clothing retail business

8/2/2019 Clothing Retail Business

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A BUSINESS PLAN REPORT ON

FABRIC RETAIL BUSINESS

Submitted by:

SHYAMSUNDER N MULE

USN: 4JY10MBA41

Under the guidance of:

Prof. Mr.GIRISH BAGHA

Professor,

JSSCMS, Mysore.

Submitted to:

Vishweshwarayya technological university, Belgaum

in partial fulfilment of the requirements

for the award of


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for the award of

Table of ContentsExecutive summary ....................................................................................................................................... 4

Objectives ..................................................................................................................................................... 5

Company Overview ....................................................................................................................................... 5

Vision ......................................................................................................................................................... 6

Mission ...................................................................................................................................................... 6

Strengths and Core Competencies ........................................................................................................... 6

Challenges ................................................................................................................................................. 6

Company Ownership ................................................................................................................................. 6

Company Location and Facilities ............................................................................................................... 6

Product and Services ..................................................................................................................................... 7

Benefits and Features: .............................................................................................................................. 7

Why people need this service? ................................................................................................................. 7

Competitive Advantages ........................................................................................................................... 8

Start-up Summary ......................................................................................................................................... 8

Marketing Analysis ........................................................................................................................................ 8

Target customers ...................................................................................................................................... 8

Trends ....................................................................................................................................................... 8

Market Demand ........................................................................................................................................ 9


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c) Marketing Objectives ...................................................................................................................... 11

d) Strategy ........................................................................................................................................... 12

3 Sales strategy ....................................................................................................................................... 12

4 Operations ........................................................................................................................................... 12

5 Goals..................................................................................................................................................... 13

Swot Analysis .............................................................................................................................................. 13

Strengths ................................................................................................................................................. 13

Weaknesses ............................................................................................................................................ 13

Opportunities .......................................................................................................................................... 14

Threats .................................................................................................................................................... 14

Marketing Mix ............................................................................................................................................. 14

a) Product ................................................................................................................................................ 14

b) Price .................................................................................................................................................... 15

c) Place .................................................................................................................................................... 15

d) Promotion ........................................................................................................................................... 15

FINANCIES ................................................................................................................................................... 16

initial investment .................................................................................................................................... 16

Sources of funds ...................................................................................................................................... 16

Means of finance .................................................................................................................................... 16

Expected revinue .................................................................................................................................... 16

INCOME STATEMENT .............................................................................................................................. 17

CALCULATION OF CASHFLOW FROM PRESPECTIVE OF INVESTOR 18


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Executive summaryThe clothing Store will be a start-up retail men's, women's, and children's clothing

store specializing in unique clothing from other parts of the Belgaum. This

business will be a casual urban wear traditional clothing store which will be run by

the owner, it will be located at maruti galli Belgaum. This store will also have a

local market and will serve both youth and adults. Our intent is to provide the

community with unique clothing they would normally purchase outside of the city.

The fashion and retail business tends to be overly youth focused. However, by

closely following generational fashion trends as well as our own customers'

purchasing preferences, we will tailor our inventory to meet the specific needs of

our clientele. We will solely focus on the our styles, colors and fits will be our

specialty.we plan to promote our retail business with an ambitious, targeted marketing

campaign, which will include a grand opening event, local media coverage, print

advertising.

1. For establishment of Fabric Retail Business in Belgaum This feasibility has been

conducted.

2. The initial cost of the project is Rs 22230000/- including the initial capital of


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Objectives

Establish a unique clothing retail business in the city of Hartford,

Connecticut

Create jobs

Provide quality clothing and customer service at a reasonable price

Achieve the largest market share in the city for urban wear

Achieve a profit within the first year

Continually and consistently increase total number of customers per year

Increase average length of customer relationships and decrease customerturnover

Company Overview

It is a retail store for men and women wear with good quality clothing. We present

an extensive variety that are manufactured using different fabrics such as Cotton,

Silk, Wool and others. Available in a wide range of gorgeous colors, designs and

prints, these apparels are designed keeping in mind the most up-to-date fashion

trends. The Clothing Store's primary goal is to find customers and keep them

coming back.

Store will set the pace for both rural and urban fashion for all seasons. Last year's

outfit will be accessorized to be this year's outfit. People like to buy clothing pieces

and accessories to continue wearing clothing that would be out-of-date otherwise


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Vision

To be a distinguished fashions-wear retailer known worldwide for the quality of

products, setting new trends and lifestyles

Mission

To offer continuous value added products to our customers.

To accomplish this, we focus on exceptional design, innovation, quality,

convenience and interactive communication.

Strengths and Core Competencies

The foundation parameters on which we ensure the excellence of our garments are:

Material

Cut

Design conformation Embroidery

Stitching

Stability

Finish

Color fastness

Challenges


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Product and Services

For different customer groups, our variety of clothes is offered in different

customers and is tremendously comfortable to wear. Our offered clothing

collections for men and women are:Shirting

We offer an exceptional range of shirting that are offered in a multitude of

Colors and patterns.

