In the competition of this project successfully, I would like to express my special thanks and gratitude to all my teachers Ms. Sunita Konwar, Ms. Gargi Datta, Ms. Priyanka Aggarwal, and Mr. Anshuman, for giving me the exposure and opportunity to do this wonderful project on the international brand Steve Madden, which helped me enhance my knowledge by practically implementing the concepts taught to real-life examples around me. Not only collecting secondary data but also gathering primary data and most importantly analysing it for better outcomes and possible profitable solutions. I would also like to thank my friends who helped me stay motivated.
Currently, the business is utilizing the influence of fashion as a worldwide force for good by pioneering the development of sustainable products. Even though this project is still in its early phases, we are committed to using superior materials in our shoes and minimizing carbon emissions across our supply chain, packaging chain, and recovering used goods after they have completed their intended use.
1990
1991 1996
Steve Madden introduced the chunky platform shoe whic Marry Louh
Madden started the company with $1100 by selling shoes out of the trunk of his car The company went public, raising about $5.6 million in net proceeds by selling 1.725 million shares at $4 each. He opened his first retail store.
Steve Madden printed his first ad
1993 1997
1999
Net sales rose to $85 78 million and then nearly doubled to $162 04 million
2001
Steve Madden Men's collection was launched in this year
2005
Steve Madden went global! Steve Madden opened his 100th store in the US Madden Girl was launched
Madden and Belfort had had a falling-out in 1997, and their disagreement mushroomed into a lawsuit
2000
Founder's Arrest
2015
The company reported net sales of $1 4 billion for 2015
2003
The new ad campaign was released
Steve Madden, the brand was born with passion. The twisted turns and history the brand arise from is definitely something worth knowing. Steve Madden has revolutionized the shoe industry, merging years of experience with unique and creative designs. The brand excels in innovation. Each pair has its own unique name. What doesn’t sell gets marked down quickly. The brand started coming together in the 1990s, The time of Fashion and Music (Grunge).
2011
Entered the Indian Market
2021
I consider Steve Madden a brand that comes with Boldness and excitement. First big investment in Madden's was made by Jordan Belfort, the wolf of the wall street.
The founder Steve Madden works one on one with ex convicts as a mentor and employer.
One or two distinct categories are the emphasis of a specialty store. Their product selection is quite limited. The benefit of a specialty store, though, is that you will find numerous items linked to that specialty there that you may not find on the open market.
Steve Madden falls under the category of a specialty retailer which has a limited selection of products but a broad range of those products. Footwear (men, women and Kids) is the main category it caters to along with accessories. It engages in adjacent and complementary product areas.
Retail establishments can provide their workers with in-depth training that equips them with thorough product knowledge if they concentrate their sales on a certain product category (Footwear Handbags), in the specific segment, these staff act as trustworthy sources of information.
Specialty shopping is regarded as an upgraded experience that is thrilling and rewarding. Specialty shops provide an unrivalled level of client attention in addition to a welcoming atmosphere. Customers who are passionate about a certain product are drawn. Customer demands are addressed with genuine interest, which encourages customer loyalty.
Specialty shops target a niche market and offer a constrained selection of goods. These stores concentrate on compiling a selection of top-notch goods as a result. Customers view specialty stores as places to purchase well-made, unique goods.
Specialty shops may see major changes in demand, depending on the nature of their product offers. When a product is out of season and hence in low demand, there is more of a disadvantage for store owners than for customers.
Specialty shops are seen as being more expensive because they sell things of a better standard. This is sometimes true since speciality shops don't frequently order goods in large quantities at the same rate that discount retailers do, resulting in greater costs that are then passed on to the customer in the form of a higher price.
Due to a lack of selection, speciality stores cannot satisfy all customer needs, forcing customers to make purchases from other merchants to finish their shopping lists. Some customers may decide to forego visiting a specialist store in favour of a general goods retailer because they find it inconvenient and not worth their time to shop there for just one specific item. In addition to being harder to locate and taking longer to get to than mass merchandiser locations, specialty stores are less common, which may put off potential customers.
A great way to boost sales and get a high profit margin to finally acquire a competitive edge is by using premium pricing.
