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Case study

Capgemini Consulting has been engaged by Jormand Garments Group, one of the largest branded fabric and fashion retailers in China, to: (1) help them assess their problems of declining customer base for their business line of luxury and premium customized mens suitings Jormand Suits, (2) speculate on the benefits of expansion into accessories market (3) and recommend an online strategy for Jormand Suits to strengthen their sales
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Input: Exhibit A Jormand Suits had a strong market and brand position in China for a few decades, but is not the market leader anymore. Over the past 12 months Jormand Suits has seen: Declining number of customers and declining overall market share despite of the endof-season and festive season sales Sharp decline in margins because of increase in raw material costs and increasing cost of utilities. Price of Wool has increased nearly 60% in the last four years Inventory overhang

Suits in China are generally considered a luxury product but due to change in income levels and concurrent needs, more numbers of customers prefer to buy suits for official, casual and occasional purposes. So, it is important for the retailers to offer an entire gamut of collection. The total suiting market in China, growing at a rate of nearly 10% annually, is pegged at around 800 million metres in volume and $3 billion in value terms, of which, 15 per cent is branded. Industry estimates peg the formal suits, jackets and blazers segment at $750 million. Major trends in Chinese Mens suiting market segment are: Menswear consumers are in a phase of transition; they no longer want to stick to wearing apparel of defined styles and silhouette but also want to experiment with the look of the clothing. The demand for occasion-specific clothing is rising within the menswear segment. The steady growth in the premium tailoring segment comprising the fashion designers and the bespoke / luxury segment. Customers in the super premium segment are willing
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Case Study - Copyright 2013 Capgemini Consulting. All rights reserved

to pay a premium to ensure that their tailor-made clothing reflects their own personality and also helps them differentiate themselves and get noticed. Changing face of consumer tech savvy, increased exposure and awareness levels, impulsive purchase behaviour among youngsters, catch up with international fashion trends, increasing demand for better shopping experience Increasing demand for accessories - ties, luggage products, cufflinks, footwear, belts, watches etc. Margins for retailers on accessories are around 50% as compared to apparels which are around 20-25%

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Input: Exhibit B Profile of Jormand Garments Group The group turnover is over $ 1.20 billion Jormand Suits, based in China, is a leading producer of integrated suiting fabric in the world, with a capacity of producing over 31 million meters of wool and wool blended fabrics. One of the largest networks of over 700 retail shops spread across China and overseas, in over 200 cities. Jormand suits has over 30% market share in China in suitings segment Net sales amounted to $204 million (Q2 FY14), 100% through their retail stores. In addition, the Group also has business interests in readymade garments, designer wear, cosmetics & toiletries, engineering files and tools, prophylactics and air charter operations.

The main competitors along with their core positioning are described below (in decreasing order of market share): Provider Wenxius About the Provider
This is one of the pioneers in suitings in China. Their brands J.Hampstead, Oxemberg are sold in more than 40,000 outlets across the country Reid & Taylor is the premium apparel and suiting brand that enjoys a high equity in the domestic and the international market.

Online sales thru website


No

Reid & Taylor Van Heusen

No

The brand embodies fashion for the corporate and reflects the current expression of elegance in today's context. Van Heusen believes that the design drivers for the brand are fashion and sophistication.

Yes

Case Study - Copyright 2013 Capgemini Consulting. All rights reserved

Louis Philippe

This is a premier Men's apparel brand. It is a statement of status and style for powerful men with infallible taste and class

Yes

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Input: Exhibit C The following are the results from a consulting firms global survey of online shoppers: 38% of Chinese in the age group of 18-35 shop online weekly 77% of these shoppers buy a product because of information received from social media 49% of online shoppers in China shop from their mobile phones

Picture 1: Products shopped online in year 2010

Source: Grovo.com Task: Prepare a presentation for the Jormand Garments Groups management on the strategy to stop the decline in customer base of Jormand Suits, formulate an online sales strategy and also recommend Jormand Suits whether to venture into the accessories segment or not. Clearly highlight any assumptions that form the basis of your recommendations. Please prepare a maximum of two slides on sheets of paper or in power point as may be available. (Duration: 1Hour)

Case Study - Copyright 2013 Capgemini Consulting. All rights reserved