Suitings

We make an extensive range of suiting that are offered in diverse colors and

Patterns.Saris

An exclusive range of saris

We offer a broad range of designer saris available in eye catching prints and colors.

Dress materials

An exclusive range of dress materials with heavy designing and quality materials

Benefits and Features:

Highlighted features:

- Lovely designs and prints

- Eye-catching colors

- Long-lasting Apparels- Comfortable to wear

- Available in various sizes


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Competitive Advantages

While there is no guarantee a competitor will locate within our area, we have no

doubt in our fashion sense, outstanding customer service and quality products.

Our supplier relationships and exclusive product offerings will prevent future

competitors from entering the market as a competitor. Also, it takes time to build a

retail store, and by the time a competitor attempts to compete with us directly, we

will have already established a strong customer base.

Start-up Summary

Total start-up expense (including fixtures, equipment, and grand opening) is

22230000. Startup assets required 4230000 in inventory. With the owners'

investment of 8000000, the amount of additional start-up funds needed are

14230000.

Marketing Analysis

Target customers

Clothing fabric is a business-to-consumer retail shop. Male and Female are our

clear target customers. However, we do realize that we will likely attract young

Male and Female customer. Moreover, we expect a portion of our products to catch

on with the younger generations. It's important that we do not offer products that

are exclusive to the older audience


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Market Demand

Shifting demographics made the male and female clothing business look attractive

to new entrants and, therefore, the market became tremendously competitive. Big

retail chains began to penetrate the market. Sales continued to grow. Fueling this

growth was a climb in birth rates in the late 1980s and early 1990s.

Industry sales normally peak between late August and December. Throughout thisphase, stores compete for valuable back-to-school sales and holiday gift purchases.

Stores normally generate between 50 percent of their annual sales in these

months.

Industry Life Cycle

Clothing market is at maturity stage although its generating good demand and

sales and has good scope for businesses for next few years. The higher birth rate

was observed in late 90s and early 2000s which boomed the market and now

demand is still growing but with slow birth rates as compared to past years. This

makes industry stand at maturity level in its life cycle.

Although this sector of the industry is season-driven, this cycle will not affect it

much.


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Market Potentials

Shifting demographics made the male and female cloth business attractive to new

entrants and, therefore, tremendously competitive. Sales will continue to grow inthe next 5 years:

Market Opportunities

Market is growing with a rapid rate so its a great opportunity to enter in the

market where demand is increasing drastically

Birth rate has remained high in the past 5 years meaning more potential for kids

cloth purchasing.

Country is going through recessionary period so parents are on tight budget,

which is a great opportunity for our business to offer discounts and low pricing

packages to attract our consumers

This business has conventionally been highly seasonal, as with other clothing

businesses, so spring is on the way, this is also the season for weddings and

gorgeous dresses and suits for wedding parties.

New sessions of schools will be starting in month or so.


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wide selection of fashionable, figure-flattering clothing. Our aim is to establish our

company as a pioneer in this youth-obsessed industry and build a boutique brand

name that will be synonymous with the fashion industry revolution.

2 Marketing strategy

Basic strategy of our business is to launch kids wear by the next some months.

Initially we launch normal kids wear which will cater the needs of masses.

By the end of the year, we will launch customized products to cater to the need of

every individual customer.

Later on, school accessories and school wear are also in the pipe line

a) Value Proposition

Our core value proposition is that we will add value to our product by providing

matchless male female and kids wear with extensive range of color and different

sizes in comfortable and durable fabric with easy mode of cash transactions at

comparatively low prices.

b) Branding


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d) Strategy

Meet the demands of market and supply demanded goods on time without anybarrier or hurdle

Offer excellent products at low price

Make products according to the needs of the customer

Give good hassle-free ambiance for shopping, which will help the business and

give edge over rivals

Develop a friendly store environment and decoration, which will attract

customers to bring their family in the store and shop with comfort.

3 Sales strategy

Clothing store generate sales via strategic marketing efforts. These concentratedefforts will be targeting new and returning customers as well as single-visit tourist

consumers. We will also implement a referral program rewarding customers who

refer new customers with discount coupons. Following our grand opening we will

offer promotional discounts and seasonal and clearance sales throughout the year.

Clothing store will accept cash and payment via major credit and debit cards. Cashlayaway plans will also be permitted. Returns and exchanges must take place

within 30 days of purchase and receipts are mandatory.


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5 Goals

The following is a list of business goals and milestones we wish to accomplish our

first year of operations.

Complete renovating, stocking, hiring and initial marketing.

Host a successful grand-opening event.

Penetrate and raise awareness in 60 percent our targeted consumer market.

Achieve a profit margin of 50 percent.

Build a solid customer base and mailing list.

Generate repeat and referral sales.

Become a profitable business with expansion potential.

Establish a solid reputation as quality retail establishment.

