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Klasik Inc. 435 7th Avenue 7th Avenue at 34th Street New York, NY 10018 212-643-6955


TABLE OF CONTENTS BUSINESS CONCEPT COMPANY SUMMARY Mission Statement Ownership and Management Structure Name and Logo MARKET ANALYSIS Target Customer Profile Visual Customer Profile Location and Site Evaluation Environment Competitive Evaluation PRODUCTS AND SERVICES FORECASTING Key Items Inspirational Collage Numbers Six Month Plan Buying and Assortment Plan Overview with Graph Merchandise Visuals with Percentages PURCHASING Trade Shows Vendor List/ Vendor Visuals Vendor Criteria FINANCIAL EVALUATION Break Even Analysis Initial Cash Requirements Projected Profit and Loss PROMOTIONAL STRATEGIES Promotional Overview Front and Forward Merchandising Statements Statement Visuals Opening Invitation Website Homepage


BUSINESS CONCEPT Incorporating high fashion looks for a woman’s everyday life. This is the concept behind Klasik. Format Klasik is a unique fashion boutique located in the 34th Street District of New York City. We feature exclusive high fashion designer collections, trendy merchandise and accessories. Location Justification We selected the 34th street district because it’s a high traffic area that has other amazing retail stores as well as restaurants. It’s in a wonderful environment and is one of the most visited areas in New York City so it’s the perfect way for our store to attract customers. Target Customers Klasik caters to a young, trendy, and professional women who also maintain a healthy, casual fashion lifestyle. These Multi-cultural women maintain a middle-high income and are between the ages of 16 to 30. Our customers are creative and innovative and love to add diversity to their wardrobe. These are women that desire to look their best, whether its students or young professionals they like to have fun with their style and have a great appreciation for fashion. Merchandise Klasik’s specializes in merchandise that is trendy, sophisticated, unique and innovative. We provide a range of the latest European and American fashion styles from fashion labels such as LaRok to Dolce Vita.

Environment Description Our merchandise is presented in a sleek, simple and sophisticated environment. Our boutique will be predominantly white with bright lights that give the area a glow. The ambience is relaxing with chandeliers to add a more elegant feel to the store. The store will have many different art pieces on the walls for décor.

Promotion Klasik offers a club card that will accumulate points for purchases and will reward our customers by offering them gift cards and special discounts. We will have planned fashion shows and or launch events to highlight new season styles and exciting new trends and special appearances by some of our designers. Klasik will offer an interactive online website, where customers will be able to shop certain items. Klasik will have a magazine that will be published every season ( Fall, Winter, Spring and Summer). Customers with our special club cards will be able to get the magazine mailed to them in advance before its available in the stores and online. Klasik boutique will also place advertisements in magazines and local papers to attract more customers to our store.


MISSION STATEMENT

Our goal is to offer the best and latest fashion trends to our customers, where our customers can shop in a well relaxed atmosphere and develop new diversity style of fashion. We will accomplish these goals by providing the best experience sales associates at our store that will respond to our customers request in an orderly fashion. Our store will be organized with a clean flow so that our customers can shop easily. We will also place exciting display throughout the store and window displays.


OWNERSHIP & MANAGEMENT STRUCTURE C.E.O & President Sharifa Wynne

Full-Time Personnel

Responsibilities: Merchandising Styling Product Development Visual Merchandising Special Events Financing Operation Sales Management Personnel

Ownership Sharifa Wynne is an S-corporation legally registered in the State of New York. Company stock is owned exclusively by the owner and founder.

Part-Time Personnel Sales Associates

Assistant Manager

Responsibilities Sales Styling Maintenance Special Events Interior Display

Responsibilities Training Sales Styling Clerical Work Windows Interior Floor Status Special Events Receiving

Outside Contractors Attorney Book Keeper Window Trimmer


NAME & LOGO

Klasik’s logo is very simple yet sophisticated. We chose a classic approach by using the black color and cursive font to exude the high class environment. The name of the itself means “Classic” but we spelt it the way it’s spell in most Asian countries. We wanted to use the name by adding a little sophistication to it, and not keeping it boring with the classic its spelt in our everyday life.


CUSTOMER PROFILE Store Name

Klasik

Geographic’s: Overall Trading Area

Residents of New York City. Tourist- Europe, United States, Asia, Australia, Latin America.

Neighborhood Location

34th Street District, New York, NY

Demographics Gender

Female

Income

Middle-Upper Class

Price Range

Contemporary, Bridge.

Body Form

Any

Size Range

XS, S, M,L

Age

16-30

Education

High School +

Ethnicity

Multicultural

Psychographics Body Image

Disciplined (controlled and pure) Mirroring (means of embellishment and glamour).

Fashion Knowledge

Savvy, trend setter, innovative, aware.