The marketing manager must choose how to position a new product in the market and what price plan to employ when a company launches it. The target market, the product's price point, its psychological reputation, and the amount of funding allocated for promotion all play a role in the decision. One tactic would be to enter a market at a low price in the beginning to gain a footing. On the other end of the scale, the premium price strategy charges a high price for the good.
In order to establish its goods as a high-quality product in consumers' thoughts, a corporation could utilise a premium pricing strategy.
When businesses aim to price their goods more than those of their rivals, they employ a premium pricing approach. The idea is to make consumers believe that because the products are more expensive than similar ones, they must be of greater quality. The business is making the assumption that the customer won't do any research to determine whether the product is really of superior quality. Marketing executives want consumers to think that the brand name alone is sufficient to convince them that their product is superior to that of the competition.
A premium pricing plan offers the benefit of improving profit margins, strengthening barriers to entry for rivals, and raising the brand's value across the board for the entire company's products.
Higher margins of profit
Increases value and brand perception
Create a moat around your company.
Depending on the inelasticity of prices
Limits the market's potential (the masses) Reduces price competitiveness
Sneaker grid wall Limit: 24 pairs each side since one box is for signage (unique styles) with LED Screen in between and handbag wall shelves below led. Limit: 3 bags in each row And Inventory room door on the right.
More outdoor signages could be used to atrract the existing foot fall using these LED advertisements spread across the promenade mall:
Since Indian Customers are price sensitive, so sorting styles based on price will help customers to filter out and choose according to their budget.
Online Retail Presence:
Introducing their own app. Putting their products on more famous platforms. Advertising their website to increase direct sales from the producer, leading to fewer mediators and higher profit margins. This could also be done by launching discounts exclusive to the website ONLY. They could also run ads to cater to the Indian audience specifically. so the Indian consumers can relate more to the brand.
Majority will consist of Early adopters (in terms of boots) and early majority to Lagards because a lot of designs of Steve Madden are sort of knock offs of famous collections of high end luxury brands like balenciaga, New Balance, Nike, Aquazzura, etc.
Here are some examples:
It is also known by the names buyer-behavior traits or customer reaction approach. It could be taken into account in regard to product advantages, product applications, and brand loyalty. The psychology of consumer behaviour includes elements including attitudes, preferences, and purchase motivations. These are briefly described in this strategy as follows:
The readiness stage: Under this step, we examine the degree to which a customer is willing or eager to purchase the good. Buyers may be interested in, desirous of, or wanting to purchase the product.
Product usage: The market may be divided into segments based on usage trends. Users, nonusers, ex-users, potential users, and regular users are all different types of buyers. Buyers can be divided into three categories according to volume and user status: heavy, medium, and light.
Benefits sought: Benefit seeking is another crucial consumer behaviour trait. This segmentation places a focus on the needs and wishes of the consumer. The existence of a market sector is due to the benefits that consumers want. Buyer satisfaction is mostly influenced by the advantages of the product, such as affordability, style, durability, taste, quality, performance, warranty status, etc.
Loyalty Status: Market segmentation may be based on customer loyalty. The ability to segment clients based on their level of loyalty allows marketers to create promotional materials and products that will appeal to existing loyal customers, draw in new ones from competing companies, or turn non-loyal customers into loyal ones. Measuring brand loyalty is a challenging task for marketers. By having a thorough grasp of their customers' needs and purchasing habits, manufacturers may build brand loyalty.
Market segmentation may be based on factors related to marketing. It comprises the product's cost, its quality, retail advertising, etc. As a result, these criteria may be used to determine market segmentation.
Attitude: A company may divide the market into several segments based on consumer attitudes. Enthusiastic, optimistic, neutral, unfavorable, and hostile are examples of these mindsets.
Understanding the potential clientele of Steven Madden Ltd is essential for creating marketing mix techniques that work. If the business comprehends the demands, expectations, and attitudes of its customers, the strategy will be more successful. The thorough investigation results in the classification of various client profiles or segments. Return and Refunds: No returns. Exchange policy of 180 days.
Steps that can be followed by Steven Madden Ltd.
