J.FIT Activewear

ACTIVEWEAR

A Brand Extension by: Morgan McCarty, Mia Rexach, Kimberly Ware FASM 215-01 Fashion Aesthetics and Style Professor Madhumeeta Roy

Table of Contents 1. EXECUTIVE SUMMARY…………………………………………………………….......3 2. COMPANY SUMMARY…………………………………………………………………….4 1. Brand Identity……………………………………………………………………………6 2. Market Positioning……………………………………………………………………8 3. MARKET ANALYSIS…………………………………………………………………………9 1. Competition……………………………………………………………………………10 2. SWOT Analysis…………............................................................13 3. PESTEL Framework…………………………………………………………………16 4. Porter’s 5 Forces Analysis…………………………………………………………19 5. Positioning for Proposed Extension…………………………………………..23 4. TARGET CONSUMER……………………………………………………………………24 5. THE MARKET MIX…………………………………………………………………………27 1. Product………………………………………………………………………………….27 2. Pricing……………………………………………………………………………………33 3. Distributional Strategy…………………………………………………………….34 4. Promotional Strategy………………………………………………………………35 6. CONCLUSION………………………………………………………………………………39 7. BIBLIOGRAPHY……………………………………………………………………………40 8. APPENDIX……………………………………………………………………………………43

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1.0 EXECUTIVE SUMMARY J. Crew is a multi-channel retailer that offers a variety of products in men’s, women’s, and children’s apparel. Our brand has had numerous successful brand extension offering now footwear, accessories, jewelry, swimwear, and bridal wear and accessories. J.Crew is noted for its superior quality and strength of design through the use of exciting splashes of color and prints. J. Crew is under the leadership of powerhouse duo, CEO, Mickey Drexler, and Creative Director, Jenna Lyons. We have established a cult brand that offers merchandise through our retail stores, e-commerce websites, and the monthly “Style Guide” to an incredibly loyal customer base.

We plan to offer these loyal customers a new category of merchandise to add to their J.Crew stocked wardrobes as well as attract new consumers from other new and emerging markets. We propose to do this by creating a line of J.Crew Activewear called “J.FIT”. Our active wear collection will encompass J.Crew’s current design aesthetic while offering the superb quality and functionality that our active wear consumers require. It is expected that this will be a successful brand extension as we have a devoted consumer base. This means that our success will depend highly on our already established and loyal customer base as well as our brand image perception that we will promote through our multi-channel sources. We intend to successfully attract new markets with J.FIT through our creative promotional and marketing strategies. Lastly, our success will be derived

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through our attention to function and quality with an equally high standard of attractive designs that will differentiate us from our competition.

2.0 COMPANY SUMMARY J.Crew was founded by Mitchell Cinader and Saul Charles and it was originally known as Popular Merchandise Inc. It began operating in the 1980s as a low-priced women's clothing line that was marketed through in-home house-to-house demonstrations, but in 1983 it launched its first mail catalogue which was sent quarterly up until 1989. In 1989 the Popular Merchandising Company officially chained its name to J.Crew in order to connote a "preppier" spirit to the brand image. After this, it opened a few retail stores in Manhattan, Canada, California, Massachusetts and eventually expanded into Europe and Japan by 1991. Retail and catalogue expansions fluctuated through the coming years and in 2003 Millard "Mickey" Drexler was accounted as new chairman and CEO of J.Crew. The company started expanding its sources by working with global fabric mills, craftsmen and by launching the kid's line, wedding line and including higher priced items to further heighten the company value. After a constant positive flux in the company's sales, the company doubled its stock two years after going public in 2006.

J.Crew is a national retail company currently owned by TPG Capital that offers women's, men's and children's apparel and accessories through

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their multi-channel sources such as catalogues, websites, retail stores and factories. The company's catalogue is the primary advertising channel and branding vehicle because it reinforces the brand image, its mission and it also boost sales in all of its channels. The brand's success is due to their ability to define brand loyal products and upcoming trends adequate to seasons and consumer demand. In 2011, the J.Crew company was acquired by affiliates of the TPG group valued at approximately $3.1 billion, which as a direct result does not place J.Crew in the publicly traded list. Currently the shares of the J.Crew group are indirectly owned by certain co-investors and the affiliates of the group TPG. Based on the company's financial statements for the fiscal year 2013, revenues increased $42.9 million (11.3% more from the previous year). (1) Also, at the moment, J.Crew is positioned #56 in the Internet Retailer Top 500 Guide. (2) J.Crew's direct net sales increased a total of 20.7% which clearly places the company in a good outlook for future sales.

