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4MBS662 Retail Management

Two Precious

Maternity and Baby

WearPortfolio of management with the elements of retail mix for a clothing

store

4th April 2011

By:

Alicja Majewska 11960290

Monika Musialik12979394

Natasha Boncoeur 11692126

Kassim Ismail 12057731

Module and Seminar Leader: Zena Lutrin

Word count: 4000

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Contents

Contents .......................................................................................................................... 2

Executive Summary ........................................................................................................ 3

Market Segmentation and Positioning ............................................................................ 4

Demographic Segmentation........................................................................................4

Positioning....................................................................................................................6

Location ...........................................................................................................................7

Location 1.....................................................................................................................7

Location 2 ....................................................................................................................9

Location 3.....................................................................................................................9

Location Overview .................................................................................................... 11

Final choice ...............................................................................................................12

Merchandise Plan ..........................................................................................................12

Our philosophy ..........................................................................................................12

Stock balance: Category of our product.................................................................... 13

Product Mix ...................................................................................................................15

Product ......................................................................................................................15

Nature of Two Precious Product Variety ....................................................................15

Layout and Design Planning ......................................................................................... 16

Human Resources Management Plan ..........................................................................18

Profit and Loss Account................................................................................................ 20

Appendix:.......................................................................................................................22

References: ..................................................................................................................27

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Executive Summary

Two Precious is a store which specializes in maternity and baby wear (newborn to 18

months) along with a small range of beauty and care products for future mums and

babies. Our range can be described as affordable luxury.

The location of our store is Blackheath, which was carefully chosen after considering

some of the most important aspects of location; accessibility and attractiveness along

with the target market population, cost, and competitors.

Within the growing fashion industry, Two Precious will focus on the niche market of

future mums and babies, by offering a great range of unique and beautiful wear that is

good quality and reasonably priced.

We aim to create a competitive advantage by creating an exclusive experience for our

clients with highly trained staff and a guarantee to offer good quality clothing to both

mother and child who buy from our store.

Our primary target market is mums to be, mums, couples and families with young

children.

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Market Segmentation and Positioning

Demographic Segmentation

Age: Two precious will essentially target consumers aged between 25-40 year olds,

this indicates that we are targeting the economically active population. This age range

is likely to have no problem with spending on what is essential to them and they will

only buy the best for their children as they are most likely to be first time mothers. As

seen in the diagram below, 43% of the population is within our target market age

group.

Percentage of people in each age band in your neighborhood, mid-2008

Gender: Our target market is females with babies, pregnant women and their partner

and families. Our target market is interested in good quality and comfortable maternity

and baby clothes.

Income: We will target professional working women and stay at home mothers and

their partners with annual income of 27.000 and above. This will give us the

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opportunity to set a premium price which is similar to our competitors such as Polarn

O.pyret and Mamas & Papas.

Social Class: We will target customers in classes C and above.

The general fertility rate (GFR) is the number of live births per 1,000 women aged 15-

44. Rates are based on the most up-to-date population estimates. Our prime location

Blackheath, which is located in Lewisham borough, has 1.8 to 2.9 rate birth (map 1

below). Patterns of family formation change over time and are primarily influenced by

social and economic factors. As a resulting short-term time-related variations in

numbers of births such as those that have recently occurred in London.

Map 1 Percentage of borough total births (2009-10)

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Positioning

The main competitors of Two Precious are the Little White Company and Mamas

and Papas. Two Precious will help and advice both mothers to be and mothers on

what best suits their shape and size and also try to help with childrens clothing.

Our price range will differ from that of the high street because our brand is exclusive to

our boutique. The goods will be manufactured and supplied from Poland, Zodyn city.

Two Preciouss Positioning

Mid-Priced Luxury Brand (unique sales only in our boutique)

High Quality wear and beauty products

Differentiation from competitors based on quality and service

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Competitors price range in relation to Blackheath and neighborhood included in

Appendix1:

Gap,H&M and ZARA offer quality fashion, affordable and low prices.

The Little White Company very simplistic range of baby clothes, good

quality and relatively expensive.

Polarn O. Pyret and Pumpkin Patch - Smart, functional and playful childrens

clothing, relatively cheap.

Mamas& Papas and Mother care- the only stores that offer a full range of

baby and maternity clothes.

We have chosen to use a mixture of high and low priced items and specialist and non

specialist product, as the store is a boutique there are high quality clothing,

comfortable for everyday wear. The products will be exclusive to the store with special

attention to the design and product texture, making sure our textiles are professionally

chosen so they may meet the clothing industries standards (ISO 1986). Our target

market does not want low priced, low quality products instead they want value for

money products which are long lasting.