Taste Level

Classic, elegant, sophisticated, trendy.

Life Style

Career, casual, active wear, special occasion

Social Attitudes

Individualists, Open minded, Status seekers

Personality

Creative


VISUAL CUSTOMER PROFILE


LOCATION AND SITE EVALUATION After reviewing the following criteria we decided to be located at: 34th Street District 435 7th Avenue 7th Avenue at 34th Street New York, NY 10018 Personal Preference: An open-air shopping area, which is in the heart of New York City and will attract a lot of people. Size availability: 1000 sq ft. Affordability and lease requirements: Rent per square foot x size = yearly rent. Yearly rent should be 10% of yearly sales. $50 per sq. ft. for $12,500 yearly rent on sales of $1,250,000This is only 10% of my yearly sales. I will have a flat lease. Access to target customer: 34th Street District is a destination for all women that are in love with their style and how they present themselves and they also fit our customer profile. Neighboring businesses: Retail mix of other shops and restaurants. Exterior design and visibility: We are located within the middle of the 34th street district. Interior layout: Open clean, white layout accented with chandeliers and modern seating.

Parking: A small number of parking available in the area, but there are lots of other means of transpirations.


ENVIRONMENT


LOCATION


COMPETITIVE EVALUATION Ratings of our planned and competitive stores in our trading area on a scale of 1 to 5 1 = Poor 2 = Fair 3 = Average 4 = Good 5 = Excellent

Store Name Store Site Size of store in sq. ft. Visibility Exterior signage / Window display Average Total Presentation Exciting merchandise displays Comfortable store layout Clear interior signage Suitable fixtures Appropriate lighting Interesting design concept Cleanliness Average Total Merchandise Assortments - variety of styles Fashion forward Quality Private brand excellence Average Total Price Appropriate price range Offers value for the price Competitive prices Average Total Customer Service Return policy Service policies Politeness of staff Friendliness of staff Knowledgeable staff Average Total

Planned Store Name Klasik

Direct Comp. 1 Intermix

Direct Comp. 2 Zara

Direct Comp. 3 Express

5 5 5

3 2 4

3 2 3

3 4 4

15

9

9

11

5 4 5 5 4 5 5 37

4 4 4 3 3 3 4 25

3 3 4 3 4 2 2 21

4 4 4 4 4 3 3 26

5 5 4 5 19

4 5 4 5 18

4 5 4 4 17

4 4 4 4 16

4 4 4 12

4 4 4 12

4 4 4 12

4 4 4 12

4 5 5 5 5 24

4 4 3 3 4 18

4 4 3 3 3 17

4 5 4 4 3 20


Competitive Evaluation Ratings of our planned and competitive stores in our trading area on a scale of 1 to 5 1 = Poor 2 = Fair 3 = Average 4 = Good 5 = Excellent

Store Names

Klasik

Intermix

Zara

Guess

Store Site

15

9

9

11

Presentation

37

25

21

26

Merchandise

19

18

17

16

Price

12

12

12

12

Customer Service

24

18

17

20

AVERAGE TOTAL

21

16

15

17

Opportunities: Customer Service

Challenges: Competitors have great presentation. Must develop new ideas and hire visual merchandisers to draw in clientele.


KEY ITEMS


INSPIRATIONS


VISUAL CLASSIFICATIONS

Tops 44%


Bottoms 35%


Dresses 16%


Shoes & Accessories 16%


VENDOR LIST Lamixx was created from a vision for clothing that is timeless, luxurious and truly wearable. Lamixx carefully takes the time to develop clothing with fine fabrics, high quality, and the pure silhouettes that makes each piece special. Inspired by classic vintage styles, and created with natural colors.

Dolce Vita is always on the pulse of what’s going on in the pages of the hottest magazines and on the top must-have lists of fashion editors. With Dolce Vita shoes, you’ll always have the most sought-after styles in the hottest colors and silhouettes.

Wildfox Couture is an American vintage-inspired women’s knitwear brand. Combining great style and unsurpassed quality. Inspired by Native American artwork and vintage rock & roll t-shirts, the young designers gave birth to a brand that tells a story of their generation and friendship.

Jenny Han is a casual-chic collection of modern apparel with character for women. Distinguished as thoughtful and meaningful clothing that is "effortlessly elegant" and "undeniably charming", Jenny Han styles are crafted with soft materials and bold prints that allow a woman to look and feel glamorous without trying too hard..

Charlotte Ronson followed the tradition by developing her own unique style at an early age. A playful mix of 70's inspired cotton tees and coveted wedge heels that gained the instant recognition of renowned publications.


