KU

LxecuLlve Summary
8ePablllmenLs esLabllshed as a LlmlLed LlablllLy CorporaLlon ls a cloLhlng and apparel buslness wlLh
prlnclpal offlces locaLed ln Sandybar Parbour 1he company sells Lrendy cloLhlng and apparel such as
casual and acLlve wear head gear workouL gear leaLher coaLs and baseball [ackeLs Lo an lnLernaLlonal
markeL conslsLlng of lndlvlduals of all ages from all walks of llfe 8ePablllmenLs markeLs lLs producL llne
as 8ePab ?our Wardrobe 8ePab ?our World and commlLs a porLlon of Lhe companys sales revenues
Lo programs LhaL Lransform Lhe llves of Lhe less forLunaLe and abollsh Lhe explolLaLlon of chlldren forced
lnLo acLlvlLles such as scavenglng ragplcklng or marglnal economlc acLlvlLles ln Lhe sLreeLs drug
Lrafflcklng crlmlnal acLlvlLles physlcal and sexual abuse forced labor debL bondage and prosLlLuLlon

8ePablllmenLs ls Lhe bralnchlld of L Cwerd Lmlynes Lhe companys founder Whlle managlng
muslcal performance group Mr Lmlynes developed Lhe ldea of promoLlng Lhe group and lncreaslng
revenue by selllng Lee shlrLs and sweaL shlrLs bearlng Lhe groups name logo and slogan 1here ls
SLrengLh ln Parmony

AfLer purchaslng $300 ln cloLhlng (eg Lee shlrLs and sweaL shlrLs) Mr Lmlynes had Lhe apparel
deslgned and sllkscreened and Lhen negoLlaLed wlLh Lwo cloLhlng sLores ln Lhe Sandybar Parbour area
Lo carry Lhe cloLhlng ln less Lhan one week boLh sLores were sold ouL of Lhe apparel

Mr Lmlynes concelved Lhe ldea of carrylng Lhe muslc groups markeLlng sLraLegy one sLep furLher and
developlng an enLlre cloLhlng llne around Lhe concepL of harmony AfLer brlef negoLlaLlons wlLh Lhe
group lL was muLually agreed LhaL slnce Mr Lmlynes was Lhe bralnchlld behlnd Lhe ldea Lhe cloLhlng
llne known as 8ePablllmenLs and Lhe company (eg 8ePablllmenLs) would belong solely Lo Mr
Lmlynes

1he underlylng foundaLlon of 8ePablllmenLs and lLs cloLhlng llne ls based upon Lhe prlnclple of harmony
harmony of LhoughL harmony of purpose and harmony ln humlllLy When people are of one mlnd
Lhey are supporLed ln Lhelr purpose and are accepLed desplLe Lhelr weaknesses 8y purchaslng
8ePablllmenLs consumers make a consclenLlous declslon Lo become an lnLegral member of a
communlLy dedlcaLed Lo Lhe greaLer good of humanlLy

LaLely Mr Lmlynes has explored Lhe poLenLlal of Lhe 8ePablllmenLs concepL expandlng Lhe llne Lo
lnclude a varleLy of apparel and bullL upon personal markeLlng efforLs and ouLofpockeL funds has sold
over $6000 ln producLs Lo varlous venues such as Lhe new ?ork ClLy !acob !avlLs ConvenLlon CenLer Lhe
8lack Lxpo ln ALlanLa CA mulLlculLural exposlLlons aL Lhe Anahelm ConvenLlon CenLer CA aL sLreeL
falrs ln Lnglewood n! and Lhrough varlous onllne ecommerce sales

We are seeklng fundlng Lo expand 8ePablllmenLs operaLlons esLabllsh a repuLable sLorefronL and Lo
furLher develop Lhe buslness buslness lnfrasLrucLure lnLernal sysLems producL and servlce
developmenL and exLenslve markeLlng and geographlc poslLlonlng 8ased upon conservaLlve markeL
growLh pro[ecLlons once sLarLup fundlng ls secured Lhe company expecLs Lo generaLe very healLhy
sales revenues ln llscal ?ears 1 2 and 3
11 Mlsslon
Cur mlsslon ls Lo be Lhe consumer's number one cholce ln garmenL (Pand weaved deslgned shlrLs)
onllne by provldlng our valued cusLomers wlLh a range of Lhe flnesL quallLy shlrLs Lhrough commlLmenL
Lo lnnovaLlon servlce and value Cur producLs are only good as our servlce and lL ls why we are
commlLLed Lo serve our cusLomers wlLh Lhe aLLenLlon and servlce LhaL Lhey deserve We wanL Lo brlng
Lomorrow's fashlon Loday
1he companys flrsL responslblllLy ls Lo ladles who use our producLs As a cusLomer orlenLed buslness
recognlzes LhaL cusLomer saLlsfacLlon ls Lhe key Lo success and sLrlves Lo dellver Lhe hlghesL quallLy
cusLomer servlce and superlor producLs 8ePablllmenLs supporLs Lhe success of lLs employees
communlLy and lnvesLors and wlll conducL lLs operaLlons prudenLly Lo ensure adequaLe flnanclng and
resources necessary Lo achleve buslness ob[ecLlves for fuLure growLh 1he company promoLes a splrlL of
sharlng and carlng where people eagerly conLrlbuLe Lhelr Llme knowledge and experlence Lowards a
successful communlLy
SLarL ?our lan 1oday
Cnllne 8uslness lannlng Made Lasy
lncludes 1uLorlals and 8ooks

Sales MarkeLlng ro 2012
?our Sales and MarkeLlng lans
SLarL 1oday lnsLanL uownload

12 Cb[ecLlves

8ePablllmenLs managemenL recognlzes LhaL Lhe company musL esLabllsh acLual goals LhaL asslsL
managemenL ln shaplng wheLher or noL Lhe company ls achlevlng corporaLe ob[ecLlves Cur growLh
depends upon managemenLs ablllLy Lo Lrack progress Loward goals and Lo measure resulLs ln
comblnaLlon wlLh Lhose goals 1o ensure lmplemenLaLlon of Lhe companys goals managemenL has
esLabllshed Lhe followlng corporaLe ob[ecLlves
Securlng sLarLup fundlng and subsequenL fundlng Lhrough a comblnaLlon of lnvesLmenL
LsLabllshlng markeLlng and sales lnlLlaLlves Lo expand Lhe companys cloLhlng llne and capLure 10 of
Lhe branded urban apparel lndusLry
8ased upon markeL growLh pro[ecLlons generaLlng very healLhy sales revenues ln ?ears 1 2 and 3

13 keys Lo Success

1o ensure Lhe success of Lhe company managemenL wlll
8ecome Lhe lndusLry leader ln Lhe branded urban weaved markeLlng lndusLry
8ulld a brand as Amerlcan as Wrangler or Levls ln Lhe counLry
Cffer cloLhlng sulLable for slzes from small medlumlarge

LsLabllsh and commlL Lo besL pracLlces ln all slgnlflcanL buslness processes lncludlng eLhlcal
producLlon pracLlces (no chlld labor) Lhrough exLenslve programs Lools measuremenL and
sophlsLlcaLed selfassessmenL reporLlng sysLems
CreaLe nurLure and enhance cusLomer relaLlonshlps Lhrough problem and opporLunlLy awareness
assessmenL of deslred goals and resulLs and Lhrough rouLlnes and communlcaLlons LhaL consLanLly
relnforce LargeL relaLlonshlps

Company Summary

8ePablllmenLs esLabllshed as a LlmlLed LlablllLy CorporaLlon ls a weavlng ladles cloLhs manufacLurlng
buslness wlLh prlnclpal offlces locaLed ln 8ahadurabad

8ePablllmenLs rooLs can be Lraced backed Lo when Ms came up wlLh Lhe ldea of esLabllshlng a
proflLable buslness due Lo Lhe huge markeL of fashlon ln Lhe counLry 1o promoLe Lhe group and
lncrease revenues Mr Lmlynes developed a cloLhlng llne bearlng Lhe groups name logo and slogan
1here ls SLrengLh ln Parmony Whlle Lhe group performed 1shlrLs and sweaL shlrLs were sold Lo Lhe
publlc ln addlLlon Mr Lmlynes negoLlaLed an agreemenL wlLh Lwo local cloLhlng sLores Lo carry Lhls
unlque llne of cloLhlng and wlLhln one week $300 worLh of 1shlrLs and sweaL shlrLs were compleLely
sold ouL ln boLh sLores unforLunaLely shorLly afLer lmplemenLlng Lhls markeLlng sLraLegy Mr Lmlynes
reslgned hls poslLlon as Lhelr manager however he conLlnued Lo malnLaln a sLrong relaLlonshlp wlLh Lhe
group

Mr Lmlynes concelved Lhe ldea of carrylng Lhls markeLlng sLraLegy one sLep furLher by developlng an
enLlre cloLhlng llne around Lhe concepL of harmony AfLer brlef negoLlaLlons lL was muLually agreed
LhaL slnce Mr Lmlynes was Lhe orlglnaLor of Lhe ldea Lhe cloLhlng llne known as 8ePablllmenLs and
Lhe company (eg 8ePablllmenLs) would belong solely Lo Mr Lmlynes

harmony of LhoughL harmony of purpose and harmony ln humlllLy When people are of one mlnd
Lhey are supporLed ln Lhelr purpose and are accepLed desplLe Lhelr weaknesses 8y purchaslng
8ePablllmenLs consumers make a consclenLlous declslon Lo become an lnLegral member of a
communlLy dedlcaLed Lo Lhe greaLer good of humanlLy

1hls prlnclple has deepseaLed meanlng Lo Mr Lmlynes who serves as a worldwlde advocaLe for Lhe
weakesL members of socleLy chlldren Pe represenLs an ongolng mlsslon Lo abollsh Lhe explolLaLlon of
chlldren forced lnLo acLlvlLles such as scavenglng ragplcklng or marglnal economlc acLlvlLles ln Lhe
sLreeLs drug Lrafflcklng crlmlnal acLlvlLles physlcal and sexual abuse forced labor debL bondage and
prosLlLuLlon

ln flghLlng Lhls explolLaLlon Mr Lmlynes donaLes a porLlon of Lhe companys proceeds Lo programs LhaL
Lransform Lhe llves of Lhe less forLunaLe such as leed Lhe Chlldren and unlCLl AddlLlonal donaLlons
are glven Lo oLher causes LhaL supporL chlld educaLlon and Lhe eradlcaLlon of llfeLhreaLenlng dlseases
1hese donaLlons fosLer soclal responslblllLy wlLhln Lhe company and represenL Lhe companys
commlLmenL Lo lLs vlslon of harmony ln addlLlon 8ePablllmenLs ls commlLLed Lo sourclng lLs orlglnal
lnvenLory (sweaLshlrLs 1shlrLs panLs eLc) only from manufacLurers who can demonsLraLe use of
eLhlcal producLlon pracLlces wlLh no chlld labor or forced labor
21 Company Cwnershlp

8ePablllmenLs ls a prlvaLely held corporaLlon LhaL ls solely owned by lLs founder Mr L Cwerd Lmlynes
1he company was lncorporaLed as a LlmlLed LlablllLy CorporaLlon
new 8uslness Course
Learn Lo SLarL and 8un ?our 8uslness
1aughL by 8uslness LxperL 1lm 8erry


22 SLarLup Summary

1oLal sLarLup expenses for 8ePablllmenLs are esLlmaLed ln Lhe Lables below 1o daLe Lhe ma[orlLy of
Lhese expenses have been flnanced by dlrecL owner lnvesLmenL however 8ePablllmenLs ls seeklng Lo
secure addlLlonal flrsL round fundlng Lhrough a comblnaLlon of lnvesLmenL and debL sLraLegles LhaL wlll
cover Lhe ma[orlLy of Lhe companys sLarLup expenses ln addlLlon Lhe founder Mr Lmlynes ls
worklng wlLh Lhe Soclal SecurlLy AdmlnlsLraLlon Lo quallfy for Lhe lan for Achlevlng SelfSupporL (ASS)
rogram whlch wlll provlde Lhe company wlLh addlLlonal fundlng

MosL expenses are Lyplcal sLarLup expenses and lnclude buL are noL llmlLed Lo Lhe followlng lLems
Legal (8uslness lncorporaLlon llllng and 1axes)
8uslness lannlng/uevelopmenL
ConsulLlng lees
AdverLlslng/MarkeLlng
8esearch and uevelopmenL
8uslness Cards LeLLerhead
1elephone/lnLerneL Lxpense
osLage/Shlpplng
8uslness lnsurance (lnlLlal ollcy)
lnlLlal 8enL
uecoraLlng/8emodellng/8epalrlng
Cfflce LqulpmenL
Cfflce SeLup/vehlcles
ManufacLurlng/ulsLrlbuLlon
Web ueslgn
8eference MaLerlals
8uslness 1ravel
Lxpensed LqulpmenL

1o daLe Mr Lmlynes Lhe founder has recelved $10000 Lhrough granL monles (eg uv8) plus an
addlLlonal $7000 from oLher lnvesLors Lo asslsL wlLh sLarLup expenses 1oLal CaplLal and LlablllLles afLer
sLarLup cosLs amounL Lo $380

AsseLs Lo be purchased durlng sLarLup lnclude

lnvenLory 100000
Mlscellaneous weavlng Accessorles 30000
Sample slze 17x17 lnces cosL 200300 per sample
CloLh 300700 per shlrL
Courler Speedex100rs for 1kC
A uell CompuLer SysLem wlLh ulglLlzlng SofLware 30000rs x4
lnLerneL ConnecLlon Lvo 93mbps 10000rs per monLh
Alr condlLloner 2 spllLs 2 Lonns x2 120000
1elephone/lAx Machlnes 1200rs
LlecLrlclLy blll 10000rs
Cfflce lurnlLure 200000rs
CuLLlng Lallor 30 Lo 100 per plece
Swlng Lallor 100 Lo 200 8s
MasLer 300 per day
Pand weaver 100 per Sample
Pand weaver 100 per Sample
CeneraLor 130000 10kva
MarkeLlng Lxpenses
Model used ln markeLlng (phoLo shooL) 30000rs Model used(Anam yamln)
WebslLe 7000rs
MonLhly runnlng cosL 3000rs

llve lndusLrlal Sewlng Machlnes (8x9803Au1C) $3000 (eg $1000 each)
An lndusLrlal SLeam ress (S643A) $6000
A MlghLy ress (M#1) $633
A MlghLy Cap ress (MC#3) $430
1wo Cash 8eglsLers $400 (eg $
SLarLup 8equlremenLs
SLarLup Lxpenses
Legal (8uslness lncorporaLlon llllng and 1axes) $1200
8uslness lannlng/uevelopmenL $830
ConsulLlng lees $120
llrsL monLh salarles (ueslgn Admln) $7130
AdverLlslng/MarkeLlng $213
Conferences/LxposlLlons $1473
8esearch and uevelopmenL $3300
8uslness Cards LeLLerhead SLaLlonery $20
1elephone/lnLerneL Lxpense $333
osLage/Shlpplng $122
8uslness lnsurance (lnlLlal ollcy) $200
Cfflce Supplles $242
CompuLer LqulpmenL $216
Coples $118
rlnLlng/Sllkscreenlng $822
Craphlc ueslgn $812
Web ueslgn and lmplemenLaLlon $6000
8uslness 1ravel $1303
arklng $20
eLLy Cash $63
CLher $0
1oLal SLarLup Lxpenses $24782
SLarLup AsseLs
Cash 8equlred $388783
SLarLup lnvenLory $30000
CLher CurrenL AsseLs $24930
LongLerm AsseLs $34483
1oLal AsseLs $498218
1oLal 8equlremenLs $323000

need real flnanclals? We recommend uslng Llvelan as Lhe easlesL way Lo creaLe auLomaLlc flnanclals for
your own buslness plan CreaLe your own buslness plan
SLarLup lundlng
SLarLup Lxpenses Lo lund $24782
SLarLup AsseLs Lo lund $498218
1oLal lundlng 8equlred $323000
AsseLs
noncash AsseLs from SLarLup $109433
Cash 8equlremenLs from SLarLup $388783
AddlLlonal Cash 8alsed $0
Cash 8alance on SLarLlng uaLe $388783
1oLal AsseLs $498218
LlablllLles and CaplLal
LlablllLles
CurrenL 8orrowlng $0
LongLerm LlablllLles $300000
AccounLs ayable (CuLsLandlng 8llls) $0
CLher CurrenL LlablllLles (lnLeresLfree) $0
1oLal LlablllLles $300000
CaplLal
lanned lnvesLmenL
lnvesLor 1 $2300
lnvesLor 2 $1300
lnvesLor 3 $1300
lnvesLor 4 $1000
lnvesLor 3 $300
CranL Money (uv8) $10000
CranL Money (ass rogram) $6000
AddlLlonal lnvesLmenL 8equlremenL $0
1oLal lanned lnvesLmenL $23000
Loss aL SLarLup (SLarLup Lxpenses) ($24782)
1oLal CaplLal ($1782)
1oLal CaplLal and LlablllLles $498218
1oLal lundlng $323000

23 Company LocaLlons and laclllLles

8ePablllmenLs ls currenLly operaLlng as a homebased buslness locaLed ln Sandybar Parbour Cnce Lhe
company acqulres sLarLup fundlng 8ePablllmenLs headquarLers wlll be moved Lo a faclllLy capable of
accommodaLlng boLh admlnlsLraLlve acLlvlLles as well as apparel warehouslng/lnvenLory and producLlon
We have locaLed Lhree sulLable slLes ln Sandybar Parbour and wlll enLer lease negoLlaLlons once sLarL
up fundlng ls conflrmed ldeally Lhe corporaLe faclllLy wlll be [olnLly lnhablLed by oLher LenanLs and/or
small buslnesses whlch wlll enable 8ePablllmenLs Lo draw addlLlonal revenue from leaslng
roducLs

8ePablllmenLs offers a full collecLlon of apparel LhaL ls classy upscale and versaLlle 1hls apparel llne
lncludes casual and acLlve wear headgear workouL gear leaLher coaLs and baseball [ackeLs CloLhlng
slzes range from Loddler Lo 3xL (ln mosL lLems)

