Yael Aflalo, CEO LYMI Inc. d.b.a The Reformation 23 Howard Street New York, New York 10013 Dear Ms. Aflalo, As we agreed upon during our last meeting on October 30th, we are enclosing the business plan to support the loan requested in the amount of $ 47,000 for start-up capital for our business, Reformation Atlanta pop-up shop. Any consideration you can extend regarding this matter is very much appreciated. Thank you so much for your time and consideration.
Sincerely, Maria Jose Reyes Ashlan Riess Shuang Yuan 675 Ponce de leon Ave Ne Atlanta, GA 30308 phone: 404-367-8877 firstname.lastname@example.org
Prepared by: Maria Jose Reyes, Marketing Director Ashlan Riess, Financial Director Shuang Yuan, Visual Director LYMI Inc. d.b.a The Reformation 675 Ponce de leon Ave Ne Atlanta, GA 30308 phone: 404-367-8877 email@example.com Date Prepared: November 13, 2015
Table of Contents Executive Summary
Brick-and-Mortar Location Plan
Evaluating Marketing Efforts
Executive Summary Company Profile Six years ago Reformation was established with the focus on design, value, and sustainability in the forefront. It was derived from a centralized idea to take the concept of sustainability and add on trend variations of apparel with a firm foundation. Creating limited edition collections that relate to the latest fashion trends and providing these collections within a few weeks to consumers. The establishment of fast fashion with sustainability. Construction, design and production are completed in an in home manufacturing department in downtown Los Angeles. By having our own manufacture we are able to release designs that reflect the needs and wants of our consumers in the industry. By eliminating the middleman and providing our own source for apparel production we are able to sell specifically to our own boutiques and online store. This allows us to control costs, provide adequate turnaround times and provide our customers with sustainable products and prices. To ensure authenticity and on trend garments we source our vintage and sustainable fabrics to incorporate green practices. As a company our goal is to use sustainable products throughout our whole supply chain to ensure beautiful styles for a fraction of the environmental impact generated by fashion companies. The Reformation of fashion within our industry is in the hands of the innovative and creative. It is our goal to continue to supply and do our part to create a name within the industry. With the help of our sustainable fashion and prices we strive to dedicate ourselves to a moderate level of consumption within luxury.
Brand Statement “Our Company’s name touches on our mission to disrupt the status quo and revolutionize fashion. To inspire our customers to join us, we tell them everything. By sharing every piece of our process, we hope to change the way people think about fashion by showing that fashion can be green without sacrificing any element of design. Join the Reformation”
Executive Summary Business Overview In order to promote our company and maximize our potential sales, it is imperative that we take advantage of advertising, media, andw that we utilize public relations. In doing so, we will create a demand for our brand. However, in order to do this we will have to establish a four-week, Reformation pops up shop. In order to do so we will have to establish a location, staff, assortment plan and a detailed layout of financials. To achieve the maximum customer reach and brand accessibility we will be using this pop up shop as market research test tool. Atlanta is a prime location for testing due to the growth of fashion and demand for sustainable on trend apparel. We will be accessing a customer base that could potentially require a full time brick and mortar location. To This temporary store will continue to increase sales and profit for Reformation as a company and increase opportunity. With opportunity comes risk but with access to strong market research, prime location, assortment plans and a strong motivated team we feel confident that this extension of business will be a building block for potential brick and mortar. Reformation as a whole can be a strong addition to the city of Atlanta. There is an increased demand for authenticity and new fashion practices. In order to continue with our mission to prove and re define fashion we have to establish new endeavors that will potentially result in new means of sales revenue and brand establishment. Reformation: Pop-Up Shop •
Four Weeks (open to consumer)
Location: Ponce City Market, Atlanta GA
300 Square Feet
Weekly Assortment Plans
Critical Success Factors •
Location: High foot traffic, being in the right area and surrounding shop by right retailers or near-
by business. 5
Executive Summary •
Pin pointing consumer: knowing and supplying needs within the industry to appeal to target mar
Provide customers with knowledge and adequate facts about product and brand.
Constant updating and review of inventory to obtain weekly sales objectives
Market Research: firm understanding of market and what needed assists are required to obtain a
strong place within intended market to ensure success within sales, establishment. •
Staffing: driven with a strong grasp and focus within intended market.
Provide a sustainable appearance within product and performance.
Carry an assortment of apparel that is shaped to fit the mold of consumer profile.
