Description
various parameters involved in retail costing.
FRESH FASHIONS
Retail Costing
2010
Page | 1
T A PAI MANAGEMENT INSTITUTE, MANIPAL
Our store is on the ground floor and spread over 18,000 sq. ft. This new fashion store in Nashik will provide great shopping options to customers in apparel (men, ladies, kids & infants), watches and sunglasses, perfume and cosmetics, footwear, sports apparel, lingerie, fashion accessories and much more.
The store would be positioning itself to create a whole new shopping experience for the people of Nashik, with the opening of the first lifestyle store in the city. This store will provide customers a large range of brands in categories like apparels for men, women and kids; jewellery, watches, sunglasses, footwear and home- furnishings. There is a lot to choose from for the entire family and the store aims to become the preferred fashion destination for the people of Nashik
The apparel for men's wear start at Rs. 219/-, women's wear start at Rs. 199/- and kids- wear start at Rs. 149/-. Watches brand available Tommy Hilfiger, Citizen, Titan, Fastrack, Timex, Esprit, Giordano and more. Trendy sunglasses from Allen Solly, Polaroid, Van Heusen, Diesel,
Carrera, Louis Phillip, Peter England, Spykar and many more. This store also offers a wide range of perfumes and cosmetics from various brands.
The brands attribute is Fresh Fashion, with its focus on 'fresh look, feel and attitude' offers, trendy and hip collections that are in sync with the hopes and aspirations of discerning young and 'young-at-heart' consumers. The brand stands out as a fashion trendsetter, on the lines of how fashion is followed internationally. This 'fresh fashion' destination allows customers to shop for the latest in fashion apparel and accessories throughout the year in an attractive and visually stimulating ambience. The brand is already well established and has a presence in 24 cities across India including - Mumbai, Delhi, Noida, Gurgaon, Kolkata, Chennai, Bangalore, Pune, Ahmedabad, Hyderabad, Baroda, Lucknow, Kanpur.
Page | 2
OVERALL SALES CONTRIBUTION OF VARIOUS CATEGORIES
Serial no CATEGORY Children’s 1 2 3 4 wear Toys Home linen Ladies Ethnic Ladies 5 6 7 8 9 10 11 12 13 Western Men’s Formal Men’s Casuals Footwear Books Jewellery Cosmetics Sunglasses Watches Total
Projected category wise sale (in Rs)
1829132 282452 418352 1464877
1481387 1503076 1353298 688305 77023 244813 68743 95071 209129 9715658
Page | 3
2% 1% 1% 7% 1% 3%
TOTAL SALES
Childrenwear Toys Home linen Ladies Ethnic Ladies Western
14% 15%
19% 15%
3% 4%
Mens Formal Mens Casuals Footwear Books
15%
Fashion Jewellery Cosmetics Sunglasses Watches
We have projected sales of 97 lakhs in the first month of operations. Here the major contributors are kids wear followed by ladies western and men casuals.
MARGIN PERCENTAGE CONTRIBUTION BY VARIOUS DEPTs
CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Mens Formal Mens Casuals Footwear Books
MARGINS 39% 29% 32% 36% 38% 40% 38% 28% 14%
Page | 4
Fashion Jewellery Cosmetics Sunglasses Watches
38% 30% 28% 30%
MARGINS
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
In most of the categories we have assumed the margins to be between 30% to 40% and 14% for books. These margins are considered based on industry standard currently prevailing in India.
