1 Business Plan Spring/Summer 2015
Katie Grantham, Melissa Reynolds, Lily Walton,
Samantha Chandler, and Morgan Whitehead
Table of Contents
The Business Plan
Executive Summary
I.
Company/Department Analysis
Pg. 1 Merchandise Categories
Pg. 2 Company/Department Image
Pg. 2 SWOT Analysis
Pg. 4 Competitor Analysis
II.
Retail Strategy Analysis
Pg. 4Target Market
-Geographic Market
-Demographics
-Psychographics
Pg. 5 Buying Motivations
Pg. 5 Potential Growth and Trends
Pg. 7Marketing Strategies
III.
Financial Goals
IV.
Suggested Buying Plan
V.
References and Appendices
I.
Executive Summary
Ann Inc. is a group of retail chain stores for women, headquartered in New York City. ANN started
in1954, when founder Richard Liebeskind opened his first store called Ann Taylor. The “Ann Taylor” design
embodied the well-dressed businesswoman. By the year 1983, Ann Taylor had grown from a regional brand
to a national brand with 47 stores across the United States.
In 1996 ANN created the brand LOFT, which had a more casual feel and was more moderately
priced. Out of the 510 LOT stores, 179 of them are located in the Southern Areas. LOFT has two types of
stores: hot stores and cold stores. The hot stores are located in Florida, Gulf Shores, and any other beach
in the southern area. The hot stores are the only ones that carry the LOFT swim line during the summer
months. ANN currently has 1,000 stores across the US and Canada, 510 of them being LOFT stores. We
will be buying for the 179 LOFT stored located in the South Eastern Region, which are known as hot stores
because they have warmer climate year round.
The LOFT style is targeted to women at age 21 through women in there 40s at a moderate price
point. The LOFT customer is someone who wants to be trendy, but has a fast pace life. Our merchandise
satisfies young professional women who maintain an active lifestyle during the workweek and into the
weekend.
Products in LOFT stores vary depending on climate. The northern stores carry more outerwear and
the southern stores offer swimsuits and more southern wear. The store environment is confortable and
casual, which makes the consumer feel like she’s free to be herself in the store. Our customer service is
key in the company because that’s how you build relationships with the clients. We like to know why the
client came in the store and know exactly what she is looking for. We call our top 200 loyal clients to alert
them of an upcoming sale. We want our stores to feel like an escape to her from her everyday life.
LOFT as seen continuous growths in the previous years. With more economic growth people have
more money to travel, which means we need to prepare our beach stores for the impact. Therefor, in
Spring/Summer 2015 we plan to increase sales and attract new customers. We are anticipating a growth of
11.5% in sales, 600 in GMROI, and 5.0x in inventory turnover.
1 II.
Company/Department Analysis
a. Merchandise Categories
LOFT offers multiple different product categories including apparel, accessories,
tall, maternity, petites, beach, and shoes. LOFT’s apparel merchandise includes ten
different merchandise categories, which consist of dresses, sweaters, tops, pants, jeans,
shorts, skirts, jackets, work, and lounge wear. In Spring/Summer 2015, we plan to carry
the same merchandise categories. Table 1 shows specific price points for each of the
categories (Anninc.com, 2013).
Table 1. Price Points of Merchandise Categories
LOFT’s Merchandise Categories
Dress
$69.50, $79.50, $89.50, $98.00
Sweaters
$44.50, $49.50, $54.50, $59.50, $69.50, $89.50
Tops
$16.50, $19.50, $24.50 $29.50, $34.50, $39.50, $44.50, $49.50, $54.50, $59.50,
$69.50
Pants
$49.50, $59.50, $69.50, $74.50, $79.50
Jeans
$49.50, $54.50, $59.50, $69.50, $79.50
Shorts
$39.50, $44.50, $54.50, $59.50
Skirts
$59.50, $69.50
Jackets
$79.50, $98.00, $118.00, $128.00, $148.00
Work
$39.50, $44.50, $49.50, $54.50, $59.50, $69.50, $79.50, $89.50, $98.00, $118.00
Lounge
$19.50, $24.50, $29.50, $39.50, $49.50, $59.50, $69.50, $79.50, $89.50
2 b. Company/Department Image
LOFT is a leading retailer for fashionable women’s clothing that serves customers
in the United States, Canada, and Puerto Rico. We make sure that women are
comfortable in their bodies as well as in the clothes that they are wearing. Our overall
image is soft and elegant. LOFT offers numerous types of merchandise looks to make
sure that our customers are always happy and will stay loyal. LOFT connects with
customers on a very genuine level and works hard to build trust. We believe in helping
women find fashion that is attainable to their lifestyles (Anninc.com, 2013).