Provide customs with excellence in customer service.
The experience is just as profitable as the merchandise itself.
Management Team Our management team for the pop up shop will include three full time employees. They are high – level executives that have come up with the framework of the pop up shop from the ground up. Each employee specializes in a specific segment. Shuang specializes in visuals and connecting key looks that translate a strong focus of brand awareness. Maria develops marketing and store management concepts to increase potential sales and drive customer point of sales. Ashlan evaluates market research and provides adequate up to date financials and projected revenues for the duration of the shop. The key to success lies in the hands of the concept, drive and initial focus that Reformation within a new location can create. Employees will bring a select group of tools and techniques to achieve maximum success and reach within the market. Maria Jose Reyes - Marketing Director Ashlan Riess - Financial Director Shuang Yuan - Visual Director 6
Executive Summary Financial Plan The measure of success for this project is not profit but rather to form a greater understanding of market potential. Therefore ROI should not me the primary metric used to determine value. We feel that Reformation for Ponce City Market is a powerful and efficient tool to achieve an overall status of the markets needs and wants. By doing so we will be investing in the selling market and developing potential for Reformation in Atlanta. We will have a $5,000.00 build out expense; the remainder will be capitalized since assets can be returned to corporate build out pool. The cost represents labor and disposable assets all other fixtures will be returned to corporate and depreciated over seven years. Expenses are so love because we are only expensing things we cant recover such as labor, permits and permanent fixtures. All other building and interior tools will be capitalized in used in future pop up shops. Our financial plan incorporates all the possible outcomes and projected costs within the development of the pop up shop.
Executive Summary Key Components: •
Gross Margin Total retail
Total current Assets
Marketing & PR
Total Current Liabilities
EBITDA EBITDA Margin
Cash Flow Operations
• EBT • Taxes
Management plan Business Structure Our business is under the legal category of an LLC or a Limited Liability company, which is a separate and distinct legal entity. This means that we have many advantages as a company such as, LLC can get a tax identification number, open a bank account and do business, all under its own name, offering lots of options so you can create a tax plan that works for the owner. LLCs don’t have the same rules of corporations, but they have their own set of guidelines. It doesn’t matter if the business has one or hundreds of employees, an LLC keeps protecting you while allowing for expansion and growth. With an LLC, there’s no requirement for special meetings, extensive corporate records, or many other formalities. This simplicity, security, and user friendly have made forming an LLC a popular choice for small businesses. For our pop-up store our management team is going to be a big priority, we will compile a team with the knowledge, skills, expertise, and experience needed to operate the store and to achieve or exceed our goals. Our team is going to be composed of people with different experiences, talents, training, and special expertise. We all complement each other’s skills, Shuang, is amazing expressing with visuals, using an image to tell a story and look interesting. Ashlan is great with numbers, the vision of the store and sales. Maria is a natural to come up with marketing strategies, advertising and employee management. All of our team members will have retail experience, but most important with experience selling specialty product due to our business mission which is to be sustainable in the entire process of our product. Reformation is a sustainable company, that creates and manufacturers their limited designs in our own factory, and this means it’s made in America in a sustainable factory. Our team is going to include Ashlan, Shuang, and Maria as the owners, we will also have one manager, two assistant managers, and one sales associate. Each member of the team is going to have a specific job duty, Ashlan is the financial manager, she will oversee every financial aspect of the company, as well as the sales manager. Shuang position is the designer manager of the team; she will design all the floor plan, visual merchandising, and the overall design of the store. Maria is going to be in charge of managing staff, marketing and advertisement. 9
Management plan Management Compensation Benefits and proper compensation is available to management team that holds higher-level positions. A variety of health benefits will be presented to management team. Compensation for time and development will be provided.
Personnel compensation To know how much each member of our team is going to receive in compensation we reviewed our finances and decided to pay $15 an hour. This will help them have an incentive because is more than the minimum wage in average retailers. The team member compensation package includes salaries, bonuses, incentives, and other compensation. One of the incentives the team members will receive is a store discount for 50% of everything in the store. Owners: Maria, Shuang, and Ashlan. Full-time: Manager and assistant manager. Part-time: Key holder, sales associate. The incentives that will be taken in consideration other than the employee discount will be bonuses if goal are achieve. Some of the qualifications, duties, and roles required of employees are going to vary according to the position they are going to take. Some of the qualifications of the sale associates include: •
Well-versed in greeting customers professionally
Effective in maintaining solid product knowledge
Hands-on experience in display maintenance and housekeeping
Experience using a cash register and inventory management system
Knowledge at managing merchandise inspection, tagging, stocking and display
Experience arranging merchandise to maintain the highest level of visual presentation
Working knowledge of the relevant industry and business operation
Thorough understanding of our product, the development and sales techniques
Management plan Key Advisors/Director
As a new store, we have created a networking of people who can provide recommendations, ex-
perience, and input. We will have a financial advisor in our team (Ashlan Riess) that will send detailed reports analyzing success and market potential. Incorporating statistical information and numbers based on profit and revenue. This will be a helpful tool to establish a firm understanding and comprehension of all financials within the business.