8ePablllmenLs wlll sLarL ouL by addlng logos and brandlng Lo premade lLems selecLed from eLhlcally
sound producers abroad and gradually shlfL Lo produclng more whole lLems lnhouse uslng our Leam of
deslgners
31 roducL uescrlpLlon

Casual Wear

Casual wear ls only one of Lhe phrases used Lo descrlbe Lhe Lrend away from pln sLrlpes and hlgh
heels CLher Lerms lnclude buslness casual (usually means Lhe uockerskhaklspolo shlrL look)
buslness approprlaLe (a sLepup from casual) buslness ready (meanlng LhaL a LradlLlonal sulL musL
be ready Lo wear aL all Llmes) corporaLe casual clearly casual resorL casual (deflnlLely noL allowed
ln Lhe offlce) reflned casual wear (accepLable provlded LhaL you undersLand whaL lL ls) and perhaps
mosL approprlaLely casual confuslon

CneL newscom Casual Wear uresslng for Success or lor SLress? !une 10 2000

8ePablllmenLs carrles a varleLy of producLs Lo sulL Lhe needs of every lndlvldual wheLher Lhey are
dresslng for success or for an afLernoon of lelsure Some of Lhe companys producLs lnclude
!erseys (30/30 WelghL ulLra 8lend)
Mens ullover Long Sleeve Small Lo 3xL $6300
Mens/Womens ullover ShorL Sleeve Small Lo 3xL $3300
1ShlrLs (100 CoLLon)
Mens Long Sleeve Small Lo 3xL $6000
Mens ShorL Sleeve Small Lo 3xL $3300
Womens Long Sleeve Small Lo 3xL $3000 (100 Ladles CoLLon)
Womens ShorL Sleeve Small Lo 3xL $2300 (100 Ladles CoLLon)
uenlm !ackeLs (100 CoLLon uenlm)
Mens Small Lo 3xL $6300
Womens Small Lo 3xL $6000
uenlm anLs (100 CoLLon uenlm)
Mens/Womens $3000

ln 2004 sLaylng aL home Lo relax wlll become an lmporLanL llfesLyle cholce LhaL wlll conLlnue LhroughouL
Lhe decade As dress becomes less formal and more casual mosL of Lhe Llme even aL work so does Lhe
deslre for dlfferenLlaLlon beLween lelsure wear and casual wear Consumers wlll requlre cloLhes Lo
cocoon ln 1hese cloLhes wlll be sofL and comforLable sLreLchlng and reLalnlng shape 1oday over
30 of consumers requlre comforL over oLher quallLles ln Lhelr cloLhlng as well as weareasy care

Source lashlon 1rends 2004 arL 1 Ceneral Changes AffecLlng 1exLlles by aullne WesLon
1homas

AcLlvewear/SporLswear

ALhlelsure llfesLyle apparel from yoga panLs Lo Lerry Lrack sulLs ls on Lhe rlse and 8ePablllmenLs offers
a range of hlghperformance cloLhlng for acLlve sporL Lrekklng cllmblng and Lravel LhaL ls sulLable for
Lhe sLreeL and pracLlcal for Lhe gym 1he collecLlon ls characLerlzed by modern comforLable hlghLech
fabrlcs and funcLlonal ergonomlc deslgns 1he companys acLlve wear producLs lnclude
SweaLshlrLs (100 CoLLon)
Mens/Womens Long Sleeve Small Lo 3xL $7000
Mens/Womens ShorL Sleeve Small Lo 3xL $6000
SweaLsulLs (velour)
Mens/Womens Small Lo 3xL $10000

SporLs sLyllng wlll conLlnue Lo dlcLaLe many casual deslgns LhroughouL 2004 alLhough naLural looks
where Lhe fabrlc makes Lhe sLaLemenL wlll also be lmporLanL SporLswear and sporLs sLyllng wlll
conLlnue Lo grlp consumers who deslre comforL ln everyday wear yeL as couch poLaLoes hardly ever
lndulge ln Lhe acLlvlLles for whlch Lhe cloLhes were orlglnally deslgned (Source lashlon 1rends 2004
arL 1 Ceneral Changes AffecLlng 1exLlles by aullne WesLon 1homas)

WorkouL Cear

1he reLurn of Lhe Clymplc Cames wlll help malnLaln sLrong sporLs fashlon lnfluences ln clLy wear for
boLh sexes 1hls wlll be more and more popular as Lhe 2004 Clymplc fever galns a grlp on lndlvlduals
globally Colorful fashlon Lralners raLher Lhan LradlLlonal runnlng Lralners wlll accommodaLe Lhe
masslve shlfL ln shoe buylng hablLs keyholes zlp lnserLs and saLln conLrasL sLrlps and blndlngs wlll
conLlnue Lo feaLure ln mass casual wear emphaslzlng Lhe sporLy feel(Source lashlon 1rends 2004
arL 1 Ceneral Changes AffecLlng 1exLlles by aullne WesLon 1homas)

8ePablllmenLs offers a llne of workouL gear LhaL brlngs LogeLher a comblnaLlon of hlghend hlghLech
and unlque fabrlcs wlLh Lodays hoL fashlon Lrends 1he companys workouL gear lncludes
WorkouL 1ops (100 Spandex)
WorkouL 8oLLoms (CoordlnaLlng) (100 Spandex)
Socks (100 CoLLon)
Womens llLs up Lo Shoe Slze 13 $1300
!ackeL (CoLLon/olyesLer 8lend)

SmarL consumers are drlvlng Lhe performance fabrlcs of Loday 1hey wanL producLs wlLh more comforL
more durablllLy and more fashlon whlch ln Lurn wlll make Lhelr llves easler ln answer Lo Lhe
consumers needs companles such as uuonL Mllllken Co and MylsLar lnc are developlng
Lechnlques LhaL manage molsLure beLLer so lL drles fasLer lmprovlng dyeLechnlques Lo enhance color
fasLness and deslgnlng garmenLs LhaL keep people warm wlLhouL welghlng Lhem down (Source
ArresLlng Cdor and MolsLure by Mlchael llckes SporLsLdge uecember 2002)

LeaLher CarmenLs

1he leaLher moLorcycle [ackeL ls much more Lhan a coaL lLs a menLallLy lrom Lhe early LwenLleLh
cenLury alrplanes auLomoblles and moLorcycles redeflned freedom ldeallzed speed and capLured Lhe
hearLs of men and women allke 1he leaLher [ackeLs developed Lo proLecL plloLs racers and moLorlsLs
from Lhe elemenLs came Lo symbollze a romanLlc sense of rugged advenLure ln parLlcular moLorcycle
[ackeLs malnLalned Lhls ldeal for decades Lo come 8ePablllmenLs carrles on Lhls Amerlcanmade
LradlLlon of Lhe classlc leaLher moLorcycle [ackeL
MoLorcycle !ackeLs (100 8lack LeaLher)
LeaLher anLs (100 8lack LeaLher)

LeaLher [ackeLs are Lhe mosL versaLlle and classlc arLlcle of cloLhlng Lhe consumer can own 1hey may be
exLremely sLyllsh and popular followlng fashlon Lrends from year Lo year buL Lhe LruLh ls LhaL Lhey are
never ouL of sLyle

Consumers can flnd leaLher [ackeLs ln varlous shapes and slzes or dlfferenL lengLhs (eg such as Lrench
coaL knee Lhree quarLer and hlp) dependlng upon Lhe consumers body Lype helghL sLyle and LasLe
Lven squareshaped leaLher bomber [ackeLs have made Lhelr reLurn and conLlnue Lo be popular All
leaLher [ackeLs are sLyllsh (Source 1he Look of LeaLher by karln Lldor AskMencom)

8aseball !ackeLs

Lver slnce hlphop lnnovaLors and sLyle avlaLors CuLkasL appeared on M1v sporLlng old school PousLon
AsLros [erseys wlLh ralnbow colors and 70s flavor Lhe rap world has seen a Lrend Loward old
school/vlnLage sporLs apparel Slnce Lhen oLhers have been seen ln vldeos dlscoverlng forgoLLen
logos and aLhleLes 8eLall sLores shop wlndows of showcase sLyles LhaL by Lodays sLandards would be
consldered ouL of place for men playlng on Lhe fleld vlbranL colors and ralnbow deslgns LhaL were once
Lhe norm ln Lhe sevenLles and elghLles have been replaced wlLh more conservaLlve color schemes or
wlLh shades of gray and black

8ePablllmenLs carrles a llne of new saLln baseball [ackeLs LhaL mlmlc Lhose worn by Leams of Lhe pasL
1hey are made of Lhlck llned saLln wlLh aLLenLlon Lo Lhe flnesL deLalls
8aseball !ackeLs (SaLln and 100 CoLLon)

1he love affalr wlLh Lhe reLlred logo ls merely anoLher Lrend ln hlp hops long evoluLlon A sporLs symbol
can symbollze far more Lhan one mlghL expecL Whlle wearlng Lhe LradlLlonal currenL logo of a local
Leam can sLlll symbollze an arLlsLs clalms of hls/her rooLs recenL sLyles of sporLlng wear aLLesL Lo more
Lhan locallLy slgnlfylng pure fashlon for fashlons sake ln an everchanglng culLure

Peadgear

uurlng Lhe summer fedoras and mesh caps made of naLural grasses found favor among boLh men and
women AnoLher common slghL was unllkely comblnaLlons of femlnlne cloLhes and baseball caps whlle
as an exLenslon of Lhe layered look Lurbans were also a hlL 1hls fall has wlLnessed Lhe renewed
popularlLy of Lhe rounded vlsored bereLs known as caskeLs LhaL have been a consplcuous presence
slnce lasL year PaLs and caps are comlng ouL ln a varleLy of maLerlals colors and shapes lncludlng
woolen caps wlLh deslgns knlLLed ln and haLs made of furry maLerlals llke angora

As Lo why haLs have become enLrenched as a fashlon accessory over Lhe pasL few years we belleve LhaL
headwear offers Lhe easlesL means of selfexpresslon ln Lhe conLexL of a general Lrend for casual
fashlon Lven a person dressed ln a slmple ouLflL llke panLs and a 1shlrL can lnsLanLly express hls or her
personal sLyle [usL by puLLlng on a haL

PaLs are becomlng as much an lnLegral parL of young peoples wardrobes as oLher fashlon lLems and
8ePablllmenLs carrles a varleLy of haLs Lo sulL everyones LasLe 1hese lnclude
Skl PaL (Wool)
Mens/Womens CneSlzellLsAll $1300
8eanle (olyesLer/CoLLon)
llLLed 8aseball Cap (CoLLon)
Sun vlsor

PaLs have always comblned fashlon wlLh pracLlcallLy offerlng proLecLlon from boLh Lhe summer sun and
Lhe wlnLer cold 8lghL now haLs are experlenclng a boom ln popularlLy LhaL has made Lhem an essenLlal
lLem regardless of Lhe season More and more people are wearlng haLs of dlsLlncLlve deslgns LhaL
unllke Lhe pasL haL booms are noL consLralned by fashlon Lrends 8aLher Lhan famous brand bouLlques
lL ls speclalLy shops sLocklng haLs creaLed by darlng young deslgners LhaL are Lhe forefronL of Lhe currenL
craze

new 8uslness Course

32 Sourclng

lnLense compeLlLlon has placed garmenL reLallers ln hlgher lncome counLrles under consLanL pressure Lo
reduce cosLs 1hls has encouraged buyers Lo favor low cosL counLrles and ln parLlcular Lo seek ouL
locaLlons whlch offer ever lower labor cosLs

lew counLrles Loday have lower labor cosLs Lhan ma[or apparel manufacLurers such as 8angladesh or
lndla however Lhls low cosL labor ls obLalned aL Lhe expense of chlldren 1he uS ueparLmenL of
Labors 1994 lnLernaLlonal chlld labor sLudy 8y Lhe SweaL and 1oll of Chlldren (volume l) 1he use of
Chlld Labor ln uS ManufacLured and Mlned lmporLs caLalogued exlsLlng lnformaLlon on chlld labor ln
Lhe garmenL lndusLrles of 8angladesh 8razll Chlna CuaLemala lndla lndonesla LesoLho Morocco Lhe
hlllpplnes orLugal and 1halland Whlle Lhe reporL noLed LhaL more research was necessary Lo conflrm
Lhe exLenL and worklng condlLlons of chlld workers ln some cases lL sLaLed LhaL chlldren were lnvolved
ln Lhe producLlon of garmenLs for exporL Lo Lhe unlLed SLaLes

WlLh Lhe excepLlon of 8angladesh where chlldren regularly worked ln largescale formal facLorles Lhe
reporL found LhaL chlldren were more llkely Lo work ln small subconLracLlng shops or homework
slLuaLlons ln some cases chlldren were found Lo work ln locked shops wlLh armed guards prevenLlng
enLrance and exlL durlng work hours Chlldren worked on Lasks such as sewlng buLLons cuLLlng and
Lrlmmlng Lhreads foldlng and movlng and packlng garmenLs ln small shops and homeslLes ln Lhe
hlllpplnes chlldren were also found embrolderlng and smocklng (maklng pleaLs) ln some cases
chlldren worked long hours someLlmes slx or seven days a week Some chlldren recelved less Lhan Lhe
mlnlmum wage and were noL pald for overLlme work

1he recenL prollferaLlon of codes of conducL can be aLLrlbuLed Lo several facLors WlLh medla reporLs
and exposes on chlld labor becomlng more frequenL consumers and Lherefore companles are
becomlng lncreaslngly concerned abouL Lhe condlLlons under whlch Lhe garmenLs Lhey purchase are
made Companles adopLlons of codes of conducL serve Lo ease consumer concerns and Lhelr own
LhaL Lhey may be conLrlbuLlng Lo Lhe explolLaLlon of chlld labor CfLen companles adopL codes Lo pro[ecL
a poslLlve lmage and proLecL Lhelr brandname or quallLy repuLaLlon Some are moLlvaLed by good
lnLenLlons some by boLLomllne conslderaLlons many by boLh

As a proponenL for Lhe rlghLs of chlldren 8ePablllmenLs ls exLremely senslLlve Lo obLalnlng goods from
manufacLurers LhaL use chlldren as Lhelr maln source of labor As a resulL managemenL Lhoroughly
researches lLs suppllers and wlll conLlnue Lo do so unLll such Llme as Lhe company esLabllshes lLs own
uSbased manufacLurlng operaLlon ln addlLlon 8ePablllmenLs operaLes on codes of conducL and
model buslness prlnclples LhaL ensure Lhe safeLy and welfare of chlldren demonsLraLlng Lhe companys
soclal responslblllLy

8ePablllmenLs currenLly obLalns lLs garmenLs from Lhree facLorles as follows
1ShlrL ManufacLurlng

226 Cokule SLreeL
8am nagar ColmbaLore 641009
1amll nadu lndla
hone 914223384843
lAx 914224378439
CarmenL Labels

Mr SupoL SanganunL Managlng ulrecLor
Samchal Label lndusLrlal Co LLd
hone (662) 89780909
lAx (662) 8978100

Mlscellaneous CarmenLs

Wlnsor ManufacLurlng Co LLd
no 14 Shllan 8oad xlnqlao anyu
Cuanzhou Chlna

CosLs for cloLhlng arLlcles are as follows
uenlm anLs $300 per garmenL
!ackeLs $300 per garmenL
SweaLsulLs $700 per garmenL
PaLs $130 per haL
Long Sleeve 1ShlrLs $130
ShorL Sleeve 1ShlrLs $100 per shlrL
!erseys $600 per [ersey

CosLs per garmenL vary dependlng upon Lhe number of garmenLs ordered aL any glven Llme 8ulk
shlpmenLs cosL less Lhan lLems ordered plecemeal
33 1echnology

As ln oLher lndusLrles Lechnologlcal advances globallzaLlon and changlng buslness pracLlces are
affecLlng Lhe apparel lndusLry Cne slgnlflcanL change ls Lhe lncreased emphasls on qulck response Lo
cusLomer demand 1hls ablllLy ls vlLal ln an lndusLry LhaL sells lLs producLs ln an everchanglng fashlon
consclous markeL Culck response capablllLy llnks apparel producers more closely Lo relaLed flrms ln Lhe
LexLlle and reLall secLors of Lhe economy Alded by communlcaLlons Lechnology such as elecLronlc daLa
lnLerchange polnL of sale Lermlnals and bar codes lnformaLlon ls lnsLanLaneously communlcaLed Lo
and recelved from flrms ln Lhese lndusLrles

CLher Lechnologles affecLlng Lhe apparel lndusLry lnclude compuLerlzed equlpmenL and maLerlal
LransporL sysLems CompuLers and compuLerconLrolled equlpmenL ald ln many funcLlons such as
deslgn marklng and cuLLlng Cverhead conveyor sysLems LransporL maLerlal beLween sewlng machlne
operaLors and beLween processes uesplLe Lhese changes however Lhe apparel lndusLry especlally lLs
sewlng funcLlon has remalned slgnlflcanLly less auLomaLed Lhan many oLher manufacLurlng lndusLrles

CompuLer alded deslgn (CAu) ls used Lo deslgn anyLhlng from an alrcrafL Lo knlLware Crlglnally CAu
was used ln deslgnlng hlghpreclslon machlnery however ln Lhe 1970s Lhe Lechnology made lLs enLry
lnLo Lhe LexLlle and apparel lndusLry 1oday mosL companles abroad have lnLegraLed some form of CAu
lnLo Lhelr deslgn and producLlon process

Accordlng Lo Lhe naLlonal knlLwear AssoclaLlon of Lhe unlLed SLaLes of 228 apparel manufacLurers
63 use CAu Lo creaLe colorways
60 use CAu Lo creaLe prlnLed fabrlc deslgn
48 use CAu Lo creaLe merchandlslng presenLaLlons
41 use CAu Lo creaLe knlLwear deslgns