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2.1 Brand Identity

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J.Crew's brand aesthetic has always revolved around the idea of modern preppy basics. After a static time in the 90's, Jenna Lyons joined the company as creative director which ultimately gave it another whole aesthetic. The classic silhouettes were re-designed, higher quality fabrics were added as well as semi-glamorous pieces that would add style and flair to the basic and core items carried at J.Crew. Currently, the importance of J.Crew's products is the recognition of clothing made for woman, but associated with menswear tailoring and similar fabrics for these. This embodies the target market to which J.Crew mainly caters its product, which is the empowered, professional woman on the go ( whom J. Crew is known to dress like Michelle Obama and Lauren Hutton). Furthermore, in terms of the catalogue and website, this concept is exemplified by the way in which each model is positioned regarding the male model or just the way a single female model is positioned within a picture. The company's ability to interpret the multifaceted look of women on the go is portrayed specifically in each catalogue throughout its variety of items and general aesthetic within the pictures portraying the garments. The fact that the women are portrayed as feminine, but powerful provides a clear understanding of both the consumer's choices and the brand's interpretation of this one. J.Crew's brand identity in the market can be said to be almost fully dependent of the niche in the market as a success and growth catalyst for the company in regards to femininity and work-oriented, independent women. Â

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2.2 Current Market Position

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J.Crew holds one of the highest positions in their market. Compared to our competition, who has both lower price points1 and lower quality, J.Crew delivers better quality and value, which is why our price points are significantly higher. J.Crew’s cult following is what allows this to work well for them, because the majority of our competitors don’t have such a loyal following and their price points are less aggressive.

Extending into active wear will put J.Crew ahead of most of these direct competitors, and those competitors who do have active wear will still remain positioned below J.Crew. The positioning of our active wear line will have to be high in order to stay consistent with where the brand is already located. This means using the same price points and delivering the same quality that J.Crew is already so well known for.

3.0 MARKET ANALYSIS Within the overall apparel market, athletic wear sales have grown faster than the general apparel market since the industry has observed many mergers and acquisitions in the recent years in terms of sportswear companies. Both individual and team sports and fitness activities have been on the rise worldwide, which will eventually boost sales in the sportswear industry in the coming years. Within this continuously evolving market, there is a rising consumer demand in the use of sportswear for both athletic

1

See Appendix 1.0

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activities and also for more casual purposes as the rise of westernization grows even more in the US and also all throughout the developing regions.

Because of this shift in consumer lifestyle, the athletic wear market has found new themes in order to promote it and boost sales within these sportswear companies that create this strong market. Versatility, fashion orientation and practicality are the prime concepts from which these companies such as Nike, Adidas and Lululemon have been aiming to accomplish in order to satisfy consumer demand when entering a more healthier lifestyle.

Worldwide, people's increasing incomes and the westernization of lifestyles are the main forces for the increasing market which is expected to reach $180.9 billion in profits by 2018. (1) The US market is currently over three times higher in value than its subsequent sportswear market, China. (2) In the last five years it has been proven that a brand can act as the main driving force for value perception for the consumers, which could ultimately shift their preferences in the market. In terms of our proposed brand extension, we are heavily relying on our loyal customer base for the successful proposition of our intended product and on the currently developing sportswear market into which we plan on expanding into.

3.1 Competition According to research, the US athletic wear market is the largest in the world and in 2012 it grew more than 7.5% and its value was estimated at an

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$80 billion in 2012. (Yahoo Finance) The US athletic apparel market accounts for 41% of total sales in the world's market making it the number one producer of sportswear. In the women's category specifically, $7 billion in sales were contributed to the sportswear market since there is a growing interest and shift in consumer behavior in terms of a healthier and more active lifestyle. More specifically, the key growth drivers in the market are active pants, which were increased by a 10%, t-shirts and athletic tops increased by 12% and outerwear that was up by 11%. (4) Within the sportswear industry, some of the key competitive players in the sportswear market include Nike, Adidas and Lululemon. Nike is currently the world leader in athletic footwear and apparel, but its presence in the US positions them as #1, generally in terms of sportswear and accessories. They own 700 retail outlets with up to 25,000 US retailer accounts and also operate in more than 160 countries. Nike's revenue was approximately $24 billion in the fiscal year 2012. The revenues for Nike in America were driven by growth in direct to consumer channels and their wholesale channels. (1) On the other hand, even though Adidas is headquartered in Germany, it has about 179 subsidiaries and they employ close to 43,000 people worldwide. As of their projections for 2015, they plan to boost sales at a 45%-50% rate after ending the five year period before 2015. As well as Nike, Adidas also has a strong brand presence and somewhat strong customer base in the US. They are aiming to boost sales ending 2015 with a yearly growth of 15%. (2)

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Lululemon, on the other hand, has approximately 87 stores worldwide and 64% of their net revenues were derived from sales in the United States only.

