Belk Final Project
Annie Lee
Carissa Sugui
AMM 350
Dabas
Winter 2015
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Table of Contents
Report 1 ……………………………………………………… 3
Report 2 ……………………………………………………… 13
Report 3 ……………………………………………………… 18
Report 4 ……………………………………………………… 30
Report 5 ……………………………………………………… 45
References …………………………………………………… 47
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Report #1
Company Background and Competition Analysis
History of the Company
Belk, founded by William Henry Belk, has been in business for about 127 years since
1888 (“This is Belk”). The first store was opened in Monroe, NC, which was a small bargain
store with $750 in savings, a $500 loan and $3,000 worth of goods (“This is Belk”). It has slowly
grown into the nation’s largest privately held department store. It currently has 306 locations in
16 states, mostly in the South, and employs about 17,900 people (“This is Belk”). Belk has
changed quite significantly over the years. In the beginning, Belk used slogans like “Cheap
Goods Sell Themselves” and “The Cheapest Store on Earth” to sell their products (“This is
Belk”). Their store begins to expand in the early 20th century after World War I, as the southern
economy flourished. During the Great Depression, Belk took advantage of their competitor’s
setback by acquiring unused stores, hence expanding their company even further. Starting from
the 1960s, Belk began to adjust to the changing retail environment. Belk was late to this
modernizing phase because during a time where most of the customers were using credit, 87% of
Belk’s sales were still in cash (“This is Belk”). As well as expanding and growing their stores
even more, their credit and data processing systems were upgraded. Belk also began selling more
upscale brand names to their stores. In 1998, the Belk National Bank was launched to increase
their credit card business (“This is Belk”). A little later, Belk began to sell products though their
website. Recently, Belk got rid of their old fashioned logo and launched a fresh new logo as well
as their motto.
Belk’s mission statement is “To satisfy the modern Southern lifestyle like no one else, so
that our customers get the fashion they desire and the value they deserve”. Belk plans to invest
more than $600 million over the next few years into the company, mainly in new technology, but
also in restoring the brand, renovating stores, and retraining employees. Belk caught on late with
all the modern technology, but they are not planning to stay that way. They are working on
incorporating its customer data with sales at both the stores and the online customer base. Their
e-commerce sales increased by 85% to $135 million in 2012 and are expecting similar to better
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results in the future (“Annual Report”). Other technology would include new point-of-sale
equipment and wireless tablets so that the staff can work directly with customers on the floor.
Belk also plans on adding a couple new locations and renovating or expanding some
departments. In 2001, Belk launched their website Belk.com, but mostly only offering home
goods and wedding registries. In 2008, most of their clothing and other merchandise that are sold
in stores were offered on their website. In 2010, Belk got rid of their old logo as well their
tagline, “All for you!” to “Modern. Southern. Style.” They spent $60 million in changing the old
signs out and replacing them. In 2011, Belk advertised their new brand nationwide during
December’s Belk Bowl, which is an end-of-season college football game, played in Charlotte.
This was in order to increase online sales, especially to those that do not have a Belk store in
their area.
Belk did pretty well over the holidays, with sales that rose 5.2% over the last year. EBay
Enterprise has recently renewed its multiyear contract with Belk Inc., which has grown its online
business over the years. EBay has supported Belk by providing customer sales and service
solutions and gave a steady branded experience through management tools and practices in the
service center. Belk and Ralph Lauren Corporation have partnered to increase breast cancer
awareness. Ralph Lauren’s “Lauren Pink” capsule collection includes a pair of sneakers that are
exclusively sold at Belk stores and Belk.com to benefit the Belk’s Women’s Health Fund. Belk
has partnered up with Project Runway winner Dom Streater in creating an exclusive collection to
be sold at 30 Belk stores, including belk.com. Belk announced their annual storewide “Our Heart
to Yours” campaign, which will benefit the American Heart Association.
Merchandise Assortment
The department that we chose is the men’s department. The major product categories are
accessories, active wear, shirts, coats & jackets, dress shirts, hoodies, jeans, pants, shorts, suits,
and swimwear. The major brands for accessories are Columbia, Fossil, Polo Ralph Lauren,
Saddlebred, and ’47 Brand. The major brands for active wear are Callaway Golf, Greg Norman
Collection, SB TECH, Polo Ralph Lauren, and Under Armour. The major brands for shirts are
Calvin Klein Jeans, Columbia, Guy Harvey, Lucky Brand, and Salt Life. The major brands for
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coats and jackets are Columbia, Nautica, Polo Ralph Lauren, Saddlebred, and
WEATHERPROOF: 32 Degrees. The major brands for dress shirts are Lauren Ralph Lauren
Dress Shirt, Tommy Hilfiger, Polo Ralph Lauren, Eagle Shirtmakers, and Brooks Brothers. The
major brands for hoodies are Chaps, Columbia, Izod, Polo Ralph Lauren, and Buffalo David
Bitton. The major brands for jeans are 7 For All Mankind, Buffalo David Bitton, Calvin Klein
Jeans, Levi’s, and Lucky Brand. The major brands for pants are Savane, Izod, Haggar, Lauren
Ralph Lauren Tailored Clothing, and Polo Ralph Lauren. The major brands for shorts are
Nautica, Polo Ralph Lauren, 7 For All Mankind, Avallone, and Bosca. The major brands for
suits are Calvin Klein, DKNY, Greg Norman, Jones New York, and Kenneth Cole. The major
brands for swimwear are Columbia, Nautica, Nike, Polo Ralph Lauren, and Tommy Bahama.
The private brands for accessories are Pro Tour, Saddlebred, and Ocean & Coast. There
are no private brands for activewear. The private brands for shirts are Chip & Pepper
CALIFORNIA, MADE Cam Newton, Pro Tour, Red Camel, Saddlebred, and Ocean & Coast.
The private brands for coats & jackets are Chip & Pepper CALIFORNIA, Red Camel, and
Saddlebred. The private brands for dress shirts are Saddlebred and Madison. There are no private
brands for hoodies. The private brands for jeans are Chip & Pepper CALIFORNIA and
Saddlebred. The private brands for pants are MADE Cam Newton, Pro Tour, Red Camel,
Saddlebred, and Ocean & Coast. The private brands for shorts are Chip & Pepper
CALIFORNIA, Pro Tour, Red Camel, Saddlebred, and Ocean & Coast. The private brands for
suits are MADE Cam Newton, Madison, Saddlebred, and Ocean & Coast. There are no private
brands for swimwear.
The major sizes for accessories are one size, small, medium, large and x-large. The major
sizes for activewear are small, medium, large, x-large, and xx-large. The major sizes for shirts
are small, medium, large, x-large, and xx-large. The major sizes for coats & jackets are small,
medium, large, x-large, and xx-large. The major sizes for dress shirts are small, medium, large,
x-large, and xx-large. The major sizes for hoodies are small, medium, large, and x-large. The
major sizes for jeans are between the waist sizes of 30-40 and length between 30-34. The major
sizes for pants are small, medium, large, and x-large. The major sizes for shorts are small,
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medium, large, and x-large. The major sizes for suits are between 38-48. The major sizes for
swimwear are small, medium, large, and x-large.
Pricing
Belk’s pricing policy is a high-low pricing strategy so they are pricing below its
competition. In order for Belk to compete with its competitors like Kohl’s and JcPenney,
offering the best price is important. However, the flagship stores might run a little differently
because it is more upscale and can compete with stores like Macy’s and Dillard’s. The price
points offered in accessories are under $50, $50-$99.99, and $200 & above. The price points
offered in activewear are under $50, $50-$99.99, and $100-$149.99. The price points offered in
shirts are under $50 and $50-$99.99. The price points offered in coats & jackets are under $50,
$50-$99.99, and $100-$149.99. The price points offered in dress shirts are under $50, $50$99.99, and $100-$149.99. The price points offered in hoodies are under $50, $50-$99.99, and
$100-$149.99. The price points offered in jeans are under $50, $50-$99.99, and $100-$149.99.
The price points offered in pants are under $50, $50-$99.99, and $100-$149.99. The price points
offered in shorts are under $50, $50-$99.99, and $100-$149.99. The price points offered in suits
are $100-$149.99, $150-$199.99, and $200 & above. The price points offered in swimwear are
under $50, $50-$99.99, and $100-$149.99. Belk also has coupons that customers may print off
their website or can be found in catalogs. These coupons may be printed to be used in the stores
or coupon codes to be used on their website. Belk offers three different rewards/credit cards.
They are called Belk Rewards, Belk Premier, and Belk Elite. All three of the cards have special
benefits like one point for every $1 in merchandise purchase, every 400 points equal to $10 Belk
Rewards Dollars, and so many more. These cards will make customers want to shop at Belk
more often in order to redeem these benefits.
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Financial Analysis (in millions)
Income
Statement
2010
2011
2012
2013
2014
Revenue
$3,346
$3,513
$3,700
$3,957
$4,038
Net Profit
$67
$128
$183
$188
$159
$2,430
$2,354
$2,462
$2,514
$2,722
$916
$1,159
$1,238
$1,443
$1,316
Sales/
Cost of
Goods Sold
Gross Margin
The sales/revenue increases throughout the years 2010-2014. The net profit increases
from 2010-2013 and it does decrease from 2013 to 2014. This may be due to the large increase in
operating expenses since Belk recently remodeled their motto and store sign for all their retail
stores as well as opening new stores. Also, Belk has begun using social media and more
electronic devices over this past year so that may be the cause of a decrease in the profit as well.
The cost of goods sold is generally stable over the five years. Belk is predicted to have a gradual
increase in sales over the next years as well. The overall financial analysis of Belk looks pretty
good without any drastic decline in sales or profits.
Competition Analysis:
A competitor of Belk Inc.’s men’s department is Kohl’s. The Kohl’s department store we
visited for our competition analysis was located in Chino Hills, Ca. This particular location has
similar demographics and income level as our projected location in Northridge, Ca. The typical
customer shopping at Kohl’s is a woman between the age of 35-54 years old belonging to the
middle and/or upper income class. In addition, Kohl’s typical customer has a family and is
usually accompanied by them during their shopping experience.