OVERALL MARGIN AMOUNT CONTRIBUTION OF VARIOUS DEPTS
Margin CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies amt 713361 81911 133873 527356 562927
Page | 5
Western Mens Formal Mens Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches 93029 20623 26620 62739 601231 514253 192725 10783
Margin amt 800000 700000 600000 500000 400000 300000 200000 100000 0 Ladies Ethnic Childrenwear Home linen Toys
Margin amt
Ladies…
Footwear
Fashion…
Mens Formal
Mens Casuals
Sunglasses
Cosmetics
Watches
Books
Page | 6
AREA OCCUPIED BY VARIOUS DEPARTMENTS
AREA( sq ft S.no 1 2 3 4 5 6 7 8 9 CATEGORY Children wear Toys Home linen Ladies Ethnic ) 1620 672 865 2600
Ladies Western 2313 Men Formal Men Casuals Footwear Books Fashion 3509 3697 1646 378
10 11 12 13 TOTAL
Jewellery Cosmetics Sunglasses Watches
140 144 192 144 17920
Page | 7
AREA
Childrenwear Toys
1% 1% 1% 2% 9%
1% 9% 4%
Home linen Ladies Ethnic Ladies Western
5%
Mens Formal Mens Casuals Footwear
21%
19% 13%
14%
Books Fashion Jewellery Cosmetics Sunglasses Watches
OVERALL
SALES
PER
SQUARE
FEET
CONTRIBUTION
BY
VARIOUS
CATEGORIES CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Men Formal Men Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches SALE p/sq ft 1129 420 484 563 640 428 366 418 204 1749 477 495 1452
Page | 8
Childrenwear Toys Home linen Ladies Ethnic Ladies Western
6% 5%
16% 20%
13%
5%
6% 6%
Mens Formal Mens Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches
2% 5% 4% 5%
7%
OVERALL
MARGIN
PER
SQUARE
FEET
CONTRIBUTION
BY
VARIOUS
CATEGORIES
Margin CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Men Formal Men Casuals Footwear Books Fashion Jewellery 664
Page | 9
p/sq ft 440 122 155 203
243 171 139 117 29
Cosmetics Sunglasses Watches
143 139 436
Margin per sq ft
700 600 500 400 300 200 100 0
Margin p/sq ft
Page | 10
A BRIEF SUMMARY
MARGIN S.no CATEGORY 1 2 3 4 Children wear Toys Home linen Ladies Ethnic Ladies 5 6 7 8 9 Western Mens Formal Mens Casuals Footwear Books Fashion 10 11 12 13 Jewellery Cosmetics Sunglasses Watches Total 244813 68743 95071 209129 9715658 93029 20623 26620 62739 664 143 139 436 1481387 1503076 1353298 688305 77023 562927 601231 514253 192725 10783 243 171 139 117 29 Projected Sale Margin 1829132 282452 418352 1464877 713361 81911 133873 527356 p/sq ft 440 122 155 203
SALE p/sq ft 1129 420 484 563 MARGINS 39% 29% 32% 36%
AREA( sq ft ) 1620 672 865 2600
640 428 366 418 204
38% 40% 38% 28% 14%
2313 3509 3697 1646 378
1749 477 495 1452 542
38% 30% 28% 30% 32%
140 144 192 144 17920
3109011 173
Projected S.no CATEGORY 1 2 3 4 Children wear Toys Home linen Ladies Ethnic Ladies 5 6 Western Men Formal 15% 15% 18% 19% Sale 19% 3% 4% 15%
AREA( sq Margin Amt ft ) 23% 3% 4% 17% 9% 4% 5% 15%
13% 20%
Page | 11
7 8 9
Men Casuals Footwear Books Fashion
14% 7% 1%
17% 6% 0%
21% 9% 2%
10 11 12 13
Jewellery Cosmetics Sunglasses Watches Total
3% 1% 1% 2% 100%
3% 1% 1% 2% 100%
1% 1% 1% 1% 100%
Brand VS Private label Sales – Margin mix S . CAT n EGO o RY Child ren 1 wear M ar gi n 71 1829 33 132 61 81 2824 91 Toys 52 1 13 Home 4183 38 linen 52 73 Ladie s 52 Ethni 1464 73 c 877 56 Ladie s 56 West 1481 29 ern 387 27 Men 1503 60 Form 076 12 Proj ecte d Sale Over allMA RGIN S priva te label sales bra nd sale s 50 % 80 % 50 % Pvt labe l sales Bra nd sale s Pvt label margi n amt Bran d margi n amt Bran d mar gins Pvt label marg ins