In our team we will ensure there is a good system in place to communicate effectively and effi-
ciently throughout the business as well as to customers. The values and expectations of the business will be communicated both internally and to the customer. Internally we will train our employees with effective approaches such as videos, employee handbook, company’s book, story, lifestyle, and mock-up interaction with customers in order to help them learn about the brand, the product, and our customers. Internally we will communicate through “all staff” group emails, this will increase staff productivity and decrease the stress levels. All the staff and members will have a meeting before the store opens and after its close time. We’ll go over goals, customer service, experiences, questions and any other communication we have to make. The company’s organizational chart consists on the 3 board members and owners Maria, Shuang, and Ashlan. All three will serve as decision makers. Also the communication between manager, sales associate and board members will be seamless but very productive with the use of iPod’s the company will provide to the members in order to efficiently help customers, deal with stock and communicate with managers.
Governmental Approval In order to open our pop-up shop we need permits, regulations, and paperwork before spring when we plan to open it. Due to our location, Ponce City Market, Atlanta, GA we had to research and identify any governmental approval necessary to operate the business legally. A business license or “occupational tax registration certificate” is required of all businesses operating within the city limits of Atlanta. A business license is required per location of your business. 11
Management plan Business licenses must be renewed each year by completion of a Business License Renewal Application, also known as the Annual Business Tax Return. Renewals are due on or before February 15th of each year. Business license payment deadline April 1, business licenses expire on December 31 annually. Generally, walk-in customers are able to complete the process in less than an hour and a half. However, this estimate is heavily dependent on the having all appropriate documents readily available and the volume of customers. The Office of Revenue stops processing new business license applications at 4pm daily. The average processing time for a mail in application is 3-5 weeks. The signage license and permits are clearly stated in the Atlanta government website. How to obtain it: Fill out the application online 1. Provide two (2) copies of plans depicting accurately scaled street front elevations, accurately scaled sign renderings and accurately scaled site plans for freestanding signs. 2. Submit the application along with at least half of the permit fees in person to the Office of Buildings, 3. Zoning Enforcement Division at 55 Trinity Ave., Suite 3900, Atlanta, GA 30303. 4. Zoning sign permit plan review. It can take up to (30) days for the Zoning Enforcement Division to review your sign permit application. 5 Upon approval the remaining balance must be paid to receive your permit. How to pay? After you receive an invoice from the Zoning Enforcement Division, you may pay at the Cashierâ€™s window in City Hall in order for the sign review process to begin. All payments must be made in the first floor of City Hall at the Cashierâ€™s window. Acceptable forms of payment are cash, Visa, MasterCard, Discover, American Express, certified bank check or money order. You cannot pay online and you cannot submit an application online. The require document is the sign permit application packet, once completed the form need to be submitted in person. While researching for insurance options we came across insurance options, State Farm Insurance policies for retail business offers several features available such as:
Management plan •
Coverage for your business property such as buildings and other structures, inventory, property in
transit, and much more. •
Comprehensive General Liability insurance, which may provide financial protection against costly
claims and lawsuits. •
Loss of Income protection in case you must close your business because of a covered loss.
Accounts Receivable may cover for loss of monies due to you that are uncollectible because of
damage to accounts receivable records. •
Back up of Sewer and Drain may provide coverage for accidental direct physical loss to business
personal property at your location. •
Computer Property coverage’s for computer equipment used in the business operation.