To start, Steven Madden Ltd needs to be very clear about who its existing and potential clients are. At this stage, a large group of clients is discovered in order to categorize them into various groups according to their goals, qualities, and attributes. Finding new clients can be more difficult than finding existing ones.
The customer analysis ought to provide details on how distinct groups' needs and expectations differ from one another and what factors may be at play.
As the last step, Steven Madden Ltd must examine how its products and services meet the needs of various client segments and determine which of these segments has the greatest potential for growth and profit. Steven Madden Ltd will use this information to create consumer personas and profiles.
We do not currently offer exchange of products. You may return the product by placing a return request. But in India, they only exchange and dont take returns.
You may place a return request on the website or by contacting the customer care. A return request needs to be placed within 30 days of receiving the order. For more details, refer to the Return Policy
No, we currently do not have this facility available. For all return requests, kindly place a return request. For more details, refer to the Return Policy
Please allow 7-10 working days from receipt of your goods at our warehouse for the return to be processed. You will receive a confirmation email once your return has been processed with a new tracking number for exchanged goods or a refund receipt.
When you provide excellent customer service, you build a base of devoted customers who are willing to pay more for the same goods. Also, Steve Madden used to provide loyalty points but stopped after covid lockdown. They must resume the same for better customer brand relationship.
While online shopping provides people with the resources to choose the merchant offering the best bargains, Steve Madden discovered that pricing isn't a key consideration among their brand devotees. Even if there were cheaper options available, customers would still purchase from Steve Madden D2C because to an enhanced on-site experience and effective search optimization.
In the past, the business attempted to compete on price by giving out significant discounts. They now only conduct promotions during significant shopping holidays like Black Friday or Labor Day, emphasising relationship-building over price reductions. They need to increase since they get a huge footfall with the help of sale in case of Indian Customers.
Customers prefer buying directly from Steve Madden because their wants are catered to in the consumer experience. On-site evaluations from previous customers are instructive; free and premium loyalty programs give interesting benefits, such as free two-day shipping and appealing discounts; and desktop and mobile checkout are simple. Thus, They should launch their own app. To increase brand experience using appropriate UI/UX. Introducing their own app. Putting their products on more famous platforms. Advertising their website to increase direct sales from the producer, leading to fewer mediators and higher profit margins. This could also be done by launching discounts exclusive to the website ONLY. They could also run ads to cater to the Indian audience specifically. so the Indian consumers can relate more to the brand.
Additionally, Steve Madden changed the way it interacted with clients online, choosing to focus on building long-term loyalty rather than short-term sales. "Gross margins on the site rose considerably" after they switched their primary call to action from an email list sign-up to a loyalty program.
Customers visited the Steve Madden stores in large numbers. Top designs disappear from stores more quickly than ever. Any #MaddenGirl you speak with will express her dismay at not finding that particular style. Because of frequent stockouts of bestseller styles, stores were losing sales. There was potential for a 6-8% untapped business. Although a certain size may not have been available in one store, it probably was in at least two or three other locations. Processes for transferring between stores were laborious. Customer satisfaction and experience were declining. The issue was how to increase sales in the stores. The company had two options: it could have streamlined the inventory, which would have taken a lot of time, effort, and money; or it could have teamed up with a tech company.
On the Fynd Store app, Fynd integrated every item in every store's inventory. The entire Indian inventory could then be practically stored in every store. If a consumer could not locate the appropriate size or fit within the store, the goal for retailers was to save the transaction by making purchases on the Fynd Store app. Therefore, whenever a store ran out of a specific SKU or other SKUs that were not assigned to them, they would locate the closest fulfillment store of their preference and place an order on the customer's behalf through the app. Additionally, improved knowledge sharing amongst Fashion Consultants from various stores was made possible by teamwork on the part of store workers.
Interaction with the brand representatives (Staff/Employees). From greetings and welcoming to identifying personal product choices. Desired products are displayed. According to the staff of Steve Madden stores in Delhi. They lose customers once the price is conveyed as it is higher for Indian Customers.
Attractive interface of the website Displays a separate category of best sellers. Supports to buy d2c. (Probably because of high margins gained per product).
Steve Madden App: Not available. Otherwise, negative reviews in terms of service and exchange.