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The national brands for men’s active wear at Kohl’s included Nike, Columbia,
Champion, Fila, Puma, and Adidas. The different styles carried for men’s active wear
classification included compression shirts, long sleeve shirts, shorts, running pants, and
hoodies/sweaters. The sizes they carried for these styles were small, medium, large, and extra
large. The colors Kohl’s offered included black, white, grey, blue, yellow, red, and green.
The brands for men’s jeans classification at Kohl’s were Levi’s, Lee’s, Rock and
Republic, Urban Pipeline, Sonoma, and Chaps. Although Levi’s had the largest variety of jean
styles the most common styles among these brands were slim fit, straight, relaxed and boot cut.
The price range varied from $68.00 being the highest then $58.00, $54.00 and $44.00. The most
popular color offered in all brands and styles was blue followed by black and khaki. The waist
sizes of these jeans ranged from a 29/30 to a size 42.
The men’s pants classification included big name brands such as Dockers, Haggar, Izod,
Chaps, Croft & Barrow, and Apt 9. The three types of pant fits included straight, slim and
classic. The colors offered in this class were black, navy blue, khaki and white. The waist sizes
offered were similar to the jeans classification ranging from size 30 to 40. Price ranges for this
category were $59.50, $55.00, and $49.50.
Based on observing the three largest men’s classifications carried at Kohl’s it is safe to
say they offer a pretty wide and deep assortment. The large assortment they carry will give them
the opportunity to cater to many different types of men and what they like. Although Kohl’s does
not carry as many national brands compared to Belk they do offer enough with a large
assortment of sizes, popular colors and styles to make up for it. Kohl’s also offers a reasonable
price range right in the middle but appropriate for the income level of the area.
While shopping at Kohl’s a customer will not find high end men’s brands such as Calvin
Klein, Guess, 7 For All Mankind, Tommy Hilfiger, The North Face, Timberland, Ralph Lauren,
Nautica, Michael Kors, and Lacoste. The major classifications within the men’s department are
jeans, pants, suits and shirts. Through observation within the department the major classifications
with the greatest depth are jeans and pants.
If you were to walk through the men’s department of Kohl’s you would probably notice
that the Levi’s denim jeans section takes up about a quarter of the entire men’s department. This
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is due to the many different styles, colors and sizes available for Levi’s jeans. It can also be
easily located within the store because of the specialty signage and fixtures made specifically for
Levi’s denim. Within each style of jean there are various assortments of colors and sizes. The
Levi’s section contains eight different styles of jeans varying between the original, regular fit,
regular taper fit, slim fit, slim straight fit, straight fit, slim boot cut, relaxed fit, relaxed straight fit
and loose straight fit. Overall, the Levi’s denim section has the most styles, sizes and colors of
one classification while only costing $68.00. Dockers is the second largest men’s brand carried at
Kohl’s and also consists of various styles, sizes and colors of pants. Dockers has different styles
such as the straight, slim and classic with colors that range between navy blue, dark grey, light
grey, black, khaki, dark green, and tan. Depending on the style of the pant it will cost between
$50-58 dollars. In regards to men’s shirts there were different styles like screen-print, logo tees,
polos, jersey knit, and woven button down shirts. Some brands that carry shirts and t-shirts
include Chaps, Sonoma one of Kohl’s private labels, and Nike. Although there were many
different styles of shirts available Kohl’s private label Sonoma was the only brand to have the
largest assortment of pastel colored t-shirts. These shirts retailed for $20.00. The major color
story throughout the men’s department was blue. In particular, the Mark Anthony collection had
many different shades of blue featured in their shirts; button up shirts, and sweaters.
Kohl’s men’s department also consists of a few private labels such as Sonoma, Croft &
Barrow, and Urban Pipeline. Their private label brands provide the same apparel classifications
as major brands like buttoned up shirts, t-shirts, denim jeans, and pants. However, Kohl’s private
labels do not carry the same amount of styles or colors like major brands. Sonoma and Croft &
Barrow do not have much depth in color or styles of pants. Kohl’s private label for denim, Urban
Pipeline, is priced much lower between $36-50 dollars compared to a major brand like Levi’s
costing $68. In general, private label brands within the men’s department are priced lower than
major brands of the same classification. After observing the men’s department Kohl’s private
label brands only make up about 25% of the total merchandise. Also, the signs for Kohl’s private
label brands are not eye catching in any way. The signs are not displayed big enough at the
entrance of the department or traffic aisles. In addition, they do not use any bright colors for the
signs almost making it difficult for the customer to find the private label brands. In the men’s
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department, Levi’s and Nike are heavily featured and advertised. These two major brands have
individual floor displays consistently merchandised throughout the aisles of the department
where there is the most traffic.
The most innovative visual presentation in the men’s department was the Levi’s denim
section. Levi’s had large custom made signs that would be the same in any department store. The
first visual presentation when walking into the Chino Hills Kohl’s is a Nike display of athletic
shirts and shorts. The types of fixtures used throughout the men’s department are hanging
fixtures, shelves, and tables. The majority of the walls are merchandised with hanging fixtures
for t-shirts or shelving for pants and denim. One interesting presentation of merchandise
displayed by the aisle was the Mark Anthony collection. It was not surprising to see a celebrity
made brand being featured on the aisle closest to the entrance and in between the jewelry
department where both men and women will see it. The Mark Anthony collection along with
Levi’s denim has the most prominent location in Kohl’s.
Kohl’s housekeeping is acceptable because there was no trash on the floors and there was
a custodian cleaning at the time. Also there wasn’t any merchandise lying on the floor. However,
a significant amount of their denim and pants as well as clearance sections were unkempt
because merchandise was not hung or folded neatly.
The overall atmosphere of the men’s department in Kohl’s was peaceful because were
not too many customers in the store and only a few sales associate providing customer service.
Although there were not many sales people on the floor the few who were very friendly and
helpful. After visiting one of Belk’s competitors I would recommend we use more eye-catching
visuals and innovative ways to display merchandise.
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Customer Profile:
According to numerous online sources, Belk’s target customer is the southern
workingwoman, between ages 35-54 in the mid-upper income bracket. North Carolina is home to
67 Belk stores, more than any other state, so to further understand more about Belk’s target
consumer we looked into their “Crabtree” location in Raleigh, NC. The region around the
Crabtree location has a median age of 36.8 whose median income is $57,000 and about 56% of
the working population has a college degree. According to esri.com, 20% of the region can be
defined as Millennial, they are well educated, either finishing school or are new to the workforce,
and rent their home. This same 20% aren’t considered brand-loyal but they shop and look for the
best price. 17% of the area is also well educated; they work a lot, are technologically dependent,
and buy environmentally friendly products. Another 16% are couples with a strong work ethic
that do not have kids which allows them time to search for the best prices while shopping. 80%
of the region is white, 11.2% are black and the remaining 6.7% are made up of Asians and those
of Hispanic ethnicity. When looking for a location in Southern California we tried to keep all of
the behavioral and shopping characteristics in mind from the Crabtree location.
When introducing a new retail store to Southern California there are many factors to
consider in choosing a location. One difference that Belk has to look forward to is that
Californians are known to be open to new things and they adapt to change quite well. We found
that the Northridge Fashion Center in Northridge, CA would make a good location for Belk to
debut their first store in the Los Angeles region. The Northridge area is home to 25,779 people
with a median income of $60,000 and a median age of 35.6 years old. Esri.com describes 24% of
the people in the region as singles and married couples who work hard to provide a stable future.
They are price savvy, they shop for bargains but they do pay extra for their favorite brands and
for quality, they are also willing to try out new stores. 11% is made up of “empty-nesters” who
spend a decent amount of their income on home improvement but when they shop they are
looking for styles that are not super trendy and they’re not particularly concerned with price.
Another 11% are young married Hispanic couples that have children but spend money shopping
the trends rather than saving. There are some considerable differences that Belk will experience
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in the Northridge area that are different from the Southern regions they are used to. For instance,
the Northridge population is only 45.5% white which is a notable difference from the 80% that
they are more familiar with. 30.9% of the population is Hispanic, which is a big increase from
what they are used to seeing in their stores, but that’s common for California and it all comes
with the territory.
Even with the differences mentioned, we believe the Northridge Fashion Center would
still fit Belk’s current customer profile. The fact that a large portion of the Northridge population
is open to trying new retailers out is good for Belk since they offer many recognizable brand
names that would bring in new consumers without making them feel like they are stepping too
far out of their comfort zone. The median income in Northridge is 60,000, which is just slightly
above that in Raleigh, NC so there shouldn’t be a great change in the type of shopper frequenting
the store as far as income goes. Because this particular mall attracts a lot of people from outside
the immediate area we thought it was important to note some demographics and spending
behaviors of the regions just outside of Northridge. We found that the median income
surrounding Northridge varies from $51,000-$108,000, the median ages are from 33-43.7 years
old but surprisingly the spending behaviors didn’t vary very much from the Northridge habits.
The only notable habit is that there are more families than singles and they tend to shop, as a
family so visiting retailers with departments for everyone was important to them. Overall, we
found that Northridge can be described as the Southern California equivalent to the typical Belk
store location.
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Report #2
Trend Analysis
Fashion Trends
For men’s accessories, there are a few fashion pieces that will come up in spring 2016.
