Harrington Case Analysis Issue Stagnant sales performance has caused Harrington Collection to explore new avenues for improved performance, including the launch of a new active-wear line. Recognizing an emerging trend of low price and rapid style turnover in the women’s apparel market, along with tremendous growth in the active-wear segment, Harrington needs to work strategically to capture this profitable market opportunity. After careful analysis, it was determined that Harrington should implement a new active-wear line. Financial Analysis While doing the financial analysis it is important to calculate the unit price first. Using the wholesale price rather than the retail price, the calculated unit price is $95. Next, we …show more content…
In addition, by outsourcing the production in Mexico, it can not only decrease costs, but also provide the possibility to respond more swiftly to changes in demand. With this in mind, it is strongly suggested that Harrington launches a new active-wear line.
Appendix A Start Up Costs: | | | Start-up Costs (Pants Plant) | $ 1,200,000 | | Start-up Costs (Hoodie and Tee-shirt Plant) | $ 2,500,000 | | Equipment (Pants Plant) | $ 2,000,000 | | Equipment (Hoodie and Tee-shirt Plant) | $ 2,500,000 | | Launch-PR, Advertising | $ 2,000,000 | | Fixtures for Company Stores | $ 2,500,000 | Total Start-up Costs | $ 12,700,000 | Annual Depreciated Start-up Costs | $ 2,540,000 | | | | Annual Ongoing Operating Costs-Fixed: | | | Overhead (Pants Plant) | $ 3,000,000 | | Overhead (Hoodie and Tee-shirt Plant) | $ 3,500,000 | | Rent (Pants Plant) | $ 500,000 | | Rent (Hoodie and Tee-shirt Plant) | $ 500,000 | | Management/Support | $ 1,000,000 | | Advertising | $ 3,000,000 | Total Fixed Operating Costs | $ 11,500,000 | | | Direct Variable Costs: | Hoodie | Tee-shirt | Pants | | Sew and press | $ 3.25 | $ 2.00 | $ 2.85 | | Cut | $ 1.15 | $ 0.40 | $ 0.70 | | Other variable labor | $ 3.20 | $ 2.40 | $ 3.05 | | Fabric | $ 9.10 | $ 2.20 | $ 7.50 | | Findings | $ 3.85 | $ 0.50 | $ 2.30 | Total Variable Cost | $ 20.55 | $ 7.50 | $ 16.40 | | | | | Direct variable costs translated
1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.
Over the last 10 years’ gym memberships within the United States have increased from 41.3 million to 54.1 million. The biggest trend over the last few years is becoming fit, more and more each day people are finding ways to live fit and healthier lifestyles. From eating the right nutritional foods, working out and people just wanting to follow the latest and greatest trends. The increase in gym memberships and the amount of people working out leads to the increase in athletic attire. For this exact reason athleisure wear was born, it is the newest fashion trends were people wear athletic clothing regardless if they intend go to the gym or not that day. People are wearing it to the office, shopping, to run errands and other social events. Athleisure wear consist of articles of clothing such as spandex, leggings, yoga pants, sports bras and fashionable sweats. Over the last 10 years an increase in athleisure wear has spread at a rapid rate globally, particularly in the women’s fashion industry. Since 2013 the increase in athleisure wear apparel has grown by 14% and accounts for 18% of the total clothing retail market. With this trend still catching on, active wear is expected to continue to grow at an average rate of 3.3% annually. Due to this rapid increase in purchasing athleisure wear the apparel industry will continue to grow especially Nike because they are the market leaders in active sportswear. For that exact reason I believe that Nike is a
The athletic apparel industry has shown a large increase in popularity. Global sales of sport clothing have increased from 146.1 billion US dollars in 2007 to 162 billion US dollars in 2012(Global Participative Sport as Consumption). Particularly in the United States, sales of sport apparel have increased by 7% from 2013 to 2014 (Wingus). There has been a large trend in healthy living, as “activewear accounted for $33.7 billion in sales and made up 16 percent of the apparel market” (Wingus). The industry is booming, as sportswear, specifically yoga pants, has transformed into people’s daily apparel. (Refer to Appendix Table 1) Huffington post noted, “people are wearing trendy workout clothes all day, every
enter into baseball cleats market. Because of the danger, and risk, involved with the current
First research objective was to determine whether it is profitable for J.Crew to shift their brand focus to a ‘sustainablity’ business model instead of resuming their position in the fast fashion industry.
The product cost per unit under absorption costing is $15.00 and under variable costing are 10.60.