AJIO:
TATA CLIQ LUXURY. This itself says how Steve Madden in India is considered but worldwide it isn't.
Fynd: Fashion e-commerce platform Fynd has contributed 8-10% of instore sales to Steve Madden in India.
44
Name: Chris Age: 21 Been working at Steve Madden, Select City for the last 5 Months.
Started as an intern and now works as a fulltime Fashion Consultant.
Store Timings for the staff are 10;00 am to 11:00 pm. Individual staff is assigned the duty of opening and closing separately. They can't open the store themselves, they have to wait for the LPA who checks everything is going well, the books are kept clean, and regulations are being followed. Collecting keys So the person handling the opening will go inside while the shutter is half opened just for her, Get the Visual merchandising ready, and the guard switches on the lights She will access Steve Madden's system computer in the backroom. The target for the day, informs others. At 11 am the second person joins and that's when the shutter opens completely
Being handled by Chris and the store manager. 11; 00 pm to 11:30 pm max. Collect the data of the day, post it in the group, and analyze what they achieved and where they lacked. The month's target gets updated. Similarly for the weekly target. Data is recorded in the DSR (Modelling tool for every store to track the performance Once done everything, before leaving the bags are checked of the staff to make sure no one is stealing anything The keys are handed to the guard to close the store.
Steve Madden is considered to be no.1 at Select City mall amongst it's competitors like Charles and Keith, Dune London, etc. in terms of highest sales. This I believe is the result of proper motivation. To give responsibility, they must also give the authority and accountability for the tasks and targets that the store and brand sets.
Employee turnover is a big drain for fashion retailers. Steve Madden must inculcate more approaches to reduce the same. One of the biggest factors for any employee is a consideration, monetary aspects, and validation. After talking to Chris (as he was transparent about the people he works with and procedures), I learned that his superior Shashank (store Manager) is inclusive of his subordinates. Although I felt the salaries were lower than expected.
Charles and Keith send their employees (designers) to USA and Europe for training. This is something that should be implemented at Steve Madden. This will not only give better exposure but will also help employees accomplish and connect their personal objective and organisational objectives.
I noticed that a lot of employees' educational background was not of the fashion business. Even though it is not wrong to choose the candidates who are chosen based on their passion and interest in the industry, but this increases the onboarding process by increasing the time of on-the-job training because that is how they adapt. This can lag the sales of the brand as a whole.
As 2022's second half approaches, garment companies are taking a beating. As inflation is rising, industry leaders see higher-than-anticipated operational costs as having an impact on profits. A challenging May earnings season throughout the industry has been followed by the reality of sustained inflation, a more vulnerable consumer, and the possibility of even more unstable economic conditions as the Federal Reserve works to control inflation. 1 Price are increasing along the entire value chain, including labor, commodities, and transportation.
For instance, inflation in the US reached 9.1 percent in July, marking the highest 12month rise in more than 40 years.
India: The country's retail inflation, which is measured by the Consumer Price Index (CPI), dropped to a three-month low of 6.77% in Oct. 2022. CPI in the month of September was 7.41% and 7% in Aug 2022
The Consumer Price Index for apparel and footwear nationwide in March 2022 was 171 1, up around 71 percent from the previous year (2012). In urban India, the index for the same products that month was 164.9.
Since their pricing adjustments are more elastomeric and their products are marketed to consumers who have less disposable income for discretionary spending, mainstream fashion companies may be more likely to experience the negative effects of inflation in raw material costs, transportation costs, and supply-chain disruptions.
The "primary issue" of the industry was "a crisis in demand because individuals don't have enough income" to spend on non-essential items like footwear or leather goods, which are the key clients for the industry
The cost of fibres and technologies may climb further as a result of the fashion industry's inflation, creating a significant imbalance between supply and demand.
Since Steve Madden imports a big portion of the raw materials they use, the cost price will go up by 9 8% as a result of the rupee's devaluation, which has declined by around 9.8% since the year's beginning.
The majority of nations have been exhibiting signs of rising prices since last year, despite the Russian invasion of Ukraine having fuelled the inflation fire International food and fuel prices were rising throughout 2021, as seen in Figure 1, as assessed by global oil prices According to current projections, inflation will rise even more in 2022, primarily as a result of increased commodity costs and supply disruptions around the world.