In the fiscal quarter 2013 an increase of 7% was evident from its sales. (3) Even though the key players within the industry such as Nike and Adidas are the prime sources of income in sportswear and accessories, Lululemon stands parallel to us in the market as our direct competitor. Not to mention, the fact that Lululemon offers a luxury activewear line towards women within the same target market as our proposed extension, making it a direct competitor in our intended market. However, Lululemon had a drawback in quality control that led analysts to speculate if it was entering a slower growth rate. (5) Since J. Crew has a higher position in their current market in comparison to its prime competitors, there is an open and viable opportunity for our company to enter the market because of our key success factors.

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3.2 SWOT Analysis

Our SWOT analysis tells us expanding into the activewear market could be a great opportunity for J.Crew because the company already has such a loyal following and active wear fits well into the brand’s identity and their customer’s lifestyle. With the activewear industry continuously growing this provides a great opportunity for J.Crew to get in on the trend of active wear

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extensions. Since very few of J.Crew’s direct competitors have branched off into active wear this gives our company an opportunity to have an extra edge on their competition.

Although this extension can be beneficial to our company, there are definitely risks to consider. Companies like LuluLemon and Nike are leaders in the market and can prove it to be difficult for J.Crew to obtain market share in the active wear industry. Several large brands like Macy’s and smaller new brands like Fabletics are also extending into active wear right now, so J.Crew will have to compete for market share with these brands as well. In fighting for customers attention J.Crew also will need to promote and market their product effectively, we have tried to do yoga wear in the past but it did not do well due to lack of promotion and customer awareness of the actual product.

Also because J.Crew has no experience in the active wear industry, and no expertise with the fabrics and materials used in active wear this could prove it difficult for us to deliver the quality that is expected from our customers. Finding the right vendors and factories to work with will be crucial for J.Crew in order to deliver an active wear line with the same quality as all their other products. If J.Crew does a great deal of promotion for their active wear line, and keeps an eye on leaders and new comers of the market; learning from what they are doing, our brand should be able to successfully launch this extension. We already hold a high position in the current market,

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and could gain a similar position in the active wear industry if we create an affective marketing plan that will appeal to their loyal customers and help us gain new ones as well.

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3.3 PESTEL Framework POLITICAL • •

Taxes on imports and exports AAFA works with the legislative and executive branches of government to seek out new marketopening opportunities.

ECONOMICAL •

• •

•

Due to the unstable economy consumers are spending their money with caution Using minimal credit Unemployment numbers rising leaving people with less money to spend Labor costs and material prices rising

SOCIAL •

•

•

•

TECHNOLOGICAL •

•

•

•

Product promotion and customer through social media Customers are able to compare products directly with competition’s products and prices online at home AND on smart phones while shopping.

Access to companies around the WORLD through online shopping (making it even more difficult to stand out) Internet provides a whole NEW channel to drive sales from

ENVIROMENTAL •

• •

Higher food and fuel prices due to shortage of crops and natural resources Organic cotton prices going up Increasing number of consumers adopting environmentally friendly approach to their life style.

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People are becoming more health conscious, joining fitness clubs and staying active Work, Gym, Home is the norm for several of the Middle and Upper Class Looking to spend on products with quality and value, consumers want their dollar to go as far as possible.

Customers are supporting companies that practice sustainability and good ethics now more than ever.

LEGAL • •

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Laws against false advertising The U.S. Free Trade Agreement has laws that protect customers from fraudulent, deceptive, and unfair business practices.

Laws that protect employees and make sure they are treated well.

There are numerous macro-environmental factors that J.Crew must be aware of, these are factors that could hurt and/or help the company. Some of the key factors that relate to J.Crew directly are customers spending money with more caution is this economy, unemployed population continues to grow, the increasing amount of people staying active, and of course the huge developments happening in technology especially social media.

The unstable economy is causing customers to continue to spend their money with caution (WARC 2012); this is definitely something that could affect J.Crew in the long run. Although the J.Crew customer is very loyal and is willing to pay that high price for a basic sweater, or pair of pants; this instability could affect how frequently they are purchasing these products, and how much they purchase at once. Likewise the increasing amount of unemployment gives customers less money to spend and will force them to be selective with what they are purchasing and where they are purchasing it.

Socially J.Crew can benefit from the increased number of people who are staying fit and active, specifically for the proposed brand extension of active wear. Along with social and economical changes J.Crew needs to keep an eye on the developments that are occurring in technology. Technology has played a huge role in J.Crew’s success over the past few years, so the use of social media to gain feedback from customers and to promote new products is very important to the brand. The Internet has provided another

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channel to drive sales for J.Crew, so having a strong presence online in social media is a great way for us to keep our customers engaged and interactive with J.Crew.