39%
50%
9145 914 66 566 5649 225 0 962 2091 209 76 176
30180 411555 7
33%
45%
2
29%
20%
19772
62140
28%
35%
3
32%
50%
94129
39743
19%
45%
4
36%
50%
50 %
7324 732 39 439
19775 329597 8
27%
45%
5 6
38% 40%
50% 50%
50 % 50 %
7406 94 7515 38
740 694 751 538
22961 333312 5 26303 338192 8
31% 35%
45% 45%
Page | 12
7
8
9
1 0 1 1 1 2 1 3
al 31 Men 51 Casua 1353 42 ls 298 53 19 Foot 6883 27 wear 05 25 10 Book 7702 78 s 3 3 Fashi on 93 Jewel 2448 02 lery 13 9 20 Cosm 6874 62 etics 3 3 26 Sungl 9507 62 asses 1 0 62 Watc 2091 73 hes 29 9 35 41 9715 43 Total 658 1
38%
50%
50 % 80 % 100 %
6766 676 49 649 1376 550 61 644 770 23
20976 304492 1 13077 8
31%
45%
28%
20%
61947
24%
45%
14%
0%
0
0
10783
14%
0%
38%
0%
100 % 100 % 80 % 100 %
0
244 813 687 43
0
93029
38%
0%
30%
0%
0
0
20623
30%
0%
28%
20%
1901 760 4 57 209 129
6655
19965
26%
35%
30%
0%
0
0
62739
30%
0%
36%
547 4238 743 227 2
189965 16417 2 79
KEY ASSUMPTIONS MADE WHILE DETERMINING MERCHANDISE MIX
1) The store will be launched in October which is just prior to the peak season in India with the coming of Diwali and the wedding season to follow 2) The store will sell both premium and mass products as it is located in a tier two city 3) The store has been modeled along the lines of Pantaloons Nashik
Page | 13
4) As mentioned above due to the season to follow jewellery and cosmetics would be considered an important segment 5) The apparel prices would range from Rs. 149 (accessories) to Rs.8000 (suits and blazers) 6) Average price point for the store will range from Rs. 650 to 750 7) Avg ticket size Rs. 2000 ( due to value producing items like jewellery and ethnic wear) 8) Avg daily walk ins 400 9) Conversion rate 40 % 10) The store has a factory set up in Tarapur (not fully operational) and has private labels in all apparel categories as well as sun glasses (recently acquired brand) and footwear (recently acquired)
Cost structure (75 lakhs) Sr No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Cost Head Rent Salary Inventory Taxes Depreciation Electricity Insurance Discounts Pilferage Advertising Sales Promotion Over draft interest Maintenance Sales force training IT costs Miscellaneous 16 17 expenses) TOTAL expenses (all other 170024 5278392
Page | 14
Amount 900000 437205 388626 388626 89286 194313 291470 1165879 242891 170024 170024 75000 170024 50000 375000
Cost Structure Assumptions 1) Rent calculated @ Rs. 50 per sq ft / month i.e. Rs 50 * 18000 sq ft 2) Salary taken as 10 % of Revenue (9715658 Rs.) 3) Inventory holding (logistics and warehousing included) taken @ 4% of sales 4) Taxes @ 4% of sales 5) Depreciation taken as monthly deduction of seven year useful life of initial outlay of Rs. 7500000 6) Electricity taken at 2 % 7) Insurance @ 3 % 8) Discounts (mark down ) @ 12 % 9) Pilferage @ 2.5 % 10) Advertising @ 1.75 % 11) Sales Promotion @ 1.75 % 12) OD Interest @ 1% of initial outlay cost of Rs. 7500000 ( assuming that entire amount is OD 13) Maintenance @ 1.75% 14) Sales force training @ Rs. 50,000 ( assuming workshop by trainer to train new staff – fee paid duly) 15) IT costs @ 5 % of initial outlay of Rs 7500000 16) Miscellaneous expenses @ 1.75 %
Page | 15
doc_685572684.docx
various parameters involved in retail costing.