1he apparel lndusLry LradlLlonally has conslsLed of producLlon workers who perform a speclflc funcLlon
ln an assembly llne lncreaslngly Lhls organlzaLlonal phllosophy ls belng replaced by a Leam concepL ln
whlch garmenLs are made by a group of sewlng machlne operaLors organlzed lnLo producLlon
modules Lach operaLor ln a module ls Lralned Lo perform nearly all of Lhe funcLlons requlred Lo
assemble a garmenL Lach Leam ls responslble for lLs own performance and lndlvlduals usually recelve
compensaLlon based on Lhe Leam's performance 1hese changes have greaLly alLered Lhe aLmosphere
and responslblllLles from Lhose of Lhe LradlLlonal assembly llne

llerce compeLlLlon from abroad has prompLed Lhese changes ln work sLrucLure and Lechnology Apparel
flrms have also responded Lo growlng compeLlLlon by merglng and employlng workers ln oLher counLrles
Lo perform some producLlon funcLlons Workers ln lowerwage counLrles are lncreaslngly belng hlred Lo
assemble garmenLsLhe mosL laborlnLenslve sLep ln Lhe producLlon processwhereas uS workers
now perform a greaLer share of Lhe preassembly funcLlons and coordlnaLe Lhe process Such changes ln
Lhe naLure of Lhe domesLlc apparel lndusLry wlll cerLalnly conLlnue as globallzaLlon proceeds

(Source uS ueparLmenL of Commerce AugusL 2000)
34 luLure roducLs

8ePablllmenLs longrange ob[ecLlves lnclude venLurlng lnLo an apparel llne for college graduaLes and
professlonals wlLh furLher opporLunlLles ln llcensed and branded cologne and perfume beddlng
underwear small leaLher goods [ewelry and eyewear 8eglnnlng ln lall 2004 8ePablllmenLs wlll offer
a llne of cloLhlng markeLed as apparel Lo CloLhe 1omorrows rofesslonals MarkeL Analysls Summary

1he recenL economlc slowdown comblned wlLh Lhe Lraglc evenLs of SepLember 11 2001 reduced
consumer confldence whlch led Lo decllnlng sales ln Lhe apparel lndusLry as a whole 1he lmpacL of Lhe
economlc slowdown ls felL dlfferenLly by varlous subsecLors of Lhe fashlon lndusLry wlLh some belng
more greaLly affecLed Lhan oLhers such as Lhe mens wear lndusLry ln whlch Lhe demand ls more elasLlc
Lhan ln Lhe womens wear lndusLry

ln general Lhe apparel markeL ls poslLlve due Lo Lhe lmmenslLy and sLrengLh of Lhe lndusLry Powever
manufacLurers who wanL Lo enLer Lhe markeL wlll have Lo be exLraprudenL and prepared Lo make
greaLer lnvesLmenLs ln promoLlons and resources Lo do observaLlon vlslLs conducL prellmlnary markeL
LesLs and lncrease Lhelr vlslblllLy by Laklng parL ln Lrade shows and oLher acLlvlLles lndusLry speclallsLs
sLrongly advlse uslng speclallzed brokers Lo lncrease ones chances of success
41 MarkeL SegmenLaLlon

8ePablllmenLs lnLends Lo LargeL men women and chlldren ln Lhe 1rlSLaLe Area who requlre
compeLlLlvely prlced branded cloLhlng WlLhln all groups Lhere are no color barrlers and cusLomers
have dlverse backgrounds 8rlefly sLaLed Lhese consumers range beLween one year and 39 years of age

Accordlng Lo Lhe nu women spend abouL 80 of all money LhaL goes for sporLswear 1hey conLrol
96 of Lhe dollars spenL on Lhelr own cloLhes 93 of Lhose spenL on chlldrens and 60 of Lhose spenL
for mens sporLs apparel

uurlng 1999 Lhe womens consumer segmenL a consLanL consumer group domlnaLed Lhe uS apparel
sales markeL Womens apparel sales growLh was 37 and represenLed 32 of all apparel sales
whereas mens apparel growLh was 41 and accounLed for 31 of LoLal apparel sales Women Lend Lo
buy aL a consLanL raLe whereas mens apparel sales have been growlng

lndlvlduals under Lhe age of 20 wear abouL 43 of sporLs apparel buL lndlvlduals aged 43 and older
accounLed for 23 of Lhe markeL ln 1999 Clrls and boys apparel rose 03 and 38 respecLlvely

1he MarkeL Analysls Lable and charL below show poLenLlal cusLomers ln Lhe 1rlSLaLe Area by gender
and age groups as well as poLenLlal lnLerneL sales
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MarkeL Analysls
?ear 1 ?ear 2 ?ear 3 ?ear 4 ?ear 3
oLenLlal CusLomers CrowLh CAC8
Men (20 Lo 49 ?ears) 1 202693 204719 206763 208831
210918 100
Women (20 Lo 49 ?ears) 1 207073 209131 211247 213364
213303 100
8oys (3 Lo 19 ?ears) 1 98462 99440 100428 101423 102432 099
Clrls (3 Lo 19 ?ears) 1 93839 94790 93730 96679 97638 099
lnfanLs 1oddlers (0 Lo 4 ?ears) 1 60377 61180 61789 62404 63023 100
lnLerneL 13 223000 234230 287303 324632 366837
1300
1oLal 443 887666 923330 963262 1007333 1036373 443

42 1argeL MarkeL SegmenL SLraLegy

Accordlng Lo Lhe ?ale School of ManagemenL (november 6 2002) larger branded apparel
manufacLurers wlLh dlverslfled producL llnes and selfowned ouLleLs reporL revenue growLh of beLween
2 and 9 Mass manufacLurlng and rapld creaLlve copylng of fashlon caLwalk deslgns means LhaL
many of us can afford lnnovaLlve looks aL hlgh sLreeL prlces wlLhouL Lhe couLure prlce Lag Age ls no
barrler Lo followlng a fashlon Lrend or maklng a fashlon sLaLemenL as 10 becomes Lhe new 18 and 30
Lhe new 33 Consumers are cravlng new and dlfferenL producLs acLlvely seeklng new fashlonforward
lLems on each shopplng expedlLlon

CurrenL opporLunlLles ln Lhe 1rlSLaLe apparel lndusLry lnclude
AdulL Apparel (Men/Women Ages 20 Lo 49 ?ears)
SporLswear (Men/Women Ages 20 Lo 49 8oys/Clrls Ages 3 Lo 19)
!unlor CloLhlng (8oys/Clrls Ages 3 Lo 19)
Chlldrens Wear (lnfanLs/1oddlers Ages 0 Lo 4 ?ears)

AdulL Apparel

1he producLlon of adulL apparel parLlcularly womens cloLhlng occuples Lhe largesL secLor of Lhe
apparel lndusLry ln 1990 over 1000000 workers were employed Lo produce an almosL lnflnlLe varleLy
of dresses sulLs coaLs and sporLswear

1radlLlonally Lhe womens apparel buslness has operaLed on a flveseason basls fall llne merchandlse ls
usually offered Lo reLall sLore buyers ln Aprll hollday collecLlons ln !une early sprlng resorL and crulse
wear ln CcLober sprlng and summer cloLhes ln !anuary summer and early fall fashlons ln March and
Aprll

Mens cloLhlng deslgn and sales are ln a sLaLe of upheaval ln Lhe pasL manufacLurers presenLed Lwo
new llnes of classlc cloLhlng each year changlng fabrlcs for seasons 1oday many flrms produce hlghly
sLyled cloLhes for deparLmenL sLore bouLlques and small speclalLy shops whlch caLer Lo Lhe fashlon
consclous man 1helr problems wlLh seasons llnes and sLyle accepLance parallel Lhose of womens wear
producers

CLher Lhan chlldrens wear Lhe markeL for mens cloLhlng has grown fasLer Lhan any oLher sales
caLegory ln Lhe lndusLry 1he lnLroducLlon of sLaLe of Lhe arL permanenLpress fabrlcs probably lnlLlaLed
Lhls sales lncrease buL Lhe accepLance of casual fashlon ln mens wear spurred by Lhe growlng youLh
markeL has been Lhe maln facLor

AlLhough Lhe larger flrms are conLlnulng Lo galn ground compared Lo smaller flrms and brandname
merchandlse already has a large share of Lhe markeL Lhe preference for ma[or brands ls noL longer
unanlmous 8eLallers are now much more open Lo addlng new producL llnes 1he currenL lnLeresL ln
personallzed Lrends whlch more closely reflecL Lhe consumers ldenLlLy provldes an openlng for small
and lesserknown collecLlons

1he cheap chlc Lrend ls also spurrlng consumers Lo expecL more aL a lower cosL seelng llLLle dlfference
ln sLyle from one brand Lo anoLher

SporLswear

lndlvlduals under Lhe age of 20 wear abouL 43 of sporLs apparel buL lndlvlduals aged 43 and older
accounLed for 23 of Lhe markeL ln 1999 1he wldenlng age gap beLween youLhful and noLsoyouLhful
wearers represenLs a mulLlLude of challenges ln deslgnlng markeLlng and brandlng for sporLswear
manufacLurers

1he growLh of Lhe sporLswear lndusLry ls parLlcularly marked among female consumers who now see
Lhemselves as more aLhleLlc and have begln Lo wear Lhese collecLlons as sLreeL cloLhes Slnce women
are more ouLflLorlenLed Lhan men when lL comes Lo exerclse cloLhlng Lhey represenL a LargeL
cllenLele for Lhls lndusLry 1he [unlor markeL segmenL ls also of prlmary lmporLanL ln Lhls lndusLry as
sporLswear ls ofLen Lled ln Lo fashlon

A producLs Lechnlcal characLerlsLlcs are also very lmporLanL ln Lhls lndusLry compeLlng wlLh Lhe sporL
fashlon facLor ln Lhe flnal buylng declslon 1echnlcal consumers are much more conslsLenL ln Lhelr
buylng hablLs and provlde sLablllLy durlng economlc slow downs 1echnlcal fabrlcaLlons wheLher
relaLlng Lo LexLlles or processes (eg sneakers) are Lherefore popular

!unlor CloLhlng

1he sLrong growLh ln demand ln Lhe [unlor cloLhlng lndusLry has so far been able Lo mlnlmlze Lhe
unforLunaLe effecLs of Lhe economlc slowdown buL heavy compeLlLlon ln Lhe markeL makes reLallers
very consclous of flucLuaLlons ln demand CompeLlLlon ln Lhe [unlor markeL segmenL has shoL up ln
recenL years wlLh a Lwofold lncrease ln Lhe number of [unlor cloLhlng chalns

opularlLy and brand vlslblllLy are very lmporLanL facLors ln buylng declslons made by Lhls markeL
segmenL Lhls reduces Lhe maneuverablllLy of small manufacLurers who wanL Lo poslLlon Lhemselves ln
Lhe markeL lL ls cruclal Lo follow Lrends because Lhls segmenL follows fashlon cycles closely lL ls
posslble Lo poslLlon ones self wlLh very upLodaLe collecLlons aL lower prlces Lhan wellknown
collecLlons however Lhls means followlng Lhe markeL closely and provldlng Lhe resources necessary for
producL vlslblllLy

Chlldrens Wear

ManufacLurers of chlldrens cloLhlng produce large llnes from whlch Lhe sLore buyer makes purchases
Lhree Llmes a year Lo cover Lhe maln selllng seasons of sprlng and summer backLoschool and holldays
AlLhough chlldrens apparel ls a baslc famlly requlremenL Lhe fashlon revoluLlon ls affecLlng even Lhese
sLyles MoLhers (conLrolllng 93 of all apparel dollars spenL on chlldrens wear) wanL Lhelr chlldren Lo
have Lhe laLesL look Chlldrens wear manufacLurers are becomlng hlghly skllled aL produclng hlgh
fashlon apparel klds fashlons have been one of Lhe Lhe fasLesL growlng caLegory of apparel 1o keep
pace wlLh Lhls Lrend manufacLurers have adopLed Lhe producLlon and sales Lechnlques used ln womens
apparel 1hls has led Lo enormous numbers of chlldrens wear deparLmenLs and speclalLy sLores
LhroughouL Lhe naLlon

1he chlldrens wear lndusLry has grown conslderably ln recenL years buL sLlll remalns a small markeL
segmenL and can be dlfflculL for small manufacLurers Lo enLer Slnce chlldrens wear Lrends lncreaslngly
mlrror Lhose of adulL apparel chlldrens collecLlons musL noL only please chlldren buL also be very
slmllar Lo currenL Lrends ln Lhe adulL markeL 1hls calls for consLanL monlLorlng of Lhe markeL and a hlgh
degree of flexlblllLy and qulck adapLaLlon Ma[or flrms LhaL markeL adulL collecLlons aL Lhe same Llme as
chlldrens coples have a head sLarL ln Lhls regard rlce noneLheless remalns a declslve facLor ln maklng
purchases glven Lhe speed aL whlch chlldren ouLgrow Lhelr cloLhes ManufacLurers who are
compeLlLlve ln Lhls regard and have Lhe flexlblllLy Lo adapL Lhelr producLs Lo fashlon Lrends can flnd
worLhwhlle nlches
421 MarkeL 1rends

1he MarkeLplace Consumer Shopplng

lnLeresL ln apparel remalns hlgh even Lhough Lhere are a number of dlscouraglng facLors lL ls Lhe
number one cholce of lLems for whlch Lo shop beaLlng ouL grocerles ln second place 34 Lo 32
ln general women 43 Lo 64 spend more on cloLhlng per caplLa Lhan any oLher group 1he 30+ markeL
spends $266 bllllon a year on womens apparel and $27 mllllon per day on personal care producLs

1he socalled beauLy and fashlon lndusLry has LradlLlonally focused on whlLe Amerlca however Lhe new
mulLlculLural maLh ls leadlng experLs Lo reLhlnk based on Lhese sLaLlsLlcs 33 mllllon Afrlcan
Amerlcans spend $646 bllllon a year 33 mllllon PlspanlcAmerlcans spend $381 bllllon 10 mllllon Aslan
Amerlcans spend $297 bllllon 1hese lndlvlduals currenLly make up 33 of Amerlca 8y 2030 lL ls
esLlmaLed LhaL Lhese lndlvlduals wlll make up 30 of Amerlca 1hls audlence ls baslcally unLapped when
lL comes Lo halr care skln care nall care and cosmeLlcs

8y 2010 Lhe Leen populaLlon ls expecLed Lo grow Lo 34 mllllon however recenL recesslon has puL a
sLraln on LhaL spendlng paLLern 1he lndusLry ls noL sure wheLher Leens are poorer Lhan ln prevlous
years or lf Lhelr parenLs are forclng Lhem Lo spend on more pracLlcal lLems ln llne wlLh Lhe famlly budgeL
1oLal Leen spendlng ln 2002 dropped 37 Lo $209 bllllon 1ween shoppers spenL $101 bllllon

More and more cloLhlng purchases are planned raLher Lhan belng lmpulse/spurofLhemomenL
purchases A survey conducLed ln Lhe sprlng of 2003 revealed LhaL 60 of Lhe respondenLs say
purchases are planned 1hls compares Lo 33 ln 2002 ln Lhe mld1990s lL was aL 33

Shopplng Lrlps are geLLlng shorLer Women are sald Lo spend 88 mlnuLes Loday (2003) compared wlLh
93 mlnuLes ln 2000 1he number of Llmes Lo shop for cloLhlng per monLh ls holdlng sLeady aL
approxlmaLely 17 Llmes per monLh

ln response Lo lncreased compeLlLlon from new markeL parLlclpanLs reLallers are exerclslng a varleLy of
sLraLegles lncludlng downslzlng and resLrucLurlng changlng Lhelr merchandlse mlx addlng servlces and
adapLlng Lhe qulck response sysLem for conLrolllng lnvenLory managemenL cosLs

1he lnLerneL has become anoLher Lremendous advanLage Lo Lhe lndusLry WlLh Lhe lnLerneL consumers
can geL updaLed and almosL lnsLanLaneous lnformaLlon 1he greaL ecommerce webslLes of many
reLallers are helplng Lo ensure global buslness lnLerneL sales are guldlng reLallers lnLo [usL Lhe rlghL
lnLernaLlonal and domesLlc clLles ln whlch Lo bulld sLores and allowlng apparel companles Lo make Lhelr
brands known lnLernaLlonally even before Lhey have any physlcal presence ln Lhe lnLernaLlonal markeL

Apparel SelecLlon lashlon ersonal Appearance and lmage
ComforL conLlnues Lo be a very lmporLanL elemenL when purchaslng cloLhlng Many consumers elecL Lo
wear casual apparel because lL feels more comforLable ln a 2002 survey 31 of Lhe respondenLs sald
Lhey choose comforL over beLLer looklng cloLhlng lLems for a nlghL ouL on Lhe Lown ln 1994 39
opLed for Lhe beLLer looklng cloLhlng lLems

Women have a greaL deal of casual cloLhlng ln Lhelr wardrobes Accordlng Lo CoLLon lncs LlfesLyle
MonlLor 36 say Lhey own more casual cloLhlng Lhan work cloLhlng whlle 33 say Lhe reverse

Accessorles have galned fashlon sLaLus durlng Lhe pasL couple of years Consumers unwllllng Lo
purchase blgLlckeL lLems Lo updaLe Lhelr wardrobes have seen and used accessorles as an lnexpenslve
way Lo achleve a new updaLed appearance

SlxLy percenL of Amerlcan women are fullflgured (slze 14 and above) LxpendlLures on apparel by plus
slzed consumers grew 8 from 1998 Lo 2001 whlle Lhose by regularslzed women grew 3

Many manufacLurers and reLall sLores are leveraglng Lhelr producLs by llcenslng Lhelr brands for
accessorles such as sunglasses waLches fragrances walleLs and fooLwear 1hls sLraLegy ls lncreaslng
exposure for wellknown brands and bulldlng consumer confldence ln a speclflc brand

1he challenge for many apparel reLallers conLlnues Lo be anLlclpaLlng Lhe comlng Lrends and decldlng
how Lhose Lrends wlll or wonL flL lnLo Lhe companys lmage Companles ln Lhe apparel lndusLry are
becomlng more Luned ln Lo whaL Lhelr cusLomers wanL and glvlng Lhem whaL Lhey wanL

1exLlles (llbers labrlcs llnlshes eLc) Care and MalnLenance
SLreLch conLlnues Lo be exLremely blg (1 Lo 3 Lycra spandex added Lo many fabrlcs)

