Buying Plan Spring/Summer 2015 for Work Wear
Samantha Chandler and Lily Walton
Table of Contents
The Business Plan
Executive Summary
I.
Merchandise Classification
Pg. 1 Sales Plan for Merchandise Classification
Pg. 1 Price Points
Pg. 1 Price Position Expectations
II.
Market Research
Pg. 2 Competitors Merchandise
- Survey of LOFT and Competitors - Competitors Classifications and Sub-­‐Classifications
- Analysis of Sub-­‐Classifications -­‐ Average Price by Sub-classification
Pg. 4 Industry Trends
III.
Merchandise Plan
Pg. 5 6-Month Budget Plan
Pg. 5 Pricing Plan
IV.
Assortment Plan for February 2015
V.
References
VI.
Appendices
I. Merchandise Classification
A. Sales Plan for Merchandise Classification
Table 1.
LOFT’s Classification & Sub-Classification
Classification
% Sales
Spring 2015 Sales Plan ($)
Work Wear
30%
$794,608.20
Pants
40%
$317,843.28
Blazer
10%
$79,460.82
Dresses
15%
$119,191.23
B. Price Points
Table 2.
LOFT’s Classification: Work wear
SubClassification
% Sales
Price Points
Pants
40%
$49.50, $59.50, $69.50, $74.50, $79.50
Jackets
10%
$79.50, $98.00, $118.00, $128.00, $148.0
Dress
15%
$69.50, $79.50, $89.50, $98.00
C. Price Position Expectations
We expect LOFT’s price position on pants to range from $49.50-­‐$79.50, their blazers to range from $79.50-­‐$148.00, and their dresses range from $69.50-­‐98.00. LOFT’s competitors have expected price points that will be above and below those of LOFT’s. Banana Republic has one price for pants that is $98.00. GAP also has one price point for pants that is $49.95.Therefore, LOFT’s price points for jeans are below that of Banana Republics and above market pricing for GAPs. Banana Republic’s price range for blazers goes from $89.5-­‐
198.00. GAPs price range for blazers goes from $88.00-­‐$98.00. LOFT’s pricing for blazers are at market price for Gap but below market price for Banana Republic. Banana Republic price range for dresses goes from $98.00-­‐$150.00. GAPs price range for shorts are between $39.95-­‐$79.95. Loft falls below the market price for Banana Republic, but above market for Gap. II. Market Research A. Competitors Merchandise 1. Survey of LOFT and Competitors 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
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).
2. Competitors Classifications and Sub-­‐Classifications Table3. SubClassification
Price Points
Brand(s)
Pants
49.95, 54.95, 59.95, 69.96
Gap
Blazers
88.00, 98.00
Gap
Dresses
39.95, 49.95, 54.95, 59.95, 64.95, 69.95, 74.95, 79.95
Gap
Table 4. SubClassification
Pants
69.50, 79.50, 89.50, 98.00
Blazers
89.50, 130.00, 150.00, 158.00, 198.00
Dresses
Price Points
98.00, 110.00, 120.00, 130.00, 140.00, 150.00
Brand(s)
Banana Republic
Banana Republic
Banana Republic
3. Analysis of Sub-­‐Classifications Gap’s clothing leans towards the more casual when compared with ours.
This is reflected in the price since their clothing is priced slightly below ours. This also
causes their clothing to isolate older and more conservative prospective consumers.
Loft on the other hand is able to appeal to women of a greater age variety since we offer
more classic silhouettes.
Banana Republic’s clothing is priced just above ours, which isolates the
younger consumer market that is just starting out in their career and may need watch
their spending. Loft offers clothing of the same quality as Banana Republic at slightly
lower prices, which makes a difference to the price conscious woman.
4. Average Price by Sub-classification
Figure 1.
160 140 120 100 Gap 80 Banana Republic 60 Loft 40 20 0 Pants Jackets Dresses B. Industry Trends
According to Vogue, spring will ring in a fresh season of bold colors, floral prints,
longer lengths, metallic, lace materials, sporty cuts, and pleated embellishments. While
Loft is not a trendy store nor is it known for fast fashion, we will do our part to insure that
our customer is among the best dressed wherever she might find herself. A turn away
from the traditional black/grey suit will keep the Loft customer is traditional cuts while
incorporating color and print into her business wardrobe. As these trends hit the market,
Loft will be there to ease the monotone chromatic customer into a daring and bright new
world. The market will be positive as new college graduates continue to build their
workplace closet. A major industry trend will be the continuing incorporation of
technology while interacting with the customer. (Vogue’s).
III. Merchandise Plan
A. 6-Month Budget Plan
Table 5.