Data Compromise and Identity Restoration coverage’s work together to help your business and
you get back on track after a data breach occurs or if you, the business owner, becomes a victim of identity theft. •
Employee Dishonesty may cover direct physical loss of business personal property including
money and securities caused by dishonest acts committed by employees. •
Equipment Breakdown may provide coverage for damage to covered property caused by me-
chanical breakdown of covered equipment, artificially generated current damaging covered equipment, explosion of steam boilers or loss of hot water boilers. •
Money & Securities covers the loss of business money and securities caused by theft, disap-
pearance, or destruction from described premises, a bank or savings institution, while being conveyed by a messenger or armored auto or within the residence of a messenger. •
Signs may cover accidental direct physical loss to signs attached to buildings (whether indoor or
outdoor) and to outdoor signs not attached to buildings at the described premises owned by you or in your care, custody or control.
Management plan â€˘
Utility Interruption provides loss of income coverage due to failure of communications, water, nat-
ural gas or electrical service to your insured premises for more than eight consecutive hours. The contact information for the insurance company is 800-782-8332, available 24/7.
Merchandising/Product Plan Merchandising Reformation for Ponce City Market is based on a four week time period. In order to provide an appealing assortment of a variety of style we had to develop a plan that incorporated the whole spectrum of Reformation’s style. We developed a cohesive assortment planed based on a three week time period. Although we are opened for four weeks it is vital that we move all product. That being said the fourth week will not be receiving a specialized assortment/shipment. During the fourth week we will be running a 15- 25-35 sales, averaging a 20% discount on all merchandise. Each week a specialized assortment has been development to target our primary consumer and show range within brand extension.
Assortment Plan Goal: To meet Atlanta style and influence a more dynamic and logic form of style. • Week 1: Key Staple Items Coverage of all apparel Categories Dress Shirt Pant Skirt
Week 2: Unique Higher Price Pointed Items Trend Conscious Pieces Higher end fabric More defined style & silhouette
Week 3: Incorporation of Wedding Apparel Dresses only Wedding inspired 7 wedding inspired pieces Party dresses
Week 4: No new assortment Combination of all 3 previous weeks Discounted merchandise Moving merchandise
ASSORTMENT PLAN APR 15 - MAY 15
WEEK THREE | FOUR
Brick-and-Mortar Location Plan
Brick-and-Mortar Location Plan Physical Location Ponce City Market (675 Ponce de leon Ave Ne, Atlanta, GA 30308) Reformation hours of operation: Monday - Saturday : 10:00 AM to 9:00 PM Sunday : 12:00 AM to 6:00 PM Location Features A 1 floor, no bathroom, a small stockroom Target Market Considerations Decoration according to our culture and our aesthetic, very urban, clean, minimal Leasehold Improvements Non. We are going to work with the space we have. Other Location costs water, lighting, etc, extra expenses Signage Signage can also include vinyl/plastic/nylon banners, which run around $3-$9 a square foot, $100-$500 or more for larger, heavy-duty, fade-resistant, 27
custom-designed full-color banners.
Brick-and-Mortar Location Plan
RE MOOD BOARD
fitting room stockroom
Marketing Plan Industry Profile From a global perspective the fashion industry is growing faster than ever, women’s apparel is an incredible extensive but profitable industry. A time are changing and with this every industry has to, environmental impact is an important issue in every company and industry nowadays. Our target, women’s clothing, is going into a transition of going from online shopping to a more balance platform with e-retailing and brick and mortar. Both give a complete different experience, but the absence of one can be fatal. Going online for company is as important as having a private space such as a physical store. This is why we decided to incorporate the idea of helping the world with a sustainable approach in the fashion industry, offering great designs and high quality clothing. Reformation decided to open its doors to start a solution for a problem that we all have to face. How to be successful and sustainable at the same time. Founded in 2008, Reformation spent the first five years of its existence as a modest business. In the last 12 months, it has blown up. Last year it had about $9 million in revenue; this year it will do better than $25 million. This success is due to the combination of a mission and the power of social media and celebrity’s influence. They are eco-friendly, relying on sustainable and vintage fabrics. When a customer walks into Reformation’s SoHo store, these are the words that greet you: “Change the world without changing your style.”