WrlnklereslsLanL garmenLs are much lmproved Lhanks Lo recenL Lechnology however consumers musL
pay more for Lhe producL LlfesLyle MonlLor (ArLlcle 301) conflrms LhaL when glven a cholce 33 of Lhe
women surveyed sald Lhey would pay $33 for 100 coLLon wrlnklereslsLanL slacks versus $30 for a palr
of coLLon/polyesLer slacks (!uly 2003)

erformance fabrlcs are noL new buL conLlnue Lo geL beLLer and more sophlsLlcaLed new
developmenLs are emerglng ln molsLure managemenL and cllmaLe conLrol

ln fashlon novelLy prlnLs are on Lhe rlse Some speclflcs lnclude absLracLs grafflLl phoLo prlnLs and
Aslanlnsplred looks 1exLures conLlnue Lo be exLremely good wlLh such looks as crlnkled suedes sLreLch
comblnaLlons eLc Lmbelllshlng wlll conLlnue wlLh embroldery lace and llke lLems

Apparel roducLlon/Sewlng
1he readyLowear apparel lndusLry ls sufferlng from cheaper lmporLs and heavy dlscounLlng Accordlng
Lo several experLs Lhere are Loo many sLores and Loo much sLuff drlvlng compeLlLors use of lower
prlces as a prlmary weapon for growLh AlLhough consumers beneflL lnlLlally from Lhls slLuaLlon
reLallers are faclng Lhe worsL of boLh worlds deflaLlon on Lhe revenue slde and lnflaLlon on Lhe cosL
slde ulLlmaLely Lhe consumer ls hurL when a LrusLed reLaller musL sell or go ouL of buslness CuallLy ls
frequenLly sacrlflced ln Lhe end
A crlLlcal elemenL for longLerm success ln Lhe apparel lndusLry ls global expanslon Companles have Lo
be dellberaLe ln lnLernaLlonal expanslon and expand lnLo counLrles where Lhe greaLesL poLenLlal exlsLs
as Lhe lnLernaLlonal secLor of Lhe lndusLry becomes more lmporLanL

Sources

Apparel and 1exLlle 1rends complled by Llnda PeaLon LxLenslon rofessor 1exLlles CloLhlng
CooperaLlve LxLenslve Servlce unlverslLy of kenLucky College of AgrlculLure november 2003

Apparel lndusLry WowLssayscom
422 MarkeL CrowLh

AdulL Apparel

1he apparel markeL as a whole has been sufferlng from a deflaLlonary Lrend ln prlces as manufacLurers
move Lo lndependenL conLracL manufacLurlng overseas AnoLher reason for prlce weakness ls Lhe casual
Lrend ln cloLhlng casual ls less expenslve and generally lasLs longer Lhan dressler cloLhlng 1hese
facLors seL reLallers on someLhlng of a promoLlonal spree

1he uS fashlon lndusLry had a modesL 2 lncrease ln apparel sales for 2000 Accordlng Lo leadlng
markeL lnformaLlon provlder nu Croup lnc LoLal apparel sales reached $182 bllllon lasL year
compared Lo $180 bllllon Lhe prevlous year Whlle sLlll a small percenLage of LoLal apparel sales
onllne/lnLerneL sales showed doubledlglL growLh ln 2000

Across all channels of dlsLrlbuLlon sales of women's apparel ouLpaced LoLal markeL growLh drlven by
sLrong sales ln boLh Lhe large slze and peLlLe markeLs ln conLrasL men's apparel Lhe lndusLry wlnner ln
1999 lagged ln 2000 decreaslng ln boLh dollar volume and markeL share 1he lnfanLs' and Loddlers'
buslness experlenced recordbreaklng growLh from 1999 Lo 2000

ln 2003 Lhe markeL showed some slgns of recovery and aL leasL a llLLle evldence LhaL dressler cloLhlng ls
selllng agaln Powever Lhe longLerm deflaLlonary Lrend ln cloLhlng wlll conLlnue Lo challenge Lhe mens
ouLwear markeL

SporLswear

ln Lhe challenglng uS reLall envlronmenL casual sporLswear one of Lhe Lop caLegorles of Lhe pasL few
years has been sLeadlly narrowlng lLs appeal noL leasL for lLs lack of lmaglnaLlon ln aLLracLlng youLh

Powever women and men over Lhe age of 33 renewed Lhelr alleglance Lo sporLs and acLlve llfesLyles by
buylng up Lo 24 and 19 more respecLlvely ln 2002 Lhan ln Lhe prevlous year accordlng Lo uS
analysL S1S MarkeL 8esearch

Womens casual sporLswear ln Lhe uS ln 2002 reglsLered a sllghL conLracLlon compared Lo 2001 falllng
Lo uS $388 bllllon from $396 bllllon whlle mens sporLswear showed less dramaLlc growLh Lhan ln pasL
years rlslng Lo uS $268 bllllon

1he mosL slgnlflcanL galns were made wlLh consumers over 33 years of age wlLh mens shopplng aL
speclalLy sLores up 6 Lo uS $17 bllllon and purchases by women over 33 up 14 Lo more Lhan uS $47
bllllon compared Lo 2001

!unlors CloLhlng

MarkeLers are compeLlng Lo provlde Lhese age segmenLs deslred producLs unforLunaLely less of Leens
and Lweens money ls belng spenL on cloLhlng Lhan manufacLurers and reLallers would llke lrom 2001
Lo 2002 Leen and Lween apparel purchases fell 37 and 46 respecLlvely

When looklng aL cloLhlng purchase drlvers for consumers aged 13 Lo 17 prlce ls a hlghly ranklng
aLLrlbuLe for [eans purchases wlLh 40 of dollar share ln 2002 up almosL 10 versus 2001

Chlldrens Wear

1he $28 bllllon chlldrens apparel markeL experlenced conLlnuous growLh from 1998 Lo 2003 wlLh Lhe
excepLlon of Lhe key 2001 hollday season whlch was depressed due Lo Lhe 9/11 LerrorlsL aLLacks 1hls
performance sLands ln conLrasL Lo Lhe overall cloLhlng markeL whlch has been noLlceably weak ln Lhls
perlod Powever even wlLhln chlldrens cloLhlng sales of lnfanL and Loddler cloLhlng have grown whlle
Lhose for older klds have decllned

1here has been furLher change ln Lhe Amerlcan consumers proflle durlng 19982003 whlch began ln
Lhe early 1990s a ma[orlLy of consumers shop aL a small number of mass merchandlse or naLlonal
deparLmenL sLores ln whlch Lhey expecL Lo flnd a comblnaLlon of Lrendy producLs and value prlces
Leadlng brand manufacLurers are able Lo reLaln markeL share only Lhrough alllances wlLh Lhe
lncreaslngly domlnanL cloLhlng reLall sLores such as WalMarL 1argeL Sears and !C enneys 1o
follow Lhe Lrend of consumer Lrafflc even premler brands ln Lhe chlldrens apparel markeL are
approachlng Lhe dlscounL channel whlle speclalLy sLores are compeLlng by launchlng less expenslve
concepL sLores ?eL demonsLraLlng LhaL chlldrens cloLhlng ls a complex markeL wlLh a large and dlsLlncL
group of consumers ouLslde Lhe Lyplcal consumer proflle speclalLy cloLhlng sLores galned slgnlflcanL
markeL share ln 2001 Lo 2003
423 MarkeL needs

Men (Age 20 Lo 49 ?ears)
8randed roducLs Men are more up fronL abouL Lhelr deslre for branded goods whlle women are more
subLle Mens sporLswear for example ofLen carrles enormous logos whlle Lhe logo on Lhe expenslve
llpsLlck worn by many a woman remalns aL Lhe boLLom of Lhe handbag Lo be flashed only dlscreeLly ln
Lhe powder room

ln a survey 8rand new Cn 1hursday conducLed by vlcLorla and AlberL Museum nearly half of all male
respondenLs clalmed LhaL you can learn a loL abouL a person from Lhe brands Lhey buy ln addlLlon
when Lhe research ls broken down lnLo 16 Lo 34yearolds and Lhose 33 or older Lhere ls a marked
dlfference ln responses Among Lhe younger age group 33 admlL LhaL Lhey are lnfluenced by brand
lmage whlle only 13 of Lhe over33s clalm suscepLlblllLy
ComforL/LasyCare Men wanL comforL and easycare apparel and Lhe sporLswear world provldes Lhls
Lhrough hlghLech fabrlcs Accordlng Lo 8lll ChlLls presldenL of global markeLlng for uuonL 1exLlles
lnLerlors (u1l) erformance fabrlcs have been a nlche for Lhe aLhleLe buL based on our research we
belleve LhaL all men parLlcularly smarL men wanL much more ouL of Lhelr cloLhes

Many apparel brands lncludlng proprleLary reLall brands see performance as Lhe fuLure Loo and Lheyre
golng forward wlLh more apparel LhaLs comforLable and easy Lo care for 1hls lncludes Lhe older
wrlnklereslsLanL or wrlnklefree Lechnology along wlLh newer Lechnologles such as sLaln reslsLance
sLreLch molsLure managemenL and uv proLecLlon (Source CeLLlng 1echnlcal by 8renda Lloyd un8
AugusL 2003)

Women (Age 20 Lo 49 ?ears)
ComforL/LasyCare Women avold wrlnkles on Lhelr skln and Lhey donL wanL Lhem on Lhelr cloLhes
elLher Whlle Lhe lounLaln of ?ouLh may be eluslve ln Lhe ongolng quesL for comforLable coLLon
cloLhlng LhaL wonL wrlnkle women (and men) are wlnnlng Lhe baLLle 1echnologlcal advances have
ushered ln a new generaLlon of wrlnklereslsLanL 100 coLLon garmenLs LhaL dellver on comforL sLyle
and wear whlle reLalnlng a crlsp appearance LhroughouL Lhe day (Source A resslng MaLLer ln
LlfesLyle MonlLor lall 2003)
Apparel Slzlng 1he dlscrepancy ln Lhe acLual slze of women who may all accuraLely clalm Lo wear Lhe
same slze ls one of Lhe many flL anomalles LhaL ls a reallLy Loday for Lhe uS cloLhlng lndusLry LlLLle
analysls of body shapes and slzes has been conducLed slnce Lhe 1940s for women and slnce Lhe Clvll
War for men

1hls lack of research along wlLh a lack of slzlng sLandards added Lo Lhe growlng pracLlce of vanlLy slzlng
addlng lnches Lo cloLhlng Lo make lL appear LhaL a woman wears a slze smaller Lhan she acLually does
has creaLed a dlsparlLy beLween Lhe cloLhes avallable Lo Lhe consumer and Lhelr acLual body shapes and
slzes (Source A llLLlng SoluLlon by 1errl 8oss Apparel AugusL 2003)
SporLswear unLll very recenLly even lf you goL women lnLo Lhe sLores looklng for sporLlng goods and
apparel Lhere was noLhlng for Lhem Lo buy 1here ls a deflnlLe vold ln Lhe markeL for womens relaLed
merchandlse such as femlnlne looklng garmenLs raLher Lhan unlsex

lemale aLhleLes and enLhuslasLs ln a number of sporLs have complalned abouL a lack of selecLlon lor
example kaLe Cengo a professlonal lnllne skaLer flnds apparel offerlngs for aggresslve lnllne skaLlng Lo
be very sllm 1here ls never any selecLlon for women Cool cloLhes are avallable from small
manufacLurers 8uyers arenL puLLlng lL ln Lhelr sLores or deflnlng Lhelr cusLomer needs say kaLe

Women are Lhe prlmary sporLlng goods buyers responslble for fourflfLhs of all aLhleLlc apparel
purchases As cloLhlng opLlons for Lhe female aLhleLe become more LargeLed women looklng for
aLhleLlc cloLhlng and shoes wlll paLronlze Lhose shopplng envlronmenLs LhaL undersLand Lhe apparel
requlremenLs speclflc Lo Lhelr sporL 1he womans sporLswear markeL raked ln nearly $23 bllllon ln 2000
and ls expecLed Lo Lop $38 bllllon by 2003 (Source Clrl ower 8oosLs lemale SporLswear lndusLry Lo
$23 8llllon ln 2000 8 newswlre new ?ork !anuary 10 2004)
Senlor CloLhlng llLnessorlenLed boomers and 1lLle lx generaLlon aLhleLes are Leamlng up Lo glve
womens aLhleLlc apparel a markeL esLlmaLed aL $23 bllllon ln 2000 sLrong growLh poLenLlal wlLhln an
oLherwlse flaL sporLlng goods arena

MaLure consumers are lncreaslng Lhelr spendlng on apparel as baby boomers reach peak earnlngs
levels and Lhelr household expenses decrease wlLh chlldren beglnnlng Lo supporL Lhemselves Women
aged 30 Lo 64 surpassed female Leens beLween 13 and 18 as Lhe largesL spenders on casual sporLswear
ln 2002

Chlldren (8oys/Clrls Age 3 Lo 19 ?ears)
lashlon WlLh fashlon conLlnulng Lo drlve Lhe chlldrens apparel markeL lndusLry players are aLLempLlng
Lo work more qulckly and efflclenLly Lo make sure Lhey have Lhe rlghL looks on Lhe floor aL Lhe rlghL
Llme Accordlng Lo 8oberL k luLLerman CLC of 8oberL k luLLerman AssoclaLes !unlors cloLhlng
young urban and hlp fashlon reLallers llke lorever 21 WeL Seal Arden 8 and PM are polsed for
growLh

Chlldrens and parenLs everlouder crles for klds apparel wlLh looks LhaL mlrror [unlors young mens
and even adulL cloLhlng ls also lnduclng reLallers Lo commlL Lo plnLslzed lncarnaLlons of older sLyles
wlLhouL walLlng Lo see how Lhe laLLer fares wlLh cusLomers 1ops wlLh spagheLLl sLraps and mulLlcolored
shlmmerlng or sequlned borders are galnlng ground wlLh glrls 8oys are gravlLaLlng Loward aLhleLlc
sllhoueLLes brlghLly colored prlnLed camp shlrLs worn over muscle 1shlrLs zlpoff panLs and shorLs
LhaL exLend several lnches beyond Lhe knee/lCn1

SLyle ls lmporLanL Lo Lhese young adulLs buL sLyle comes ln many dlfferenL packages cellular phones
cars and vacaLlon desLlnaLlons are among Lhem ln addlLlon Lhe Leen and Lween segmenLs appear Lo
flnd lndlvlduallLy appeallng
lnfanLs/1oddlers (8oys/Clrls Age 0 Lo 4 ?ears)

LLhnlc ueslgns/Colors 8y 2003 aL leasL 40 of Lhe deslgns and colors seen on chlldrens cloLhlng wlll be
Lallored Lo appeal Lo Afrlcan Amerlcans and Plspanlcs Accordlng Lo 1he uS MarkeL for lnfanL 1oddler
and reschool CloLhlng a newly publlshed ackaged lacLs reporL avallable aL MarkeL8esearchcom
chlldrens cloLhlng companles have ldenLlfled eLhnlc markeLs and speclflcally Afrlcan Amerlcan and
Plspanlc segmenLs of Lhe populaLlon as Lhelr mosL lmporLanL audlence

Accordlng Lo uon MonLuorl AcqulslLlons LdlLor for ackaged lacLs Plspanlcs and Afrlcan Amerlcans
are already maklng a vasL percenLage of chlldrens cloLhlng purchases We have found LhaL Lhese eLhnlc
demographlcs are more Lhan Lwlce as llkely Lo purchase lnfanL Loddler and preschool cloLhlng When
you conslder Lhls flndlng ln Landem wlLh demographlc growLh Lrends of recenL years Lhere can be llLLle
doubL LhaL success ln Lhe klds cloLhlng markeL resLs upon a companys ablllLy Lo markeL effecLlvely Lo a
dlverse populaLlon
43 lndusLry Analysls

1he apparel and fabrlcaLed LexLlle producLs lndusLry ls a maLure slow growlng lndusLry lnLense
compeLlLlon characLerlzes Lhls lndusLry and drlves lLs everchanglng sLrucLure and operaLlons 1he
markeL ls hlghly fragmenLed parLlcularly ln Lhe 1rlSLaLe Area 1he complexlLy of Lhls markeL calls for a
hlgh level of research and speclallzaLlon prlor Lo any aLLempL aL markeL peneLraLlon

1he fashlon lndusLry ln Lhe 1rlSLaLe Area malnly looks Lo new ?ork ClLy wlLh lLs mulLlple opporLunlLles
ln parLlcular Lhe famous CarmenL ulsLrlcL an area of Lhe clLy beLween 33Lh and 42nd SLreeL and 3Lh and
9Lh Avenue 1hls dlsLrlcL ls Lhe maln gaLherlng polnL for buyers and deslgners ln Lhe unlLed SLaLes and ls
beglnnlng Lo rlval Lhe ma[or lnLernaLlonal fashlon caplLals of arls and Mllan ln addlLlon many flrms
place Lhelr head offlces and/or buylng offlces ln new ?ork ClLy

1he resL of Lhe 1rlSLaLe Area follows fashlon buL ln longer cycles and can serve as Lhe sprlngboard for
manufacLurers who donL feel ready for Lhe ma[or challenge represenLed by Lhe new ?ork ClLy markeL