TRADE SHOWS Dates: August 17, 18, 19, 2010 Venue: Las Vegas Convention Center Location: Las Vegas, NV Website: www.magiconline.com

Dates: September 21-23 2010 Venue: Javits Center Location: Manhattan, NY Website: http://www.modamanhattan.com

Dates: August 1-3 2010 Venue: Javits Center Location: Manhattan, NY Website: http://www.curvexpo.com

Dates: August 7-9 2010 Venue: Merchandise Mart Location: Chicago Website: http://www.stylemaxonline.com


VENDOR CRITERIA & NEGOTIATION POINTS As a new business we are extremely aware of the importance of developing and maintaining good vendor relationships. We will focus on the following areas: DISTRIBUTION POLICY Exclusive distribution only or exclusive and selective within the trading area. PRICING We will offer great value all items sold at the store, we will have semiannual seasonal clearance sales and also offer promotional prices each month for special items. TARGET MARKUP Our yearly planned target markup will be 65%. DATING AND FREIGHT We will negotiate for the best dating terms 8/10 e.o.m. and F.O.B. destination for freight as the ideal RETURN AND EXCHANGE PRIVILEGES We will return all late deliveries and damages with agreed damage stickers. Slow sellers will be returned on memorandum if possible. ADDITIONAL AREAS FOR NEGOTIATION INCLUDE THE FOLLOWING SERVICES. Cooperative Advertising- Vendor shares cost of advertising Editorial credits - Fashion magazines Sales Training


BUYING & ASSORTMENT PLAN Open to Buy: Major Classifications/SubClasses Basic Knits Sweaters Blouse & Shirts Novelty Knits Total Knits Dress Jackets Vest Trench Coats Casual Jackets Total Jackets Total Tops Casual Pants Dress Pants Leggings Shorts Denim Total Pants Shoft Skirts Casual Skirts Total Skirts Total Bottoms Soft Dresses Day Dresses Evening Dresses Total Dresses Total Apparel Jewelry Handbags Headbands Shoes Total Accessories TOTAL APPAREL / ACCESSORIES

$100,000

% 3% 3% 5% 3% 14% 6% 4% 5% 4% 19% 33% 6% 5% 5% 5% 6% 27% 4% 4% 8% 35% 5% 5% 6% 16% 84% 4% 4% 4% 4% 16%

$ $3,000 $3,000 $5,000 $3,000 $14,000 $6,000 $4,000 $5,000 $4,000 $19,000 $33,000 $6,000 $5,000 $5,000 $5,000 $6,000 $27,000 $4,000 $4,000 $8,000 $35,000 $5,000 $5,000 $6,000 $16,000 $84,000 $4,000 $4,000 $10,520 $4,000 $22,520

Average Price $30 $80 $70 $40 $49 $150 $50 $250 $80 $112 $194 $100 $200 $30 $40 $80 $60 $60 $40 $67 $61 $100 $60 $200 $98 $93 $30 $50 $20 $50 $27

Units 100 38 71 75 284 40 80 20 50 170 170 60 25 167 125 75 452 20 100 120 572 50 83 30 163 905 133 80 526 80 819

100%

$100,000

$62

1724


ASSORTMENT PLAN OVERVIEW Major Classifications

Percentage

$

Average Retail Price

Units

33%

$33,000

$194

170

Total Pants

27%

$27,000

$60

452

Total Skirts

8%

$8,000

$67

120

Total Dresses

16%

$16,000

$98

163

Total Accessories

16%

$22,520

$27

819

Total Apparel

84%

$84,000

$93

905

Total Tops

TOTAL 100%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Apparel Accesso ries

$106,000

$62

1724

Tops

84% 16%

Bottoms

16% 33%

Skirts

16% 8%

27%

Dresses Accessories


SIX MONTH PLAN selling space Store Size: Sales per Square Foot: Stock Turn: Total Pl. Yearly Sales: Average Monthly Sales: Average Monthly Stock: Average Planned Stock/Sales Ratio:

1,000 1,250 4 1,250,000 104,167 312,500 3.0

Yearly Planned Markdown $ Yearly Planned Markdown %: Yearly Projected Markup %: Cost%:

1,000

250,000 20% 65% 35%

PLANNED SALES Month September October November

% 8% 8% 8%

*Sales $ 100,000 100,000 100,000

**Stock to Sales Ratio 3.00 3.00 3.00

MD $

Md% to Year

MD% to /mo.