FRESH FASHIONS
Retail Costing
2010
Page | 1
T A PAI MANAGEMENT INSTITUTE, MANIPAL
Our store is on the ground floor and spread over 18,000 sq. ft. This new fashion store in Nashik will provide great shopping options to customers in apparel (men, ladies, kids & infants), watches and sunglasses, perfume and cosmetics, footwear, sports apparel, lingerie, fashion accessories and much more.
The store would be positioning itself to create a whole new shopping experience for the people of Nashik, with the opening of the first lifestyle store in the city. This store will provide customers a large range of brands in categories like apparels for men, women and kids; jewellery, watches, sunglasses, footwear and home- furnishings. There is a lot to choose from for the entire family and the store aims to become the preferred fashion destination for the people of Nashik
The apparel for men's wear start at Rs. 219/-, women's wear start at Rs. 199/- and kids- wear start at Rs. 149/-. Watches brand available Tommy Hilfiger, Citizen, Titan, Fastrack, Timex, Esprit, Giordano and more. Trendy sunglasses from Allen Solly, Polaroid, Van Heusen, Diesel,
Carrera, Louis Phillip, Peter England, Spykar and many more. This store also offers a wide range of perfumes and cosmetics from various brands.
The brands attribute is Fresh Fashion, with its focus on 'fresh look, feel and attitude' offers, trendy and hip collections that are in sync with the hopes and aspirations of discerning young and 'young-at-heart' consumers. The brand stands out as a fashion trendsetter, on the lines of how fashion is followed internationally. This 'fresh fashion' destination allows customers to shop for the latest in fashion apparel and accessories throughout the year in an attractive and visually stimulating ambience. The brand is already well established and has a presence in 24 cities across India including - Mumbai, Delhi, Noida, Gurgaon, Kolkata, Chennai, Bangalore, Pune, Ahmedabad, Hyderabad, Baroda, Lucknow, Kanpur.
Page | 2
OVERALL SALES CONTRIBUTION OF VARIOUS CATEGORIES
Serial no CATEGORY Children’s 1 2 3 4 wear Toys Home linen Ladies Ethnic Ladies 5 6 7 8 9 10 11 12 13 Western Men’s Formal Men’s Casuals Footwear Books Jewellery Cosmetics Sunglasses Watches Total
Projected category wise sale (in Rs)
1829132 282452 418352 1464877
1481387 1503076 1353298 688305 77023 244813 68743 95071 209129 9715658
Page | 3
2% 1% 1% 7% 1% 3%
TOTAL SALES
Childrenwear Toys Home linen Ladies Ethnic Ladies Western
14% 15%
19% 15%
3% 4%
Mens Formal Mens Casuals Footwear Books
15%
Fashion Jewellery Cosmetics Sunglasses Watches
We have projected sales of 97 lakhs in the first month of operations. Here the major contributors are kids wear followed by ladies western and men casuals.
MARGIN PERCENTAGE CONTRIBUTION BY VARIOUS DEPTs
CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Mens Formal Mens Casuals Footwear Books
MARGINS 39% 29% 32% 36% 38% 40% 38% 28% 14%
Page | 4
Fashion Jewellery Cosmetics Sunglasses Watches
38% 30% 28% 30%
MARGINS
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
In most of the categories we have assumed the margins to be between 30% to 40% and 14% for books. These margins are considered based on industry standard currently prevailing in India.