Cverall Lhe uS apparel lndusLry ls large maLure and hlghly fragmenLed Apparel sold ln Lhe unlLed
SLaLes ls produced boLh domesLlcally and ln forelgn locaLlons Accordlng Lo esLlmaLes from Lhe
Amerlcan Apparel ManufacLurers AssoclaLlon (AAMA) an lndusLry Lrade group based ln ArllngLon
vlrglnla Lhe dollar value of domesLlc apparel producLlon was $39 bllllon aL Lhe wholesale level ln 1997
(laLesL avallable) whlch was less Lhan Lhe $46 bllllon (uS wholesale value) of goods lmporLed lnLo Lhe
unlLed SLaLes ln addlLlon $13 bllllon of goods were produced ln boLh Lhe unlLed SLaLes and anoLher
counLry

ln 1998 Amerlcans purchased approxlmaLely $213 bllllon of apparel and fooLwear Accordlng Lo nu
Croup lnc approxlmaLely $177 bllllon was spenL on cloLhlng ln 1998 1he remalnlng $38 bllllon was
used Lo purchase more Lhan 11 bllllon palrs of shoes WlLh Lhe uS populaLlon aL 270 mllllon Lhls
accounLs for roughly $800 a year per caplLa spenL on apparel and fooLwear
431 ulsLrlbuLlon aLLerns

ln addlLlon Lo Lhe LradlLlonal channels new ?ork has a unlque Lrade sLrucLure LhaL enhances buslness
opporLunlLles ln addlLlon Lo havlng slx Lo elghL markeL weeks each year durlng whlch buyers can place
Lhelr orders several showroom represenLaLlves offer opporLunlLles for placlng orders LhroughouL Lhe
year 1hls markeL characLerlsLlc creaLes openlngs for deslgners who wanL Lo enLer Lhe markeL and wanL
good vlslblllLy for Lhelr producLs

ln general LradlLlonal dlsLrlbuLlon channels are followed 1he producLs are boughL from dlsLrlbuLors
and/or dlrecL from Lhe manufacLurers who have llLLle say ln how producLs are markeLed Slnce
compeLlLlon ln Lhe apparel lndusLry ls exLremely lnLense Lhe use of a sales represenLaLlve ls sLrongly
recommended Lo faclllLaLe enLry lnLo Lhe markeL ulrecL dlsLrlbuLlon ln Lhls markeL can requlre a very
exLenslve lnvesLmenL of Llme and money wlLh no assurance of poslLlve resulLs
432 CompeLlLlon and 8uylng aLLerns

CompeLlLlon ln Lhls lndusLry currenLly Lurns on prlces 1he flrsL Lwo quarLers of 2001 were parLlcularly
dlfflculL for uS LexLlle manufacLurers leadlng Lhem Lo shlfL Lo a push sLraLegy AfLer Lwo years of rlslng
prlces pressure from forelgn compeLlLlon and shaky economlc condlLlons leadlng LexLlle manufacLurers
are belng forced Lo lower Lhelr prlces

ln a broad vlew Lhe reLall apparel lndusLry compeLes wlLh all oLher secLors ln Lhe reLall lndusLry 1hese
dlfferenL secLors lnclude elecLronlc reLallers wholesalers oLher dlscounL sLores shoe sLores
convenlence sLores and oLhers Many of Lhese dlfferenL secLors have comblned LogeLher and ofLen a
company may operaLe ln varlous dlvlslons Lo lncrease proflLablllLy

1999 uaLa lndlcaLe LhaL Lhe largesL reLallers ln Lhe apparel lndusLry were
WalMarL $166809000
Sears 8oebuck and company $41071000
kMarL company $33923000
1argeL CorporaLlon $33702000
!C enny $32310000

1he Lop reLallers ln Lhe Apparel SLores caLegory lncluded
1he Cap $11633398
1he LlmlLed $9723334
1!x $8793347
lnLlmaLe 8rands $4310836
Splegel/Lddle 8auer $3210223

Many experLs polnL Lo changes ln consumer aLLlLudes as a drlvlng force behlnd Lhe resLrucLurlng LhaL ls
occurrlng ln Lhe reLall apparel lndusLry noL only have consumers become more cauLlous ln Lhelr buylng
hablLs buL Lhey have been reduclng Lhe porLlon of dlsposable lncome LhaL Lhey spend on apparel ln
addlLlon consumers are lncreaslngly demandlng quallLy goods aL low prlces whlch forces reLallers Lo
permanenLly sell merchandlse aL sale prlces wlLh promoLlons occurrlng LhroughouL Lhe year
LconomlsLs and soclologlsLs have aLLrlbuLed lncreaslngly volaLlle consumer demand Lo growlng numbers
of new producLs Lhe rlse of fashlonconsclousness for even Lhe lowesLcosL apparel and more selllng
seasons (Source Codes of ConducL ln Lhe uS Apparel lndusLry uS ueparLmenL of Labor 8ureau
of lnLernal Labor Affalrs)
433 Maln CompeLlLors

AlLhough Lhe apparel lndusLry ls maLure and slow growlng lL exlsLs ln a dynamlc and compeLlLlve
envlronmenL Many companles are resLrucLurlng Lo creaLe leaner organlzaLlons and adopL new
Lechnologles wlLh consolldaLlon prevalenL as larger companles galn leverage ln markeL poslLlon and cosL
cuLLlng measures

8ePablllmenLs compeLlLlon ln Lhe apparel lndusLry ls wldely varled and comes from a varleLy of sources
lncludlng 1ommy Pllflger lnc 1he Cap lnc Abercromble llLch Lhe !ones Apparel Croup lnc olo
8alph Lauren Corp Llz Clalborne lnc and nauLlca LnLerprlses lnc 1he closesL compeLlLor ln Lerms of
popularlLy growLh and producL llne ls Lhe lu8u CorporaLlon

1ommy Pllflger lnc (wwwLommycom)

1ommy Pllflger CorporaLlon Lhrough lLs subsldlarles deslgns and sources markeLs mens and womens
sporLswear [eanswear and chlldrens wear under Lhe 1ommy Pllflger Lrademarks 1hrough a range of
sLraLeglc llcenslng arrangemenLs (almosL 40 producL llnes) Lhe company also offers a broad array of
relaLed apparel accessorles fooLwear fragrance and home furnlshlngs 1he companys producLs can
be found ln leadlng deparLmenL and speclalLy sLores LhroughouL Lhe unlLed SLaLes Canada Lurope
Mexlco CenLral and SouLh Amerlca !apan Pong kong and oLher counLrles ln Lhe lar LasL as well as Lhe
companys own neLwork of speclalLy and ouLleL sLores ln Lhe unlLed SLaLes Canada and Lurope

1ommy Pllflgers cloLhlng company 1CM lnc ls among Lhe leadlng exponenLs ln Lhe lnLenslfled process
of mass cusLomlzaLlon over Lhe lasL few years 8eglnnlng wlLh a llne of preppy looklng cleancuL and
conservaLlve sporLswear slmllar Lo LhaL offered by 1he Cap lnc buL somewhaL more expenslve
Pllflger seL ouL ln Lhe early 1990s Lo compeLe agalnsL deparLmenL sLore sLaple llnes llke 8alph Lauren
and Llz Clalborne who were essenLlally ?oung 8epubllcan cloLhlng ln Lhe course of only a few years
Lhls baslcally khakl crew and buLLondown WAS sLyle whlle remalnlng a consLanL Lheme ln Pllflger
collecLlons has been submlLLed Lo varlaLlons whlch are lnLended Lo brlng Lhe producL closer Lo PlpPop
sLyle bolder colors blgger and baggler sLyles more hoods and cords and more promlnenL logos and
Lhe Pllflger name 1CMs corporaLe sLraLegles have been ahead of Lhose of many of lLs compeLlLors and
have always sLressed Lhe acceleraLlon of producL dellvery new forms of reLalllng parLnershlp lnnovaLlve
Lul usage for lnvenLorles and cusLomer Lracklng and speedy and Llmely lnLroducLlon of new llnes and
redeslgned goods assurlng consumers a wlde range of producL cholces (Source 1ommy Pllflger ln
Lhe Age of Mass CusLomlzaLlon ln no SweaL by aul SmlLh edlLed by Andrew 8oss)

lor Lhe nlne monLhs ended 12/31/03 1ommy Pllflgers neL revenues fell 2 Lo $137 bllllon neL
lncome before accounLlng change rose from $302 mllllon Lo $1033M 8evenues reflecL fewer
Wholesale segmenL sales ln Lhe mens womens and chlldrens producL caLegorles neL lncome reflecLs
Lhe absence of $849 mllllon ln sLore closurerelaLed speclal charges

1he Cap lnc (wwwgapcom)

1he Cap lnc ls a global speclalLy reLaller operaLlng sLores selllng casual apparel accessorles and
personal care producLs for men women and chlldren under Lhe Cap 8anana 8epubllc and Cld navy
brands 1he company operaLes sLores ln Lhe unlLed SLaLes Canada Lhe unlLed klngdom lrance
Cermany and !apan As of lebruary 1 2003 Lhe company operaLed a LoLal of 4232 sLore concepLs aL
3117 locaLlons 1he companys sLores alm Lo offer a shopperfrlendly envlronmenL wlLh an assorLmenL
of casual apparel and accessorles LhaL emphaslze sLyle quallLy and good value Cap sLores are generally
open seven days per week (where permlLLed by law) and mosL holldays All sales are Lendered for cash
personal checks deblL cards or credlL cards lncludlng Cap 8anana 8epubllc and Cld navy prlvaLe label
credlL cards whlch are lssued by a Lhlrd parLy Cap deslgns vlrLually all of lLs producLs whlch ln Lurn are
manufacLured by lndependenL sources and sold under Lhe companys brands

Slnce 1he Caps foundlng ln 1969 Lhe company has been bullL upon a culLure of passlon creaLlvlLy
energy and enLrepreneurlal flexlblllLy 1hese characLerlsLlcs have helped 1he Cap conLlnually evolve Lo
learn from lLs challenges and Lo make Lhe changes necessary Lo creaLe longLerm quallLy growLh 1he
Cap Cld navy and 8anana 8epubllc are Lhree excepLlonal brands wlLh sLrong emoLlonal appeal 1hese
cloLhlng llnes provlde cusLomers wlLh cloLhes and accessorles LhaL enhance personal sLyle cloLhes LhaL
are slmple sexy and cool 1he power of Lhese brands and Lhe lmporLanL place Lhey hold ln Lhe
everyday llfe of people around Lhe world provlde Lhe company wlLh Lremendous opporLunlLles Lo
maxlmlze Lhls unlque brand afflnlLy

lor Lhe flscal year ended 1/31/04 1he Caps neL sales rose 10 Lo $1383 bllllon neL lncome LoLaled
$103 bllllon up from $4773 mllllon 8esulLs reflecL an lncrease ln comparable sLore sales lmproved
merchandlse marglns and lower occupancy expenses

Abercromble llLch (wwwabercromblecom)

Abercromble llLch Co ls a speclalLy reLaller LhaL operaLes sLores selllng casual apparel personal care
and oLher accessorles for men women and klds under Lhe Abercromble llLch Abercromble and
PolllsLer Co brands As of lebruary 1 2003 Lhe company operaLed 602 sLores ln Lhe unlLed SLaLes
1he companys sLores and polnLofsale markeLlng are deslgned Lo convey Lhe prlnclpal elemenLs and
personallLy of each brand 1he sLore deslgn furnlLure flxLures and muslc are all carefully planned and
coordlnaLed Lo creaLe a shopplng experlence LhaL ls conslsLenL wlLh Lhe Abercromble llLch llfesLyle

1he company has become Lhe cloLhler of cholce for Lhe young and fashlonable and ls no longer your
faLhers Abercromble llLch 1he muslc alone does as much Lo repel undeslrables say anyone over
23 as aLLracL LargeL cusLomers Cnce a respecLed reLaller Lhe company has aLLracLed conLroversy wlLh
Lhese ob[ecLlves lssues of Al CuarLerly read llke a cross beLween a caLalog and husLler magazlne
leaLurlng nude models ln suggesLlve poses Al CuarLerly has carrled revlews of eroLlc books and an
lnLervlew wlLh a porn sLar compleLe wlLh professlonal Llps 1he caLalog comes enclosed ln shrlnkwrap
and sLamped xxx you musL be 18 Lo buy a copy 8ecenLly Lhe companys boLLom llne was hlL hard by
a naLlonwlde boycoLL and bad press generaLed by Lhe pornographlc caLalog Al CuarLerly

lor Lhe flscal year ended 1/31/04 Abercromble and llLchs neL sales rose 7 Lo $171 bllllon neL
lncome rose 3 Lo $2031 mllllon 8evenues reflecLs Lhe addlLlon of new sLores and conLlnued lncreases
ln Lhe womens markeL neL lncome was parLlally offseL by hlgher general admlnlsLraLlve and sLore
operaLlng expenses

!ones Apparel Croup lnc (www[nycom)

!ones Apparel Croup lnc deslgns and markeLs branded apparel fooLwear and accessorles 1he
companys brands lnclude !ones new ?ork Lauren by 8alph Lauren 8alph by 8alph Lauren and olo
!eans company llcensed from olo 8alph Lauren CorporaLlon Lvanlcone 8ena 8owan norLon
McnaughLon Clorla vanderbllL Lrlka lel Lnergle 1odd Cldham nlne WesL Lasy SplrlL Lnzo
Anglollnl 8andollno napler and !udlLh !ack !ones Apparel also markeLs cosLume [ewelry under Lhe
1ommy Pllflger brand llcensed from 1ommy Pllflger CorporaLlon and Lhe Clvenchy brand llcensed from
Clvenchy CorporaLlon as well as fooLwear and accessorles under Lhe LsplrlL brand llcensed from LsprlL
Lurope 8v Lach brand ls dlfferenLlaLed by lLs own dlsLlncLlve sLyllng prlclng sLraLegy dlsLrlbuLlon
channel and LargeL consumer !ones Apparel operaLes four segmenLs wholesale beLLer apparel
wholesale moderaLe apparel wholesale fooLwear and accessorles and reLall

!ones alms Lo galn sLablllLy ln Lhe apparel lndusLry as well as reLall markeLs Lhrough bulldlng compleLe
llfesLyle brands servlng a wlde breadLh of consumers ln a wlde range of lncome levels and shopplng
desLlnaLlon preferences (Source 8 newswlre 2/7/01) 1he company has a mulLlbrand mulLl
dlsLrlbuLlon buslness sLraLegy

lor Lhe flscal year endlng 12/31/03 !ones neL sales rose 1 Lo $438 bllllon neL lncome before
accounLlng change decreased 1 Lo $3286 mllllon 8evenues reflecL Lhe acqulslLlon of Clorla vanderbllL
whlch provlded healLhy sales Larnlngs were offseL by a decrease ln gross margln and a decrease ln
operaLlng margln

olo 8alph Lauren Corp (wwwpolocom)

olo 8alph Lauren CorporaLlon deslgns llcenses conLracLs for Lhe manufacLure of markeLs and
dlsLrlbuLes mens and womens apparel accessorles fragrances skln care producLs and home
furnlshlngs 1he companys sales are prlnclpally Lo ma[or deparLmenL and speclalLy sLores locaLed
LhroughouL Lhe unlLed SLaLes and Lurope lL also sells dlrecLly Lo consumers Lhrough fullprlce and
ouLleL olo 8alph Lauren and Club Monaco sLores locaLed LhroughouL Lhe unlLed SLaLes Canada Lurope
and Asla olo ls also a parLy Lo llcenslng agreemenLs whlch granL Lhe llcensee excluslve rlghLs Lo use lLs
varlous Lrademarks ln connecLlon wlLh Lhe manufacLure and sale of deslgnaLed producLs ln speclfled
geographlcal areas

1he olo 8alph Lauren company was esLabllshed ln 1967 wlLh a llne of mens Lles lrom Lhe onseL
founder 8alph Lauren belleved ln defylng convenLlon Lo brlng abouL unlque yeL Llmeless sLyles LhaL
decades laLer have become Lhe companys Lrademark WhaL began wlLh a Lle 33 years ago has grown
lnLo an enLlre world and llfesLyle LhaL has redeflned how Amerlcan sLyle and quallLy are percelved olo
8alph Lauren has bullL an lnLernaLlonal mega brand by selllng fashlons and fragrances Lo Lhe well heeled
Lhrough deparLmenL sLores

ln 1999 Lhe company acqulred 1oronLobased Club Monaco afLer learnlng LhaL someLhlng ls
consldered ln vogue when lL reflecLs a prevalllng soclal mood Lhese days corporaLe ls deflnlLely noL
cool 1he acqulslLlon of Club Monaco a much smaller buslness was Lhe door Lo Lhe younger
consumers markeL and presenLed an effecLlve way for Lhe company Lo capLure cusLomers noL normally
aLLracLed Lo Lhe clean allAmerlcan look of Lhe 8alph Lauren llne wlLhouL allenaLlng lLs loyal base of
supporLers 1he Club Monaco chaln offers fashlon baslcs wlLh a Luropean flalr aL prlces well below
name deslgner wear

lor Lhe 39 weeks endlng 12/27/03 olo 8alph Lauren revenues rose 3 Lo $183 bllllon neL lncome
decreased 7 Lo $944 mllllon 8evenues reflecL an lncrease ln reLall neL sales neL lncome was offseL
by hlgher S/C/A expenses due Lo lncreased selllng salarles and relaLed cosLs and hlgher resLrucLurlng
charges

Llz Clalborne lnc (wwwllzclalbornecom)

Llz Clalborne lnc deslgns and markeLs an exLenslve range of branded womens and mens apparel
accessorles and fragrance producLs approprlaLe Lo wearlng occaslons ranglng from casual Lo dressy 1he
company operaLes Lhe Wholesale Apparel Wholesale nonApparel and 8eLall buslness segmenLs
Wholesale Apparel conslsLs of buslnesses LhaL deslgn manufacLure and markeL Lo Lhe companys
wholesale cusLomers womens and mens apparel Wholesale nonApparel deslgns manufacLures and
markeLs accessorles cosmeLlcs and [ewelry producLs 8eLall conslsLs of buslnesses LhaL sell merchandlse
deslgned and manufacLured by Lhe Wholesale Apparel and Wholesale nonApparel segmenLs Lo Lhe
publlc Lhrough companyoperaLed speclalLy reLall and ouLleL sLores and concesslon sLores where lLs
producLs are sold ln LhlrdparLyowned locaLlons