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3.4 Porter’s 5 Forces Analysis

It is not expensive to enter the industry Low economies of scale No technology protection Low barriers to entry Low specialist knowledge

• • •

M

SUPPLIER POWER • •

•

H

• •

M

COMPETITIVE RIVALRY

THREAT OF SUBSTITUTION

•

Moderate number of suppliers There is an easy access for possible supplier substitution The cost for changing suppliers is moderate There is a moderate number of suppliers in terms of uniqueness in service

H

•

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Loyal customer base Medium price sensitivity from customers expecting high quality Medium: Highly competitive market Moderate order size Moderate possibility of lowering price due to price sensitivity of our customers

BUYER POWER

SUPPLIER POWER

• •

THREAT OF NEW ENTRY

THREAT OF ENTRY

BUYER POWER • •

THREAT OF SUBSTITUTION •

It is not necessary for our customers to purchase our product for its intended use

•

Cost differences can be substituted due to similar or even lower than established names within our company

Threat of Entry: High •

It is not expensive to enter the industry

•

Low economies of scale

•

No technology protection

•

Low barriers to entry

•

Low specialist knowledge

Threat of Substitution: High •

There is a higher threat of product substitution because it is not necessary for our customers to purchase our product for its intended use

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Cost differences are easy to substitute because they may be somewhat similar and even lower that the established ones within our company

Buyer Power: Medium •

The buyer power is medium to high because the fact that we have an established loyal customer base lowers the possibility to loose buyer power

•

There is a medium price sensitivity because our customer is used to quality and higher priced products

•

There is a medium possibility for product substitution because of the highly competitive market we're positioning our extension

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•

The size of each order is moderate

•

There is a moderate possibility for our customers to drive down our prices because of the already established price sensitivity of our customers

Supplier Power: Moderate •

Moderate number of suppliers 2

•

There is an easy access for possible supplier substitution

•

The cost for changing suppliers is moderate

•

There is a moderate number of suppliers in terms of uniqueness in service

OVERALL: Medium-High Overall, the sportswear market is a highly fragmented and directed industry with multiple competing brands that range from basic brands to luxury brands that are highly recognized in the market.

These well

established brands have to constantly work on their image as a brand keeping up with consumer needs and lifestyles.

Some challenges that

companies have noticed are the ever-shifting fashion trends, price-conscious shoppers and overall the competition within the market. (1) Statistics show that 75% of the total output of the sportswear market is sold by these major

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See Appendix 2.0

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retailers that dominate the market (Nike, Adidas, Reebok, etc).

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companies have shown a stiff competition within the industry since a majority of these brands control this market. To stay in such position, they heavily rely on innovation and sponsorship events which act as major barriers for new entrants to the industry. (2) Also, it is important to take into consideration the fact that the sports retail market has grown to such extent that it is easier for key players to lower down prices for their products and services as the market keeps growing, consumers become even more price oriented and demographical changes keep evolving. In fact, the actual changes in these socio-economic groups (women in their 30's who are entering a healthier lifestyle) enhance the buyer power in such way that the increasing choices in the market are now confined to the buyer's preferences and brand loyalty.

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3.5 Positioning for Proposed Extension

J.Crew has a high position in the market they already exist in so as we extend into active wear we will have to maintain this high position. The key players in active wear and other non- active wear brands with active wear extensions all have decent quality but with lower price points. J.Fit with have price points that are similar to that of Lululemon, which is the only brand that is really positioned where we want to be in the market. Â

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Because we are competing with several successful brands that have lower price points3, we really have to rely on our customers who are brand loyal. We also need to push the message of the quality and value that really sets J.Fit apart from most of competitors throughout the active wear market.

4.0 TARGET CONSUMER Our target consumer market is Caucasian4 females living in the United States within the ages of 25-45 years old. These consumers fall within the older Millennial and Gen X generational categories5. Our consumers are typically affluent and are apart of the upper-middle class with an income level of above $60,0006 (J.Crew 2013; PewResearch). Our younger demographics are primarily college educated, postgraduate, or are currently within the college system7. Our older consumers have maintained active and professional careers8 (PewResearch). Our customers are the fashion conscious, professional women on the go, working mothers, stay at home moms, and the college girl.

These consumers are found primarily in largely populated areas and locations where income levels are high such as New York, Los Angeles, San Francisco, Chicago, and other metropolises (J.Crew, 2013). Large portions of

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See Appendix 3.0 See Appendix 4.0 5 The Millennial Generation refers those born after 1980 –the first generation to come of age in the new millennium. Generation X covers people born from 1965 through 1980 (PewResearch).