Market Economic Factors After extensive research we understand the local economy of Atlanta. We decided that our pop up shop would be a success due to our diversity of young people .We will offer affordable clothing with a plus value of “Made in the U.S.” and “Made out of Recycled Materials”. According to the economic trends and patterns that are occurring in this specific graphic location having this equal label open its doors to the Atlanta market would be beneficial and inspiring to other future businesses. According to the Bureau of Labor Statistics in the Atlanta metropolitan area, professional and business services recorded the largest employment gain from August 2014 to August 2015, adding 18,500 jobs. The area’s 3.9% growth in professional and business services employment was larger than the nationwide increase of 3.4%. Atlanta was 1 of the nation’s 12 largest metropolitan statistical areas in August 2015. All 12 areas experienced over-the-year job growth during the period, with 7 exceeding the national average of 2.1%. 35
Marketing Plan Market Analysis Summary The characteristics and profile of our target market is stated by: age: 23-35, economic class: upper middle, class income: 80,000-100,000, location: Atlanta (Buckhead, West Side, Midtown, and Ponce de Leon). Our primary target market is a young cool adult with disposable income in order to invest in sustainable, made in the U.S. pieces. Metro Atlantaâ€™s growth potential is bolstered by strong demographic trends. The regionâ€™s population is youthful as well. A third of the population is between the ages of 18 and 34. This is part of our market; young adults based in the Atlanta area of ages 23 to 35.
Market Needs Our pop up shop is part of a niche group and we want to fill that need. There is a gap in the marketplace for a fresh, trendy, original, label offering sustainable and all American products. In a diverse city as Atlanta there is an opportunity of growth.
CONSUMER PROF REFORMATION
Customer Profile Defining our target market is one of the key aspects of our business. Our customer is a person that chooses their clothing by quality instead of quantity, care for environmental issues. •
Upper Middle Class
Enjoys nature, traveling, art and
Aesthetic: elegant, romantic, sim-
Atlanta based (Midtown, Ponce,
Job Description: High Museum
Income: $80,000- $100,000
Marital Status: Single
Style: Casual, natural, trendy,
Marketing Plan Future Markets In the future we hope to expand, have a traditional brick and mortar store in Atlanta and in other key places around the country. This expansion would open the door to new opportunities and bring conscience to retailers and new upcoming businesses that are interesting in filling the gap and start a sustainable movement in fashion.
Competitive Analysis To identify our competitive analysis, we decided to make a competitive matrix. Our main competitors are companies that offer designer quality pieces with an affordable price that include a sustainable factor. Some of these direct competitors are Stella McCartney, and People Tree, due to the high quality, unique merchandise, and sustainable factor of the company and the price point. People Tree is a company based in London, so they are considering as online sales competition. According to style and aesthetic, the main direct competitors are Theory, COS, rag & bone. They are known for being trend forward, affordable, unique merchandise, but has not explore a sustainable approach. They all have retail stores in the U.S. or offer their products in other retailers in the Atlanta area. Also, they are all targeted to the same market; cool, hip, young adults with disposable income that care about fashion. Our advantage and uniqueness is going to be the sustainable approach and the made in the US value to our customers with an affordable price point. Other indirect competitors that sell similar style but are much lower in price, quality, and vision are fast fashion companies such as Zara, H&M, and Topshop. They are all located in the Atlanta area and all of them are very well known.
Competitive Advantage Reformationâ€™s competitive advantage in the marketplace is the Eco-Label value of the company. Currently there is nothing like it in the industry, trendy, cool, high quality craftsmanship, affordable, sustainable and made in the U.S. all in the same label or brand. Our brand has also a competitive advantage in pricing; they vary from $100 - $500. The unique merchandise makes the brand so recognizable; itâ€™s a brand with everyday casual pieces, and trend forward. We also have a recycled campaign and marketing with simple/clean designs that transmits the companyâ€™s vision. The recycling campaign implicates 39
Marketing Plan to buy something from us online; weâ€™ll include a free return Recycling-shipping label. Simply slap that on the box your stuff came in, fill it up with whatever you want to recycle, have it picked up at your door, and weâ€™ll do the rest. You can login to your Reformation profile and log the label number to track your shipments and see where your old stuff is going, and the positive environmental impact you made. Also, our quality and sustainable advantage is supported since we manufacture most of our products in our own sustainable sewing factory. By cutting out the middleman and selling online and in our own boutiques, we eliminate traditional retail markups. We source sustainable fabrics and vintage garments, and incorporate sustainable practices throughout our supply chain to make beautiful styles at a fraction of the environmental impact generated by most fashion brands.
Pricing Pricing Strategy Our pricing strategy is going differentia us from our competition. Our affordable take on our sustainable pieces makes us unique. Other brands give their “organic cotton” label to their pieces and raise the markup double. We have the advantage of having our factory, which means manufacture in America, making unique merchandise. We are going to give our customers the advantage of an affordable sustainable and the made in the U.S. value, which is going to drive sales in relation to the competition.