1he company founded by LllzabeLh Clalborne CrLenberg ln 1976 deslgned and produced moderaLely
prlced sporLswear for women 1he companys alm was Lo provlde cloLhes approprlaLe for elLher work or
lelsure and LllzabeLhs deslgns were marked by cleanly sculpLured sllhoueLLes and splashes of color
Lhese qulckly supplanLed Lhe dark Lallored sulLs Lhen popular ln 1980 Clalborne was named Lhe
fashlon lndusLrys flrsL LnLrepreneurlal Woman of Lhe ?ear A year laLer her flrm made a publlc sLock
offerlng afLer whlch Lhe company began Lo dlverslfy addlng peLlLe dress and shoe dlvlslons ln 1986
Lhe company was llsLed among Lhe lorLune 300 for Lhe flrsL Llme

lor Lhe 40 weeks ended 10/4/03 Llz Clalborne neL sales rose 18 Lo $321 bllllon neL lncome lncreased
19 Lo $2066 mllllon 8evenues reflecL Lhe addlLlon of sLores and Lhe acqulslLlon of MLxx neL lncome
also reflecLs an lncreased gross proflL margln due Lo lmproved companywlde lnvenLory managemenL
and lmproved producL performance

nauLlca LnLerprlses lnc (wwwnauLlcacom) (wwwvfccom)

nauLlca LnLerprlses salls Lhe deep blue seas of mens apparel 1he upscale cloLhler deslgns and markeLs
sporLswear ouLerwear and sleepwear for men as well as [eans and chlldrenswear nauLlca also
globally llcenses producLs such as fragrances waLches dlnnerware eyewear ralnwear swlmwear and
home furnlshlngs 1he companys brands lnclude nauLlca Larl !ean (womens denlm) !ohn varvaLos
(mens sporLswear) and L MagraLh and 8yron nelson (golf apparel) nauLlca sells Lhrough some 2300
reLallers ln Lhe uS 1300 lnsLore shops lLs flagshlp sLore ln new ?ork a handful of dlrecL reLall sLores
and over 100 of lLs own ouLleL sLores Cn AugusL 28 2003 a merger beLween nauLlca LnLerprlses lnc
and vl CorporaLlon (n?SL vlC) was compleLed As a resulL of Lhe merger nauLlca ls now a wholly
owned subsldlary of vl CorporaLlon

Slnce lLs foundlng nauLlca has Laken prlde ln an auLhenLlc Amerlcan herlLage LhaL draws people
LogeLher 1he foundaLlon for Lhe connecLedness ls rooLed ln Lhe companys core values classlc
confldenL advenLurous approachable nauLlca a modern Amerlcan classlc offers quallLy deslgn and
value whlle capLurlng Lhe essence of an acLlve advenLurous and splrlLed llfesLyle Larl !ean offers
unlquely sLyled womens denlm and apparel collecLlons wlLh parLlcular appeal Lo flLconsclous fashlon
savvy Leens and urban professlonals 1he !ohn varvaLos CollecLlon of apparel and accessorles for men
reflecLs a modern aLLlLude Comblnlng Lhe hlghesLquallLy Luropean fabrlcaLlons and deslgn deLalls Lhls
collecLlon redeflnes Amerlcan sLyle

vl CorporaLlon Lhe parenL corporaLlon for nauLlca LnLerprlses lnc Lhrough lLs operaLlng subsldlarles
deslgns manufacLures and markeLs branded [eanswear lnLlmaLe apparel occupaLlonal apparel
knlLwear ouLdoor apparel and equlpmenL chlldrens playwear and oLher apparel 1he consumer
apparel segmenL lncludes [eanswear and relaLed producLs womens lnLlmaLe apparel and chlldrens
apparel all havlng slmllar characLerlsLlcs of economlc performance producL Lype producLlon process
meLhod of dlsLrlbuLlon and class of cusLomer 1he occupaLlonal apparel segmenL ls dlsLlngulshed from
Lhe oLher segmenLs because of a dlfferenL class of cusLomer 1he ouLdoor apparel and equlpmenL
segmenL conslsLs of Lhe companys ouLerwear and advenLure apparel plus daypacks and Lechnlcal
equlpmenL and ls Lherefore dlsLlngulshed from Lhe oLher segmenLs by Lype of producLs 1he all oLher
segmenL conslsLs prlmarlly of Lhe companys llcensed sporLs apparel and dlsLrlbuLor knlLwear
operaLlons

lor Lhe flscal year ended 1/3/04 nauLlcas sales rose 2 Lo $321 bllllon neL lncome from conLlnued
operaLlons before accounLlng change rose 9 Lo $3979 mllllon 8evenues reflecL hlgher CuLdoor
Apparel and LqulpmenL segmenL sales Larnlngs also reflecL lower lnLeresL expense

lu8u CorporaLlon (wwwfubucom)

lu8u Look Lhe fashlon lndusLry by sLorm when lLs label speclallzlng ln urban gear helped deflne Lhe
look of young Amerlca lu8u lor us 8y us ls consldered one of Lhe hoLLesL urban cloLhlng llnes ln
Lhe fashlon lndusLry lLs owners are nelghborhood frlends uaymond !ohn Carl 8rown ! Alexander
MarLln and kelLh errln 1he lu8u label was esLabllshed ln 1992 when !ohn Lhe companys CLC began
worklng ouL of hls moLhers home ln Cueens Lo make LleLop haLs embroldered wlLh Lhe lu8u logo
!ohn laLer recrulLed 8rown MarLln and errln Look ouL a $100000 morLgage on hls moLhers house and
moved hls operaLlon lnLo Lhe basemenL 1he parLners gradually expanded Lhelr llne Lo lnclude hockey
[erseys 1shlrLs and baseball caps AfLer flndlng lL dlfflculL Lo markeL Lhelr cloLhlng Lhrough LradlLlonal
adverLlslng channels Lhe foursome succeeded ln promoLlng lLs llne by uslng celebrlLles and hlp hop
arLlsLs

1he companys newesL llcensed llnes lnclude laLlnum lu8u lu8u looLwear for Ladles lnLlmaLe
Apparel AcLlvewear Swlmwear WaLches Lhe lu8u sulL shlrL and Lle collecLlon and for Lhose speclal
occaslons Lhe lu8u Luxedo lu8u has recelved several honors for Lhelr enLrepreneurlal achlevemenLs
lncludlng Lwo Congresslonal Awards Lwo nAAC Awards raLL lnsLlLuLe Award ChrlsLopher Wallace
Award Cnllne Plp Pop Award and a ClLaLlon of Ponor from Lhe Cueens 8orough resldenL

lu8us headquarLers are now ln new ?orks Lmplre SLaLe 8ulldlng and Lhe company has added
womenswear fooLwear sulLs and accessorles 1he label ls carrled ln more Lhan 3000 reLall sLores ln 26
counLrles ln 1999 lu8u reporLed an annual sales volume of $200 mllllon from lLs menswear buslness
and $130 mllllon from lLs llcenses
434 llnanclal 8lsks and ConLlngencles

As wlLh any sLarLup buslness 8ePablllmenLs ls sub[ecL Lo cerLaln rlsks boLh known and unknown
lncludlng changes Lo general economlc condlLlons changes ln Lhe level of consumer spendlng on or
preferences ln apparel Lhe companys ablllLy Lo successfully lmplemenL varlous new supply chaln and
merchandlslng sysLems ln a Llmely and cosL effecLlve manner unseasonable weaLher Lrends and greaLer
Lhan planned operaLlng expenses Some of Lhe more predomlnanL rlsks lnclude

SLyle lracy 8ecause deslgn and sLyllng ldeas are such lmporLanL compeLlLlve weapons Lhey are ofLen
sLolen lashlon plracy ls so common LhaL lL ls consldered an lnLegral parL of Lhe garmenL Lrade Whlle
Lrademarks and names can be reglsLered laws agalnsL sLyle plracy are of llLLle pracLlcal value

Copylng creaLlve work ls sLandard pracLlce for some flrms especlally Lhe smaller and budgeL houses A
sLyle produced by many manufacLurers and knockedoff aL successlvely lower prlce levels ls ofLen
referred Lo as a ford 1hls Lerm ls ofLen applled Lo runaway besLsellers as well

1o mlLlgaLe rlsk from sLyle plracy 8ePablllmenLs wlll ensure LhaL all of lLs deslgns are copyrlghL
proLecLed 1o daLe Lhls ls Lhe besL soluLlon Lo deslgn plracy because Lhe appllcaLlon process ls cheap
and expedlLlous and Lhe copyrlghL proLecLs Lhe creaLlve works of fashlon deslgners for a llmlLed Lerm
under copyrlghL law uue Lo Lhe shorL llfe span of apparel deslgns paLenL proLecLlon ls nelLher avallable
nor approprlaLe

MarkeL 8lsk MarkeL rlsk ls Lhe rlsk of loss due Lo adverse changes ln lnvesLmenL from markeL
flucLuaLlons dlrecLly relaLed Lo 8ePablllmenLs producLs servlces and markeL segmenLs As Lhe
complexlLy of Lhe buslness lncreases rlsk managemenL becomes lncreaslngly lmporLanL and dlfflculL
MarkeL flucLuaLlons could aversely affecL Lhe resulLs of 8ePablllmenLs operaLlons and flnanclal
condlLlons 1o mlLlgaLe exposure Lo markeL rlsk 8ePablllmenLs wlll use varlous economeLrlc and
sLaLlsLlcal analysls Lools Lo monlLor Lhe movemenL of Lhe markeL lnLeresL perform analyses on Lhe
currenL Lrends and forecasL resulLs ln Lhls manner managemenL can make Lhe necessary ad[usLmenLs
ln Lhe asseL and llablllLy sLrucLure of Lhe company

Lconomlc SLablllLy 8lsk Changes ln Lhe economy wlll requlre LhaL Lhe company ad[usL lLs operaLlons Lo
accounL for flnanclal and economlcal flucLuaLlons 8ePablllmenLs wlll pursue varlous buslness
sLraLegles lncludlng horlzonLal lnLegraLlon and economles of scale geared Loward reduclng economlc
rlsk 1o ensure conLlnued proflLs durlng economlc lnsLablllLy Lhe company wlll conLrol Lhe envlronmenL
ln whlch lL operaLes by reduclng uncerLalnLy mlnlmlzlng expenslve compeLlLlon and capLurlng a larger
share of Lhe markeL

CperaLlonal 8lsk 8ePablllmenLs llke all large companles ls exposed Lo many Lypes of operaLlonal rlsks
lncludlng Lhe rlsk of fraud by employees or ouLslders unauLhorlzed LransacLlons and errors relaLlng Lo
compuLer or LelecommunlcaLlons sysLems 1o mlLlgaLe operaLlonal rlsks 8ePablllmenLs wlll malnLaln a
sysLem of conLrols LhaL ls deslgned Lo keep operaLlng rlsk aL a mlnlmum such as llmlLlng auLhorlLy Lo
conducL buslness acLlvlLles Lo Lhe approprlaLe funcLlonal deparLmenLs/branches

Supply Chaln/Merchandlslng 8lsk uue Lo recenL evenLs such as LerrorlsL aLLacks and pollLlcal lnsLablllLy
ln Lhlrd world counLrles supply chaln rlsks have been lnLroduced or helghLened wlLh pressure Lo
enhance producLlvlLy ellmlnaLe wasLe remove supply chaln dupllcaLlon and drlve for cosL
lmprovemenL 1o mlLlgaLe supply chaln rlsk managemenL wlll consLrucL and opLlmlze whaL lf
scenarlos abouL Lhe companys fuLure 1hese whaL lf scenarlos wlll serve as models by whlch
8ePablllmenLs can reflne and exLend managerlal lnLulLlon abouL ma[or sLraLeglc declslons SLaLlsLlcal
models and meLhods for developlng longLerm supply chaln forecasLs wlll supporL Lhese scenarlos

Larly SLage 8uslness As a sLarLup company 8ePablllmenLs has llmlLed operaLlng hlsLory beyond Lhe
lndusLry experlence galned by Lhe founder 1o mlLlgaLe rlsks relaLlng Lo lnexperlence Lhe company wlll
leverage Lhe experlence of exLernal advlsors Lo provlde supporL for managemenL declslons as well as
lndusLry experLlse and dayLoday operaLlons

8rand ldenLlLy Slnce brands do noL llve ln vaulLs wlLhouL Llme or LhreaL brand rlsk ls LhreaLened by Lhe
loss of value due Lo a change ln consumers percepLlons of Lhe company LsLabllshlng bulldlng
sLrengLhenlng and malnLalnlng 8ePablllmenLs brand regardless of producL or servlce ls lmporLanL Lo
lLs ablllLy Lo aLLracL and reLaln cusLomers 8rand recognlLlon ls key Lo Lhe success of 8ePablllmenLs ln
local reglonal naLlonal and lnLernaLlonal markeLs 1o mlLlgaLe Lhe rlsk assoclaLed wlLh brand
8ePablllmenLs wlll ensure LhaL Lhe companys brand ls clear speclflc and unlque Lo lLs producL and
servlce offerlngs and wlll bulld brand sLrengLh Lhrough leadershlp sLablllLy markeL geography Lrend
supporL and proLecLlon

lnLellecLual roperLy 8ePablllmenLs copyrlghLs Lrademarks Lrade secreLs meLhodologles pracLlces
Lools and oLher lnLellecLual properLy rlghLs are crlLlcal Lo success 1he company relles on a comblnaLlon
of Lrademark and copyrlghL laws Lrade secreL proLecLlon nondlsclosure agreemenLs and oLher
conLracLual agreemenLs wlLh lLs employees afflllaLes cllenLs sLraLeglc parLners acqulslLlon LargeLs and
oLhers 8ePablllmenLs managemenL wlll prudenLly monlLor Lhe companys lnLellecLual properLy and
ensure LhaL adequaLe measures are Laken Lo proLecL lnLellecLual properLy belonglng Lo Lhe company
433 lndusLry arLlclpanLs

1he Apparel lndusLry ls made up of small flrms 1he average number of employees ln an apparel
buslness ls 38 and LwoLhlrds of all esLabllshmenLs employ fewer Lhan 20 workers 1he average
esLabllshmenL slze however varles conslderable across producL secLors WlLh 109 employees Lhe
average mens wear esLabllshmenL ls more Lhan Lhree Llmes Lhe slze of Lhe average womens wear
esLabllshmenL LsLabllshmenL slze had been growlng unLll Lhe early 1980s when Lhls Lrend reversed
across all producL caLegorles llrms wlLh fewer Lhan 20 employees now accounL for less Lhan 10 of Lhe
lndusLrys workforce whlle 37 of Lhe workforce ls employed ln esLabllshmenLs wlLh 230 or more
employees (Source uS lndusLry ln 2000 SLudles ln CompeLlLlve erformance (1999) eLer
uoerlnger and Audrew WaLson 8osLon unlverslLy)

1he uS apparel markeL can be dlvlded lnLo Lwo Llers naLlonal brands and oLher apparel naLlonal
brands are produced by approxlmaLely 20 slzable companles and currenLly accounL for some 30 of all
uS wholesale apparel sales 1he second Ller accounLlng for 70 of all apparel dlsLrlbuLed comprlses
small brands and sLore (or prlvaLelabel) goods

Apparel ls sold aL a varleLy of reLall ouLleLs 8ased on daLa from nu Croup dlscounL sLores offprlce
reLallers and facLory ouLleLs accounLed for 30 of 1998 apparel sales whlle speclalLy sLores and
deparLmenL sLores accounLed for 22 and 18 respecLlvely AnoLher 17 were sold aL ma[or chalns
and dlrecL mall/caLalogs accounLed for 6 1he remalnlng 7 of apparel sales occurred Lhrough oLher
means of dlsLrlbuLlon

1he ma[or players ln Lhe apparel lndusLry are Lhe large manufacLurers headquarLered ln Lhe uS 1here
are also many local manufacLurers LhaL are much smaller and who usually speclallze ln a parLlcular area
of apparel SporLs wear acLlve wear and oLher relaLed producLs are offered for sale aL speclalLy ouLleLs
as well as ln reLall sLores naLlonwlde Such ouLleLs are able Lo cuL oneLhlrd off Lhe garmenL prlce aL a
reLall sLore Apparel ls avallable Lo consumers Lhrough mulLlple avenues ecommerce reLall sLores
ouLleLs and wholesale Lhrough Lhe manufacLurer for mall order caLalogues and smaller bouLlque sLyle
ouLleLs
SLraLegy and lmplemenLaLlon Summary

1he company has developed a sLraLegy LhaL wlll ensure Lhe longLerm growLh and success of
8ePablllmenLs ln Lhe apparel lndusLry 1hls sLraLegy wlll conLlnue Lo evolve and lnlLlally lncludes
locuslng on LargeL markeLs and aggresslvely markeLlng Lhe fullrange apparel collecLlon as an alLernaLlve
Lo exlsLlng cloLhlng llnes

ulfferenLlaLlng Lhe companys producLs Lhrough excluslveness and brand awareness Lhereby fulfllllng
Lhe promlse of 8ePab ?our Wardrobe8ePab ?our World

ueveloplng parLnershlps wlLh boLh lndusLry leaders and compeLlLors ln Lhls manner Lhe company can
neuLrallze lLs compeLlLors by LreaLlng Lhem as allles

8ulldlng a relaLlonshlporlenLed buslness LhaL fosLers longLerm seller/cusLomer relaLlonshlps noL
slngleLransacLlon deals

losLerlng soclal responslblllLy wlLhln Lhe company Lhrough commlLmenL Lo programs LhaL Lransform Lhe
llves of Lhe less forLunaLe ln supporL of Lhls sLraLegy 8ePablllmenLs donaLes 3 of all proceeds Lowards
leed Lhe Chlldren and oLher charlLles
31 CompeLlLlve Ldge

1he debuL of Lhe lu8u CorporaLlon ln 1992 was based upon Lhe a slogan lor us 8y us (lu8u) LhaL
expressed Lhe founders purpose of creaLlng a llne of popular cloLhlng deslgned for AfrlcanAmerlcans
by AfrlcanAmerlcans AL Lhe Llme of lu8us lnauguraLlon numerous cloLhlers were LargeLlng black
consumers for Lhelr urban wear however none of Lhese companles was blackowned or operaLed 1he
companys earllesL collecLlon conslsLed of 1shlrLs rugby shlrLs hockey [erseys and baseball caps all
embroldered wlLh Lhe lu8u logo 8y 1999 Lhe company reporLed an annual sales volume of $200
mllllon from lLs menswear buslness and $130 mllllon from lLs llcenses WhaL had orlglnally begun as a
cloLhlng llne for Afrlcan Amerlcans had developed lnLo a mulLlculLural base of cusLomers all wearlng
lu8us cloLhlng

harmony of LhoughL harmony of purpose and harmony ln humlllLy 1he companys name
8ePablllmenLs and lLs cloLhlng llne 8ePablllmenLs Apparel are compeLlLlve advanLages ln Lhemselves
1he name ls noL aLLached Lo any parLlcular group of cusLomers whlch allows Lhe company enLry lnLo
dlfferenL segmenLs of Lhe apparel lndusLry AnoLher compeLlLlve advanLage sLems from 8ePablllmenLs
parLnershlp wlLh Lhe enLerLalnmenL lndusLry and Lhe use of malnsLream celebrlLles ln adverLlslng and
promoLlng Lhe company

ln a markeL where consumers are barraged by adverLlslng and markeLlng campalgns dellverlng an
onslaughL of llfesLyle and fashlon messages a brand name ls a powerful weapon LsLabllshed brand
names wlLh a quallLy lmage make Lhe consumers shopplng experlence easler and fasLer lor
manufacLurers brands bulld consumer loyalLy whlch LranslaLes lnLo repeaL buslness