Swot Analysis

Strengths

Experience and understanding of the fashion industry

Unique shopping experience with exceptional customer service

Great downtown location

Large and growing consumer base


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Marketing expense in the start will be huge, to establish brand name required

lot of advertising

Opportunities

Outstanding shopping experience will lead to repeat business

Seasonal business: in summer demand is very high as new academic session

starts and also a wedding season

Sector is growing fast in state and in the area our business operating

Girls wear demand is huge so adding value in this category will be the great advantage

Animated movies increased the demands and popularity of printed shirtings.

Threats

Competition is high and big chains like Wall-Mart, Gap and Limited

Incorporation


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b) Price

Penetration Pricingwill be the pricing strategy for our business, as our business isnew and at the high street of Belgaum where competition is huge, so we try to givegood quality at low price to penetrate in the market and try to achieve higher sales

volume to set low price and better quality strategy. Once we achieve this objective

then try to charge higher price for our customized products for value addition

c) Place

At one of the high street of Belgaum City

d) Promotion

Advertising:1. Above The Line:

- Internet

- Radio

- Magazines ( Parents and kids magazines only)

- Newspapers ( Only Weekends for two or three weeks)

2. Below The Line:

Flyers ( through hawkers)


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FINANCIES

initial investment

Perticular Amount

Cost of materials 10000000

Building 3000000

Interior & Exterior Decoration 1000000

Furniture 1000000

Machinerys

Genarator 100000

Dit Fabric Printing Machine 700000

Dit Fabric Embrodery Machine 525000

Computerized Swetching Mach 875000

Computer 25000

Printer 5000

17230000

Land 5000000

Total 22230000

Sources of funds Means of finance

Particulars Amount Particulars Amount

Equity 8000000 FA 12230000

Long term loan 14230000 NWC 10000000


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INCOME STATEMENT

1 2 3 4 5

total Revinue 33000000 36300000 43560000 52272000 62726400

EXPENDITURE

Purchases 10000000 11000000 13200000 15840000 19008000

Salaries 1812000 1993200 2192520 2411772 2652949

Postage and Stationery 10000 10000 10000 10000 10000

Licence and other Fees(legal charges) 10000 10000 10000 10000 10000

Miscellaneous Expenses(general exp) 100000 100000 100000 100000 100000

Repairs & Maintanence 25000 27500 30250 33275 36602.5

Insurance 200000 200000 200000 200000 200000

Fuel 50000 50000 50000 50000 50000

Electricity charges 60000 66000 72600 79860 87846

Total Expenditure 12267000 13456700 15865370 18734907 22155398

EBDIT 20733000 22843300 27694630 33537093 40571002

Less. DEP 6084000 5137200 4352760 3700908 3157556

EBIT 14649000 17706100 23341870 29836185 37413446


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CALCULATION OF CASHFLOW FROM PRESPECTIVE OF INVESTOR

INV 0 Year Year 1 Year 2 Year 3 Year 4 Year 5

FA 14230000

NWC 8000000

Revenue 33000000 36300000 43560000 52272000 62726400

Total Expenditure 12267000 13456700 15865370 18734907 22155398

EBDIT 20733000 22843300 27694630 33537093 40571002

Less. DEP 6084000 5137200 4352760 3700908 3157556

EBIT 14649000 17706100 23341870 29836185 37413446Less.Int 1588681 1308423 992621.23 636768.1 235783.9

EBT 13060319 16397677 22349249 29199417 37177662

Less. Tax 30% 3918096 4919303 6704774.6 8759825 11153299

EAT 9142224 11478374 15644474 20439592 26024363

Add Depn 6084000 5137200 4352760 3700908 3157556

Net cash flow 15226224 16615574 19997234 24140500 29181920

PV @ 12% 13594842 13245834 14233636 15341724 16558605

Approx IRR

75%

pya back period


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19

PROJECTED BALANCE SHEET

Year 1 Year 2 Year 3 Year 4 Year 5

SOURCES OF

FUNDS :

Promotors

Fund 8000000 8000000 8000000 8000000 8000000

Reserves Total 9142224 11478374 15644474 20439592 26024363

Total

Shareholders

Funds 17142224 19478374 23644474 28439592 34024363

Secured Loans 14230000 12020201 9530143 6724285 3562572.8

less :repayment 2209799 2490057 2805859 3161712 3562696.1

Total Debt 12020201 9530143 6724285 3562572.8 -123.276

Total Liabilities 29162425 29008517 30368759 32002165 34024240

APPLICATION

OF FUNDS :

Building 2700000 2430000 2187000 1968300 1771470

land 5000000 5000000 5000000 5000000 5000000

machinery 3384000 2707200 2165760 1732608 1386086

cls stock 5000000 7500000 10000000 10000000 10000000

Bank 13078425 11371317 11015999 13301257 15866683

Total Assets 29162425 29008517 30368759 32002165 34024240

clothing retail business

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