The enormous pressure that inflation places on household disposable earnings is one important factor. As indicated in Figure 2, the budget proportion of food and energy costs in the consumer basket in LAC is over 40%, with Peru, Mexico, Brazil, and Paraguay having the greatest amounts
This graph shows the total revenue of Steve Madden worldwide from 2014 to 2021, by geographic area. In 2021, the total domestic revenue of Steve Madden amounted to about 1.64 billion U.S. dollars. * Includes revenues of 329,934 U S dollars, 249,235 U S dollars and 333,704 U S dollars for the years ended 2021, 2020 and 2019 related to sales to U.S. customers where the title is transferred outside the U S and the sale is recorded by the company's international entities
Manufacturing of Steve Madden takes place in Mexico and Brazil. Brazil, Chile, Colombia, Mexico, and Peru, collectively known as the LA5, had an increase in inflation in 2021, as did other developing markets and developed economies. The rise in inflation was initially caused by soaring food and energy prices, but it broadened as a result of wage indexation practises (contracts that automatically adjust their terms with inflation), monetary policy inertia, and a robust recovery in demand, initially for goods but later for services as well.
With a compound annual growth rate (CAGR) of 9.5%, the global market for plastic and rubber products increased from $1,229.98 billion in 2021 to $1,347.37 billion in 2022. At least temporarily, the Russia-Ukraine conflict hampered the possibilities of a COVID-19 pandemic-related global economic rebound. Economic sanctions on several nations, a rise in commodity prices, and disruptions in the supply chain as a result of the conflict between these two nations have all had an impact on numerous markets around the world At a CAGR of 6 1%, the market is anticipated to reach $1,709 08 billion in 2026
Industry’s “main concern” was “a demand crisis because people don’t have enough income” to channel to non-essential goods such as footwear or leather goods, which are the sector’s main customers.
The COVID-19 outbreak has significantly constrained the market for the manufacture of plastic and rubber products in 2021 as supply chains were disrupted by trade restrictions and consumption fell as a result of lockdowns imposed by governments around the world.
Steve Madden's various distribution channels all had sales reductions, with wholesale revenues down 13.0% to $302.7 million and retail revenues falling 15.8% to $52 9 million Since March, the Covid-19 pandemic has forced the closure of every one of the company's retail locations outside of China. For the first quarter of 2020 that ended on March 31, Steve Madden reported a net loss of $17.5 million, or $0.22 per diluted share, as the company's sales were negatively impacted by Covid-19-related shop closures. The group's net income for the comparable period in the prior year came to $34.5 million, or $0.41 per diluted share.
As we can clearly notice the dip in revenues in the year 2020. It was caused by covid as the sales dipped because of the pandemic.
As the coronavirus issue continues to hurt retail in general, Steve Madden Ltd. has become the most recent footwear business to announce furloughs and compensation cuts, including those of its top executives.
The New York-based shoemaker revealed in a statement with the Securities and Exchange Commission that it will be laying off a "substantial" number of employees as beginning April 1. On the other hand, those who earn more than $100,000 year will have their pay decreased in a gradual manner Medical benefits will still be available to employees.
Steve Madden, the company's creator and creative director, along with chairman and CEO Edward Rosenfeld, won't get compensation, and the salaries of the company's president, CFO, COO, and merchandising director will be 30% lower. Additionally, the board of directors decided to postpone all of its members' financial remuneration.
As states eased several COVID-19 limitations, many stores started to open their doors, but store traffic is anticipated to remain low and consumer spending has been hampered by sharp rises in unemployment.
Output:
CEO of Steve Madden Edward Rosenfeld stated on a conference call on Thursday that "even the plants that are open are not running at their regular productivity," adding that only approximately a third to twofifths of its China factory workers had returned to the production lines. Although the situation is undoubtedly unstable, they were anticipating production delays of around three weeks on average. The American footwear and clothing business Steve Madden has moved roughly half of its women's production from China to Mexico and Brazil as a result of supply chain difficulties in recent months.