8uslness SLarLup Culdes
SLepbysLep lnsLrucLlons you need
for sLarLlng a buslness Loday

32 MarkeLlng SLraLegy

eople wanL Lo Lhlnk of Lhemselves as belonglng Lo a group LhaL Lhey admlre or respecL and wlll dress
as Lhey Lhlnk a member of LhaL group would dress AlLhough Lhey may belleve Lhelr ob[ecL ls Lo reflecL
Lhelr lndlvlduallLy Lhe dlfferences Lhey sLress ln chooslng a cloLhlng sLyle are really beLween Lhelr own
chosen group and all oLhers

1he message of cloLhlng ls Lherefore dlrecLed prlmarlly Lo lLs wearer eople assoclaLe Lhe way Lhey
dress wlLh Lhe way Lhey feel lor many lndlvlduals Lhelr cholce of cloLhlng may noL be Lhe mosL
becomlng ouLflL Lhey could wear however Lhey are expresslng Lhelr membershlp ln a class of oLher
people wlLh whom Lhey feel a connecLlon expresslng lL Lo Lhemselves and Lo whomever may be looklng

8ePablllmenLs markeLlng sLraLegy ls based on Lhe followlng
roducL dlfferenLlaLlon based upon 8ePab ?our Wardrobe8ePab ?our World
8ulldlng a relaLlonshlporlenLed buslness
losLerlng corporaLe soclal responslblllLy
locuslng on Lhe dlverslfled communlLles as Lhe companys LargeL markeLs

8ePablllmenLs brand and markeLlng message are noL dlrecLly aLLached Lo any parLlcular group of
cusLomers buL raLher Lo a dlverslfled communlLy of consumers who belleve ln humanlLarlanlsm and
equal opporLunlLles and cholces for everyone 1he company does noL slmply offer producLs LhaL cloLhe
Lhe body buL raLher producLs LhaL cloLhe Lhe soul cloLhlng LhaL supporLs people elLher dlrecLly or
lndlrecLly Lhrough dlfflculL slLuaLlons

1he companys prlmary markeLlng sLraLegy ls Lo esLabllsh lLself as Lhe Apparel Company of Lhe luLure
WlLh managemenLs deep rooLs ln humanlLarlanlsm coupled wlLh a flrm bellef ln harmony and honesLy
ln buslness and adverLlslng 8ePablllmenLs wlll greaLly lncrease Lhe markeLablllLy of lLs apparel llne
321 rlclng SLraLegy

8ePablllmenLs prlclng sLraLegy remalns compeLlLlve wlLh all oLher hlgh quallLy apparel companles buL
offers much more ln Lerms of meeLlng Lhe companys mlsslon and purpose for exlsLlng As a general rule
of Lhumb 30 of each garmenLs cosL ls consumed ln acLual manufacLurlng dlvlded among labor and
maLerlals 1he oLher 30 ls allocaLed overhead and shlpplng expenses* Average markup ls 40 of
cosL

CurrenLly all of Lhe companys producLs are on LargeL ln prlce as compared Lo oLher slmllar branded
apparel 8ePablllmenLs wlLh regularly monlLor lLs operaLlng expenses dellvery cosLs cosL of sales Lrade
dlscounLs offered damage allowance hazards and oLher varlables Lo ensure LhaL Lhe companys prlclng
sLraLegy remalns compeLlLlve wlLh lndusLry sLandards and expecLaLlons

*noLe overhead lncludes nonpayroll operaLlng expenses as well as purchase and replacemenL of
producLlon equlpmenL lncluded here as parL of sLarLup asseLs
322 romoLlon SLraLegy

8ePablllmenLs brand ls a compeLlLlve advanLage ln lLself as lL ls noL dlrecLly aLLached Lo any parLlcular
group of cusLomers and allows enLry lnLo dlfferenL segmenLs of Lhe apparel lndusLry ln addlLlon Lhe
company has an esLabllshed markeLlng sLraLegy LhaL relles upon celebrlLles markeL speclflc adverLlslng
producL promoLlon and glveaways LhaL have esLabllshed 8ePablllmenLs presence ln Lhe apparel
lndusLry

8ePablllmenLs wlll depend upon several promoLlon sLraLegles Lo reach new cusLomers 1hese sLraLegles
lnclude
AdverLlslng 8ePablllmenLs wlll uLlllze lndusLrywlde apparel magazlnes and newsleLLers as prlmary
sources of adverLlslng

Magazlnes/newsleLLers lndusLry magazlnes and newsleLLers are consldered Lo be effecLlve adverLlslng
medla because Lhey conslsLenLly reach Lhe companys LargeL markeLs 8ecause magazlnes and
newsleLLers are Langlble medla Lhey help adverLlsers relaLe lnLanglbles such as bellevablllLy quallLy
and presLlge 1hese Lypes of medla are nonlnLruslve quleL personal vehlcles LhaL usually have a long
llfe 1helr prlmary audlences pass Lhem along Lo secondary readers so LhaL Lhelr reach bullds over long
perlods of Llme maklng Lhem a longLerm lnvesLmenL

ulrecL Mall 8ePablllmenLs wlll explore Lhe beneflLs of lncremenLal coordlnaLed dlrecL mall campalgns
whlch ensure LhaL Lhe companys adverLlslng ls

1argeLable When uslng dlrecL mall each cusLomer ls carefully selecLed 1hls enables 8ePablllmenLs Lo
speak Lo Lhe cusLomer ln Lhelr own language and abouL Lhelr lndlvldual needs ln addlLlon Lhe
company can Llme lLs dlrecL mall efforLs Lo colnclde wlLh crlLlcal polnLs ln Lhe cusLomers buylng cycle
LfflclenL ulrecL mall ensures LhaL 8ePablllmenLs knows LhaL every dollar spenL ls belng dlrecLed aL
people who are genulne prospecLs for Lhe companys servlces
llexlble ulrecL mall ls capable of handllng a varleLy of adverLlslng or markeLlng Lasks ln addlLlon Lo
belng able Lo sell dlrecLly lL ls a medlum LhaL can dellver a sample rlghL Lo Lhe cusLomer regardless of
wheLher Lhe sample ls an acLual producL or a demonsLraLlon of a producL
Measurable WlLh a dlrecL mall campalgn Lhere ls no guesswork when lL comes Lo Lhe resulLs and
vlrLually no walLlng when 8ePablllmenLs has a wlnnlng producL managemenL wlll know lmmedlaLely!
AccounLable As responses pour ln Lhe value of Lhe dlrecL mall campalgn speaks for lLself

LMall 8ePablllmenLs emall campalgn wlll exLend Lhe companys markeLlng reach and vlslblllLy wlLh
mlnlmal resource allocaLlon As 8ePablllmenLs bullds lLs cusLomer daLabase lL wlll gaLher emall
addresses wlLh opLln permlsslon Lo conLacL currenL cusLomers and prospecLlve cusLomers vla emall
and oLher elecLronlc means Many of Lhe beneflLs of a dlrecL emall adverLlslng campalgn lnclude

CreaL ulrecL 8esponse vehlcle lf Lhe cusLomer ls recelvlng Lhe emall Lhe cusLomer has already
demonsLraLed hls/her lnLeresL ln Lhe conLenL Lhey are recelvlng
1lmely LMall ls Lhe perfecL Lool for LargeLlng speclflc daLes
lacemenL 8ePablllmenLs adverLlslng wlll have llLLle compeLlLlon

Medla 8ePablllmenLs wlll lnlLlally develop a local medla campalgn lncludlng radlo and Lelevlslon bullL
around servlce lnnovaLlon 1hls campalgn wlll begln wlLh a Who We Are sLaLemenL and be supporLed
by oLher adverLlsemenLs LhaL relnforce Lhe companys markeLlng message Lo consumers of casual
acLlve and sporLs apparel

8adlo Cne of radlos greaLesL sLrengLhs ls lLs ablllLy Lo dellver a markeLlng message Lo a selecLlve
audlence 1he medla ls porLable free and very accesslble aL leasL one radlo exlsLs ln mosL Amerlcan
homes 8ePablllmenLs radlo campalgns lnclude adverLlslng wlLh WMCA 370 and WWu! 970 whlch are
Lwo of Lhe largesL radlo sLaLlons
1elevlslon nearly 31 of LoLal 1v households waLch prlmeLlme Lelevlslon (A8C/n8C/C8S afflllaLes) a
share change of 388 slnce 19831986 eople spend more Llme wlLh 1v Lhan wlLh any oLher medlum
whlch due Lo lLs slghL and sound unlqueness creaLes awareness lnLeresL and deslre LxecuLed
properly 8ePablllmenLs 1v campalgn wlll lend presLlge and glamor Lo Lhe companys markeLlng
message
Cable 1elevlslon Cable Lelevlslon servlce ls avallable Lo 93 of all Lelevlslon households ln Lhe unlLed
SLaLes and abouL LwoLhlrds of all Lelevlslon households subscrlbe Lo lL MosL of Lhose sysLems offer aL
leasL 30 channels (37 have beLween 3033 channels and 13 have 34 of more channels)

1rade Shows/1rade lalrs 8ePablllmenLs wlll acLlvely parLlclpaLe ln lndusLry and Chamber of Commerce
Lrade shows Lo promoLe Lhe companys producLs 8y Laklng advanLage of Lrade show parLlclpaLlon Lhe
company enhances lLs opporLunlLles Lo learn grow and connecL wlLh poLenLlal cllenLs and oLher
buslnesses ln Lhe apparel lndusLry 1rade Shows/lalrs are a markeLlng Lool for communlcaLlon
promoLlng dlalogue beLween reLallers and manufacLurers and wlll allow Lhe company Lo explolL lLs
unlque cloLhlng llne Lo a concenLraLed group of buyers
323 ulsLrlbuLlon SLraLegy

1he prlmary dlsLrlbuLlon channel ln Lhe apparel lndusLry ls sLlll Lhe brlcks and morLar sLore augmenLed
by caLalogues and dlrecL selllng 1he lncredlble success reallzed by oLher lndusLrles ln lnLerneL e
commerce has noL followed lnLo apparel LxlsLlng llmlLaLlons from producL llcenslng and dlsLrlbuLlon
agreemenLs Lo flL and Lrlal lssues have sLunLed Lhe growLh of Lhe lndusLry ln Lhe lnLerneL space 1he
mosL successful players Lend Lo be Lhose wlLh a cllck and morLar sLraLegy such as 1he Cap or Lhose
companles wlLh a sLrong background ln caLalogues and dlrecL selllng such as Lands Lnd 1he flL and Lrlal
lssues and dlfflculLles wlLh color and LexLure percepLlon on compuLer monlLors however conLlnue Lo be
lssues LhaL keep lnLerneL sales relaLlvely low compared Lo Lhe LoLal markeL for companles AnoLher area
Lo see some success ls LhaL of offprlce and dlscounL clearlng houses llke 8luefly 1hls ls an example of
how Lhe lnefflclencles of Lhe exlsLlng lndusLry model for apparel has spawned a whole new caLegory of
reLall boLh onllne and offllne ln facLory ouLleLs and clearlng houses

8ePablllmenLs has several poLenLlal meLhods of peneLraLlng Lhe 1rlSLaLe Area markeL 1hey are from
leasL resourcelnLenslve Lo mosL resource lnLenslve
Sell dlrecLly Lo sLores or conLacL buylng offlces Lo be placed on Lhelr llsLs
resenL Lhe companys merchandlse aL Lrade shows or hlre a sales represenLaLlve
Cpen a sLore

8ePablllmenLs wlll begln wlLh opLlons 1 and 2 above and open a sLore when we have Lhe avallable
resources and growLh Lo warranL lL lor now Lhe company plans Lo use a dlrecL sales force Lhe
enLerLalnmenL lndusLry reLallers and Lhe lnLerneL Lo reach lLs LargeL markeLs 1hese channels are mosL
approprlaLe because of Llme Lo markeL reduced caplLal requlremenLs and fasL access Lo esLabllshed
dlsLrlbuLlon channels
324 oslLlonlng SLaLemenL

lor men women and chlldren seeklng cloLhlng wlLh sLyle selecLlon dlfferenLlaLlon and subsLance
8ePablllmenLs offers a unlque cloLhlng llne LhaL ls affordable Lrendy excluslve and fashlonable whlle
meeLlng boLh Lhe physlcal and emoLlonal needs of Lhe consumer unllke 8ePablllmenLs largesL
compeLlLor lu8u CorporaLlon Lhe company offers affordable Lrendy 8ePab ?our Wardrobe8ePab
?our World cloLhlng LhaL promoLes Lhe prlnclple of harmony and dedlcaLes a porLlon of Lhe companys
cloLhlng proceeds Lowards ongolng humanlLarlan efforLs
33 Sales SLraLegy

8ePablllmenLs sales Leam wlll be Lasked wlLh generaLlng sales leads on a local reglonal and naLlonal
basls 1hey wlll also be responslble for esLabllshlng connecLlons wlLh oLher wholesaler and reLall ouLleLs

A key facLor ln Lhe success of 8ePablllmenLs wlll be lLs dlsLrlbuLlon 1he company plans Lo use Lhe
followlng reLall dlsLrlbuLlon channels
SupercenLers such as WalMarL
ueparLmenL SLores such as ulllards and loleys
Apparel SpeclalLy SLores such as 1he Cap
8ouLlque CloLhlng SLores
lnLerneL SLore

Consumers buy apparel from a varleLy of reLall ouLleLs ln 1998 dlscounL offprlce and facLory ouLleL
sLores accounLed for 30 of apparel sales speclalLy sLores accounLed for roughly 22 deparLmenL
sLores for 18 and ma[or chalns for 17 accordlng Lo daLa from nu Croup lnc 1he remalnlng 13
was sold Lhrough mall order and oLher means

ulfferences exlsL ln Lhe dlsLrlbuLlon mlx for mens womens and chlldrens lLems lor example more
womens apparel ls purchased ln speclalLy and deparLmenL sLores Lhan ls Lhe case for mens apparel
Mens apparel ls more prevalenL ln dlscounL sLores and general merchandlse chalns ln Lhe chlldrens
segmenL a conslderably hlgher porLlon of apparel ls purchased ln dlscounL sLores

CaLalogues are anoLher lmporLanL meLhod of dlsLrlbuLlon Consumers have less Llme Lo shop and for
some caLalogue shopplng offers a more convenlenL and pleasanL alLernaLlve ln 1996 (laLesL avallable)
an esLlmaLed 133 bllllon dlrecL mall caLalogs were prlnLed ln Lhe unlLed SLaLes more Lhan 30 for every
man woman and chlld ln Lhe naLlon Accordlng Lo nu Croup approxlmaLely 6 of apparel reLall sales
were Lhrough dlrecL mall/caLalogs ln 1998 represenLlng a 29 decllne from 1997

1he dlsLrlbuLlon channel LhaL has recelved Lhe mosL aLLenLlon recenLly ls Lhe lnLerneL AlLhough lL now
represenLs only a small porLlon of apparel sales Lhls dlsLrlbuLlon channel has Lhe mosL poLenLlal for
growLh Consumers llke Lhe convenlence of belng able Lo shop from anywhere and aL anyLlme Lhey
wlsh ManufacLurers wlLh webslLes use Lhem for markeLlng and lnformaLlonal purposes WlLh expecLed
Lechnologlcal advances ln hardware sofLware and daLa plpellnes ln Lhe fuLure shopplng for apparel
should galn popularlLy

CurrenLly however due Lo Lechnologlcal and lnfrasLrucLure llmlLaLlons consumers are noL fully saLlsfled
wlLh Lhe speed quallLy securlLy and cosL of lnLerneL shopplng AnoLher hlndrance Lo wlder accepLance
ls Lhe facL LhaL consumers cannoL see and Louch Lhe producL AlLhough some manufacLurers have
sLarLed Lo sell dlrecLly Lo consumers on Lhe lnLerneL many of Lhem are belng cauLlous noL Lo allenaLe
Lhelr reLall (brlckandmorLar) cusLomers 8ePablllmenLs expecLs Lhese lssues wlll be resolved
evenLually whlch wlll make Lhe lnLerneL an lmporLanL meLhod of dlsLrlbuLlon ln Lhe fuLure
331 Sales lorecasL

1he followlng Lable shows our pro[ecLed yearly Sales revenues CosL of Sales here represenLs only
lnvenLory purchases (lncludlng shlpmenL of lnvenLory from abroad) LoLals for labor shlpplng and
overhead can be found ln Lhe roflL and Loss sLaLemenL

We anLlclpaLe movlng a hlgher number of producLs Lhrough wholesale conLracLs wlLh reLallers buL Lhe
hlgher prlce we can charge wlLh dlrecL sales (lnLerneL and evenLually reLall) means Lhe revenue sLreams
from Lhese llnes wlll be roughly equal We are forecasLlng 30 of sales values on a cash basls and 30
as accounLs recelvable


Sales lorecasL
?ear 1 ?ear 2 ?ear 3
Sales
Mens Apparel $1094972 $1880106 $1937191
Womens Apparel $1719382 $3067131 $3180636
8oys Apparel $240122 $446337 $463303
Clrls Apparel $229944 $383063 $386896
lnfanLs/1oddlers Apparel $306392 $338061 $372497
lnLerneL Sales $1970930 $3641013 $4077934
1oLal Sales $3362162 $9933933 $10638638
ulrecL CosL of Sales ?ear 1 ?ear 2 ?ear 3
All roducL Llnes $1112432 $1991187 $2127732
CLher $0 $0 $0
SubLoLal ulrecL CosL of Sales $1112432 $1991187 $2127732