$25,000 $20,000

10% 8%

25.0% 20.0%

December

12%

150,000

2.50

$30,000

2%

20.0%

January

15%

187,500

2.50

$28,125

2%

15.0%

February

10%

125,000

3.00

$25,000

10%

20.0%

Total Feb

61% 10%

450,000 125,000

$30,750

33%

3.00

PLANNED PURCHASES Fall Plan Planned Sales $

Sept. Oct. Nov. 100,000 100,000 100,000

(x) Stock to Sales Ratio 3.00 3.00 3.00 (=) Planned Retail Stock (BOM) 300,000 300,000 Planned Retail Stock (EOM) 300,000 300,000 375,000 Planned Markdown $ 25,000 20,000 Planned Purchases at Retail 400,000 125,000 195,000 Planned Purchases at Cost 140,000 43,750 68,250

Dec. 150,000

Jan. 187,500

Feb. 125,000

Total 762,500

2.50

2.50

3.00

375,000

468,750

375,000

1,818,750

468,750 30,000

375,000 28,125

375,000 25,000

2,193,750 128,125

273,750

121,875

150,000

1,265,625

95,813

42,656

52,500

442,969


FINANCIAL EVALUATION Key Financial Indicators The most important indicator with regard to our business success is sales growth. In order to succeed, we must achieve early sales success and build on that success to generate sales growth. A dominant share of our launch effort will be to generate these early sales. Secondly, we must maintain gross margin of at least 60%. The margin is crucial if we are to be able to afford adequate marketing and other fixed costs. Finally, we must control costs. Since pricing and variable costs are very difficult to control, we must operate in a consciously cost-controlling manner.

Break Even Analysis

Year 1

Year 2

Total Operating Expenses

320,100

370,100

Divided by Gross Margin %

58%

58%

Break Even Sales

551,900

638,100

Total Operating Expenses

320,100 260,000 580,100 58%

370,100 300,000 670,100 58%

1,000,000

1,155,344

+ =

Projected Net Income Total

Gross Margin % Break Even Sales + Projected Net Income


INITIAL CASH REQUIREMENTS PREOPENING EXPENSES AMOUNT

DESCRIPTION

Beginning Inventory

$56,000

Exterior Building/Remodeling

$7,500

The amount of inventory (at cost) needed to open. The amount per contractor bid, materials, etc.

Exterior Sign

$2,000

Use contractor bids.

Interior Decorating /Fixtures

$35,000

Estimate based on bid if appropriate.

Technology

$9,100

Computers and Sound System

Insurance

$1,000

Bid from insurance agent.

Licenses and Permits

$5,000

Check with city or state offices.

Travel and Miscellaneous

$12,000

Professional Fees

$1,000

All other. Include accountant, bookkeeper and attorney.

Rent

$8,332

The amount to be paid before opening.

Utility and Phone Deposits

$2,400

Supplies

$4,500

Check with the utility companies. Shopping bags, garment bags gift wrap, etc.

Total ONGOING EXPENSES Payroll Rent Advertising

$143,832 REQUIREMENTS FOR THE FIRST 90 DAYS. 10,000 per month x by three months = $30,000 50,000/12 months in a year = $12,498 First three months = $18,000

Cash on hand

$3,700

Total

$34,228

TOTAL STARTUP CAPITAL

$178,060


YEARLY PROJECTED PROFIT AND LOSS STATEMENT Net Yearly Sales Minus Cost of goods sold$= Gross Margin $ Gross Margin %= Gross Margin $/Net Sales Dollars Operating Expenses Selling Expenses Payroll Advertising Total Selling Expenses General and Administrative Expenses Rent Utilities Telephone/Communications Travel Insurance Outside contractors Technology Depreciation Supplies Total General and Administrative Total Operating Expenses= (Selling + General & Administrative Expenses) Gross Margin $ Minus Total Operating Expenses=

Net Income Before Taxes Minus Income tax =

Net Income

$ 1,000.000 $420,000 580,000 58%

120,000 72,000 192,000 50,000 2,200 2,400 40,000 12,000 15,000 2,000 4,500 128,100 320,100 580,000 320,100

260,000 40,000 220,000


FRONT & FORWARD MERCHANDISING Based on upcoming trends we have selected three statements for the first three seasons of the opening period to be used for advertising, interior displays, exterior windows and overall presentation emphasis.

Month

Fall/Winter

Statement Name

Fur

Spring

Modern touch

Summer

Stripes

Colors

Overall Description Sophisticated Chic Trendy Fur

Pants, skirts, & jackets with pops of color.

Brightened looks with navy theme colors


FUR


Modern touch


SUMMER STRIPES


PROMOTIONAL OVERVIEW

INTERNAL PROMOTIONS Visual Presentation: Display Strategy – interior and exterior and ongoing special events, Trunk Shows etc… Overall Ambiance: Personnel, merchandise knowledge and overall visual appearance, customer service, music, magazines, shopping bags, gift wrap etc…

EXTERNAL PROMOTIONS Media: Print Internet: Webpage, Email clientele communication, and E-mail Newsletter, Online Magazine Special Events: Fashion Shows, Charity Events

Sales Promotions: Direct Marketing and Discounts Free Publicity: Magazine Editorials, General articles in newspapers, Word of Mouth, Product Placement


INVITATION


WEBPAGE


Klasik Inc