As two separate companies, they have established a different approach towards the market, however with the right research and evaluation, Rousteing and The Bay have beautifully managed to make both sides collide with success. They have managed to design ready-to-wear for different target groups, for example, women’s outerwear shoes, men’s business attire, jewellery, as well as the latest Balmain Army collection inspired by Rousteing himself. They have made the price range of the products in the listed categories reasonable and affordable for premium quality clothing, accessories and footwear for both genders that are quality and price conscious. Also, in Toronto and Vancouver, The Bay has launched a showroom called “The Room” that features some of Balmain’s hottest but not-so-retail-friendly designer clothing from Rousteing’s runway collection. With the stratospheric prices, these items are obviously in display for the more sophisticated young female adults that completely disregard the price tag when they see something they genuinely adore. However, this was also an intelligent way for Rousteing and The Bay to promote their collection by giving the people of middle-class families to feel and take a closer glimpse of some high-quality handiwork. This makes the women of the demographic target market want to know what else Balmain has in store at The Bay, that is of similar quality, but with a more affordable
= Unit Selling Price – Unit Variable Cost = $9.00 – ($1.25 + $0.35 + $1.00) = $6.40
The fitness clothing market is growing rapidly. Customers’ new found inclination towards living healthier lifestyles has produced an increase in participation of people into various physical activities. Hence, the high levels of competition in the fitness and
Of the hundreds of named brand clothing that form part of the retail and fashion industry I chose to compare, for my analysis, Abercrombie & Fitch, Forever 21, American Eagle, and H&M. These stores are prominent, well-known for selling apparel, shoes, and accessories by the means of offering sales and promotions to their customers. This is a clever strategy for attracting customers, allowing them to believe that they bought goods at affordable, convenient prices – and not to mention the prestigious name prescribed to the clothing brands. Using keyhole.co as my main source, I obtained relevant and valuable information regarding the status of these brands. My intentions were to compare a period of 14 days, however, due to the limited access that I received from my free trial, the program only allowed me to see fewer of the dates than I anticipated. I want to take this opportunity and mention ahead of time that due to the various and distinctive products that are sold from these stores, when looking for the “spending capacity” I decided to focus on shirts/ jeans for men and women and compare the prices among them since each of these retailers carry those items and as a way to make this report easier to contrast and comprehend. Also, when approaching the section of “setting”, I screen-shotted some of the images on Instagram and made them into a collage to separate the type of clothes and trends that each of these brands sell currently. In the following modules
Crew’s biggest enemy is still itself. According to CEO, Mickey Drexler, “[We] filled its stores with clothes that women really just weren’t into” (J. Crew). J. Crew markets an iconic “quintessentially American aesthetic” at an affordable price (Sacks). But, since the economic downturn of 2008, much of the targeted market has been flocking to cheaper, foreign retailers including H&M and Zara. Drexler admitted in 2015, that he believes his designers, “meddled too much with its classic styles and offered unappealing silhouettes and fits” (Brinded). As a result, J. Crew has had to change its product. With regards to design, J. Crew is attempting to return to the preppy basics it was once known for. In addition, many complained clothes and shoes that were once made with high quality and durable materials are now not lasting nearly as long as customers are used to. Also, J. Crew is altering what products it sells. Last month, the company announced that they are partnering with New Balance to create an active wear line, a move that seems obvious given the success of countless other active wear brands including Lululemon, Adidas, Nike, and Athleta (Kosman). This week, J. Crew announced that it is discontinuing its bridal line due to lack of
With such high levels of product differentiation between products and an already concetrated industry, it would be difficult for Harrington Collection's to stand out and secure market share for the new active-wear line, without signifacnt costs towards an effective advertising and marketing campaign. Harrington would most likely need to build on the existing customer base and/or appeal to consumers in an untargeted market space. For example high-end quality active sports wear.
Although the market for separates is certainly viable given promising growth in test markets, it is not a market that makes sense for Hart, Schaffner & Marx (HSM) to compete in. The trend certainly shows a divergence in how some customers view their needs with regards to semi-formal clothing, but the firm runs the risk of diluting not only the perceived quality of its clothing, but also alienating its current client base that is partial to the experience HSM offers in its stores. This experience includes personalized expertise on new fashions, custom tailoring, and the status associated with purchasing and wearing the company’s clothes.
Statement of Problem: In this case, it focuses on the company Advanced Materials, Incorperated. According to the case the president and CFO of the company Will Mortensen brought together the sales and marketing teams in order to consider initiatives for Nundies. The product Nundies According to the case is “A single-use disposable panty that sticks to the inseam of women’s pants […] (p. 579)”. This article of clothing can be worn with things such as athletic wear, leggings, and jeans among other things. Nundies first came onto the scene for consumers in 2006 and according to the case “by December 2007, the product was available in 232 women’s boutique and specialty shops, […] department stores, […] and on numerous store websites” (p. 579). This product was made readily available for consumers to use and this helped the product to become popular and it was available in numerous states. Overtime, sales for this product started to decline and as a result the product was pulled from store inventories. According to the case “[…] the store repurchase rate had not met expectations. About 6 percent of stores had placed orders for additional units beyond the initial purchase” (p.579). The problem that this company is facing regarding this product is that they are trying to figure out the market potential for the product and they are also trying to figure out how to market, using different strategies so that the product so that sales can increase.
Johnson’s Shoe Emporium & Repair Shop (“Johnson’s”) is a high-end retail shoe store for men. The store will sell dressy and casual shoes, ankle boots and other accessories for men. The purpose of Johnson’s is to sell non-athletic shoes of the highest quality so that