6 See Appendix 5.0 7 See Appendix 6.0 8 See Appendix 7.0 4

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our younger consumers are going to reside around college campuses within these metropolitan areas. Our promotional strategies will be implemented more heavily throughout these areas. While our consumers uphold busy and professional working lifestyles, these trendy and active women maintain healthy lifestyles by finding time for exercise9 in fitness clubs and through popular routines such as Zumba, Yoga, and Pilates (PewResearch; HuffingtonPost). This is important to our active wear line as our designs reflect fashion forward, trendy, and versatile styles that our customer would feel confident and comfortable wearing to and from gym. Our loyal consumer base should receive our J.FIT line easily as these consumers are accustomed to dramatic and unexpected change and have very adaptable and liberal mentalities (HomeBusinessMag).

Our consumers are heavy users of technology and social media10. They utilize social media websites such as Twitter, Facebook, Pinterest, and Instagram (jcrew.com). They often read magazines such as Esquire, Instyle, Vogue, and Glamour and get their news through sources such as The New York Times and The Wall Street Journal (J.Crew, 2013).

Though these are print media, our consumers are found reading these through their laptops, smartphones, and tablets (PewResearch). With the rise of online video streaming websites, our consumers are less likely to watch Television and respond to TV advertising (PewResearch). As multi-channel

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See Appendix 8.0 See Appendix 9.0

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consumers, they are likely to purchase items online and through electronic media as well as take advantage of our targeted, direct media through instore and catalog purchases (Moses). Online ratings and reviews, and peer recommendations are our consumer’s source for purchasing decisions. When shopping in-store, it is common to find our younger consumers sending a picture messages to friends for review while in the dressing rooms. Our consumers interact with retailers through reviews and commentary online and with social media (HomeBusinessMag). Our consumers’ technology use, media consumption and shopping habits are important factors in our J.FIT promotional strategies.

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5.0 THE MARKET MIX

5.1 Product

for

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From its beginnings, J.Crew has evolved and implemented new marketing strategies in order to redefine the customer's needs and the company's aesthetic by expanding its product line and also its delivery to the consumer's market. Since J.Crew's target market revolves around 25-45 years old professional women who are on the building and developing stages of their careers, the product should primarily have a polished style, but as the typical J.Crew customer, this young professional also wants to add fun and unique pieces to add personality to their style. We will incorporate a variety of outerwear, pants (long/high-waisted, Capri pants, shorts), shirts and sports bras with a color scheme appropriate to the season it will be launched in (Spring). These include blues, grays, blacks, and less saturated colors like salmon and green. Each individual item was designed as if it was intended to be intermixed with other pieces within the collection, which effectively is proper of the J.Crew brand aesthetic. Our product is intended to offer the best quality possible in order to comply with our established theme of great quality and value.

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5.2 Pricing Based on the price points that J.Crew already has we know our positioning in the market will be higher than most of our competitors. The only competitor with similar price points is Lululemon Athletica. In setting our price points we looked at how Lululemon prices their products to get an idea of what price range is reasonable for certain products. Along with looking at Lululemon’s prices, we went back and looked at the prices of our merchandise, that way we make sure the price points for J.Fit coordinate with the price points of the rest of the J.Crew brand.

Look 1: Tank Top ($40), Yoga Pant ($100) Look 2: ¾ Sleeve Top ($78), Shorts ($50) Look 3: Sports Bra ($60), Yoga Pants ($150) Look 4: Sports Bra ($58), Jacket ($178), Short ($78) Look 5: Short Sleeve Top ($58), Cropped Pants ($120) Look 6: Short Sleeve Top ($70), Pant ($200) Look 7: Sports Bra ($50), Shawl Cardigan ($128), Pant ($128)

The collection we designed for J.Fit was inspired by the idea of combining the J.Crew aesthetic of simple silhouettes and bright colors with active wear pieces that double as casual wear. The fits and styles we chose were pulled from garments we saw competitors like Lululemon, Victoria’s Secret, and Zella selling. To make it fit J.Crew’s brand; we looked at colors

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that J.Crew has used in the past and colors that will be trending in the next few seasons, and pulled together a fun color scheme. The colors are nice balance between easy neutrals and fun bold colors that add interest to each garment. The fabrics that we would be using would be a balance between easy knits and some performance fabrics. Our competition has a great range of performance fabrics that they use to in order to compete with that it is necessary for us to incorporate a few in our collections as well.