Price List All of our merchandise is within middle to high price range. Our markup percentage varies week to week. Our products range anywhere from as low as $84.00 to as high as $816.00. Having a pretty wide price range allows us to achieve and meet the reach of many consumers. Reformation establishes a centralized system for pricing within their platforms. On our assortment sheets distributed you can see the cost of goods and the retail pricing strategy for these products.
Pricing Policies For customer return policies we are going to be transparent and strict on the policies, letting our customer know to please return anything you’re not happy with. We promise to do everything we can to make.
Domestic For online orders, we accept stuff in new condition with original tags attached for a full refund. You have 20 business days to return items from the day you receive your shipment to get it back to us. There’s no restocking fee and return shipping is free. Your refund will be credited to the same credit card used to make the purchase. For in store purchases, we are happy to take it back for credit or exchange within 14 days of purchase. We accept items in new condition with original tags attached. Please note that all apothecary, lingerie, swimwear and sale items are final sale. All online orders must be returned online and in store purchases must be returned in store. 41
Pricing International For online orders, we accept stuff in new condition with original tags attached for a full refund. You have 30 business days to return items from the day you receive your shipment to get it back to us. There is no restocking fee however; customs duties and sales taxes are non-refundable through Reformation. You may be able to recover these funds by contacting your local customs bureau directly. Your refund will be credited to the same payment method used to make the purchase. A strategy that we want to continue giving to our customers is the detail care instructions that our pieces require in order to maintain their look. We have a 24/7 customer service that can help with any care instruction that itâ€™s not in the label. Additionally we have in the website suggested cleaners that can help. Because we try to help the environment in every aspect, we give tips or suggestions on sustainable routes for washing, or any cleaning instruction. We have all of this information in our website and our blog.
Market Penetration Brand Strateg We have an understanding of the image we want our customers to have from us, according to our vision and mission it’s what portrays our company. Our culture revolves in sustainability and doing everything for a cause. It’s more than cool clothes; we want to create a lifestyle around our label. Reformation is a lifestyle brand were everything sustainable and good for the planet and our community are valid. The factory is filled with creative and talented people that want to leave a mark in the fashion industry and the world. We want to be a unique company that our customers go to truly make a difference when buying our product, we want our company and our blog to grow by making sustainable practices a cool lifestyle. Employees are going to only wear Reformation clothes, very simple and not flashy jewelry; everything will have a simple, clean, but fun aesthetic. Employees must be extra polite when answering the phone, always mentioning their name, offering their help the customer. Customer service is our priority, our employees will be trained to give an amazing customer services, we want our customers to remember our store for the experience they had while in there.
Advertisement & Promotion Our promotion tactics will maintain our vision and culture, which means we have to manage advertising and promotion as sustainable as possible. We will use email as our set advertising because it’s free and it doesn’t waste paper. Our policy on advertising and promotion is to get noticed but not to annoy customers. This is why we will send emails at the beginning of every season, and when new arrivals come in. Our website is always getting better, updated, and giving our customers the best online shopping experience. Another platform we are going to take advantage of is social media; we will be using Instagram, Facebook, and Twitter. Our blog is also going to be a part of our advertising strategy. Full of inspiration, lifestyle images and articles. Another type of advertising we will consider is Magazine ads in some of the main magazines, such as, WWD, Marie Claire, Atlanta magazine, Bloggers and celebrities exposure, there are some celebrities that already have a great relationship with the brand, such as, Rihanna, Taylor Swift, Karlie Kloss and more. They will wear our clothes and be invited to our private party and opening event.
Market Penetration Sales Strategy By identifying a way to track sales and knowing whoâ€™s buying and with what frequency. Mails can be targeted; we want to know what type of advertising made them interested in our product. To know what type of ad and how customer service is doing in our company, we will record the customer service calls, and send a survey after a transaction or a call. We also want to know where to focus in order to maximize sales; we are tracking sales by using different methods. Total sales by time period. The first metric to track is our sales on a calendar basis choosing to track sales by day or week. By doing this we know exactly how well we are preforming. If sales are up versus the prior period, be it the prior day, week, month, quarter or year. And if sales arenâ€™t up each period, action needs to be taken. Sales per prior activity. The final sales metric to track is sales per prior activity. Prior activities are those events that occurred shortly before the sale. For example, tracking sales per click or sales per impression when doing online advertising. This will allow us to find the root of sales success or failure. If it fails, we can take action, by changing the script the phone staff uses and improves customer service.
