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Green Design – The Market
Demand for name-brand apparel is on the rise at department stores. Several of the top design firms, such as Ralph Lauren, Tommy Hilfiger, and Nautica Apparel are stepping up efforts to offer active sportswear collections for both men and women. In addition, the current trend in business of “dressing-down” on Fridays has influenced numerous apparel companies to increase product offerings.
Name brand products are selling better than generic and commodity items. However, as branded items proliferate, a vacuum is created for quality non-branded products at lower prices. The industry is cyclical in nature, with interest in branded products swinging up and down typically lasting 18 to 24 months. Anticipating industry swings and positioning Green Design Group LLC to take advantage of the next swing to private-label manufactured goods will be an advantage.
The fastest growing segment of the active sportswear market is women’s apparel products. This follows closely on the heels of a huge surge in women’s footwear sales in the of Fall 1996. Industry manufacturers are in a rush to design and develop comprehensive marketing and apparel programs to meet this growing demand.
DEFINITION OF THE MARKET
Inherent advantages exist for a client to use Green Design Group LLC as a design and production resource. Advantages of outsourcing are common to all groups of target customers. The opportunity and flexibility to move quickly and not assume costly assets such as personnel and equipment is appealing in this fast paced industry.
Additional advantages exist for the client company in having one resource handle all stages of development, especially if revenues are tied to product performance. Realistic product forecasting can be set in respect to developmental time-lines and manufacturing feasibility. Products can be designed and developed combining marketing goals with current trends. Standards in sizing and quality can be established for the client and miscommunications can be reduced or eliminated.
For The Company advantages exist in economies of scale. One client can not support the expense, time and attention required for product development and production. With each additional client the cost per client decreases.
Product pricing is extremely competitive in the retail apparel industry. Marketing companies strive to achieve 50% gross margins. The majority of manufacturing is contracted to suppliers in Asia, Central America and The Caribbean. The FOB (Freight-On-Board/cost of manufacturing) price is generally one-fifth of the opening retail price. The following charts illustrate a traditional industry mark-up structure for a $20.00 FOB apparel garment. Variations of this theme exist according to brand name and channels of distribution. (See Appendix B for a comparison chart.)
|Level of Mark-Up||Cost Along Value Chain|
|Manufacturer’s FOB price||$20.00|
|Landed Duty Paid (includes shipping, insurance, import duties)||$25.00|
|Wholesale Cost (to retailer)||$50.00 (50% gross margins)|
|Retail Cost (to end user)||$100.00 (50% “key-stone” mark-up)|
|Green Design Group, LLC|
|Table of Contents||Appendices|
|1. Executive Summary
3. Product & Services
5. Sales & Marketing
8. Historical Financials
9. Projected Financials
Projected Income Statements
Projected Cash Flow Statements
Projected 4 Year Income Statement
Resume & Business
|© Green Design Group LLC. April 1,1997.|