OVERALL MARGIN AMOUNT CONTRIBUTION OF VARIOUS DEPTS
Margin CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies amt 713361 81911 133873 527356 562927
Page | 5
Western Mens Formal Mens Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches 93029 20623 26620 62739 601231 514253 192725 10783
Margin amt 800000 700000 600000 500000 400000 300000 200000 100000 0 Ladies Ethnic Childrenwear Home linen Toys
Margin amt
Ladies…
Footwear
Fashion…
Mens Formal
Mens Casuals
Sunglasses
Cosmetics
Watches
Books
Page | 6
AREA OCCUPIED BY VARIOUS DEPARTMENTS
AREA( sq ft S.no 1 2 3 4 5 6 7 8 9 CATEGORY Children wear Toys Home linen Ladies Ethnic ) 1620 672 865 2600
Ladies Western 2313 Men Formal Men Casuals Footwear Books Fashion 3509 3697 1646 378
10 11 12 13 TOTAL
Jewellery Cosmetics Sunglasses Watches
140 144 192 144 17920
Page | 7
AREA
Childrenwear Toys
1% 1% 1% 2% 9%
1% 9% 4%
Home linen Ladies Ethnic Ladies Western
5%
Mens Formal Mens Casuals Footwear
21%
19% 13%
14%
Books Fashion Jewellery Cosmetics Sunglasses Watches
OVERALL
SALES
PER
SQUARE
FEET
CONTRIBUTION
BY
VARIOUS
CATEGORIES CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Men Formal Men Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches SALE p/sq ft 1129 420 484 563 640 428 366 418 204 1749 477 495 1452
Page | 8
Childrenwear Toys Home linen Ladies Ethnic Ladies Western
6% 5%
16% 20%
13%
5%
6% 6%
Mens Formal Mens Casuals Footwear Books Fashion Jewellery Cosmetics Sunglasses Watches
2% 5% 4% 5%
7%
OVERALL
MARGIN
PER
SQUARE
FEET
CONTRIBUTION
BY
VARIOUS
CATEGORIES
Margin CATEGORY Children wear Toys Home linen Ladies Ethnic Ladies Western Men Formal Men Casuals Footwear Books Fashion Jewellery 664
Page | 9
p/sq ft 440 122 155 203
243 171 139 117 29
Cosmetics Sunglasses Watches
143 139 436
Margin per sq ft
700 600 500 400 300 200 100 0
Margin p/sq ft
Page | 10
A BRIEF SUMMARY
MARGIN S.no CATEGORY 1 2 3 4 Children wear Toys Home linen Ladies Ethnic Ladies 5 6 7 8 9 Western Mens Formal Mens Casuals Footwear Books Fashion 10 11 12 13 Jewellery Cosmetics Sunglasses Watches Total 244813 68743 95071 209129 9715658 93029 20623 26620 62739 664 143 139 436 1481387 1503076 1353298 688305 77023 562927 601231 514253 192725 10783 243 171 139 117 29 Projected Sale Margin 1829132 282452 418352 1464877 713361 81911 133873 527356 p/sq ft 440 122 155 203
SALE p/sq ft 1129 420 484 563 MARGINS 39% 29% 32% 36%
AREA( sq ft ) 1620 672 865 2600
640 428 366 418 204
38% 40% 38% 28% 14%
2313 3509 3697 1646 378
1749 477 495 1452 542
38% 30% 28% 30% 32%
140 144 192 144 17920
3109011 173
Projected S.no CATEGORY 1 2 3 4 Children wear Toys Home linen Ladies Ethnic Ladies 5 6 Western Men Formal 15% 15% 18% 19% Sale 19% 3% 4% 15%
AREA( sq Margin Amt ft ) 23% 3% 4% 17% 9% 4% 5% 15%
13% 20%
Page | 11
7 8 9
Men Casuals Footwear Books Fashion
14% 7% 1%
17% 6% 0%
21% 9% 2%
10 11 12 13
Jewellery Cosmetics Sunglasses Watches Total
3% 1% 1% 2% 100%
3% 1% 1% 2% 100%
1% 1% 1% 1% 100%
Brand VS Private label Sales – Margin mix S . CAT n EGO o RY Child ren 1 wear M ar gi n 71 1829 33 132 61 81 2824 91 Toys 52 1 13 Home 4183 38 linen 52 73 Ladie s 52 Ethni 1464 73 c 877 56 Ladie s 56 West 1481 29 ern 387 27 Men 1503 60 Form 076 12 Proj ecte d Sale Over allMA RGIN S priva te label sales bra nd sale s 50 % 80 % 50 % Pvt labe l sales Bra nd sale s Pvt label margi n amt Bran d margi n amt Bran d mar gins Pvt label marg ins