Location

According to McGoldrick (2002) the choice of retail location is one of the most

important aspects and its crucial objectives are accessibility and attractiveness.

When research for our perfect retail site we decided to evaluate the major factors

among a few locations (shopping centre, high street, and village) such as customer

preferences, population factors, accessibility, competitive forces, cost and the variable

factors which include storage, delivery.) The location of the store was chosen from

three options: Fulham, Blackheath, and West Hampstead.

Location 1

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1. Customer preference

Westfield shopping centre offers 345 retailers from which 26 stores are designed for

children`s clothes, activities and games. As it is a shopping centre we have the

advantage of being close to store facilities (M&S and Waitrose) and at the same time

we will be placed among our competitors. This location suits families that want to go

shopping together under one roof with children stores such as toy shops attracting our

target market to the area.

2. Population factors

Although the Acorn overview of families with children is low in the area (as you can

see from the table below), Westfield shopping centre is a destination where families

will make an effort to go to. There are few reasons why Westfield is convenient for

families, such as a number of shops under one roof (convenience for pushchairs),

children play area, children friendly restaurants and baby clothing stores.

This area represents type 18 ACORN classification: Multi-ethnic young, converted

flats. (Up my street, 2011)

3. Competitive Forces

In clothing industry competitive forces are very strong due to the constant changing of

trends and fashion. Our store in Westfield would need to face direct competition and

focus on maintaining the advantage over them in terms of effective suppliers, new

products and attracting new customers.

Our range in a shopping centre would face direct and close competition from other

maternity and babies stores. Nevertheless this location offers not only easy

accessibility but also meets the needs of everyday shoppers with supermarkets such

as M&S and Waitrose located in the shopping centre, which can attract potential

customers by proximity.

4. Cost

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Our boutique will be located opposite Lego store in the childrens section and the total

space given by associate director Tom Welham will be 10.8 sq m at 200k per annum.

5. Business needs.

Delivery accessibility and hours are very convenient in Westfield location due tospacious parking which is available during the night for stock unloading.

Location 2

West Hampstead

1. Customer preference

West Hampstead is a very famous and modern area, offering 104 shops and various

eateries. As an upcoming area close to the West End, West Hampstead is famous not

only with home owners but also with visitors due to its easy accessibility.

This area represents ACORN classification: 2 - Affluent working families with

mortgages.

2. Competitive Forces

Competitive forces are relatively low in West Hampstead and our store would not face

any direct competition from other maternity and babies stores as these are non-

existent in the area. However there are a number competitors such as Mamas and

Papas in the surrounding areas of Camden as Kilburn and Camden Town.

3. Accessibility

West Hampstead is located four miles from central London and accessible by car,bus, tube and train.

Parking is highly restricted to residents and on payment meter for the access of one

hour.

Location 3

Blackheath

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Many of the people who live in this postcode will be wealthy mature professionals

living in large houses. They are known as type 1 in the ACORN classification and

1.7% of the UK's population live in this type of area. This type of postcode

encompasses the most affluent people in the UK. They live in wealthy, high status

suburban and semi-rural neighbourhoods.

Most are highly qualified professionals, senior executives and business owners with

young children, often in their 25s and 40s. They tend to live in large detached houses

with four or more bedrooms, many of which are owned outright. These households

often have more than two cars, at least one of which is likely to be a high value

company car.

There is a high level of readership of the Financial Times as well as the other quality

broadsheets. These people have a well developed interest in the arts, classical music

and opera as well as enjoying fine wine, gourmet food and good quality lifestyle and

clothing.

Mid-2008 population estimates

Your

neighbor

hood

Your area

All People Count 1,383 5,321

Males Count 670 2,621

Females Count 713 2,700

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Location Overview

Population factors, accessibility and competition within the locations chosen are

represented in the table below:

Location Population factor

Family Income

Means of

transportation

Competition

Westfield High Underground,

Buses, private cars

and bicycle

High

West

Hampstead

Medium Underground, over

ground, Buses,

private cars and

bicycle

High

Black heath High Buses, private car

and bicycle

Medium

The area map is shown below:

Shepherds Bush

West Hampstead

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product. The store will offer its own Two Precious branded items and other small

independent brands and designers.

We are an up-scale fashion brand with the latest luxurious and sophisticated trends

that cannot be found on high street. The boutique will offer a beautiful range of

maternity evening dresses and smart work wear clothing for future mums as well as

basics and essentials. In addition the store will sell items for new born babies.

Stock balance: Category of our product.