34 SLraLeglc Alllances

8ePablllmenLs currenLly has sLraLeglc alllances wlLh boLh Muslc 8ecords and Lhe LnLerLalnmenL Croup
1hese alllances are crlLlcal Lo Lhe companys markeLlng sLraLegy as Lhey provlde Lhe exposure for Lhe
companys apparel llne and assoclaLe 8ePablllmenLs producLs wlLh celebrlLles CelebrlLles are valuable
sLraLeglc allles as Lhey recelve free apparel for Lhelr parLlclpaLlon ln lnLervlews concerLs and muslc
vldeos

CurrenL and poLenLlal producL llne represenLaLlon and adverLlslng conLracLs are as follows
WalMarL
lnflnlLy 8roadcasLlng
WMCA 370 970 u!
CrysLal 8lue Medla
8ulkWorkscom
ks CorporaLlon !apan
Shop Amerlca neLwork lnc

ln addlLlon 8ePablllmenLs has a promoLlonal collaboraLlon wlLh one of Lhe hoLLesL dlsc [ockeys ln
Amerlca uegas vanCC Pe Lravels LhroughouL Lhe world enLerLalnlng llsLeners aged 13 Lo 40 on new
?ork 8adlo 1073 W8LC lM uegas vanCC has hls own radlo show and ls very well known Pe ls well
connecLed ln Lhe muslc lndusLry whlch ls one of 8ePablllmenLs prlmary LargeL markeL areas and has
used hls connecLlons Lo forge a relaLlonshlp beLween 8ePablllmenLs and vlrgln 8ecords Amerlca lnc

1hrough our afflllaLlon wlLh uegas vanCC vlrgln 8ecords has allowed 8ePablllmenLs Lo use Lhelr
famous logo on promoLlonal lLems such as leaLher [ackeLs haLs and 1shlrLs 1hls afflllaLlon sends a
very powerful message Lo lnvesLors and cusLomers allke

8ePablllmenLs has Lhe earnlng poLenLlal Lo become Lhe fasLesL growlng mosL unlversally accepLed
cloLhlng llne slnce lu8u 1he parLnershlp wlLh uegas vanCC ls Lhe golden key Lo counLless hundreds of
Lhousands of dollars ln sales as well as a dlrecL promoLlonal channel
33 MllesLones

1he followlng Lable llsLs lmporLanL program mllesLones wlLh pro[ecLed sLarL and flnlsh daLes Lhe names
of Lhe lndlvlduals ln charge of compleLlng each mllesLone and budgeLs for each mllesLone 1he
mllesLone schedule lndlcaLes Lhe companys emphasls on plannlng and lmplemenLaLlon of Lhe buslness

WhaL Lhe Lable doesnL show ls Lhe commlLmenL behlnd each mllesLone 8ePablllmenLs buslness plan
lncludes compleLe provlslons for planversusacLual analysls and Lhe company wlll hold monLhly follow
up meeLlngs wlLh key managemenL Lo dlscuss any varlances and Lo plan a course of acLlon Lo resolve
Lhose varlances

Web lan Summary

Clearly deflnlng Lhe goals and plans for 8ePablllmenLs webslLe are lmporLanL sLeps Loward Lhe
companys success lmplemenLlng a web presence as parL of Lhe companys acLlve markeLlng plan ls
crlLlcal Lo Lhe vlslblllLy of Lhe company ln lLs local reglonal naLlonal and global markeLs and allows Lhe
company Lo lnexpenslvely adverLlse lLs producLs and promoLe sales Lo a varleLy of vlrLual cusLomers

1he companys corporaLe ob[ecLlves for lLs webslLe are
1o provlde currenL and poLenLlal cusLomers publlc relaLlons and medla enLlLles wlLh an efflclenL
secure lnLeracLlve means by whlch Lo communlcaLe wlLh 8ePablllmenLs and obLaln relevanL
lnformaLlon abouL Lhe Company lLs mlsslon and lLs producLs

1o provlde cusLomers wlLh efflclenL userfrlendly auLomaLed processes LhaL allow Lhem Lo easlly
browse Lhe companys producLs and Lo place orders for producLs Lhrough Lhe webslLe Lhereby
effecLlvely reduclng admlnlsLraLlve cosLs assoclaLed wlLh malllng producL lnformaLlon

8ePablllmenLs foresees lLs lnLerneL presence as a Lool LhaL wlll allow Lhe company Lo effecLlvely manage
lLs cusLomers and Lhelr buylng paLLerns and Lo Lrack and manage corporaLe acLlvlLles as Lhey relaLe Lo
dlfferenL markeL opporLunlLles 1hrough Lhe companys webslLe 8ePablllmenLs wlll be able Lo swlfLly
respond Lo sudden shlfLs ln demand new markeL Lrends and changes ln cusLomer needs and demands
61 WebslLe MarkeLlng SLraLegy

lL ls noL enough for 8ePablllmenLs Lo bulld a webslLe and Lhen expecL cusLomers Lo flood Lo Lhe
companys new onllne presence Slnce Lhe lnLerneL ls growlng exponenLlally 8ePablllmenLs dlrecL
compeLlLors are also vylng for pole poslLlons ln Lhelr respecLlve markeLs and dolng Lhelr uLmosL Lo
adverLlse and promoLe Lhelr slLes Lo Lhe lnLerneLs global audlence

8ePablllmenLs buslness sLraLegy wlll lead Lhe way ln deLermlnlng Lhe companys onllne ob[ecLlves for
promoLlon and developmenL of Lhe webslLe 1he lnLerneL and Lhe Lechnology behlnd lL wlll provlde
buslness opporLunlLles Lo creaLe cusLomer servlces and develop promoLlonal opporLunlLles LhaL would
be lmposslble ln Lhe physlcal world

1he company wlll rely upon a comblnaLlon of offllne and onllne meLhods Lo promoLe lLs webslLe Cffllne
meLhods lnclude
8uslness Cards
rlnLed company MaLerlals
Local newspapers
resenLaLlons
Conferences/LvenLs/Semlnars
8adlo/1elevlslon/ress/Clnema
lnLerneL/Web !ournals

Cnllne markeLlng meLhods lnclude
useneL Croups
8eclprocal Llnks
LMall SlgnaLures
Search Lnglnes
Web ulrecLorles
company Speclflc uomaln name
orLal SlLes
8anner AdverLlslng
LMall MarkeLlng
Cnllne CompeLlLlons
AfflllaLe arLnershlps

8ePablllmenLs wlll ensure LhaL Lhe companys webslLe carrles masses of useful producL and company
lnformaLlon LhaL ls noL only lnLeresLlng buL lnformaLlve 1hls wlll conLrlbuLe Lo Lhe cusLomers overall
experlence of Lhe webslLe as well as lnLernally promoLe oLher secLlons of Lhe slLe Lhrough relevanL llnks
LhaL are sLraLeglcally placed on Lhe page and allow cusLomers Lo chase up lnformaLlon lor example lf
8ePablllmenLs provldes a serles of web pages LhaL descrlbe Lhe companys producLs ln deLall aL Lhe
boLLom of each page wlll be lncluded a sLandard seL of useful followLhrough hyperllnks such as
lace an order wlLh us now!
need deLalled producL lnformaLlon?
WanL Lo conLacL a salesperson?
8ead cusLomer revlews on our producLs!

8y lnvesLlng Llme efforL and money Lo maxlmlze 8ePablllmenLs buslness presence on Lhe lnLerneL
managemenL can ensure LhaL Lhe companys webslLe effecLlvely promoLes lLs producLs and poslLlvely
conLrlbuLes Lowards Lhe success of Lhe company 8ulld lL markeL lL and Lhey wlll come

8uslness SLarLup Culdes
SLepbysLep lnsLrucLlons you need
for sLarLlng a buslness Loday

62 uevelopmenL 8equlremenLs

8eallzlng LhaL every buslness ls dlfferenL wlLh dlfferenL ecommerce needs 8ePablllmenLs has opLed Lo
conLracL ouL lLs web developmenL servlces Lo ensure LhaL Lhe companys flnal webslLe meeLs speclflc e
commerce needs Cnce compleLed Lhe webslLe wlll lnclude
A Web hosLlng accounL
A reglsLered domaln name
A secure SSL CerLlflcaLe LhaL allows Lhe browser Lo creaLe an encrypLed connecLlon Lo 8ePablllmenLs
webslLe and Lhe shopplng sysLem
1he shopplng carL sysLem
A merchanL accounL LhaL ls Lled Lo 8ePablllmenLs checklng accounL and allows Lhe company Lo accepL
credlL card paymenLs
1ermlnal sofLware LhaL allows 8ePablllmenLs Lo process credlL cards
A paymenL gaLeway accounL LhaL allows 8ePablllmenLs Lo Lake credlL cards uslng auLomaLed processlng
and approval wlLh Lhe shopplng carL

llnal developmenL cosLs for Lhe enLlre ecommerce webslLe wlll range beLween $3000 and $8000 for a
fully enabled ecommerce webslLe
8ePablllmenLs managemenL phllosophy ls based upon responslblllLy muLual respecL and proflLablllLy
and Lhe founder belleves LhaL Lhe companys presenL and fuLure growLh are based upon
LxcepLlonal eople
Soclal 8esponslblllLy
uncompromlslng CommlLmenL Lo CusLomer Servlce
Lxcellence
CommlLmenL Lo Core values
71 ManagemenL 1eam

Mr L Cwerd Lmlynes Chlef LxecuLlve Cfflcer (CLC) As Lhe CLC Mr Lmlynes wlll reporL Lo Lhe 8oard
of ulrecLors and/or be asslsLed by a 8oard of Advlsors Pe wlll have overall responslblllLy for all aspecLs
of Lhe company lncludlng operaLlons markeLlng sLraLegy flnanclng company culLure human
resources compllance regulaLlons sales and publlc relaLlons Mr Lmlynes's mosL lmporLanL role ls ln
seLLlng Lhe sLraLegy and vlslon for 8ePablllmenLs ln addlLlon he wlll be responslble for sLeerlng Lhe
organlzaLlon ln budgeLs parLnershlps maklng flnal declslons on producL/servlce llnes and lndusLrles
Mr Lmlynes has over LhlrLeen years ln Lhe muslc and producLlon lndusLry ln capaclLles ranglng from
bass gulLarlsL muslcal dlrecLor Lo choreographer and producLlon manager ln addlLlon he has exLenslve
experlence ln fashlon and deslgn worklng for 8onds Men's CloLhlng SLore for a number of years
AlLhough paralyzed from Lhe chesL down L Cwerd ls a moLlvaLlonal speaker a professlonal racecar
drlver a professlonal muslclan an amaLeur body bullder a Leen menLor and an enLrepreneur

Ms 8avel dLddge vlce resldenL of 8uslness uevelopmenL/SLraLeglc Alllances 1he v of 8uslness
uevelopmenL/SLraLeglc Alllances ldenLlfles evaluaLes and pursues Lhe sLraLeglc and flnanclal prospecLs
of new markeL opporLunlLles Ms dLddge wlll dlrecL Lhe assessmenL of fuLure markeLs and be
responslble for coordlnaLlng commerclal lnpuL Lo speclflc programs as necessary She wlll esLabllsh new
sLraLeglc parLnershlps [olnL venLures and alllances and follow Lhrough on all parLnershlp acLlvlLy
lncludlng Lhe Lracklng documenLlng and sLaLus reporLlng of all collaboraLlon along Lhe buslness
developmenL plpellne Ms dLddge wlll esLabllsh and lmplemenL approprlaLe developmenL sLraLegles
lnLeracL wlLh exlsLlng corporaLe conLacLs faclllLaLe communlcaLlon Lrack mllesLones and ldenLlfy
opporLunlLles for enhanclng Lhese relaLlonshlps ln addlLlon she wlll oversee Lhe plannlng and
execuLlon of a comprehenslve markeLlng sLraLegy lncludlng responslblllLy for Lhe preparaLlon of
presenLaLlon and markeLlng maLerlals for professlonal meeLlngs semlnars and conferences Ms
dLddge has a MasLer of ArLs ln CompuLer 8esources and lnformaLlon ManagemenL and a MasLer of
8uslness AdmlnlsLraLlon She has over elghLeen years of experlence ln lnformaLlon
managemenL/Lechnology and buslness sysLems managemenL and admlnlsLraLlon buslness procedures
documenLaLlon buslness plannlng/developmenL and currenLly owns a buslness plannlng and
developmenL consulLlng buslness

unfllled poslLlons
CLher managemenL poslLlons have noL yeL been fllled We are currenLly LalenL scouLlng and wlll begln
Lhe hlrlng process ln Aprll 2004 All managemenL poslLlons wlll be fllled by !une 1sL 2004
new 8uslness Course


72 ManagemenL 1eam Caps

8ePablllmenLs lacks seasoned professlonal managemenL (eg whaL lnvesLors call Lhe gray halred
facLor) wlLh experlence ln Lhe reLall apparel lndusLry 1he company wlll requlre a sLrong flnance
manager Lo closely guard cash flow Lo ensure poLenLlal parLners and lnvesLors LhaL 8ePablllmenLs
flnances are sLrong and supporL fuLure growLh As Lhe company maLures lL wlll acLlvely pursue addlng
more experlenced lndlvlduals Lo Lhe Leam LhaL meeL gray halred facLor requlremenLs

AddlLlonal senlor level poslLlons LhaL are currenLly open and have yeL Lo be fllled lnclude

Chlef llnanclal Cfflcer (ClC) 1hls poslLlon ls currenLly open wlLhln 8ePablllmenLs As Lhe ClC Lhe
poLenLlal candldaLe wlll be responslble for dayLoday operaLlons lncludlng developmenL of guldellnes
dlsLrlbuLlon of resources auLhorlLy conslsLenL wlLh plannlng conLlnuous revlew and evaluaLlon of
performance as well company overvlew of commlLmenLs agalnsL avallable flnanclal resources and
esLabllshed schedules Pe wlll dlrecL Lhe developmenL of and lmplemenL changes Lo flnanclal reporLlng
and managemenL sysLems LhaL are sub[ecL Lo frequenL and ma[or modlflcaLlons as well as recommend
flnanclal pollcles and procedures 1hls lndlvldual wlll provlde professlonal consulLaLlon Lo managemenL
regardlng flnanclal maLLers and ln Lhe appllcaLlon of lnformaLlon Lechnology Lo supporL Lhe operaLlon of
varlous accounLlng audlLlng or budgeLlng reporLlng sysLems and requlremenLs ln addlLlon he wlll
serve as Lhe prlmary conLacL for lnvesLors and lnvesLorrelaLed lssues

vlce resldenL of roducL ManagemenL (v/M) 1hls poslLlon ls currenLly open wlLhln 8ePablllmenLs
As Lhe v/M Lhe poLenLlal candldaLe wlll esLabllsh currenL and long range ob[ecLlves plans and
pollcles sub[ecL Lo approval by Lhe 8oard of ulrecLors Lo creaLe a Lechnlcal vlslon for 8ePablllmenLs
1hls lndlvldual wlll plan for lmplemenLaLlon of new producLs and/or producL llnes dlspense advlce
guldance dlrecLlon and auLhorlzaLlon Lo carry ouL ma[or plans and procedures conslsLenL wlLh
esLabllshed pollcles Pe wlll work wlLh producL/servlce developmenL sales and markeLlng Lo dlscern
compeLlLlveness of new producLs revlew operaLlng resulLs of 8ePablllmenLs and compare Lhem wlLh
esLabllshed ob[ecLlves creaLe Lechnlcal budgeLs allocaLe resources and deLermlne schedules

vlce resldenL of MarkeLlng 1hls poslLlon ls currenLly open wlLhln 8ePablllmenLs As Lhe v of
MarkeLlng Lhls lndlvldual wlll be responslble for developlng and lmplemenLlng markeLlng programs Lo
drlve sales and ralse communlLy awareness 1he person ln Lhls poslLlon wlll deflne analyze and
lmplemenL prlnL and medla programs and monlLor Lhe resulLs of such programs menLor and Lraln
operaLlons personnel on markeLlng Lerms raLlonales and sLraLegles wlLh emphasls on Lhe operaLlons
role ln effecLlve markeLlng execuLlon and supporL new producL/servlce rollouLs wlLh sLrong unlL
communlcaLlons and publlc relaLlons acLlvlLles 1hls lndlvldual wlll develop and lmplemenL new unlL
openlng programs and grand reopenlngs as well as be aware of new lndusLry Lrends economlc facLors
new markeLlng programs/sLraLegles and medla Lools 1he v of MarkeLlng wlll provlde asslsLance wlLh
new slLes relaLlons and closlngs as well as develop subordlnaLes such as MarkeLlng
Supervlsors/AsslsLanLs 1hls lndlvldual wlll be a brand and poslLlon experL and manage boLh lnLernal and
exLernal publlc relaLlons ln addlLlon he wlll possess relevanL markeLlng emphasls and lnLerneL
experlence lncludlng sponsorshlps afflllaLe programs search englne opLlmlzaLlon emall and elecLronlc
newsleLLers

vlce resldenL of Sales 1hls poslLlon ls currenLly open wlLhln 8ePablllmenLs As Lhe v of Sales Lhe
poLenLlal candldaLe wlll be responslble for developlng Lhe companys sales sLraLegy acqulrlng of
cusLomers plannlng sales compensaLlon and bulldlng Lhe sales organlzaLlon and lnfrasLrucLure Lo
supporL Lhe sales sLraLegy 1hls candldaLe musL have experlence execuLlng Lhe enLlre sales cycle from
generaLlng prospecLs Lo closlng Lhe sale and musL have Lhe ablllLy Lo sell sLraLeglcally Lo key declslon
makers (ClC C1C ClC v l1) as well as LacLlcally aL Lhe operaLlonal level

AddlLlonal poslLlons wlll be ldenLlfled as necessary As necessary 8ePablllmenLs wlll rely on exLernal
advlsors and consulLanLs Lo provlde supporL for managemenL and flnanclal declslons as well as provlde
lndusLry experLlse for dayLoday operaLlons
73 ersonnel lan

1he followlng Lable summarlzes Lhe companys personnel expendlLures for Lhe flrsL Lhree years 1he
company belleves Lhls plan ls a compromlse beLween falrness and expedlence and meeLs Lhe
commlLmenL of Lhe companys mlsslon sLaLemenL

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