Even though Steve Madden is a well-known brand worldwide, reliance industries are responsible for managing the brand in India This indicates that modifications to Indian monetary policies will have an impact on the brand as well as on customers.
Any company that borrows money will undoubtedly be impacted by rising interest rates, not only fashion footwear enterprises However, because of the challenging retail climate, fashion companies will face special difficulties in managing the increases Because they anticipate customer resistance to price hikes, shops won't want to accept a price increase to offset the higher borrowing rates
In order to remain competitive in this challenging retail climate, fashion companies will need to be diligent about their own costs, including being wiser with the money they borrow, strictly managing their overhead, and regulating their inventory levels
Most retailers are closing down stores, which means less chances for producers and a potential worsening of the situation. Manufacturers won't be able to shift these expenses to retailers as they once may have because of the decline in retail When combined with ongoing minimum wage increases, supposedly these manufacturers may possibly find themselves in a harder cash-flow situation
In order to cover their greater operational expenses, businesses can find themselves functioning on a smaller scale
The rate at which the RBI lends money to banks is known as the repo rate. It is a measure to control inflation and liquidity.
The Central Board of Directors of the Reserve Bank of India decides on interest rates in India. The benchmark repurchase rate is the official interest rate. Price stability replaced the government's borrowing, the rupee's exchange rate stability, and the need to safeguard exports as the RBI's major monetary policy goals in 2014. The government and the central bank decided to set a target for consumer inflation in February 2015 of 4 percent, with a tolerance of plus or minus 2 percentage points, starting with the fiscal year that ends in March 2017.
During its meeting in September 2022, the Reserve Bank of India raised its benchmark repo rate by 50 basis points to 5 9%, marking the fourth consecutive rate increase. This move came amid growing worries about spiralling inflation, global headwinds, and the fall of the rupee to record lows, which was widely anticipated.
The choice came after an increase of 50 basis points in August, which had brought the rate to a level last seen in May 2019. The central bank kept its FY 2023 inflation forecast at 6.7% while lowering its economic growth prediction to 7.0% from 7.2%, with Q2 inflation at 6.3%, Q3 inflation at 4.6%, and Q4 inflation at 4.6%. The standing deposit facility (SDF), marginal standing facility (MSF), and bank rates were all increased by the central bank by 50 bps, to 5.65% and 6.15, respectively.
The business should search for measures to reduce its borrowing to assist growing interest rates. Lowering inventory levels, obtaining shorter terms on accounts receivables, extending the due date for payments made on accounts payable, and, of course, keeping more profits in-house are all potential ways that fashion manufacturers might increase liquidity in their operations. All of these elements can lower a company's borrowing needs and assist in keeping rising interest rates under control.
Those who extensively rely on short-term finance to supplement working capital will need to adjust their costing and customer pricing as well as their balancesheet management in order to absorb the additional expenses. Among the tactics are increasing the turn of accounts receivable, lowering inventory levels, and/or negotiating better terms with suppliers.
Operating successfully at the highest levels requires effective cost management. Businesses must manage cash flow and, more crucially, inventory control more effectively. Moving out-of-season commodities quickly is necessary. In order to sustain gross margins and bottom-line earnings, businesses must constantly negotiate better prices with their vendors and better purchasing conditions. Additionally, payouts should be carefully controlled to help preserve capital and reduce the amount that needs to be financed.
As we all know, the end game is the bottom line. Profits cure a lot of problems.
On July 1, 2017, the Goods and Services Tax (or GST), a more simplified mannerofpayingtaxes,enteredintoeffect.Itmustbefollowedbyeveryone whoparticipatesinthenation'ssupplychainforgoodsandservices.Inorder to ensure uniformity in the indirect tax system, service taxes, income taxes, andothertaxesthatwereinforcebeforetotheimplementationoftheGoods andServicesTaxhavebeenreplaced
Businesses are required to collect GST, an indirect tax, when they provide goodsorservices
In the past, different agencies were required for the management of a variety of indirect taxes, including Central Excise, entry tax, OCTROI, and VAT/Central Sales taxes. All of these levies have been combined with the GST that was recently implemented. The burden of compliance is now less for manufacturers. Textile dealers can now focus more on business growth without having to worry about challenging compliance requirements.