Oversized backpacks will be trendy in the spring that will add a bit of luxury to an outfit. The
backpack will be leather either in a dark brown or black color. The exterior is simple with one
large opening that comes together towards the center with a buckle (Menswear Trend Forecasts,
n.d.). This bag can be worn with active wear as well to add a bit of a sophisticated look. Oxford
shoes are already popular now but in 2016, these oxfords with will slick and black to give a
classier look rather than a casual look. It will also have a metal detailing on the base of the shoe
to give it a little edge (Menswear Trend Forecasts, n.d.). Scarves will also be trendy especially in
a mango yellow or tangerine orange color for the spring. The scarves will be satin and have
loose, laidback look for it will be perfect for the spring/summer season (Menswear Trend
Forecasts, n.d.). Of course sneakers are a must in a spring look. The sneakers will be graphically
painted which will look great with a relaxed suit and trousers. You can dress these shoes up or
down. A bucket hat will also be very trendy during this season. It will be a brightly printed
canvas fabric that will make any outfit pop out.
Active wear is an important category in men’s fashion. Active wear has gradually been
worn on an everyday basis for both men and women. Spring is when everyone is getting ready
for that summer body and feels the need to get in shape. Men’s active wear will consist of
vibrant and quirky patters, colors, and shapes (Active wear Forecast Women Men S/S 2016,
n.d.). A workout jacket will be trendy that will be both practical and fashionable. The fabric will
be nylon to it is lightweight and also has thermo-conductive abilities to absorb and retain body
heat. There will be zippered pockets on the sides as well as the upper chest. It will come in bright
neon colors as well as abstract prints. There will also be matching pants and shorts that will go
along with the jacket (Active wear Forecast Women Men S/S 2016, n.d.). Bright and decorative
socks will also be trendy. These socks will keep feet fresh and dry all day as well adding a layer
of cushioning so your feet can be comfortable.
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It is true that denim in jeans is beginning to fade away, but it will be back in 2016. You
cannot go wrong with a classic dark wash pair of straight jeans with a very slight flare. It will
have cuffed hems right above the knee and has five pockets (Fall/Winter 2015 and
Spring/Summer 2016 Denim Style Trends, n.d.). Besides the classics, there will be other denim
jeans that will be in trend. The first one will be a lightweight denim pants that is pleated and
drapes well. It will have a wide leg and long break. It can be worn casual (Fall/Winter 2015 and
Spring/Summer 2016 Denim Style Trends, n.d.). The second one is also a lightweight denim pant
that is folded at the ankle. It will have five pockets; a slight drop at the crotch and a peg legged
(Fall/Winter 2015 and Spring/Summer 2016 Denim Style Trends,n.d.). The last one will be
denim pants that look like an active wear/ sweat pant look. It is cinched at the waist with a
drawstring and has side pockets. It has an elastic cuff on the bottom and has stitching details on
the outer leg to give it a dressier look (Fall/Winter 2015 and Spring/Summer 2016 Denim Style
Trends, n.d.).
Shorts are a must during the spring season as well. The first forecasted style for shorts
would have five pockets and end at the knee. The shorts will have patches all around and will be
slightly distressed as well. It will be frayed at the hem of the shorts (Fall/Winter 2015 and
Spring/Summer 2016 Denim Style Trends, n.d.). These shorts have an urban appeal to them and
can be worn casually. The second pair of shorts is streamlined Jodhpur style denim shorts that go
a little past the knees with a slight drop at the crotch. These are either dark wash denim or even
white/ khaki denim (Fall/Winter 2015 and Spring/Summer 2016 Denim Style Trends, n.d.). It
can be worn either preppy with a colored shirt or dressed up with a casual blazer (Menswear
Trend Forecasts, n.d.). Neutral colored shorts will also be in trend during the spring season like
pale pink or sky blue.
Button up shirts is the go to fashion piece during the spring/summer season. The arm
length stops right at the elbow and has a pocket on the left chest. It will have bright, abstract
prints such as Hawaiian or geometric prints. It most likely will have the two colors Mango Lassi
and Papaya as the primary color choices for the prints (Menswear Trend Forecasts, n.d.). As for
more casual shirts, ribbed Henley shirts will be popular in neutral colors such as navy, white,
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gray, and black. It buttons down a quarter and can be rolled up at the sleeves. It is cotton so it is
comfortable and casual to wear on cool day. Flannel shirts are also a classic fashion item. It has a
front button closure with two chest pockets (Menswear Trend Forecasts, n.d.). It is a long sleeve
shirt but can be rolled up to the elbows and is a classic pair with some jeans or shorts.
The men’s swimwear in 2016 will consist of swim trunks, board shorts, swim briefs, and
swim jammers. The swim trunks and board shorts will come in different patterns and colors
(Petrova, 2014). It has a drawstring at the waist and pockets on the side. They are both of a loose
fit unlike the briefs. The swim briefs are tighter and come in neutral shades and simple patterns.
Swim jammers are like the swimsuits that athletes wear that is form fitting but come a little
above the knee. They will come in many different colors as well (Petrova, 2014). The swim
jammers are not seen as often in general because it is mainly for competitive swimmers, but they
will be more trendy for those men who go to the beach often. It is not as revealing as the briefs
and it will let you be able to swim against the currents better than the swim trunks and board
shorts because it is more form fitting.
Men’s pants for Spring 2016 will be in a range of earth toned colors such pine and olive
green shades, metal greys and mustard yellow giving a down to earth outdoorsy vibe (WTC,
n.d.). The style of pants next spring will be more relaxed and simple leaning more towards a
casual everyday look. Nautical themes are also going to be present for spring fashion so it will be
reflected in how men’s pants will be cuffed and have a length that stops a little above the ankle.
Lastly, the fabric choice for men’s pants will be softer and more wearable everyday like cotton.
However, fiber trend forecaster Lenzing suggests more manmade fibers such as tencel, modal
and viscose will be used more during Spring 2016 because of their properties for being soft,
absorbent and strong (Lenzing, n.d.).
According to We Connect Fashion (n.d.), two metallic colors will be making an
appearance in men’s suiting Spring 2016. The two colors are champagne sheen and iridescent
beetle (WTC, n.d.). Iridescent beetle is a dark teal and blue shade while champagne sheen is a
shimmery gold (WTC, n.d.). The addition of these two metallic colors to men’s suiting adds
luxe, sophistication and a futuristic appeal (WTC, n.d.). Fabric for men’s suiting will be more
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wearable and comfortable. Style wise men’s suiting will be more simple and casual since the
overall trend for spring according to Peclers Paris is an increased relaxed style and return to
simplicity and freedom (peclers, n.d.).
We Connect Fashion and Promedia both agree that men’s t-shirts will have more graphics
including landscapes, nature, nautical and technology themed pictures that cover all over the
shirt. The color palette for men’s t-shirts will be earth toned with different shades of blues and
greens. The style for men’s t-shirts for spring will be quite simple with no pockets and have a
basic t-shirt silhouette. Lenzing has predicted the use of more man-made and eco-friendly fibers
in fabrics.
Men’s outerwear for spring will have a looser overall shape and its design will not be
structured. A popular material for men’s outerwear will be denim that will give a simplistic and
casual overall look. The color palette for men’s outerwear will include the iridescent beetle
metallic color as well as prints from nature. The fabric choices for spring outerwear will be soft
and wearable fabrics like cotton or eco-friendly fibers like lyocell, modal and viscose.
Market Trends
The most significant change that the men’s apparel industry has seen in recent years is
that men from the ages of 16-24 are no longer the market’s most frequent shoppers. The 16-24age bracket is known for shopping more of the trendy styles, men still tend to shop with more
caution when it comes to trends in comparison to women but they are still influenced to choose
style over quality in this particular group. Because of this shift in age for the men’s most frequent
buyers, the market has had to respond by changing how and what to sell to in order to cater to the
25-34 year olds who are dominating the market. Retailers are beginning to focus more on
quality, as it is extremely important to this age group and on the timelessness of the garments.
The older men are more concerned about apparel that fits the needs of their lifestyle and less
about variety in their wardrobe so the industry is seeing a shift towards more attention to detail.
The younger age group still has substantial buying power in the market so it is still
important for retailers to be aware of what happening with the latest trends. Consumer research
16
shows a third of men shop for apparel online so e-commerce has become increasingly important
to companies that provide menswear (Mashable.com, 2015). Overall, the market has seen a
demand for more focus on menswear so we’ve seen a few retailers like J. Crew, Ralph Lauren,
and Gucci opening up men’s-only stores to provide a broader range of products for their target
customer.
A popular men’s trend this season is a dressed up casual look, there’s a demand for looks
that transition well from day to night. This means pairing dark denim with blazers and un-tucked
button up tees. Many designers have focused on navy, dark gray, and black suede loafers that
instantly dress up jeans opposed to pairing them with sneakers. We’re seeing a demand for the
logo-less worn-in looking tees and a casual looking timepiece that have either a worn-looking
leather strap or a cloth strap. Again, there is an extreme focus on quality and advertisers should
mention apparel’s potential timeless look.
Markets For Buying Products
LA Majors Market
The Boston Menswear Collective
October 5-7
August 30-September 1
PROJECT
July 19 - 21
MODA GENT
August 9-11
Los Angeles, CA
Boston, MA
New York City, NY
Birmingham, UK
The reason why we decided to attend these particular trade shows is because each trade show
carries many household department store name brands. In particular, MODA GENT located in
the United Kingdom offers a wide variety of major international names and retail favorites.
PROJECT is a tradeshow hosted by MAGIC that is specifically for men’s apparel and
accessories.
17
Report #3
Dollar Plan & Justification
Dollar Planning Justification
Sales change: 6.50% increase for Men’s Department net sales
Dollar: $65,606.70 increase
The spring and summer 2016 plan is to increase net sales of the Men’s department by
6.50%. This will increase net sales from the previous season of $1,009,333.87 to the planned
$1,074,940.57 this coming season. A projected $65,606.70 increase in sales during the spring
and summer season will come directly from the Men’s department of the newly opened Belk
store. The average monthly sales will also increase to $179,156.76 compared to last year’s $168,
222.31. Although the stock turnover for s/s 2016 will decrease to 1.32 compared to last year’s
1.48 this will be due to the increase in average retail stock held. Stock turnover will be slightly
lower because of the increased stock being held at the beginning of each moth however this will
not negatively affect sales.