Publicity The strategy we are going to take in order to get great publicity is a diversity of events. The first event we have planned itâ€™s going to be a private event for special Atlanta socialite guests, celebrities, models, and brand ambassadors. Our event is going to be exclusive, the night before we open our doors to the public. The guests will receive gifts such as an exclusive Reformation T-shirt. They are going to be able to shop and have a great time, with a small dessert bar and wine. Invitations are going to be sending out by mail. Also, social media especially on Instagram will manage the opening day and all of the promotion around the opening of the store. Bloggers and celebrities that are already loyal to the brand are going to post the opening too publicity too.
Reformation Website Home Page 45
ATLANTA DON’T WORRY BE SEXY APR 15TH - MAY 15TH, 2016 675 Ponce de leon Ave Ne, Atlanta, GA 30308 #JOINTHEREFORMATION
Market Penetration Promotional Events Some of the promotional events that Reformation will have while in Atlanta are going to be the opening event, with live DJ, great ambience, music, and people. We will be promoting the reformation-recycling project, giving information about sustainability and what we do to make a difference. The next event we will have is a â€œSip & Shopâ€?, Ponce city market is full of hip, cool people, so this will be a great opportunity to engage more people into our store. This event will take time around the 2nd week of our stay.
Hey Babe! YOU ARE CORDIALLY INVITED TO ATTEND A GIRL’S NIGHT HOSTED BY
REFORMATION TO CELEBRATE THE OPENING OF THE POP-UP SHOP
THURSDAY, APRIL 14, 2016 8 O’CLOCK IN THE EVENING
675 Ponce de leon Ave Ne, Atlanta, GA 30308
APR 15TH - MAY 15TH, 2016
Evaluating Marketing Efforts The most effective marketing and promotional efforts are social media, because of our target market, our culture, and our product. Everything points to social media and our website, they have a low cost and with everyone watching it will be very effective to promote our pop-up shop in Atlanta through that media. We will start making publications 2 months in advance; also we will have videos about our lifestyle, beliefs, mission and vision of the company. These videos will portray the difference we are making in the industry and to the world, our factory and the way our employees work, their craftsmanship. This will really give customers a feel for what we are all about. According to how much buzz we create around this videos we will be able to track their reaction whether is positive or negative.
ATLANTA DONâ€™T WORRY BE SEXY Reformation Clothing
APR 15TH - MAY 15TH, 2016 675 Ponce de leon Ave Ne, Atlanta, GA 30308 #JOINTHEREFORMATION
Atlanta Pop-up Shop
Check out the pop-up shop at Atlanta: April 15- May 15
Evaluating Marketing Efforts
REFORMATION ATLANTA APR 15TH - MAY 15TH, 2016 675 Ponce de leon Ave Ne, Atlanta, GA 30308 #JOINTHEREFORMATION
ATLANTA POP-UP SHOP
11/10/15 7:10 PM
11/10/15 7:02 PM
Reformation for Ponce City Market
Forecast Financial Statements Sales Markdowns Net Sales Cost of Goods Sold Gross Profit Gross Margin
Pre-Open $ $ $ $
$ $ $
21,143 6,368 14,774 69.9%
$ $ $
28,190 8,491 19,699 69.9%
$ $ $
14,095 4,246 9,850 69.9%
$ $ $ $ $ $ $ $
1,000 211 1,211 13,563 64.1%
$ $ $ $ $ $ $ $
1,000 282 1,282 18,417 65.3%
$ $ $ $ $ $ $ $
(9) $ 13,572 $
$ $ $ $ $ $ $ $
Interest expense EBT
(33) $ (19,017) $
Taxes (38.5%) Net Profit
(7,322) $ (11,695) $
750 9,000 1,000 300 8,000 19,050 (19,050) N/A
Expenses Sales staff (Fully loaded with Benefits) Rent Marketing & PR Collateral (Bags, supplies, etc) Unplanned Shrink Buildout Total Expenses EBITDA EBITDA Margin
Net cash flow
Shutdown $ $
$ $ $ $ $
7,048 1,410 5,638 2,123 3,515 49.9%
1,000 141 1,141 8,709 61.8%
$ $ $ $ $ $ $ $
1,000 70 1,070 2,445 43.4%
$ $ $ $ $ $ $ $
$ (750) $
(289) $ (461) $
750 750 (750)
$ $ $ $ $
70,476 1,410 69,066 21,228 47,838 67.9%
$ $ $ $ $ $ $ $ $
5,500 9,000 1,000 300 705 8,000 24,505 23,334 33.8% (42) 23,376 9,000 14,376 23,334
Start Up & Working Capitol Sales Forecast: 69,066 Rent Electricity & Gas (Included in Rent) Phone & Internet (Covered by Corporate) Merchandise Furniture & Fixtures Event Cost In store Activity (Sales Personnel) Bags, Tissue etc. Shrink Markdowns
TOTAL: Break-‐‑ Even Analysis Gross Margin = Net Sales – Cost of Goods Gross Margin %= (Gross Margin $/ Net sales) 100 Break Even= Fixed Expenses/ Gross Margin % Pro Cash Flow Statement Retail Total-‐‑ Working Capitol Weekly Cash Flow (Retail Total-‐‑ Working Capitol)/4
9,000 0 0