The following footwear categories are subject to an 18% GST rate:
1. Shoes having leather, plastic, rubber, or composite leather exterior soles and textile uppers.
2 A separate category of footwear with an outer sole and a top made of rubber or plastic
3 Goods of footwear (with uppers whether or not connected to soles); removable insoles; and similar items such as heel cushions. Gaiters, leggings, and similar items, as well as their component portions.
4. Waterproof shoes have rubber or plastic exterior bottoms and uppers that are not sewn, riveted, nailed, screwed, plugged, or in any other way similarly bonded to the sole.
5. Shoes with leather uppers and rubber, plastic, or leather outer soles or composite leather.
Margin of wholesalers and retailers will increase
• cascading taxes like turnover tax, anti-tax, and number of different taxes will go away
• Increase in transparency across allied
• services & industries
• Branded footwear is too costly
• limited presence of large-scale manufacturing units
• highly cash-intensive
•
•
• rising level of disposable income
• international demand increase
• social media & e-commerce
• change in lifestyle
•
The cost of imported goods is significantly influenced by exchange rates. You will typically spend much more for international goods when your own currency is weaker. As a consequence, a stronger home currency may somewhat lower the cost of imports.
Through changes in the demand for exports and imports, the exchange rate has a direct impact on the nation's real economy. Exports become more competitive overseas and imports become more competitive domestically when the local currency actually depreciates
The brand is based in US meaning it has a good hold of the strong currency dollar. Its's production takes place in Latin America ( Brazil and Mexico) So, paying off the labours and infrastructure eases them as the dollar is stronger than Mexican Peso and the Real.
The chief economist for the Footwear Distributors and Retailers of America, Gary Raines, believes that a strong dollar could have a significant effect on the footwear sector. To begin with, it might contribute to reducing the record-high costs of duties and import fees on some shipments to the United States.
Due to the fact that purchases made abroad are less expensive than those made in the U S , consumers "should stand to benefit" from the current strength of the dollar However, poor foreign exchange rates are likely to be a barrier for American companies that export their goods abroad. This is because people in those nations are less likely to buy American-made goods when they are more expensive in those nations. It can be clearly seen how Steve Madden is perceived a premium brand in India because of the price points, but the brand has a very different image in USA.
Exchange rate fluctuations have an impact on the value of international investment portfolios, the competitiveness of imports and exports, the value of international reserves, the value of foreign currency used to pay debts, and the cost to travellers due to the value of their currency. Thus, changes in exchange rates have significant effects on trade, capital flows, and the business cycle of the economy, and are therefore essential for comprehending financial developments and shifts in economic policy.
To reduce the risk associated with the volatility of future cash flows, the company uses derivative instruments, specifically forward foreign exchange contracts. The foreign exchange contracts are referred to as cash flow hedging instruments and are used to lessen the effect of exchange rate fluctuations on a few anticipated inventory purchases. Insofar as their domestic or international operations involve doing business in foreign currencies, they are subject to market risk Additionally, since the majority of their inventory purchases are made in foreign countries, future increases in the cost of goods sold may result from fluctuations in the exchange rate between the US dollar and the local currencies of their contract manufacturers.
They mainly control these risks by making these purchases in US dollars. They may enter into forward foreign exchange contracts for terms of no longer than two years in order to lessen the risk of purchases made in foreign currencies. Here is the stats for Mexico and Brazil's currency dropping against usd.
Additionally, because their subsidiaries and joint ventures in these nations use the local currency as their functional currency and those financial results must be converted into U.S. dollars, they are exposed to translation risk in connection with their international operations in Canada, Mexico, Europe, South Africa, China, Taiwan, and Israel. The comparability of financial results between years is impacted by the foreign currency exchange rate translation adjustments reflected in their financial statements with regard to their foreign operations due to currency exchange rate fluctuations.
This was one of the most interesting projects that we have been assigned. Not only did we explore the impact on the Indian audience but also worldwide since this was an International Brand project. Pushed our boundaries by not sticking to apparel but expanding it towards footwear. I loved the challenges that came along the way. We were taught theoretical concepts very practically which helped me with the application of knowledge.
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