According to Third Eyesight (a consulting firm focused on the retail and consumer

products sector) clients visiting a store are looking for either the width of merchandise

the variety of product lines offered or the depth the number of each item or

particular style of a product on offer (Diwakar Kumar,2010).

The stock balance for our boutique will be very simplified and carefully allocated in the

space we designed. Our shop is selling maternity and baby wear (newborn to 18

months) and the merchandise division will equal 70% to 30%, where 70% will

represent maternity clothing and 30% will represent products for babies. The

merchandise plan for our boutique will include clothing for all seasons (Appendix 2).

Best selling items: all our bestselling items will appear in the fashion and baby

magazines, and will significantly improve sales.

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Two Precious will offer the wide selection from the basics of maternity and babies

wear to the trendy clothing. We will be purchasing through three independent

suppliers based in Poland in a variety of sizes, colours and style to fit our target

market base.

Product Mix

Product

Our boutique product mix, which includes all our garments offered for sale is

represented in two dimensions breadth and depth. We offer sixteen products lines

(breadth) for maternity and baby with wide variety of sizes, colors and models that

represents the depth of our stock (Appendixes 3 and 4).

Two Precious is a multi branded store with up to 450 items of clothing that can be

found on the shop floor at any point in time. These will consist of the items in the

merchandise category, three items of each size and additionally accessories as well

as beauty care products. Brands included are Jocasi, Nero Cap and Bell.

Baby Wear designs are divided into boys and girls section and included more general

basics wear, next to a special occasion wear as well as accessories. We present an

extensive range of kids wear that are manufactured using different fabrics. 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.

Womens wear designs include:

Casual wear - T-shirts, Shirts, Tops, Jackets, Sweaters, Cardigans ,Jeans,

Shorts, Skirts and Dresses, Parkas

Formal wear & Office Wear - Shirts, Formal Jackets, Trousers and Evening

wear dresses, Skirts

Sports Wear - Sweat T-shirts, Jackets, Trousers and Shorts

Accessories Anti stretch creams, Scent oils, Body creams

Nature of Two Precious Product Variety

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We want our consumers to perceive our merchandise through a unique set of

attributes we are offering (fabrics, cuts, colours). The Unique Value Proposition (UVP)

of an apparel item is governed by visual and other sensation (Appendix 5).

These subjective sensations will be captured through objective parameters we offer:

design, comfort and handle. Each of these objective parameters is influenced byvarious material & process characteristics in the upstream direction of apparel chain.

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

Material. We are choosing the best quality cotton, silk, wool, cotton/polyester blends,

fleece, cashmere and viscose. Our main attractiveness is introduction of organic

cotton in all of our baby garments.

Cut. We are offering the clothing cuts that are suitable for all the shapes to enhance

the beauty of motherhood. Baby section cuts are made to be comfortable and slightly

loose to ensure movement freedom.

Embroidery. Our boutique stock will be handmade embroidered. All of our

merchandise is made with attention to details.

Layout and Design Planning

We strive to make Two-precious a place that feels comfortable, warm and welcoming

to our customers and are planning to achieve this by the chosen color scheme, its

layout design and atmosphere. Furthermore we are aiming to create an environment

that positively influences the customers purchase behavior and their perception,

attitude and image of Two Precious.

Regarding the physical elements of the environment as layout, the store will be on one

level with 1,000 square feet to create enough space for customers to easily move

around the shop with prams. The ceilings will be low in order to induce better focus

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and attention to detail with the floor being carpeted to create a comfortable feeling

(Appendix 6).

The windows will be a major communication tool to create a good first impression and

attract potential customers attention. The windows will be big to let the day light flow

into the shop with the display being uncluttered, clean and simple to give the shop a

more professional look.

In terms of fixtures and fittings, the store will make use of freestanding fixtures,

Windows, Walls and Point-of-sale (POS) displays/areas. Examples of fixtures are

Straight Rack: this is a long pipe suspended with supports to the floor or attached to a

wall. Gondola: A large base with a vertical spine or wall fitted with sockets or notches

into which a variety of shelves, peg hooks, bins, baskets and other hardware can be

inserted, Four-way Fixture: This is two crossbars that sit perpendicular to each other

on a pedestal and Round Rack round fixture that sits on pedestal.

For the purpose of the store layout and design, Tables, Gondola and glass shelving

will be used to display and exhibit the products in the store. In addition, the store will

have mannequins displayed in the window and on a table in the middle of the store.

Bins will be put at designated locations to allow buyers to dispose of waste and to

prevent them from spilling liquid and food on the products.

The premises will have two toilets, one will be for the staff and will be located close to

the store room, and the other toilet will have a nappy changing facility in it which will

be located close to the changing rooms and will be for the customers.