c. SWOT Analysis
We have many strengths that allow us to be a better company. One of our
strengths is the fact that we target women only. This is beneficial because it allows us to
focus solely on women and ensure that they are always happy. Another strength is our
unique variety. This simply means that our merchandise is very versatile and different.
Items can be paired differently to widen the wardrobe which allows our customers to
become more loyal. A main weakness is also that we only target women. Our competitors
offer merchandise for different ages and genders whereas we focus solely on women
alone. There are opportunities out there that we need to grasp. It would benefit us
tremendously if we expanded our retail market online as well as globally. A few threats
are the competition with one of our own businesses Ann Taylor when it comes to
business wear. A few more threats would be changes in customers tastes such as
seasonal fads that we do not carry, a weak economy and the fact that we do not offer
means apparel.
3 Strengths
Weaknesses
Target women only.
Focus more time on what women alone
like unlike Gap and Banana Republic.
Variety of unique items for women.
Customer loyalty.
Only offer women's clothing while
competitors target other genders and
age groups
Some merchandise is sold only
online, not in stores
Opportunities
Threats
Expanding their online retail market
Expanding products offered
Competition with Ann Taylor for
business- wear
Change in customers' taste could
decrease sales
Weak economy
Do not offer men’s apparel
d. Competitor Analysis: Banana Republic and Gap
LOFT has competition within itself because of its close relation with Ann Taylor and
our similar lines. Two of LOFT’s top competitors are Banana Republic and Gap in that
similar merchandise and price points are offered from all three companies.
Banana Republic
Banana Republic offers clothing that is targeted to a similar consumer base as
LOFT, ranging from 15 to 45. Banana Republic has a consumer base that tends to be
energetic and work-oriented, much like the LOFT consumer base. The brand is also
known for targeting the minority races, as well. The brand stays to its simple silhouettes
and basic colors. Gap also offers that casual, but business style that LOFT seems to
specialize in (Target, 2010).
Gap
4 Gap also offers that casual, but business style that LOFT seems to specialize in.
Gap tends to be a little trendier than LOFT, but keep their straight lines and edges of their
silhouettes. Gap has gained most of their success from their popular television
commercials, which is something that we do not partake in. Like the Banana Republic,
Gap also targets the minority consumer and does well in this area (Target, 2010).
One of LOFT’s sustainable competitive advantages over our competitors is our
omni-channel strategy. We offer a mobile app for smart phones, brick- and- mortar
stores, outlet locations, emails and advertisements, and online shopping which offers
multi-channel initiatives that allows the orders to be delivered almost immediately. Our
delivery methods are one of the main advantages that we hold over our competitors. We
have also undergone many remodels over the past few years that have given us the
boutique style that we needed (Ghelani, 2013). We are also known for offering highquality products but at prices that everyone can afford, which is why our female-based
target market stays loyal (Hoovers.com, 2013).
III.
Retail Strategy Analysis
a. Target Market
Geographic Market: Our stores are located in Southern areas of the United States
in most rural and urban areas where our stores are mainly located in mall-type settings,
but also can be found in independent stores. Due to the weather in the southern areas,
we purchase merchandise to accommodate to shorter cold seasons and longer warm
5 weather seasons. We plan to purchase merchandise that flows easier from
season to season; winter clothing is thinner and more prone to layering (Roberts, 2012).
Demographic: The typical LOFT customer is a woman who ranges in age from her
early twenties to her mid-forties. She likes to be trendy, yet professional, and enjoys
having an outfit that works at home and in the office. The target market of LOFT is with
the middle-class woman. We cater to stay at homes mom and women who maintain a
mid-level income (Roberts, 2012).
Psychographic: LOFT customers are very educated-women who are seeking a lifelong career but strive to also be stylish within an affordable price range. Our customers
are very active in social events and their neighborhood and communities. Our client is
described as having an “approachable fashion,” meaning that they look to us to help them
look good at work and at play (Roberts, 2012).