February
Net Sales %
8%
Net Sales $ $63,568.66
Reductions
20%
%
Reductions $31,784.33
$
BOM SSR
5
BOM stock $317,843.28
EOM stock $429,088.43
Purchases R $206,598.13
Purchases C $45,451.59
March
18%
$143,029.48
20%
April
21%
$166,867.72
15%
May
21%
$166,867.72
14%
June
17%
$135,083.39
16%
July
15%
$119,191.23
15%
Total
100%
$794,608.20
20%
$31,784.33
$23,838.25
$22,249.03
$25,427.46
$23,838.25
$158,921.64
3
$429,088.43
$417,169.31
$162,894.68
$35,836.83
2.5
$417,169.31
$417,169.31
$190,705.97
$41,955.31
2.5
$417,169.31
$432,266.86
$204,214.31
$44,927.15
3.2
$432,266.86
$476,764.92
$205,008.92
$45,101.96
4
$476,764.92
$480,700.70
$146,965.26
$32,332.36
$2,490,302.10
$2,653,159.52
$1,116,387.26
$245,605.20
1. The departmental seasonal sales were found by projecting a yearly sales figure for
Loft assuming an 11.5% sales growth from previous years.
2. The total planned seasonal sales figure for the classification (794608.2) was derived
from Loft’s projected sales for 2015 and work wear’s 30% makeup.
3. The monthly planned sales are based on the knowledge that post Christmas time is
slow (February-March), springtime months typically have the greatest % of sales (AprilMay), and things slow down slightly during the summer (June-July).
4. The overall reductions are equal to 20% of the sales.
5. The months with the lower sales % have greater reductions % and vice versa.
6. The desired inventory TO is 2.79 based on our yearly goal of TO being 5.58.
7. The SSR for February-July are as follows: 5, 3, 2.5, 2.5, 3.2, and 4. This is because
the month’s with higher planned sales have lower SSR and vice versa.
8. The BOM for each month is derived from multiplying the monthly SSR by the monthly
sales.
9. We predict that July will have the highest EOM of all the month’s (480700.7).
10. Average inventory at retail is planned to be $186,090.91 (divide sales by TO).
11. Average inventory at cost will then be $102,350.00.
12. Our actual TO is 2.21 which is extremely close to the goal of 2.79 so no changes will
be made to SSR.
13. Planned purchases at retail per month are based on the equation in which you take
monthly NS add monthly reductions subtract BOM stock and add EOM stock. Planned
purchases at cost are found by multiply the monthly purchases at retail by the difference
between 100% and IMU (in our case 78%).
14. GM will be 45% this was found converting the yearly projected GM into a usable and
applicable figure for this department and season then dividing it by the projected
seasonal/departmental sales.
15. GMROI for this classification will be 180.82 over the season.
B. Pricing Plan
We are using a 78% initial markup plan to help raise our net sales and our profit. The prices will also attract our target customers. We will have many markdowns such as marking items down to clearance prices. This will help us move through slow moving merchandise and will help us raise our raise our net sales and profit. Moving items into clearance helps us move our merchandise that is from the past season much quicker. The last markdown we will have is sales promotions. We will have a monthly sale on the entire store for the clients that are in our loyalty program or on our email list. This will increase traffic and increase excitement on the sale day. This will also increase brand loyalty from our regular customers and from first time customers. We will have coupons sent to all of our customers to attract the price sensitive customers. Coupons will intrigue interest in new customers and make them regular customers. They will also make regular customers have much larger purchases and move merchandise more quickly. IV. Assortment Plan for February 2015 The BOM stock for February is $317,843.28 and the work wear classification is responsible for 30% of the sales. Pants are responsible for 40%, blazers responsible for 10%, and dresses are responsible for 15% of the BOM stock for February. We plan to have a total of $127,137.31 BOM stock for pants, $31,784.33 for blazers, and $47,676.49 for dresses. To make our BOM stock we need to sell a total of 1,831 pants, 319 blazers, and 561 dresses. We multiplied each sub-­‐classification percent by February BOM stock to find the total BOM stock for each sub-­‐classification. We calculated the BOM stock for each assortment factor by multiplying the distribution percent for that assortment by the total BOM stock for the sub-­‐classification. Diving the BOM stock by each price point lets us find how many units we need to sale for each price point and adding those tells us the total number of units we need to sell. We then multiply each assortments distribution percent by the total number of units to find the number of units we need to sell for each assortment. To find the distribution percent for each assortment we divide the BOM stock units by the total BOM stock units. Table 6. BOM stock for Feb. $317,843.28 Sub-­‐classification % of sales Sales Plan ($) Pants 40% $127,137.31 Blazers 10% $31,784.33 Dresses 15% $47,676.49 Table 7. Assortment Factor for
pants
Style
Color
Size
Price Points
Total
Element
s
Bootcut
Trousers
Cropped
Ankle
Skinny
Light
gray
Dark
gray
Brown
Khaki
White
Black
0
2
4
6
8
10
12
$49.50
$59.50
$69.50
$74.50
$79.50
% Distr.
($)
10.00%
20.00%
35.00%
20.00%
15.00%
BOM Stock
($)
$12,713.73
$25,427.46
$44,498.06
$25,427.46
$19,070.60
% Distr.