5.3 Distributional Strategy Business is conducted through three channels: retail stores, catalogues and e-commerce. Retail stores are usually located in upscale regional malls, lifestyle centers and street locations. The retail stores are designed and fixed with the foal of creating a distinctive and inviting atmosphere, with displays and information about quality. Through their e-commerce server, customers can access J.Crew, Madwell and J.Crew Factory. Also, the brand uses their direct channel to sell exclusive styles not available in stores, introduce and test new product offerings, offer extended sizes and colors on various products and to drive targeted marketing campaigns in designated areas. The catalogue specifically serves as the main distribution and communication channel for our company because it has proven to boost sales up in every

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other of our sources. In the fiscal year 2012, J.Crew circulated approximately 4.2 billion catalogue pages.

5.4 Promotional Strategy PRE-LAUNCH In previous promotional activities, J.Crew has put an emphasis on print and catalog campaigns as the primary source of advertising. Due to the heavy technology use and online social media trends11 within our target market we plan to implement a promotional strategy with a greater focus on these sources. We plan to create initial awareness of J.FIT through the use of social media and public relations. Social media platforms that we use will be Facebook, Twitter, Pinterest, and Instagram. We will create updates to inform our followers of our upcoming launch in order to create buzz. Later, during the period of our launch in April 2014, we will upload our campaign images onto these platforms along with corresponding product launch discounts to be redeemed either in store-or online through April and May 2014. These platforms will continuously be updated throughout the year by reposting our campaign advertisements and offering corresponding discounts during our “back to school” promotions, in September and October 2014, and our “post holiday” promotions, in late December 2014, in order to launch us into the upcoming year.

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See Appendix 9.0

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LAUNCH During our launch in April 2014, we will have contacted magazines such as Instyle, Glamour, Vogue, Esquire, Self, and Fitness as well as The New York Times, The Wall Street Journal, and our J.Crew Style Guide to premiere our active wear campaign in the April 2014 issues (J.Crew 2013). These campaigns will have been planned and photographed in advance during the fall/winter 2013 season. The campaigns will continue featuring in these publications for a six-month period post-launch, ending in October 2014. We will also create a short 15-minute long fitness training video that will feature our active wear in order to show the functionality of our product. Along with this video, there will be three more corresponding training videos that will exclusively be available to those who download our J.FIT fitness app. The mentioned app will only be available to those who purchase our active wear in the form of a redemption voucher that will come with our merchandise.

The app will offer these exclusive workout videos, styling tips and how they can be paired with J.Crew ready to wear, advice on the best look for specific workouts, and a feature that will allow users to upload their pre or post workout looks in order to see other customers styling examples.

Our launch will include a product launch party located in three of the top metropolitan cities, in which our market is located, in New York City, Los Angeles, and Miami (U.S. Census 2011). It will consist of a salon style showing of merchandise on live models. Food and beverages will be

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provided. We will also premier our fitness training video. There will also be an announcement of our upcoming popup shops and corresponding discount cards for those who attend. Prior to this launch press and media will be contacted to create buzz. Our popup shops will be located in New York City, Los Angeles, Miami, Chicago, San Francisco, and Boston for these are the top locations for our targeted consumer base (U.S. Census 2011). The pop up shops will last for a three-month span, post launch, from May to July 2014.

Merchandise will be sold at a discounted price and those who received discount cards from our launch party may redeem those at this time.

POST-LAUNCH After the launch, we will attempt to reinstate awareness and buzz about J.FIT by contacting top fashion bloggers, ones who have previously worn J.Crew clothing in their blogs, such as Glamourai, Song of Style, Garance Dore, and My Style Pill, to promote our products by sending them merchandise to review on their blogs in exchange (HuffingtonPost). During the “back to school” season of September and October, we will contact and notify college campus about an opportunity to host a one-day J.FIT pop up shop event. This event will be hosted by campus sororities and their members and will sell merchandise. Students may hash tag pictures taken during these events using #jfit and @jfitathletics through social media platforms in order to represent their college campus. In order to continue buzz into the upcoming year we will implement an approach that will center on the concept of using

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J.Fit apparel to get into shape for the New Year and offering appropriate discounts on merchandise.

Lastly we will offer sweepstakes throughout the year to regenerate awareness. One of our sweepstakes will be a “snap a selfie” sweepstake in which our customers can take a picture of their pre or post workout looks using @jfitathletics and #jfit for a chance to be featured within the upcoming issue of our Style Guide. There will be a selection of 25 winners and occur after the launch in May. We will also have a sweepstakes within our fitness application that will consist of a random monthly drawing of 5 customers from which who have downloaded our app that will receive a 30% discount on their next purchase of J.FIT apparel.