The 6.5% increase in net sales was determined by reviewing Belk’s annual total sales
from 2010 to 2014. As a new department store unfamiliar to the Los Angeles area it was also
important to consider the sales of our competitors such as Kohl’s. Over the past five years Belk’s
annual sales have continued to increase and with the U.S. economy in the process of recovering
from the recession consumer faith is being restored. According to Bloomberg Business,
disposable income increased 0.5 percent in November 2014 (Bloomberg, 2014). The extra
income in consumers’ pockets has definitely brightened their spirits and prompted for more
spending. In addition to the rise of disposable income the decline in gasoline prices have also
played a part in consumer spending. The money saved from spending less on gas means the
consumer will be more willing to travel more and spend more on goods. Market Watch predicts
that the creation of jobs from 2014 will continue into 2015 fueling consumer spending. In
association to job creation “hourly earnings have risen an average 2% annually” which will also
help move consumer spending (Bartash J., 2015). We also expect to see more male shoppers this
coming season because it is, “ not only socially acceptable but desirable for men to care about
(and spend money on) their personal appearance” (Wang L., 2014). The combination of these
18
factors and their favorable affect on the consumer looks promising for Belk financials. Our
projected sales increase for the spring and summer season is a reasonable and achievable goal
based on the expected economic growth for the coming year.
Operating expenses for the spring/summer season increased by 4.88% to accommodate
the additional costs associated with opening a new store in Southern California. These additional
costs will bring in new displays to show off major label brands that will attract new and
unfamiliar consumers to Belk and win over their loyalty. In addition to new merchandise
displays the use of more advertising will be needed to reach consumers who have never heard of
Belk and entice them into our doors.
We have given an additional $27,807.14 from the previous season for retail reductions. In
total we have $290,233.95 to spend on markdowns that will be divided up into six months. The
increase of additional funds towards markdowns will help in holiday promotions throughout the
season and move last season’s inventory out while transitioning new spring and summer apparel
into the department. Particular months throughout the season will have more markdowns to
accommodate bigger sales such as Father’s day and Valentine’s day that will target more women
shopping for their husbands. However, other months in the season will have substantial amounts
of markdowns for promotions that will entice male shoppers as well. Although men are not
customarily the primary shopper in department stores the use of the internet and e-commerce
sites have helped ease male shoppers into entering physical stores.
19
Monthly Sales Projections
February: 3.8% Increase
We predict that the sales in February 2015 will increase by 3.8% from 14.03% last year’s
sales to this year’s sales of 17.83%. January 2015 retail sales decreased 0.8% over the previous
month, but increased 3.3% from the January from the previous year (EPR Retail News, 2015).
This shows that retail sales have been gradually increasing over the years and will continue to
grow. Retail industry sales will increase 4.1%, up from the 3.5% growth seen in 2014 (EPR
Retail News, 2015). Also, non-store (online) sales will grow as much as 10% in 2015. The sales
in January decreased because of the massive holiday shopping in the previous month, however,
sales will pick up again slowly in February. A Valentine’s promotional event will encourage the
season of shopping once again for the men’s department.
March: 3.94% Increase
March sales will increase as well as shoppers begin to shop for a new closet for the new
spring season. It will not increase too drastically due to the non-existent weather changes in
Southern California, but will consumers will still spend a little more than the previous year and
month. March’s sales will increase by 3.94% from 17.56% last year’s sales to this year’s sale of
21.50%. Another factor of an increase is because March is when most people get their tax
refunds back and with a little extra money back into their pockets, consumers will be more likely
to go shopping. According to a Bankrate poll, 7% of Americans plan to spend their tax refunds
on a shopping spree. Although it is only 7%, it is still enough to boost sales for the month of
March.
April: 5.12% Increase
We anticipate that April’s sales will increase 5.12% from 18.23% last year’s sales to this
year’s sales of 23.35%. Last year’s dollar plan was $184,006.82 and this year our planned
increase sales will be $250,998.62 for this month. April will bring in lots of new merchandise as
well as sales due to the early summer sale. Again, consumer’s spending will increase as
consumer confidence goes up. According to Sleep Savvy magazine, shoppers will participate in
greater shopping due to the improving unemployment rate. The unemployment rate improved to
a 5.9% level toward the end of 2014 and expects it to decline to 5.7% by the end of 2015. By the
20
end of 2016, the nation should experience an unemployment rate of 5.5%.
May: 7.58% Increase
We predict that May’s sales will increase by 7.58% from 17.85% last year’s sales to this
year’s sale of 25.43%. Our sales goal last year for the month of May was $180,174.44 and this
month’s projected sales is $273,357.39. With our Memorial Day sales coming up, May’s
projected figures will increase. According to Moody’s Analytics, retailers that are planning to
boost revenues and profits over the next 12 months should benefit from a gradual improvement
of shopper’s willingness to spend. In 2015, the nation’s GDP is expected to increase at a 3.5%
rate. With the economy on the rise, consumers are also encouraged to spend a little more.
June: 10.12% Increase
Last year, June’s sales were at $168,834.79, this year, June’s sales is projected to have a
10.12% increase to 26.85% with a monthly sales of $288,621.54. We predict that the Father’s
Day sale will have a big impact on June’s sales. Last year, the month of June’s sales decreased
from the previous month, but we predict that Father’s day boost that decreases from last year to a
big increase this year. According to the Office for National Statistics, in June 2014, the amount
spend in the retail industry increased by 3.5% compared to the previous year and by 0.8%
increase with May 2014.
July: 8.27% Increase
Planned sales for the month of July we predict will increase by 8.27% from last year’s
sales of 15.60% to 23.87% for this year’s projected sales for the month of July. Last year’s
dollar plan was $157,442,64 and our planned sale for the month is $256,588.31. Although it is an
increase from last year’s sales, the monthly sales have decreased from the previous month of
June. The season of summer is when retail sales are not stable and due to the higher volume of
traveling, the sales of July is planned to decrease from the previous year. Also, there are no
planned promotions or sales for the month of July so there is predicted to be less sales.
According to the Office for National Statistics, in July 2014, the amount spent in the retail
industry increased by 1.7% compared to the previous year of July 2013, but decreased by 0.1%
from the previous month of June. This justifies that July’s sales just aren’t as high as the previous
months before.
21
Markdown and Promotion Calendar Justification
February
The month of February has been given the second largest amount for planned markdowns
this spring/summer season with $49,339.77. However, compared to last year’s budget this month
shows a 0.86% decrease from last year. The two significant reasons why the budget for
markdowns is fairly high are for moving fall/winter merchandise out of the store and Valentine’s
Day promotions. The addition of more markdowns in the men’s department will attract female
shoppers to spend more on the men in their lives because of the upcoming holiday. The
selling/promotion calendar for February will have promotions on product categories such as
men’s underwear, ties, dress shirts, suits, outerwear and fall/winter apparel. Promotions will
include buy one get one fifty percent off for men’s underwear, twenty-five percent of ties and
suits, forty percent off dress shirts, twenty percent off outerwear and fifty percent off fall/winter
apparel. According to MarketingProfs, many people are expected to spend Valentine’s Day with
their families due to the transitioning from spending one on one time to family time. For many
female shoppers that means they will not only be shopping for their husbands but for their
children as well. Although this may be true we still predict that many of the same female
shoppers who purchased gifts last year will be present again this year to buy gifts for their
husbands or significant others. The expectation of many purchases being made during the month
of February due to the holiday and getting rid of last season’s merchandise will be the cause of
markdowns.
March
The month of March has $47,888.60 allocated to it for the spring special promotion. This
is a $4,022.86 increase from last year. The increase in markdowns is also reflected in the
projected sales increase for March that is $231,112.22. During the month of March markdowns
will be made on any existing merchandise from the fall/winter season that was not sold during
the Valentine’s Day sale. Also new spring and summer apparel will be introduced into the
department. The spring special will be on all remaining fall/winter apparel, men’s shorts, shirts,
pants, jeans, outerwear and active wear. Special promotions will include sixty percent off all
fall/winter apparel, twenty percent off active wear, twenty percent off denim, buy one get one
22
fifty percent off on men’s shorts and pants, forty percent off shirts and twenty-five percent off
outerwear. We will start to advertise all new spring apparel being brought into the department.
We hope that the increase in advertising for the spring special/goodbye winter clearance will
bring shoppers into the department and purchase new and out of season merchandise. According
to The Business of Fashion, many high-end labels are focusing on expanding their menswear
offerings (Wang L., 2014). With the focus of menswear becoming greater, newer and more
innovative merchandise will be offered during the spring/summer season. In response, additional
markdown will be placed on new merchandise to not only attract female but also male shoppers
who are looking to update their look.
April
The month of April has been allotted $44,841.15 in markdowns that is the smallest
amount of the markdown budget. This is a 0.12% decrease in markdowns from last year even
though sales for the month have increased by 5.12%. The promotion for the month of April is the
early summer sale that will happen towards the end of the month. The promotion will be for
men’s swimwear, active wear, shorts, shirts, and pants. Our early summer sale will include fifty
percent off swimwear, twenty percent off active wear, twenty-five percent of shorts and shirts.
We expect the sales from the month of April to be higher than those of the previous months
because of the newer merchandise in the department and fewer markdowns being made. There
will be an increase in advertisements for publicity on our new spring and summer apparel as well
as the early summer sale that will get consumers thinking about purchasing apparel for the
warmer months ahead. The promotions for the month of April will not be has big as those
featured in the spring special because all of our fall/winter apparel has been moved out of store
and any markdowns on spring and summer apparel are just to keep the merchandise moving at a
steady pace. This will lead up to the Memorial Day sale happening at the end of May.
May
The month of May has been allocated $48,323.95 in markdowns. During this month we
have a substantial amount of the markdown budget in use and expect our sales to increase
significantly more since the beginning of the season to $273,357.39. Our Memorial Day sale will
cover almost all the product categories in the men’s department such as suits, ties, dress shirts, t23
shirts, pants, shorts, denim, active wear, swimwear, underwear, outerwear, and sweaters.
