. We also based our criteria of selection looking at past clients, this would help us understand what type of production the factories have experience with. When deciding on countries and suppliers we really tried to crunch the numbers, to achieve our target retail and a good profit margin. This is why we ended up sourcing all our products from China, in three different manufacturers. This would allow us a lower freight rate while still achieving our target retail and remaining highly profitable. Still, we explored Hong Kong manufacturers as our second option and left the Philippines as our last alternative.
In conclusion, the countries and factories that were selected and explored best match our company because of the textiles and fibers they specialize in. After analyzing their past clients, products, and overall structure we are certain they will be able to deliver a good quality product in a reasonable time. Our research also showed us that this regions and manufacturers will have no issue adhering to our code of conduct. They have a good reputation for being compliant and aiming to develop better techniques within the industry. Last but not least, we also carefully analyzed cost requirements and duty rates in order to crunch the numbers and meet our target retail, generating a profitable end.
SKU: #001562, #001563 Ningxia Zhongyin Cashmere Industry Co. Ltd. - China Cropped Sweater - Volume 3680 Target Retail $89.00 - Target Cost $26.48 - Target Markup 70% SKU: #001552, #001553 Ningxia Zhongyin Cashmere Industry Co. Ltd. - China Long-Sleeve Sweater - Volume 4000 Target Retail $125.00 - Target Cost $30.90 - Target Markup 75% SKU: #268372, #268373 Jiangmen Henghao Supply Chain - China Asymmetrical Skirt - Volume 2720 Target Retail $115.00 - Target Cost $23.62 - Target Markup 79%
SKU: #370124, #370125 Jiangmen Henghao Supply Chain - China Wide Leg Trousers - Volume 3200 Target Retail $115.00 - Target Cost $34.04 - Target Markup 70% SKU: #157923 Shaoxing Meipin Garment Co. Ltd - China Wool Coat - Volume 2400 Target Retail $275.00 - Target Cost $74.39 - Target Markup 73%
PROJECT CONCLUSION
The main benefit of our overall strategy is that because everything is produced in China, this makes transportation and duties less expensive and more effective on our side. We also believe that the manufacturers we selected are truly specialized and experienced in the selected textiles/fibers for our collection. These factories presented the right information, which leads us to understand they will meet our production and legal expectations. Most importantly, all these countries and factories selected fit with the values of LAGOM and our sourcing guidelines. They all maximize our inventories
and lead time, but with China, our selected COO everything runs more smoothly. Lead time is a competitive advantage compared to other countries in Asia. With all our pieces being manufactured in China, the logistics and costs become simpler and more efficient. The manufacturers selected offer flexibility in sourcing supplies, they offer a wide variety of products and timely production updates/need changes, this is because the region they are located. Though, because we decided to work with manufacturers that specialize in warm fabrics, we could continue working with them for future fall/winter lines, but would probably manufacture somewhere else for spring/summer lines.
These suppliers chosen minimize risk because of their experience and location, the business of apparel and textile production is well developed in China, even though it has room to grow, it has gained a worldwide reputation. Our selection also maximizes an opportunity to grow further as clients of these manufacturers and through them explore and discover different factories similar to them. We are proud to share all LAGOM suppliers and business partners because we know they are the right place to produce our products as best as possible for our clients. All our manufacturers meet the standard legal compliance and adhere to our code of conduct, which guarantees as clean of a supply chain as possible.
SOURCES & REFERENCES
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