In terms of Psychological elements the desired ambience will be created by making

use of lightening and colour.

The walls of the shop will be Beige to induce a feeling of warmth and comfort. (Santa

Rosa Family and Consumer Sciences Newsletter, Vol 1 Issue 8, 2003, October).

Items will be displayed in repeated shape and colour, to create a sense of harmony.

Lighting as well as colour has also been chosen to create a relaxing atmosphere, to

make customers more comfortable about making purchases by allowing them to

examine the merchandise probably.

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http://www.helium.com/items/1047611-the-importance-of-a-retail-stores-design-and-atmospherehttp://www.helium.com/items/1047611-the-importance-of-a-retail-stores-design-and-atmosphere


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MANAGER 9:15-

18:00

9:15-

18:00

9:15-

18:00

9:15-

18:00

9:15-

18:00

40

ASSISTANT

MANAGER

9:15-

18:00

9:15-

18:00

9:15-

18:00

9:15-

18:00

10:45-

17:00

40

SALES

ADVISER

FT

9:15-

18:00

9:15-

18:00

9:15-

18:00

24

SALES

ADVISER

Part Time

9:15-

18:00

10:45-

17:00

14

SALES

ADVISER

PT

12:00-16:00 12:00-

16:00

12:00-

16:00

12

SALES

ADVISER

PT

12:00-

16:00

12:00-

16:00

12:00-

16:00

12

Total 142/40=

3.55

Weekly opening hours;

Store Opening Hours Open Close

Monday - Saturday 09:30 18:00

Sunday 11:00 17:00

Level of personal service

Meeting our customers expectations matter most to us and in making this happen, we

will be showing more care to the customers and insure our product and services are to

the best standards thus satisfying them and giving them a positive atmosphere in our

store.

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Internal facilities: There will be no use of CCTV on the premises as the store will be

set as a boutique, the staffs will be very attentive and will monitor the clothing taking

into the changing rooms and what the customers are packing into their bags and

buggies. Customer experience is one of the main goals of our boutique. Our fully

trained staff will ensure that the customers enjoy their time in the shop, return againand be a source of direct advertisement among their friends.

Creation of a comfortable atmosphere in our boutique is on the top of our agenda that

is why we will always work on excellent customer service and a child friendly

environment. Furthermore our boutique design and store layout give enough space for

pushchairs and we are keeping a simple layout where all our products are visible.

Personal selling: The staff on site will make sure that all customers are attended to atthe point of entry making them feel wanted and welcomed to the store, the customers

will be offered helped while trying on their clothing if required and will be offered

alternatives and add-ons. Our well trained staffs will be well informed about quality,

fabrics and sizes of our merchandise and will be able to offer help and advice to our

clients.

For us it is crucial that we provide a positive and comfortable experience, and make

sure that all the small but important processes are executed such as maintaining a

clean shop, price tags attached to the items, fresh flowers and replenishing stock.

Along with a clean and tidy shop, our staff will be appropriately dressed in smart,

professional, work wear: black trousers/ skirt/ dresses.

Payment and refund and exchange policy: credit cards such as American express,

Visa and MasterCard will be accepted in our store. Our refund policy will be to offer a

refund for clothing that is unworn, unwashed and with the purchased price tag within

28days of buying with the original receipt.

Profit and Loss Account

The profit and loss account of Two Precious will show the opening stock among many.

It will show how the company operates from month to month with the emphasis on the

percentage paid on National insurance, Tax (20%) and the amount each staff will be

paid per hour to what they get monthly and yearly. The store will open with a capital or

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starting cost of 150,000Pounds. An analysis of how the opening cost will be

appropriated will be shown below:

Cost rent: 3583.00 per month

Cost of Human Resources:

Manager: 25.000 per annual

Assistant Manager: 22.000 per annual

Sales Assistant (12): 5.040 per hour

Sales Assistant (14): 5.880 per hour

Cost of inventory: 10.000 every quarter

Total Cost per month: 77.933 start-up cost

The salary paid at all level will be reasonable low in the first year so as to achieve

break even. We will in the future increase salaries according to improve the

employees work and in- work relationship (Cipd 2011).

Position

Salary per

annum

Hourly

wage

Manager 25,000 n/a

Assistant Manager 22,000 7.00

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Sales Adviser (FT) 5.880 7.00

Sales Adviser (PT) 5,040 7.00

Sale Adviser (PT) 5,040 7.00

Sale Adviser (PT) 5,040 7.00

Total 68,000

Advertising: This will consist of using news papers and posters and in-store

magazines to increase our brand awareness. After this, we will rely on words of mouth

as the sole source of advertisement for the store; this will relatively reduce our cost in

the long run.