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6.0 CONCLUSION Our brand extension is proposed in order to further benefit the overall aesthetic of the company, to reinforce the relationship with our customers and to ultimately increase our profits from the J.FIT line. The collection is ultimately based on comfort, fit, performance, practicality and most importantly, style based upon our market research on the intended target market. Since our consumers are used to pay full price for quality clothes, we will make sure our merchandise will meet their needs while further exemplifying the mission of our company. Even though there is an intense competition in the sportswear market, we intend to differentiate ourselves from the competitors in terms of our loyal customer base, strong multichannel sources and adaptable, yet progressive brand aesthetic.

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7.0 BIBLIOGRAPHY COMPANY SUMMARY

1. 10 Global Macro Trends for the Next Five Years – Executive Briefing.

Publication. N.p.: n.p., n.d. WARC. Web. Nov. 2013.

2. "'Hello, World,' J.Crew Says, via the Web." International Marketing. N.p., n.d. Web. 19 Nov. 2013. <http://www.internetretailer.com/2012/06/27/hello-world-jcrewsays-web>.

MARKET ANALYSIS

1. "Global Sportswear Industry to Generate Additional US$55 Billion in New Sales by 2017, According to Euromonitor." Yahoo Finance. N.p., n.d. Web. 18 Nov. 2013. <http://finance.yahoo.com/news/globalsportswear-industry-generate-additional-080000338.html>.

PESTEL FRAMEWORK

1. 10 Global Macro Trends for the Next Five Years – Executive Briefing.

Publication. N.p.: n.p., n.d. WARC. Web. Nov. 2013.

2. "Federal Trade Commission Protecting America's Consumers." Online Apparel Retailer Settles FTC Charges That It Failed to Safeguard Consumers’ Sensitive Information, in Violation of Federal Law. N.p., n.d.

Web. 10 Nov. 2013.

3. “Free Trade Agreements (OTEXA)." Free Trade Agreements (OTEXA).

N.p., n.d. Web. 12 Nov. 2013.

4. Suttle, Rick. "The Macroenvironmental Factors Affecting the Clothing Industry." Small Business. N.p., n.d. Web. 10 Nov. 2013.

5. Treadwell, Lauren. "The Role of Macro Environment in the Retail Industry." Small Business. N.p., n.d. Web. 15 Nov. 2013.

COMPETITION

1. "Choose the Country You Want to Ship to." Financial Information. N.p., n.d. Web. 5 Nov. 2013. <http://investor.lululemon.com/financials.cfm>.

40

2. "NPD Reports Strong Sales In Activewear and Athletic Footwear From January-August 2013." – NPD.com. N.p., n.d. Web. 19 Nov. 2013. <https://www.npd.com/wps/portal/npd/us/news/press-releases/npdreports-strong-sales-in-activewear-and-athletic-footwear-fromJanuary-august-2013/>.

3. "Women's Activewear Market Takes off." Chicago Tribune. N.p., 07 Oct. 2012.

Web. 19 Nov. 2013. <http://articles.chicagotribune.com/2012-­‐10-­‐ 07/business/ct-­‐biz-­‐1007-­‐womens-­‐activewear-­‐20121007_1_lululemon-­‐ athletica-­‐activewear-­‐market-­‐workout-­‐pants>.

4. "U.S. Apparel Market -­‐ Statistics & Facts | Statista." Statista RSS. N.p., n.d.

Web. 18 Nov. 2013. <http://www.statista.com/topics/965/apparel-­‐market-­‐ in-­‐the-­‐us/>.

5. "Form 10-­‐Q." Form 10-­‐Q. N.p., n.d. Web. 19 Nov. 2013. <http://www.sec.gov/Archives/edgar/data/320187/000119312513142156 /d481614d10q.htm>.

PORTERS FIVE FORCES

1. "Solly's Space." Sollys Space. N.p., n.d. Web. 19 Nov. 2013. <http://vinodhsolly.wordpress.com/2009/07/31/sports-retail-5forces-analysis/>.

TARGET CONSUMER 1. Lenhart, Amanda, Kristen Purcell, Aaron Smith, and Kathryn Zickuhr.

"Social Media and Young Adults." Pew Internet. Pew Internet & American Life Project , 3 02 2012. Web. 3 Nov 2013. <pewinternet.org/Reports/2010/Social-Media-and-YoungAdults/Summary-of-Findings.aspx.

2. "Millennials ." PewResearchCenter. PewResearchCenter, n.d. Web. 5 Nov 2013. <http://pewsocialtrends.org/files/2010/10/millennialsconfident-connected-open-to-change.pdf>.

3. "Interactive: A Portrait of Five Generations." PewResearchCenter.