39%
50%
9145 914 66 566 5649 225 0 962 2091 209 76 176
30180 411555 7
33%
45%
2
29%
20%
19772
62140
28%
35%
3
32%
50%
94129
39743
19%
45%
4
36%
50%
50 %
7324 732 39 439
19775 329597 8
27%
45%
5 6
38% 40%
50% 50%
50 % 50 %
7406 94 7515 38
740 694 751 538
22961 333312 5 26303 338192 8
31% 35%
45% 45%
Page | 12
7
8
9
1 0 1 1 1 2 1 3
al 31 Men 51 Casua 1353 42 ls 298 53 19 Foot 6883 27 wear 05 25 10 Book 7702 78 s 3 3 Fashi on 93 Jewel 2448 02 lery 13 9 20 Cosm 6874 62 etics 3 3 26 Sungl 9507 62 asses 1 0 62 Watc 2091 73 hes 29 9 35 41 9715 43 Total 658 1
38%
50%
50 % 80 % 100 %
6766 676 49 649 1376 550 61 644 770 23
20976 304492 1 13077 8
31%
45%
28%
20%
61947
24%
45%
14%
0%
0
0
10783
14%
0%
38%
0%
100 % 100 % 80 % 100 %
0
244 813 687 43
0
93029
38%
0%
30%
0%
0
0
20623
30%
0%
28%
20%
1901 760 4 57 209 129
6655
19965
26%
35%
30%
0%
0
0
62739
30%
0%
36%
547 4238 743 227 2
189965 16417 2 79
KEY ASSUMPTIONS MADE WHILE DETERMINING MERCHANDISE MIX
1) The store will be launched in October which is just prior to the peak season in India with the coming of Diwali and the wedding season to follow 2) The store will sell both premium and mass products as it is located in a tier two city 3) The store has been modeled along the lines of Pantaloons Nashik
Page | 13
4) As mentioned above due to the season to follow jewellery and cosmetics would be considered an important segment 5) The apparel prices would range from Rs. 149 (accessories) to Rs.8000 (suits and blazers) 6) Average price point for the store will range from Rs. 650 to 750 7) Avg ticket size Rs. 2000 ( due to value producing items like jewellery and ethnic wear) 8) Avg daily walk ins 400 9) Conversion rate 40 % 10) The store has a factory set up in Tarapur (not fully operational) and has private labels in all apparel categories as well as sun glasses (recently acquired brand) and footwear (recently acquired)
Cost structure (75 lakhs) Sr No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Cost Head Rent Salary Inventory Taxes Depreciation Electricity Insurance Discounts Pilferage Advertising Sales Promotion Over draft interest Maintenance Sales force training IT costs Miscellaneous 16 17 expenses) TOTAL expenses (all other 170024 5278392
Page | 14
Amount 900000 437205 388626 388626 89286 194313 291470 1165879 242891 170024 170024 75000 170024 50000 375000
Cost Structure Assumptions 1) Rent calculated @ Rs. 50 per sq ft / month i.e. Rs 50 * 18000 sq ft 2) Salary taken as 10 % of Revenue (9715658 Rs.) 3) Inventory holding (logistics and warehousing included) taken @ 4% of sales 4) Taxes @ 4% of sales 5) Depreciation taken as monthly deduction of seven year useful life of initial outlay of Rs. 7500000 6) Electricity taken at 2 % 7) Insurance @ 3 % 8) Discounts (mark down ) @ 12 % 9) Pilferage @ 2.5 % 10) Advertising @ 1.75 % 11) Sales Promotion @ 1.75 % 12) OD Interest @ 1% of initial outlay cost of Rs. 7500000 ( assuming that entire amount is OD 13) Maintenance @ 1.75% 14) Sales force training @ Rs. 50,000 ( assuming workshop by trainer to train new staff – fee paid duly) 15) IT costs @ 5 % of initial outlay of Rs 7500000 16) Miscellaneous expenses @ 1.75 %
Page | 15
doc_685572684.docx