Classic Label Company

Executive Summary

Classic Label will be a clothing boutique located at Los Angeles offering both men and women fashion outfits; regular, slim and straight fit. Citing from the number of clothing boutiques that exists in Los Angeles, Classic Label will be looking forward towards making partnerships and alliances with numerous local boutiques in LA as one of the strategies for expansion. The other strategies intended for enlarging the customer base include setting up manufacturing and distribution relationships with similar organizations in New York City. Venturing in New York City market is based on the fact that the area has developed greatly with regards to the market served by Classic Label which means that demand on fashion is very high in the area. Therefore, Classic Label will be targeting on gaining a larger market penetration in different areas that exhibit demand in fashion and design particularly of clothing for both genders. On the other hand, considering the issue of environmental responsibility, Classic Label will be focusing on starting a recycling program for their clothing by allowing customers to drop off their used clothes which will be used to manufacture new clothes. Thus, Classic Label will be enduring stiff competition from counterparts such as Nudie Jeans Company, Kuyichi and Denim Company.

Overview

The organizational name of the company will be Classic Label and will be headquartered in Los Angeles. Precisely, the company will focus on selling fashion wears for both men and women which will be manufactured locally in the organization. Therefore, the type of business that will be adhered to by this organization is manufacturing and retail business. The type of business ownership for Classic Label will be partnership where potential entrepreneurs will combine their financial powers for the initiation of the company. Furthermore, citing from the products and services offered by other fashion companies such as denim, Classic Label will not focus on manufacturing jeans alone. The company will extend its product line to other fashion and design outfits such as shirts, blouses, ties, belts, hats, sports outfits among other products.

The target market for Classic Label will include potential customers at the age of 17 to 40 years living in Los Angeles and New York City.  The reason for targeting this market is because this group dominates the population in LA and New York City, and exhibits high demands on fashion and design. Conversely, some of the factors that will influence the success of Classic Label include stiff competition, government involvement, lack of brand equity, and a threat of new entrants.

Citing from the personal experience, I as the founder of the business have sufficient experience as a fashion designer and have worked in other similar organizations such as Levi and the GAP which have given me enough competence in the sector.  However, the major weakness that I have with regard to this venture is based on the market and customer base that my company will be focusing on. Los Angeles and New York are large and new to me as I had experience with smaller markets that were easy to analyze and control. Therefore, citing from the fact that these markets greater changes that demand effective changes in the organization’s strategies, it will be challenging to adjust to the market changes. Thus, in order to cope up with the challenges, I will focus on making prompt planning and implementations in order to prepare for the potential changes in the market.

Mission Statement

To produce variety of fashion and design products for men and women at affordable prices that is slightly lower than those of other boutiques in LA and New York.

MARKETING PLAN

It is factual that the fashion and design industry in the contemporary market depends on mass market sales in order to achieve success. Therefore, the organization serving this market ought to have a wider product line that will cut across different potential customers. Citing from the market analysis, it is exhibited that men and women at the age of 25 to 50 years spend approximately $35 billion annually on clothing. This means that in order to serve these target consumers maximally, the business ought to offer wider range of products that satisfies their demands. However, for women, fashion clothing covers the largest part of their spending on clothes and outfits. Thus, targeting men and women on fashion and design basis, the competitive advantage of Classic Label will be on offering variety of fashion outfits at lower prices than the competitors. Producing goods at slightly lower prices will be achieved through recycling programs that will lower the production costs. Additionally, the company will use cheaper fabrics and simpler manufacturing processes that will effectuate the lowering of the production costs. As a result, the company will be able to sell products at cheaper prices to the massive customers.

Some of the potential competitors for Classic Label Company include the GAP, Denim, Ralph Lauren, Nudie Jeans Company and Mango. Some of the strengths exhibited by these competitors include economies of scale and brand recognition in the fashion and design market. However, one of the weaknesses of these competitors is based on the fact that they focus on offering narrow product line such as jeans. Therefore, offering wider product line at slightly lower prices will mark the competitive advantage of the company. Some of the factors that will influence success of the company with regard to competition from these companies include better product quality, wider customer base served, mass production, stronger reputation and domination of the market by these competitors.