PewResearchCenter, 24 02 2010. Web. 5 Nov 2013. <http://www.pewsocialtrends.org/2010/02/24/interactive-graphicdemographic-portrait-of-four-generations/>.

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4. Patel, Arti. "Fitness Trends 2013: The Top Exercise Trends To Look Out For Next Year" HuffingtonPost. 12 21 2012. Web. 5 Nov 2013. <http://www.huffingtonpost.ca/2012/12/21/fitness-trends2013_n_2338901.html?just_reloaded=1>.

5. J.Crew Group. Form 10-K. Filed March 20, 2013. jcrew.com, accessed November 2013 6. Moses, Lucia . "Wealthy Millennials Approach Shopping Differently Than Their Parents." AdWeek. 3 09 2013: n. page. Web. 5 Nov. 2013. <http://www.adweek.com/news/advertising-branding/wealthymillennials-approach-shopping-differently-their-parents-152140A>.

7. Bachler, Christopher . "How to Market Gen X and Gen Y." HomeBuisnessMagazine. n.d. n. page. Web. 5 Nov. 2013. <http://www.homebusinessmag.com/marketing/how-guides/howmarket-gen-x-and-gen-y>.

PROMOTIONAL STRATEGY 8. Green, Grace. "NYC Fashion Bloggers: 10 Blogs Worth Reading."

The Huffington Post. TheHuffingtonPost.com, 20 Sept. 2010. Web. 5 Nov. 2013. <http://www.huffingtonpost.com/2010/09/20/checkout-these-nyc-fashi_n_731915.html>.

9. US Census Bureau. 2011. “U.S. Census Bureau Releases Data on Population Distribution and Change in the U.S. Based on Analysis of 2010 Census Results.” Operational Press Briefing. Web. 5 Nov. 2013.

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8.0 APPENDIX Appendix 1.0 COMPETITOR J.CREW BEBE THE LIMITED

SWEATERS $60-$80 $40-$150

DRESSES $148$500 $50$375 $80$150

JACKETS/COATS $120-$800 $100-$330 $80-$200

DENIM $115$288 $90$130 $70$90

BOTTOMS $75-$600

JEWELRY $35$440

$40-$140

$10-$90

$35-$90

$12-$50

BAGS $158$325 $40$200 $30$80

NEW YORK AND COMPANY LAUREN BY RALPH LAUREN BANANA REPUBLIC THE GAP

$20$46

$20-$60

$65-$75

$45-$160

$50$70

$36-$80

$13-$27

$42$55

$30$160

$55-$280

$100$300

$100-$700

$70$140

$70-$700

$20$198

$130$370

$20$198

$60-$225

$98$225

$120-$325

$70$90

$44-$198

$15-$150

$16$298

ANN TAYLOR

$40$159

$40-$250

$80$400

$98-$300

$90$98

$70-$200

$20-$98

$30$200

$15$50

$30-$90

$30-$70

$50-$150

$40$70

$25-$60

$13-$40

$17$40

$50-$100

$15-$65

$25

$70-$150

$18-$55

-

$228$348

$32$700 $25$200

$100$1000 $60$180

AMERICAN EAGLE OUTFITTERS LOFT BY ANN TAYLOR JONES NEW YORK KATE SPADE TALBOTS

TOPS $25$168 $19$109 $20$80

$15$100 $25$100 $58$498 $22$140

$40-$100 $50-$170 $198-$328 $30-$200

$70$100 $90$140 $378$798 $102$250

$98-$300 $50-$460 $678-$798 $60-$375

43

$60$90 $50$75 $198$448 $80$100

$70-$250

Appendix 2.0

44

Appendix 3.0 COMPETITOR

TOPS

BRAS

BOTTOMS

JACKETS

$25-$50

$25

$30-$45

$40-45

ZELLA

$20-$70

$28-$64

$45-$75

$90-$100

VICTORIAS SECRET SPORT

$25-$50

$30-$56

$40-$90

$70-$140

UNDER ARMOUR

$25-$60

$25-60

$25-$103

-

LULULEMON

$40-$100

$40-$80

-

$100-$200

GAP

$20-$40

$25-$40

$40-$70

$40-$60

ANTHROPOLOGIE

$30-$80

$40-$60

$50-$130

$70-$150

LUCY

$30-$70

$40-$60

$70-$100

$50-$170

ATHLETA (GAP)

$40-$70

-

$40-$100

$70-$100

NIKE

$20-$90

$30-$70

$40-$120

$60-$100

ADIDAS

$20-$50

-

$50-$180

$50-$120

AEO PERFORMANCE

45

Appendix 4.0

46

Appendix 5.0

47

Appendix 6.0

48

Appendix 7.0

49

Appendix 8.0

50

Appendix 9.0

51