Buying Motivations: LOFT is a trendy and diverse store in that there is an array of
different outfits that can be mixed and matched to create more than one look, and
different looks for separate occasions. Our customers consist of the everyday woman and
therefore we make an effort to serve women in every aspect of their lives including work,
home, and play. Our customers enjoy our clothing because it is very versatile and
practical. LOFT serves women who want clothes tailored to both their bodies and their
lives.
Potential Growth and Trends: LOFT stores have been steadily increasing in the
number of stores they have opened, with the new number being over 500 locations. With
this many locations, LOFT as the brand must hold onto current customers’ loyalty while
finding ways to appeal to new customers, primarily young women just entering the
6 professional world. As the retail world transforms itself into a digital marketplace,
LOFT will also expand its image online by incorporating smartphone apps and usage into
everyday shopping. E-commerce is a way for LOFT to grow as a brand. Over the past
few years LOFT has reported online sales growth in the double digits, with it being up
15% in the year 2012 (2013). This on top of overall sales growth of 27% in 2009 to 2011,
which shows an upward trend for LOFT in the years to come as illustrated below (see
Figure 1).
Figure 1. LOFT Upward Trend in Years to Come
7 (2011).
Marketing Strategies: LOFT aims to not just be a place women shop but to be a
part of their lives. In order to achieve this they must make shopping as easy and
enjoyable as possible for their customers. To achieve this goal LOFT’s marketing
strategies focus on their website and making it a fast and easy way to shop. This is being
accomplished through an expansion of LOFT’s online store and adding incentives of
online only sales and online exclusive merchandise. They offer incentives to buy more
online by offering free shipping on orders over a certain amount. They also offer discounts
on some of their online merchandise when you type in a code at checkout.
IV.
Financial Goals
In Spring/Summer 2015, we expect 11.5% sales growth than in the previous years.
Between the years of 2011 and 2012, there was a 9.6% increase across our figures
(Hoovers.com, 2013). Since we have seen continued growth in the world economy
within more recent years, we are anticipating a growth of 11.5% in sales, 11.11%
increase in gross margin, and 11.12% increase in inventory turnover (see 2015 Loft
Financial Goals Table).
2015 Loft Financial Goals
Planned Sales
Gross Margin
Inventory Turnover
GMROI
V.
Suggested Buying Plan
2015
$2,648,694
$1,196,581
5.58
459.88%
2012
$2,375,510
$1,073,167
5.00
412.08%
8 The Classification table shows the planned sales of each classification that LOFT offers.
Work wear merchandise is made for the average-working women with pieces that can be
styled to take the items from day to night. Weekend wear consists of more casual
merchandise for larger age ranges then work wear. Work wear consists of woven tops,
skirts, dresses, blazers, and pants. Weekend wear consists of jeans, knit tops, and some
woven tops. Woven tops typically have the highest annual sales in LOFT. The goal is to
take work wear pieces and be able to mix them with weekend wear pieces to create new
outfits.
2015 LOFT Classification table
Classification
Planned Sales (%)
Work Wear
30%
Weekend Wear
50%
Others
20%
TOTAL
100%
9 Works Cited
Anninc.com. (2013). Retrieved from http://www.anninc.com/aboutUs.asp
Ghelani, P. (2013). Retrieved from
http://strategistas.com/2013/07/08/thetransientadvantage/
Hoovers.com (2013). Retrieved from
http://subscriber.hoovers.com.spot.lib.auburn.edu/H/company360/overview.html?comp
anyId=14959000000000
Market focus and competitive advantage: Snapshots of four global companies. (2006).
Retrieved from http://sharimayministries.tripod.com/focus.htm#APPENDIX
Roberts, C. (2012). LOFT target market. Retrieved from http://storify.com/croberts4/lofttarget-market
Target market segmentation research paper- Gap inc. (2010). Retrieved from
http://www.studymode.com/essays/Target-Market-Segmentation-Research-PaperGap-Inc-408806.html
Trefis. (2011). Retrieved from http://www.dailyfinance.com/2011/04/07/three-key-trendsfor-ann-taylor/
Trefis. (2013). Retrieved from
http://www.forbes.com/sites/greatspeculations/2013/03/04/ann-taylor-earnings-will-ringup-growth-with-online-and-multichannel-sales/