Promotion will include twenty-five percent off suits, twenty percent off ties, buy one get one
fifty percent off dress shirts, twenty-five percent off shirts, buy one get one fifty percent off
men’s pants, shorts and denim, thirty percent off active wear, forty percent off swimwear, twenty
percent off underwear, and twenty percent off outerwear and sweaters. Since this is the month
right before summer really begins we are hoping that this Memorial Day sale will jump start
summer shopping.
June
The month of June has the largest budget of markdowns with $52,242.11. This is an
$8,376.37 increase from last year. According to Sourcing Journal, “June is the second largest
volume for store sales because people are excited about summer, outdoor activities, and we see
the drive up in sales then” (Salfino C., 2014). We expect 26.85% of our season’s sales to come
from the month of June alone and hope the increasing amount of markdowns will entice
consumers to purchase more merchandise because of their high-spirited and lively moods
heading into the summer months. The main promotion during the month of June will be our
Father’s Day sale. The men’s department of Belk anticipates a numerous amount of female
shoppers looking to purchase gifts for their fathers, grandfathers, Uncles and even brothers gifts
for Father’s Day. This holiday centered on the male figure will definitely increase sales for this
particular department significantly. The promotions during our Father’s Day Sale will include
fifty percent off dress shirts and t-shirts, fifty percent off pants and shorts, thirty percent of
denim, forty percent of ties, twenty-five percent off sweaters and outerwear, fifty percent off
swimwear, thirty percent off active wear, and twenty percent off underwear.
July
The month of July has been allocated $47,598.37 in markdowns. This is a 1.07% increase
and a little over ten thousand dollars more of markdowns from last year. The sales for the month
of July will be significantly lower than the sales from June. According to Sourcing Journal, “in
July and August, consumers are enjoying their June purchases so they’re not shopping as much
— until it’s time for Back-to-School” (Salfino C., 2014). Any markdowns taken during the
month of July will move spring and summer apparel out of the department to make room for
24
incoming fall and winter apparel. The amount of reductions that will be taken at this time will
not be as significant as those in June or August but will still stimulate consumer interest. Also
since the month of June will be one of slower months of the season we will use advertisements to
promote markdowns. Markdowns will include sixty percent off swimwear, forty percent off
shorts, and forty percent off shirts.
Justification of Stock/Sales Ratio
We chose stock sales ratio for our stock planning method because this method is ideal
when projecting inventory levels for each month. This method forecasts the amount of inventory
that is required to reach the projected sales goal for the month. When using this planning method,
it reduces the possibility of experiencing overstock situations because the stock sales ratio
calculates the inventory level in order to meet planned sales for the month. Using this method
also gives an estimate of the stock turnover for the season. The biggest flaw to this stock
planning method would be that this method could only look at one interval at a time. This
method does not consider the fluctuating sales trend over time so the projected planned inventory
may change. The stock sales ratio will provide our men’s department appropriate inventory
levels to plan for the month in order to reach our projected sales at the same time diminish the
possibility of stock shortages.
February: 3.81
Our stock sales ratio for the month of February will decrease by 0.40 from last year’s
ratio of 4.21. February’s sales are anticipated to pick up compared to the previous month so the
stock sales ratio is going to be lower as well to reach the projected sales goal. The planned stock
turnover is lower than last years from 1.48 to 1.32 because the store is opening at a new location
so the demand for the products may not be as high as the previous years. For the Belk men’s
department, a BOM stock of $730,231.85 is needed to reach a sales goal of $191,661.90 for the
month of February. By researching on what kind of products the target market demands, the
stock sales ratio will be able to decrease without experiencing any stock outs. Since the projected
sale for the month of February has increased by 3.8% from the previous year, a lower stock sale
25
ratio is needed as well as having the right inventory on hand to reduce the amount of
merchandise being unsold for too long.
March: 3.78
The stock sales ratio for the month of March will decrease by 0.55 from last year’s ratio
of 4.33. By having a lower stock sales ratio of 3.78, this will help the men’s department to sell
more merchandise at the initial price without needing to increase the amount of markdown on the
merchandise. By having a lower ratio will also beneficial by decreasing the amount of
merchandise that is not needed or is in the warehouse. For the Belk men’s department, a BOM
stock of $873,604.20 is needed in order to reach a sales goal of 231,112.22 for the month of
March. The stock sales ratio is not too low for this month because spring merchandise is still on
hand for the month of March and by having a low stock sales ratio, it may lead to a stock out for
the spring merchandise. Also, consumers will have a bit more money to spend in her pockets due
to the tax refunds received during this month so it would be important to have enough
merchandise in stock.
April: 3.46
For the month of April, we predict that the stock sales ratio will decrease once again, but
it will be beneficial for this month. The stock sales ratio decreased from 4.23 last year to this
year with a ratio of 3.46. There was a 0.77 decrease in ratio most likely from the spring
merchandise being sold while the men’s department slowly beings to move onto the early
summer merchandise. In order to replenish the store will new products, it is important to clear
out as much older merchandise. Fortunately, spring merchandise is still in demand for the month
of April so the transition from spring to summer merchandise will not be as drastic. For the Belk
men’s department, a BOM stock of $868,455.24 is needed in order reach a sales goal of
$250,998.62. By having a lower stock sales ratio, the inventory turnover is also reduced to things
like holding costs to store the excess amount of merchandise will lower the overall sales for the
month.
26
May: 3.35
For the month of May, the stock sales ratio will again decrease by 0.93. Last year’s stock
sales ratio was 4.28 and this year’s is 3.35. The reason for the decrease in ratio is due to once
again, the low level of new merchandise to come into the store. By having a low stock sales
ratio, this will allow the men’s department to sell their merchandise at first price with little to no
markdowns to reach the sales goal for this month. A BOM of $915,747.25 is needed reach in
order to reach a sale of $273,357.39. By having a higher turnover, it increases the ability respond
to the customer’s demands and at the same time replacing obsolete merchandise.
June: 3.60
Our stock sales ratio for the month of June will decrease by 0.63 from last year’s ratio of
4.23. The stock sales ratio did increase from the previous month because we project that Father’s
day is going to be a crucial promotion in the month of June as well as the sales for the month.
Although out stock sales ratio did increase from May, our projected sales for the month of June
is still higher with a planned sales of $288,621.54 than May with a planned sales of $273,357.39.
The sales is higher in June because of the promotions in the month to be able to meet the
consumer’s demands to have the accurate amount of inventory on hand without having too much
excess merchandise. A BOM stock of $1,039,037 is needed in order to meet the sales goal of
$288,621.54. Although the amount of inventory needed at the beginning of the month is the
highest throughout this Spring-Summer season, the projected sales is the highest as well in the
month of June.
July: 3.00
Our stock sales ratio for the month of July will decrease by 1.29 from last year’s ratio of
4.29. This is the lowest possible stock sales ratio for Belk because if the ratio were to get any
lower, the men’s department would experience a stock shortage. The ratio is the lowest in July
because not as many consumers are spending compared to the other months of the season. There
are no promotions running in the month of July so in order to meet the sales goal for the month,
the merchandise at the store need to be sold at reduced prices or marked down. A lower stock
sales ratio will allow the men’s department to have a stable cash flow and just the right amount
of stock for the customers. A BOM stock of $769,764.94 is needed in order to meet the sales
27
goal of $256,588.31 for the month of July. By having a lower stock sales ratio, it will provide the
men’s department enough cash flow to stock up on inventory for the following month.