21,228 8,000 700 5,500 300 705 1410
46,843 47,838 69,066-‐‑ 21,228 69% (47,838 /69,066) 100 35,514 24,505/69% 22,223 69,066-‐‑46,843 17,266.5 69,066/4
Retail Operations Reporting Policies The policies in the store, sales, and goals will be reporting to our different managers. This is why we have one manager and an assistant manager. The manager will report to Shuang, Ashlan, and Maria for any corporate, merchandise, customer question. The assistant manager will report to the manager, for any store, customer or sales problem or question. The key holder assists the manager and helps manage the sale associate and helps customers in the store. The sale associates are the ones that deal with the day-to-day operations of the store, interacting and talking with the customers, they report mainly to the key holder or the manager.
Employee Development To develop our employees, Reformation will offer training courses on vital subjects of the store such as, customer service, product knowledge, the Reformation culture and mission. We will improve employeeâ€™s opportunities and develop a program for them where they can be the best person they can be for the company and for themselves. Employees will be evaluated on their performance and their passion for the company. From there, it is easy to move up in our company. In Reformation we work as a community and we want to help improve our employees.
Staffing Levels Staff levels consist on all the positions we will be having at the Reformation pop-up shop. We will have three owners, one store manager, and one key holder/assistant manager, one sales associate. In order for them to reach a higher staff position level within the company, employees have to show their investment and drive for Reformation culture, mission and customers. They have to genuinely show us that they care and are as passionate about the company as we are.
Hours/Days of Operation Our hours and days of operation are going to vary according to the day. Our pop-up shop is going to open its doors on spring, which means the weather is getting hotter, the days are getting longer and people will have more time to shop. We will be open from Monday to Saturday from 10:00am to 9:00pm 53
Retail Operations and Sunday from 12:00pm to 6:00pm. All staff should arrive an hour prior to the opening time in order to get the store ready for the public, go over goals, questions, and staff meetings. Staff will also leave an hour after closing time in order to prep and close for the next day.
Inventory Control Organizing will control inventory, regular physical counts, and electronic loss-prevention tags and bar code with scans on price tags. Keeping up with inventory is one of the most time consuming tasks you’ll face in operating a retail store. We are going to have a smaller and narrower product mix, because it’s a pop-up shop for 4 weeks. Having a control over inventory has some advantages such as, Theft control. Without an inventory system, it’s impossible to know if customers or employees are ripping you off until it’s too late. Customer service. You can avoid running out of stock and can determine if an item’s in stock and locate it more readily if you keep track. You can also locate out-of-stock items, their prices, and manufacturers. Financial management. Inventory systems help you keep track of how you’re doing. It makes little sense to go for an entire year without knowing the status of your stock. Product tracking. You can track specific items and weed out low sellers with sales or markdowns.
Security Systems/Shrinkage Control For our security system and shrinkage control we will have our cashier strategically placed where we can oversee the entire store, we don’t want any fixture or furniture on the way of the entrance/exit. Planning for a security system for a store very important for the success and the development of the business. Clear and concise operations and development plans provide a resource for retail a manager that limits risk and provides support for their actions. In order to have a shrinkage control we will have two employees working in the floor at all times. This will help the store by being surrounded and having more than one person watching the store when a customer is being helped. Also, we are going to acquire cameras for the store, just to monitor the store and how to manage cases of shoplifting. If in the case of experiencing shoplifting the sales associates are required to not accuse but to suggest help or hint them that you know about their shoplifting plans.
SEE YOU SOON, BABE