(units)
10.00%
20.00%
35.00%
20.00%
15.00%
BOM Stock
(units)
183
366
641
366
275
10.00%
$12,713.73
10.00%
183
10.00%
5.00%
20.00%
25.00%
30.00%
5.00%
10.00%
25.00%
25.00%
15.00%
10.00%
10.00%
5.00%
15.00%
40.00%
10.00%
30.00%
100%
$12,713.73
$6,356.87
$25,427.46
$31,784.33
$38,141.19
$6,356.87
$12,713.73
$31,784.33
$31,784.33
$19,070.60
$12,713.73
$12,713.73
$6,356.87
$19,070.60
$50,854.92
$12,713.73
$38,141.19
$127,137.31
10.00%
5.00%
20.00%
25.00%
30.00%
5.00%
10.00%
25.00%
25.00%
15.00%
10.00%
10.00%
7.02%
17.50%
39.96%
9.32%
26.20%
100%
183
92
366
458
549
92
183
458
458
275
183
183
128
321
732
171
480
1831
Table 8. Assortment Factor for
blazers
Style
Color
Size
Price Points
Total
Eleme
nts
Linen
Denim
Cotton
Twill
Tweed
Navy
Blush
Brown
Tan
White
Black
0
2
4
6
8
10
12
$79.50
$98.00
$118.0
0
$128.0
0
$148.0
0
% Distr. BOM Stock
($)
($)
20.00%
$6,356.87
10.00%
$3,178.43
35.00% $11,124.52
20.00%
$6,356.87
15.00%
$4,767.65
10.00%
$3,178.43
5.00%
$1,589.22
5.00%
$1,589.22
20.00%
$6,356.87
25.00%
$7,946.08
35.00% $11,124.52
5.00%
$1,589.22
10.00%
$3,178.43
25.00%
$7,946.08
25.00%
$7,946.08
15.00%
$4,767.65
10.00%
$3,178.43
10.00%
$3,178.43
20.00%
$6,356.87
50.00% $15,892.17
% Distr.
(units)
20.00%
10.00%
35.00%
20.00%
15.00%
10.00%
5.00%
5.00%
20.00%
25.00%
35.00%
5.00%
10.00%
25.00%
25.00%
15.00%
10.00%
10.00%
25.06%
50.81%
BOM Stock
(units)
64
32
112
64
48
32
16
16
64
80
112
16
32
80
80
48
32
32
80
162
20.00%
$6,356.87
16.88%
54
5.00%
$1,589.22
3.89%
12
5.00%
100%
$1,589.22
$31,784.33
3.36%
100%
11
319
Table 9. Assortment Factor for
dresses
Style
Color
Size
Price Points
Total
Elemen
ts
A-Line
Maxi
Sheath
Shift
Shirt
Dress
Blue
Cream
Brown
Pink
White
Black
0
2
4
6
8
10
12
$69.50
$79.50
$89.50
$98.00
% Distr. BOM Stock
($)
($)
35.00% $16,686.77
10.00%
$4,767.65
20.00%
$9,535.30
20.00%
$9,535.30
15.00%
10.00%
5.00%
5.00%
20.00%
25.00%
35.00%
5.00%
10.00%
25.00%
25.00%
15.00%
10.00%
10.00%
20.00%
20.00%
25.00%
35.00%
100%
$7,151.47
$4,767.65
$2,383.82
$2,383.82
$9,535.30
$11,919.12
$16,686.77
$2,383.82
$4,767.65
$11,919.12
$11,919.12
$7,151.47
$4,767.65
$4,767.65
$9,535.30
$9,535.30
$11,919.12
$16,686.77
$47,676.49
% Distr.
(units)
35.00%
10.00%
20.00%
20.00%
BOM Stock
(units)
196
56
112
112
15.00%
10.00%
5.00%
5.00%
20.00%
25.00%
35.00%
5.00%
10.00%
25.00%
25.00%
15.00%
10.00%
10.00%
24.47%
21.40%
23.76%
30.37%
100%
84
56
28
28
112
140
196
28
56
140
140
84
56
56
137
120
133
170
561
V. References Cited
Work Cited
Clothes, Shoes, and Accessories for Women and Men | Free Shipping on $50 |
Banana Republic. (n.d.). Retrieved March 31, 2014, from
http://bananarepublic.com
LOFT: Women's Clothing, Petites, Dresses, Pants, Shirts, Sweaters. (n.d.).
Retrieved March 31, 2014, from http://Loft.com
Shop Clothes For Women, Men, Baby, and Kids | Free Ship on $50 | Gap. (n.d.).
Retrieved March 31, 2014, from http://gap.com
Vogue's Guide to the Fashion Trends for Spring 2014 - Vogue. (n.d.).
Retrieved March 31, 2014, from http://vogue.com/guides/vogues-guide-to-spring-2014fashion/
VI. Appendices