Dollar Plan
28
Promotional Calendar
29
Report #4
Dollar Plan & Justification
Six-Month Dollar Plan Budget
S/S 2016 Men’s Department
Total Retail Reductions $
Six- Month Budget | Season: Spring-Summer 15 | Department: Men's | Buyer's Name: Carissa Sugui & Annie Lee
Actual LY
Plan TY
Actual LY
$
262,426.81 $
290,233.95
Net Seasonal Sales
$ 1,009,333.87
Total Retail Reductions %
26.00%
Initial Mark-up %
Operating Expenses%
Profit%
GMROI
27.00%
Sales change (inc. Dec.%) over LY
Average Retail Stock
Stock Turnover
Average Monthly Sales
$
$
51.74%
29.28%
9.43%
1.42
March
177,287.03
17.56%
191,554.41
17.82%
767,652.85
4.33
724,075.67
3.78
43,865.74
16.72%
47,888.60
16.50%
778,348.87
693,648.40
Last Year Sales $
% TT (LY)
Planned Sales $
% TT (Planned TY)
$
Last Year $
S-S Ratio (LY)
Planned Year $
S-S Ratio (TY)
$
Last Year $
% TT (LY)
Planned Year $
% TT (Planned TY)
$
EOM STOCK
Last Year $
Planned Year $
Revised
Actual
$
$
46.51%
24.40%
8.20%
0.90
February
141,588.13
14.03%
148,879.27
13.85%
596,086.04
4.21
567,230.02
3.81
46,881.51
17.86%
49,339.77
17.00%
767,652.85
724,075.67
PLANNED
PURCHASES AT
RETAIL
Last Year $
Planned Year $
Revised
Actual
$
$
360,036.45
355,064.70
$
$
PLANNED
PURCHASES AT
COST
Last Year $
Planned Year $
Revised
Actual
$
$
192,590.93
171,353.66
ON ORDER
At Retail
At Cost
OPEN TO BUY
At Retail
At Cost
$
$
$
$
248,545.29
119,947.56
106,519.41
51,406.10
Season:
SALES
BOM STOCK
REDUCTIONS
30
$
$
$
$
$
April
184,006.82
18.23%
200,476.42
18.65%
778,348.87
4.23
693,648.40
3.46
40,849.97
15.57%
44,841.15
15.45%
771,146.62
661,152.95
231,848.80
209,015.74
$
$
$
$
124,020.70
100,870.67
$
$
$
$
146,311.02
70,609.47
62,704.72
30,261.20
$
$
$
$
$
$
$
$
May
180,174.44
17.85%
197,359.09
18.36%
771,146.62
4.28
661,152.95
3.35
49,348.96
18.80%
48,323.95
16.65%
714,171.17
652,058.95
217,654.55
212,822.11
$
$
$
$
116,427.91
102,707.61
$
$
$
$
148,975.48
71,895.33
63,846.63
30,812.28
$
$
$
$
$
$
Plan TY
$ 1,074,940.57
6.50%
$
$
679,762.76
1.48
168,222.31
$
608,236.27
1.77
179,156.76
$
$
June
168,834.79
16.73%
181,127.49
16.85%
714,171.17
4.23
652,058.95
3.60
43,865.74
16.72%
52,242.11
18.00%
675,428.94
466,631.70
172,547.96
236,589.05
$
$
173,958.31
47,942.35
$
$
(24,866.61)
229,366.78
$ 1,131,179.45
$ 1,290,800.72
$
$
92,299.46
114,177.50
$
$
93,053.89
23,136.90
$
$
(13,301.66)
110,692.04
$
$
605,091.23
622,938.39
$
$
$
$
165,612.33
79,924.25
70,976.71
34,253.25
$
$
$
$
33,559.64
16,195.83
14,382.70
6,941.07
$
$
$
$
160,556.74
77,484.43
68,810.03
33,207.61
$
$
$
$
903,560.50
436,056.88
387,240.22
186,881.52
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
July
157,442.64
15.60%
155,543.90
14.47%
675,428.94
4.29
466,631.70
3.00
37,614.87
14.33%
47,598.37
16.40%
455,504.81
492,856.21
$
Season Totals
$ 1,009,333.87
100.00%
$ 1,074,940.57
100.00%
$ 4,302,834.49
$ 3,764,797.69
$
262,426.81
100.00%
$ 290,233.95
100.00%
$ 4,162,253.27
$ 3,690,423.88
Table 1: Classification Distribution
Classification Percent Planned Purchases at Retail
Jeans
Pants
Shorts
Active wear
Suits
Shirts
Total
25.00%
15.00%
20.00%
15.00%
10.00%
15.00%
100.00%
$ 1,290,800.72
$ 1,290,800.72
$ 1,290,800.72
$ 1,290,800.72
$ 1,290,800.72
$ 1,290,800.72
Class Sales
$ 322,700.18
$ 193,620.11
$ 258,160.14
$ 193,620.11
$ 129,080.07
$ 193,620.11
$ 1,290,800.72
Table 2: Classification Sales by Month
February
13.85%
$ 44,693.97
Jeans
$ 26,816.38
Pants
$ 35,755.18
Shorts
Active wear $ 26,816.38
$ 17,877.59
Suits
$ 26,816.38
Shirts
Section 2a: Classification Sales by Month
March
April
May
June
17.82%
18.65%
18.36%
16.85%
$ 57,505.17 $ 60,183.58 $ 59,247.75 $ 54,374.98
$ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99
$ 46,004.14 $ 48,146.87 $ 47,398.20 $ 43,499.98
$ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99
$ 23,002.07 $ 24,073.43 $ 23,699.10 $ 21,749.99
$ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99
July
14.47%
$ 46,694.72
$ 28,016.83
$ 37,355.77
$ 28,016.83
$ 18,677.89
$ 28,016.83
Total
100.00%
$ 322,700.18
$ 193,620.11
$ 258,160.14
$ 193,620.11
$ 129,080.07
$ 193,620.11
Table 3: Classification of Planned Purchases at Retail by Month
Percentage Distribution
Jeans
Pants
Shorts
Active wear
Suits
Shirts
Total
30
25.00%
15.00%
20.00%
15.00%
10.00%
15.00%
100.00%
Section 2b: Classification Planned Purchases @ Retail by Month
February
March
April
May
June
July
Total
13.85%
17.82%
18.65%
18.36%
16.85%
14.47%
100.00%
$ 44,693.97 $ 57,505.17 $ 60,183.58 $ 59,247.75 $ 54,374.98 $ 46,694.72 $ 322,700.18
$ 26,816.38 $ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99 $ 28,016.83 $ 193,620.11
$ 35,755.18 $ 46,004.14 $ 48,146.87 $ 47,398.20 $ 43,499.98 $ 37,355.77 $ 258,160.14
$ 26,816.38 $ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99 $ 28,016.83 $ 193,620.11
$ 17,877.59 $ 23,002.07 $ 24,073.43 $ 23,699.10 $ 21,749.99 $ 18,677.89 $ 129,080.07
$ 26,816.38 $ 34,503.10 $ 36,110.15 $ 35,548.65 $ 32,624.99 $ 28,016.83 $ 193,620.11
$ 178,775.90 $ 230,020.69 $ 240,734.33 $ 236,991.01 $ 217,499.92 $ 186,778.86 $ 1,290,800.72
Assortment Factors per Classification with Percentage Distribution
Table 1: Men’s Jeans Classification
Classification:
Jeans
SubClassification
Waist
Length
Price Points
Vendor
Total
Straight Skinny Boot cut Relaxed
Style
Color
Class
$
Avg.
$60.10
Total 322,700.18 Price
30.00%
30
10.00%
Regular
50.00%
$40.00
15.00%
Blue
35.00%
Red
Camel
15.00%
25.00%
31
12.00%
Long
25.00%
$46.00
30.00%
Black
25.00%
20.00%
32
15.00%
Short
25.00%
$58.00
35.00%
White
10.00%
25.00%
33
34
35
10.00% 15.00% 13.00%
100.00%
36
15.00%
38
10.00%
$100.00
20.00%
Grey
Khaki
15.00% 15.00%
David
Lee
Levis
Other
New
Bitton
20.00% 25.00% 20.00% 10.00% 10.00%
100.00%
100.00%
100.00%
100.00%
100.00%
It has been said that the majority of men dislike shopping or despise spending any
amount of time in a store, however they do need to wear clothes like the rest of us. The most
basic and essential category of men’s apparel is the denim jean that accounts for 25% of the
planned purchases at retail budget. We decided to narrow down the amount of jean styles and
offer four basic fits straight, skinny, boot cut, and relaxed. The percentage ratios for these styles
are 30% to 25% to 20% to 25%. The percentages for each style do not differ by much because
based on our market trend report these are four basic styles of jeans that men between the ages of
25-34 who are currently leading the men’s consumer group would tend to purchase. Although
our trend analysis for the spring/summer 2015 predicted more trendy styles of denim jeans those
styles would fit better with the declining age group of men’s apparel shoppers that focus on
trendiness. It is still true for older men who are currently dominating the market want styles that
are straightforward and fit their lifestyle. Also according to our market trend analysis we
understand that the dominating age group strives for quality in garments. We offered a large
selection of vendors like Red Camel, Lee, Levis, David Bitton, and other new brands that are
known for their long lasting quality. The percentage distribution for jean vendors is 15% to 20%
to 25% to 20% to 10% to 10%. We decided to give Levis, Lee and Buffalo by David Bitton the
32
larger percentages because based on our demographic analysis from report 1 the consumers in
the Northridge area prefer quality products and do not mind spending more on big brands they
know and love. According to Money Crashers, men like the satisfaction of walking out of a store
with something however do not enjoy the process. (Money Crashers, 2013). Also, men are more
likely to buy multiple colors of one style to avoid shopping in the future. (Retail Week, 2012). In
order to simplify the shopping experience for men we only offered basic colors like blue, black,
white, grey and khaki. The percentages for these colors are 35% to 25% to 10% to 15% to 15%.
We offered the largest percentage of jean in the color blue because it is the most common color
of denim jean that can be worn everyday making it easier on men. We also gave black, grey and
khaki colored denim larger percentages since most men stick to a monochromatic and do not
stray to more exciting colors. The waist sizes presented for jeans range between size 30 to 38
with a percentage ratio of 10% to 12% to 15% to 10% 15% to 13% to 15% to 10%. According to
NPR, the top-selling pant size in the United States is size 34 with size 36 being the next popular
and size 38 being the least purchased. (NPR, 2014). The price points offered for men’s denim
jeans are $40.00, $46.00, $58.00, and $100.00. These price points are directly related to the retail
price for Levis, Lee, David Bitton and Red Camel. Based on our competition analysis from
report 1 our main competitor Kohls offers Levi’s and Lee denim as well so priced them at the
same price point as our competitor. Our highest price point of $100.00 is for Buffalo by David
Bitton, which is a much higher price point than offered at our competition but is appropriate for
the Northridge location with an average income of $60,000.
33
Table 2: Men’s Pants Classification
Classification:
Pants
SubClassification
Fit
Style
Waist
Length
Price Points
Color
Vendor
Class
$ Avg.
$75.35
Total 193,620.11 Price
Slim
Straight Classic
30.00% 35.00% 35.00%
WrinkleDress
Pleated
Free
35.00% 35.00% 30.00%
30
31
32
10.00% 12.00% 15.00%
Regular Long
Short
50.00% 25.00% 25.00%
$42.00 $60.00 $65.00
30.00% 25.00% 20.00%
Blue
Black
Ivory
10.00% 25.00% 10.00%
Palm
Dockers
Izod
Beach
25.00% 20.00% 15.00%
Total
100.00%
100.00%
33
34
35
10.00% 15.00% 13.00%
36
15.00%
38
10.00%
100.00%
100.00%
$139.00
25.00%
Grey
Khaki
25.00% 30.00%
100.00%
100.00%
Dickies Haggar
25.00% 15.00%
100.00%
The men’s pants classification has been given 15% of the planned purchases budget. The
fits offered are slim, straight and classic with a percentage ratio of 30% to 35% to 35%. Classic
and straight fit has the largest percentage because they are the most common and acceptable style
purchased. The slim fit pant has the second largest percentage because spring/summer 2016
forecasts a more casual and simple everyday pant with a nautical flare. There are three different
styles that will be in store like dress pant, wrinkle-free, and pleated with a ratio of 35% to 35% to
30%. The dress pant and wrinkle-free pant will have the largest percentage because they are also
fitting with the trend of a more casual relaxed look compared to the pleated pant that is dressier.