Shipping: This will include the cost of getting the merchandise to the store and also

sending old clothing back.

Insurance: The store will be insured against fire, flood and property damage. The cost

will be 750 pounds per calendar month.

Rent: having checked the amount shops and store places are rented for, we have

decided to go for a nice location with a relative amount of rent; we will be paying

approximately 3,600pounds for the location of our choice as it is close to the highstreet and other amenities. All the details are included in Cash flow (Appendix 6).

Appendix:Appendix 1: Two Precious competitors in Blackheath area

Items Competitors

Dior Po

larn

O.Pyret

Pumpkin

Patch

H&Mand

ZARA

Gap

The

Little

Mamas

&Papas

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Appendix 2: Merchandise Categories (and calculated linear meter to each of the

items)

Appendix 3: Women product assortment

Categories Colors Sizes

T-shirts/ Tops Red, Blue, Green, Yellow, Pink, White,

Black

S-4XL

Shirts White, Black, Grey, Navy Blue, Pink,

Green

S-4XL

Jackets/Parkas Grey, Black, White, Brown, Red S-4XL

Sweaters &

cardigans

Red, Blue, Pink, Magenta, Grey, Black S-4XL

Shorts/ Trousers White, Blue, Red, Black, Denim S-4XL

Skirts Black, Red, Pink, Green, White S-4XL

Dresses Blue, White, Red, Black, Cream S-4XL

Jeans Shades of Blue 26-44

Shirts Shades of Blue, White, Black 26-44

Formal Jackets Blue, Grey, Brown, White, Black, Beige S-4XL

Trousers Blue, Grey, Brown, White, Black, Beige 26-44

Evening Wear

Dresses

Black, Blue, Red, White, Brown, Silver,

Violet, Crimson, Onion Pink

S-4XL

Party Dresses Silver, Gold, Grey, Black S-4XL

Sweat T-shirts & Red, Green, Blue, White, Black, Brown, S-4XL

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M e r c h a n d i s e Categories(42.3 linear meters, lm)

M a t e r n i t y w e a r 7 0 % lm B a b y w e a r 3 0 % lm

1. Dresses, skirts14% 5.9

casual

professional

evening

2. Shirts, T-shirts, Tops,10% 4.2

Long sleeves

Short sleeves

3. Trousers, Jeans, Shorts13% 5.5

4. Sweaters, Cardigans12% 5

5. Hosiery, Sleepwear 8% 3.5

6. Lingerie, Swimsuits5% 2

7. Jackets, Parkas2% 0.8

8. Beauty, Care products6% 2.5

1. Body, Pram, Sleep suits 6% 2.5

Long sleeves

Short sleeves

2. T-shirts, Tops, Tunics 6% 2.5

Long sleeves

Short sleeves

3. Vests, Cardigans, Jackets 4% 1.6

4. Hats, Bibs 2% 0.8

5. Shoes, Socks, Tights, 2% 0.8

6. Leggings, Trousers, Shorts 4% 1.6

7. Dresses, Skirts 4% 1.6

8. Beauty and care products 2% 0.8


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Jackets Navy Blue,

Trousers Black, White, Navy Blue, Grey, Pink,

Red

S-4XL

Shorts Black, Red, Brown, White, Navy Blue S-4XL

Anti stretch mark

creams, Scent oils,

Body creams

Vanilla, Coconut Butter scents 300-500 ml

Appendix 4: Babies product assortment

Categories Colors Sizes

Tops/T shirts/ Tunics Pink, White, Red 0-18 months

Jackets/Vest/

Cardigans

Yellow, Brown, Green 0-18 months

Skirts/ Dresses Pink, Yellow, Blue, Silver 0-18 months

Leggings/ Trousers/

Shorts

Beige, Blue, White, Pink 0-18 months

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Body/ Pram/Sleep Suits Beige, white, Blue, White, Yellow0-14 months

Shoes/Socks/Tights Pink, Yellow, Blue, Silver 0-18 months

Hats/Bibs Beige, Blue, White, Pink 0-18 months

Body, face oils/ Anti

rash creams

Scent free 200-400 ml


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Appendix 5

Appendix 6: Layout and disign

Appendix 7: Cash flow

Net Sales 150,000

Costs of goods sold 90,000

Gross Profit 250,000

Operating expenses

Salaries 68,000

Advertising 10,000

Utilities 3,000

Shipping 1,000

Insurance 7,500

Maintenance 5,000

Rent 43,000

Total Costs 214,000

Net Profit before

taxes 36,000

Taxes (8%) -384

Net Profit after taxes 35,616

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