	Year 1	Year 2	Year 3
Sales	$500,000	$800,000	$1,200,000
Total expenses	$200,000	$250,000	$300,000
Net profit	$300,000	$550,000	$900,000

 

Advertisement Plans

Citing from the fact that the target market of the company is composed of fashion forward, social media oriented and addicted to technology (mobile phones and personal computers) customers, the following are some of the promotion mix methods that will be employed.

• SEO

Using internet as the basis of company’s promotion, the company will use blogs and web content with keywords such as “organic fashion clothes”, “eco-friendly outfits” and other phrases that will be targeted towards achieving a competitive rank by the company.

• Social Media Channels

The company will have accounts in Facebook, Twitter, LinkedIn, and Pinterest which will be used to advertise fashion and design products. Additionally, these social media accounts will be used to notify on offers and discounts together with the launching of new products.

• Public Relations

Public relations will be used to promote values, fashion and other stories of the company on fashion magazines and blogs in order to support our value on environmental conservation strategies ethical production of our brands.

• Business Development

Through research the staff of Classic Label Company will search for the dominating fashion boutiques in the local areas selected by the company and through research and development, we will be able to advance our strategies and operations to increase competitive advantage of the business.

FINANCIAL PLAN

To start with, the projected startup cost is $300,000 in order to get the organization off the ground. Therefore, this money is anticipated to be acquired from business loans and potential investors.  Currently, I have raised approximately $100,000 which has to be invested in Classic Label Company. According to the financial planning, the potential investors are anticipated to raise an approximate amount of $150,000 and the remaining $50,000 will be obtained from business loan.

For the startup cost, the capital will be used to rent a building, pay for the renovations, purchasing of the required equipments, and advancing the acquired building to attain the standards of a fashion products manufacturing company.

 

	Year 1	Year 2		Year 3
Sales	$500,000	$800,000		$1,200,000
Expenditures
Paying bills	$100,000	$150,000		$200,000
Cash spending	$50,000	$50,000	$50,000
Principal repayment of long-term liabilities	$30,000	$34,000	$36,000
Other purchases (current assets)	$20,000	$16,000	$14,000
Total expenses	$200,000	$250,000	$300,000
Net profit	$300,000	$550,000	$900,000

 

APPENDIX

According to the statistics, from 2012, United States has been importing textiles of value amount not below than $100 billion as International Trade Administration infers (CITA, 2015). This figure derives the demand that exists in the fashion market as the manufacturers and retailers continue to imported utilize textiles. Furthermore, different segments in this market exhibit different increase in demand with women leading with the highest purchasing habit of the fashion products (California Fashion Association, 2011). From the market analysis, it is exhibited that women spend approximately 80% of their income on fashion and sportswear products (Cadigan, 2014). This translates to 96% of the capital expended on their own clothes, 93% of the money spent on their children’s clothes and 60% of that spent on men’s clothes. Since 1999, the spending habit of women on fashion clothes has been increasing up to 52% of the overall sales recorded on fashion outfits (Jones, 2005). On the other hand, the purchasing habit of men has been increasing steadily where it has reached approximately 31% of the total sales recorded on fashion apparel. With regard to age, it is approximated that individuals at the age of 30 years and below cover approximately 53% of the fashion clothes market whereas individuals at the age above 50 years make approximately 25% of the sales.

Citing from the fact that Classic Label Company will base much of its promotion strategies on the internet, it has been approximated that for more than $500 billion sales that recorded back in 2012, approximately $70 billion sales were recorded from the internet (CITA, 2015). As a result, the figure has been enlarging as people continue to embrace the use of internet and the development of technology. This means that the company will acquire wider customer base from the internet as it continues to offer its products through the internet.

References          

Top of Form

Cadigan, E. (2014). Sourcing and selecting textiles for fashion.

Jones, S. J. (2005). Fashion design. London: Laurence King.

California Fashion Association, (2011). “The Los Angeles Area Fashion Industry Profile”

United States Department of Commerce International Trade Administration (CITA), (2015). Office of Textiles and Apparel