The waist sizes for pants are the same as those for jeans sizes 30 to 38 with a percentage ratio of
10% to 12% to 15% to 10% to 15% to 13% to 15% to 10%. The sizes with the largest
percentages are size 32, 34, and 36 because according to NPR the most common waist size for
men is size 34. The colors offered for men’s pants would be blue, black, ivory, grey, and khaki.
Based on our trend analysis from report 2 men’s pants will be more earth toned however the
colors we have chosen are more monochromatic based on popular colors men tend to wear. The
vendors that will be present for men’s pants are Izod, Dockers, Dickies, Haggar and Palm Beach.
34
The percentage distribution for the vendors is 25% to 20% to 15% to 25% to 15%. The bigger
brands such as Dockers, Dickies, and Izod will have a greater percentage because the consumers
in the Northridge area will recognize and equate it with quality. The price points for men’s pants
are directly related to its brands. The price points are $42.00, $60.00, $65.00 and $139.00 to
accommodate our target consumers who are price savvy but are willing to pay for brands they
love.
Table 3: Men’s Shorts Classification
Classification:
Shorts
SubClassification
Style
Size
Price Points
Color
Vendor
Class
Avg.
$ 258,160.14
Total
Price
Fitted
Cargo Flat-Front Patterns
30.00% 25.00% 30.00% 15.00%
30
31
32
33
34
35
10.00% 12.00% 15.00% 10.00% 15.00% 13.00%
$40.00 $50.00
$55.00 $88.00
30.00% 25.00% 20.00% 25.00%
Khaki
Grey
30.00% 25.00%
Red
Camel
Tommy
Bahama
25.00% 20.00%
$57.50
Total
100.00%
36
15.00%
38
10.00%
Black
Stripes Plaid
25.00% 10.00% 10.00%
Polo
Ralph
Izod
Other
New
Lauren
20.00% 15.00% 10.00% 10.00%
100.00%
100.00%
100.00%
100.00%
The styles for shorts are fitted, cargo, flat front, and patterns. Slim fitted clothing are
going to be trendy so fitted shorts are going to be popular for the Spring 2016. Based on our
trend analysis is Report 2, patterned shorts are also going to be trendy such as embroidered or
printed shorts. The sizes will range from 30-38, with the most average sizes available. The price
points will be $40, $50, $55, and $88 with percentages of 30%, 25%, 20%, and 25%. These price
points will be competitive to that of Kohl’s price points for shorts mainly because of the similar
brands that will be offered. The colors that will be available are khaki, grey, black, stripes, and
plaid. Based on our trend analysis from Report 2, neutral colors for shorts will be trendy so most
of the shorts offered will be very basic. Similar brands from Kohls will be offered such as Red
35
Camel, Tommy Bahama, Polo Ralph Lauren, Izod, and many others. Red Camel is our highest
distribution because it is one of our private brands that will match our target customer in
Northridge.
Table 4: Men’s Active Wear Classification
Classification:
Active wear
SubClassification
Class
$
Avg.
$43.24
Total 193,620.11 Price
10.00%
25.00%
20.00%
Long
Sleeve
Shirt
20.00%
Small
Medium
Large
X-Large
15.00%
$24.99
25.00%
Grey
25.00%
Under
Armour
25.00%
$35.00
30.00%
Red
15.00%
25.00%
$49.99
25.00%
Blue
20.00%
20.00%
$69.99
20.00%
Black
25.00%
SB Tech
Columbia
Jockey
Other
New
20.00%
20.00%
15.00%
10.00%
10.00
%
Hoodies/ Compression
Run Pants
Fleece
Shirt
Style
Size
Price Points
Color
Vendor
25.00%
Total
Shorts
25.00%
XXLarge
15.00%
100.00%
100.00%
100.00%
Pattern
15.00%
100.00%
100.00%
The men’s active wear classification will make up 15% of the planned purchases budget.
Active wear will include hoodies, compression shirts, running pants, long sleeve shirts and
shorts. The percentage distribution for active wear will be 10% to 25% to 20% to 20% to 25%.
Compression shirts and shorts will have the largest percentage because of the spring season and
warmer weather as compared to running pants and long sleeve shorts that will be 5% less. Basic
active wear tops and bottoms will be more present than hoodies and fleece as well due to the
season. The vendors for men’s active wear will be Under Armour, SB Tech, Columbia, Jockey,
and other new brands. The percentage distribution will be 25% to 20% to 20% to 15% to 10% to
10%. Well known brands will have a significantly higher percentage distribution because of their
reputation for quality and positive feedback from consumers however private label brands like
SB Tech will be offered at a lower price point as an alternative. The price points will be $24.99,
$35.00, $49.99 and $69.00 with a percentage ratio of 25% to 30% to 25% to 20%. The first three
36
price points will be offered slightly more than the highest price point based on the suggested
retail price of nationwide brands like Under Armour, Columbia and Jockey. The colors will be
less monochromatic than other product categories and will include grey, red, blue, black and
patterned. We decided to offer more color variety in active wear because men tend to wear more
colors when exercising outdoors and at night. Also based on our trend analysis matching top and
bottom active wear pieces as well as jackets in print will be more popular.
Table 5: Men’s Suits Classification
Classification:
Suits
SubClassification
Style
Waist
Length
Price Points
Color
Vendor
Class
Total
Classic
45.00%
38
10.00%
Short
35.00%
$350.00
40.00%
Black
35.00%
Slim
Trim
40.00%
15.00%
39
40
41
42
43
10.00%
15.00%
10.00% 15.00% 10.00%
Regular
Long
40.00%
25.00%
$550.00 $695.00
35.00%
25.00%
Blue Grey/Silver Khaki/Tan
30.00%
25.00%
10.00%
Lauren
Calvin
Tommy
Ralph
Other
New
Klein
Hilfiger
Lauren
35.00% 25.00%
20.00%
10.00% 10.00%
$
Avg.
$506.25
129,080.07 Price
Total
100.00%
44
15.00%
45
46
5.00% 10.00% 100.00%
100.00%
100.00%
100.00%
100.00%
The styles for the suits will be classic, slim, and trim with percentages of 45% to 40% to
15%. Classic suits will always be in the trend year round, but the slim fit suits are going to be
trendy for the spring. Jackets and pants that have more of a narrow fit is what are going to be
popular with men for this season (Lauretta, 2015). The sizes for the suits are going to range from
38-46, with sizes 40, 42, 44, and 45 having percentages of 15% and the other sizes with 10%.
These sizes are the most popular and average sizes between men for the suits. The lengths
offered for suits are short, regular, and long with percentages of 35%, 40%, and 25%. The price
points will be $350, $550, and $695. They are on the more expensive side but considering all the
37
brand names that are carried, it is reasonable. Kohls do carry cheaper suits, but majority of them
are not brand names. The colors available will be black, blue, grey/silver, and khaki/tan with
percentages of 35%, 30%, 25%, and 10%. A black suit is a classic so we would carry the most
amounts of black suits, but for the Spring 2016 season, blue is also going to be a trendy color for
suits. Based on our trend analysis from Report 2, both lighter and darker shades of blue will be
popular for the spring. The vendors are mostly going to be brand names like Calvin Klein,
Lauren Ralph Lauren, and Tommy Hilfiger with percentages of 35%, 25%, and 20%. These
brands are also famous for their suits so they will be popular
Table 6: Men’s Shirts Classification
Classification:
Shirts
SubClassification
Class
Avg.
$ 193,620.11
$28.88
Total
Price
V-Neck Crew Neck
50.00% 50.00%
ShortLongGraphic
Sleeve
Sleeve
40.00% 20.00%
40.00%
Cut
Style
Small
Size
Price Points
Color
Vendor
Medium
Large
20.00% 25.00%
25.00%
$20.00
$24.00
$30.00
20.00% 25.00%
30.00%
Blue White/Ivory Black
20.00% 20.00%
15.00%
Guy
Tommy
Salt Life
Harvey
Bahama
25.00% 25.00%
15.00%
Total
100.00%
100.00%
XXX-Large
Large
20.00% 10.00%
$39.50
25.00%
Red
Green Grey
15.00% 15.00% 15.00%
Lucky
Columbia
Other
Brand
15.00% 10.00% 10.00%
100.00%
100.00%
100.00%
100.00%
The two basic types of shirts that will be offered are V-necks and crew necks with a ratio
of 1:1. Men’s shirts for spring 2016 will be quite simple with a basic t-shirt silhouette according
to our trend analysis from report 2. The styles offered are short-sleeves, long-sleeves, and
graphic with a ratio of 2:1:2. Based on the findings in report 2, men’s shirts will have more
graphics including landscapes, nature, nautical, and technology themed pictures. The sizes that
will be available are small, medium, large, x-large, and xx-large. The price points are pretty
affordable and similar to Kohl’s price points. They will be $20, $24, $30, and $39.50. Based on
38
our trend analysis, the color palette for shorts will be earth tones with different shades of blue so
the colors offered will be blue, white/ivory, black, red, green, and grey. Blue and white/ivory has
the highest percentage of 20% and the rest with 15%. The brands that will be available are Guy
Harvey, Salt Life, Tommy Bahama, Columbia, Lucky Brand and other smaller brands.
Assortment Plan by Price Line in Units and Dollars
39
Men’s Jeans
Classification Price Line
$40.00
Jeans
$46.00
$58.00
$100.00
Total
% # Of Units $ By Price Line Class Total
15.00%
805
$48,405.03
30.00% 1,611
$96,810.05
35.00% 1,879
$112,945.06
20.00% 1,074
$64,540.04
5,369
$ 322,700.18
Men’s Pants
Classification Price Line
$42.00
Pants
$60.00
$65.00
$139.00
Total
% # Of Units $ By Price Line Class Total
30.00%
771
$58,086.03
25.00%
642
$48,405.03
20.00%
514
$38,724.02
25.00%
642
$48,405.03
2,570
$ 193,620.11
Men’s Shorts
Classification Price Line
$40.00
Shorts
$50.00
$55.00
$88.00
Total
% # Of Units $ By Price Line Class Total
30.00% 1,347
$77,448.04
25.00% 1,122
$64,540.04
20.00%
898
$51,632.03
25.00% 1,122
$64,540.04
4,490
$ 258,160.14
Men’s Active Wear
Classification Price Line
$24.99
Active wear
$35.00
$49.99
$69.99
Total
Men’s Suits
40
% # Of Units $ By Price Line Class Total
25.00% 1,119
$48,405.03
30.00% 1,343
$58,086.03
25.00% 1,119
$48,405.03
20.00%
895
$38,724.02
4,477
$ 193,620.11
Classification Price Line % # Of Units $ By Price Line Class Total
$350.00 40.00%
102
$51,632.03
Suits
$550.00 35.00%
89
$45,178.03
$695.00 25.00%
64
$32,270.02
255
$ 129,080.07
Total
Men’s Shirts
Classification Price Line
$20.00
Shirts
$24.00
$30.00
$39.50
Total
% # Of Units $ By Price Line Class Total
20.00% 1,341
$38,724.02
25.00% 1,676
$48,405.03
30.00% 2,012
$58,086.03
25.00% 1,676
$48,405.03
6,705
$ 193,620.11
Assortment Variety and Volume
41
Assortment Variety for Men’s S/S 2016
Assortment Variety
Jeans
11,520
Pants
21,600
Shorts
3,840
Active wear 3,000
Suits
4,860
Shirts
4,320
Model Stock Plan for Men’s S/S 2016
Model Stock
Jeans
4(style)*8(waist)*3(length)*4(price)*5(color)*6(vendor)
Pants
3(fit)*3(style)*8(waist)*3(length)*4(price)*5(color)*5(vendor)
Shorts
4(style)*8(size)*4(price)*5(color)*6(vendor)
Active wear 5(style)*5(size)*4(price)*5(color)*6(vendor)
Suits
3(style)*9(waist)*3(length)*3(price)*4(color)*5(vendor)
Shirts
2(cut)*3(style)*5(size)*4(price)*6(color)*6(vendor)
Assortment Volume for Men’s S/S 2016
Assortment Volume
Jeans
5,369
Pants
2,570
Shorts
4,490
Active wear 4,477
Suits
255
Shirts
6,705
VSA for Men’s S/S 2016
VSA
Jeans
Pants
Shorts
Active wear
Suits
Shirts
0.47
0.12
1.17
1.49
0.05
1.55
Volume Per SKU Plan
42
Shirts Volume per SKU
Shirts Volume: 6705
V-Neck (50%)
Price Point: $20.00 (20%)
Color
Size
Blue
Small Medium Large X-Large XX-Large Total
27
White/Ivory 27
Black
20
Red
20
Green
20
Grey
20
Total
134
Price Point: $24.00 (25%)
Color
Size
Blue
Color
Size
Blue
34
Color
Size
Blue
27
27
20
20
20
20
134
13
13
10
10
10
10
67
134
134
101
101
101
101
671
42
42
31
31
31
31
210
42
42
31
31
31
31
210
34
34
25
25
25
25
168
17
17
13
13
13
13
84
168
168
126
126
126
126
838
Small Medium Large X-Large XX-Large Total
40
40
30
30
30
30
White/Ivory
Black
Red
Green
Grey
Total
201
Price Point: $39.50 (25%)
34
34
25
25
25
25
168
Small Medium Large X-Large XX-Large Total
White/Ivory 34
Black
25
Red
25
Green
25
Grey
25
Total
168
Price Point: $30.00 (30%)
34
34
25
25
25
25
168
50
50
38
38
38
38
251
50
50
38
38
38
38
251
40
40
30
30
30
30
201
20
20
15
15
15
15
101
201
201
151
151
151
151
1,006
Small Medium Large X-Large XX-Large Total
34
White/Ivory 34
Black
25
Red
25
Green
25
Grey
25
Total
168
42
42
31
31
31
31
210
42
42
31
31
31
31
210
34
34
25
25
25
25
168
17
17
13
13
13
13
84
168
168
126
126
126
126
838
Crew Neck (50%)
Price Point: $20.00 (20%)
43
Size
Small Medium Large X-Large
XX-Large
Total
Color
Price Point: $24.00 (25%)
Color
Price Point: $30.00 (30%)
Color
Price Point: $39.50 (25%)
Color
27
Blue
White/Ivory 27
20
Black
20
Red
20
Green
20
Grey
134
Total
Size
34
34
25
25
25
25
168
34
34
25
25
25
25
168
27
27
20
20
20
20
134
Small Medium Large X-Large
13
13
10
10
10
10
67
134
134
101
101
101
101
671
XX-Large
Total
Blue
34
42
42
34
17
168
White/Ivory
34
42
42
34
17
168
Black
25
31
31
25
13
126
Red
25
31
31
25
13
126
Green
25
31
31
25
13
126
Grey
25
31
31
25
13
126
Total
168
210
210
168
84
838
XX-Large
Total
Size
Small Medium Large X-Large
Blue
40
50
50
40
20
201
White/Ivory
40
50
50
40
20
201
Black
30
38
38
30
15
151
Red
30
38
38
30
15
151
Green
30
38
38
30
15
151
Grey
30
38
38
30
15
151
Total
201
251
251
201
101
1006
XX-Large
Total
Size
Small Medium Large X-Large
Blue
34
42
42
34
17
168
White/Ivory
34
42
42
34
17
168
Black
25
31
31
25
13
126
Red
25
31
31
25
13
126
Green
25
31
31
25
13
126
Grey
25
31
31
25
13
126
Total
168
210
210
168
84
838
Total Volume 6,705
Report #5
Sourcing Strategy & Purchase Terms
44
Our major vendors will be located in the Downtown Los Angeles area to the Irvine,
Orange County area. Since our retail store is in Northridge, it will be a good distance so that a
close relationship can be made. Most of our private label brands like Red Camel will be located
closer to the retail store so that exclusive and limited distribution can be made. For the vendors
located in Downtown Los Angeles, it will take 1-2 days for the order to be received by the
vendors from us. Then it will take 2-3 days for the order to be ready to be delivered. Lastly, the
delivery will take place in one day because the vendors are close by. For the vendors located in
Irvine, there will be a similar order delivery lead-time. We will start placing orders during the
middle of the week so that the merchandise will be delivered by the beginning of the following
week. For our replenishment strategy, we will be placing orders every week. We will keep track
of our entire inventory so that we know which products are selling quickly and which are not.
Depending on the demand for specific products, we will decide to order more of those or place
orders for new products to replace slow moving merchandise. In order for our store to avoid any
stock out situations, we will replenish the assortments every week depending on how fast those
products sell. To maintain smooth vendor relationships, we will keep in touch with them often
and discuss how their products are selling in our store. Also, making unreasonable demands,
canceling orders at the last minute, or returning perfectly good merchandise with no excuse will
lead to a rocky relationship with a vendor. We will maintain an open door policy so that other
new vendors will be able to offer their products. This will show our current vendors that we do
not plan to stay with a particular vendor for long if other vendors show more profitable terms.
When negotiating on terms like discounts, we will work together with the vendors to develop fair
terms that will satisfy both parties. When choosing our vendors, we will see which vendors’
products suit our target market, each vendor’s past history with other retailers, and negotiation
terms. We will evaluate our vendors by their selling performance, stock turnover performance, if
order and reorders are received on a timely basis, negotiated markups maintained, openness to
promotional allowances, and return rate of products from customers.
The best possible shipping terms are FOB store/destination and FOB store/destination,
freight collect and allowed. The FOB store/destination is the best shipping terms that can be
negotiated for the buyer. This term means the buyer will assume responsibility only when the
goods arrive at the store or designated location. The vendor will accept all risk of loss and will
45
pay for all transportation charges. For the FOB store/destination, freight collect and allowed
shipping terms the vendor still accepts responsibility until the merchandise reaches the store or
destination but the buyer will pay the shipping charges and then deduct it from the invoice when
payment is made. Since we are opening a new Belk store we will negotiate for the best shipping
terms with the vendors we have had a strong relationship with like Levi’s. It is important that we
negotiate for the best shipping terms so the cost of goods does not increase significantly. We will
negotiate the best shipping term for our international and national vendors because it is in our
best interest for our vendors to assume all responsibility and charges.
After deciding on the shipping terms we now must negotiate with each vendor the cash
discounts and dating agreements. The EOM terms and dating would be the most common terms
for the ready-to-wear apparel industry and the most obvious choice. However, since we will be
opening the very first Belk store on the west coast we want to negotiate for the extra terms and
dating agreement, which will be more beneficial for this new store financially. We would be able
to negotiate extra terms and dating because we will be waiting for our first merchandises to be
received and then put out on display on the sales floor. As stated in our Retail Buying textbook,
“In many instances it can take over three weeks before merchandise can be offered for sale”
(fiorito s., & gable m. 2012). The extra days from this agreement will give us time to pay the
invoice since it will take time for our new location to generate sales. The extra terms and dating
will be possible to negotiate with our vendors that we have been long-term customers with.
There are other opportunities to receive discounts through promotions and quantity.
Promotional discounts will be applicable for national brands such as Nike, Jockey, Dockers and
Levi’s that we can provide special displays positioned closer to the aisles for more visibility.
Levi’s and Dockers will have designated shelf space and displays in the men’s department. The
other discount we can negotiate is through quantity. Based on our assortment plan men’s shirts
and jeans will have the largest amount of units being purchased so it only makes sense to
negotiate a quantity discount for these classifications with those vendors like Lee, Levi’s,
Columbia and Tommy Bahama.
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51