Improving the business in the UK market Gemma Hagan

Presentation Structure

Research Methodologies

An Introduction to The Dune Group: -Head Over Heels and Madden Girl
Current trading conditions in the UK Strategy and justifications Summary

Research Methodologies
Primary Research
-Interview with Daniel Owen- Concession Manager -Concession and Solus Store visits

Secondary Research
-The Dune Group intranet -The Dune Group brand book -Dune News- weeks 35-39 -Internet

The Dune Group

To develop leading affordable luxury brands in the footwear and accessories market in the UK and globally

-Began in 1992 as a concession in selected Faith Stores -1993 Kings Road, London - Operation International 2001- Dubai & Abu Dhabi
-Acquisition of Shoe Studio in 2009 Company size and turnover tripled- 150m Acquired Brands- Roland Cartier, Roberto Vianni, G by Guess, Head Over Heels, Madden Girl -Brand Portfolio: -Dune -Black Sands by Dune -(Shoe Studio) -Gabor

-Steve Madden -Pied A Terre -Bertie - Chelsea Cobbler

The Dune Group

The Dune Group

Location & Store Format
48 solus stores in the UK 165 ladies/70 mens concessions - leading department stores in UK, Ireland, Holland, Denmark and Germany Franchise stores in Kuwait, Bahrain, Qatar, NA, Russia and Poland -India and China stores opening 2013 Department Stores:

Subsidiary brands to improve

Head Over Heels by Dune Fun, Affordable, Fashionable Original brand of Shoe Studio Younger target audience: Ages 15-22 Less disposable income- fast fashion interests Available in Debenhams Dune concessions & online

Younger Sister brand of Steve Madden American range- fashionable and affordable Younger target audience: Ages17-25 Less disposable income- fast fashion and quantity desires Available in Debenhams Dune concessions & online

Shoe Studio Brands- Products

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Price Points: 18-110

Price Points: 22-69

Current trading conditions in the UK

Recession
Increased levels of unemployment Consumers reduced disposable income Consumers spending less & more cautiously to reduce personal deficit Opting for fast fashion: Quantity over quality

Fluctuating VAT
Fluctuation between 17.5% and 20% rate Increased prices of products- negative effect on consumer spending Costly/time consuming process to re-price all products

Bi-Seasonal Weather
Bi-seasonal weather- no clear definition between seasons Retailers cant plan easily what stock needs to be in stores when to maximize sales This year boot sales increased on LY by 13%/ decrease on LY sandal sales by 19%

Current trading conditions in the UK

Foreign Manufacturing and Exchange Rates
Fluctuations in exchange rates- effect cost of importing/exporting goods Effect companies that trade in UK- import costs too high, increase manufacturing costs= tighter profit margins or increased product costs

Ethical Expectations
Increased expectation of society for retailers to become more ethical Usually involves natural materials/products in production and recycling Cost of being ethical > usual methods used by fast fashion companies Increased costs reflected in higher product price points

Strategy 1
Removal of Head Over Heels and Madden Girl from Debenhams and House of Fraser to New Look, Jane Norman and Dorothy Perkins Why?
HOH is already sold as online exclusive on New Look website Brands suited to a younger target audience- do not shop in Debenhams/HOF HOH & MG products stocked where the target audience shop = Increased sales in the UK Make Dune concessions more exclusive for the main brand Increased locations with suited price points First shoe brand for Jane Norman

Removal from Debs & HOF

HOH and MG into New Look, Dorothy Perkins, Jane Norman large stores

Expand into smaller stores

Open small Shoe Studio stores in main city centres

Strategy 1- Justifications
Do you feel the Head Over Heels and Madden Girl brands are too young to be housed in Debenhams and House of Fraser stores? Yes, if you look at the average age and desires of the Debenhams customer, they do not fit the HOH and MG target audiences. The Debenhams consumer seeks the high quality luxury products of Dune, not the fast fashion products of HOH and MG. - Daniel Owen, Dune Concession Manager

E-commerce sales
Week 38: SS -67% on LY sales only achieving 52% on target Week 39: SS -93% on LY sales missing target by 75%Poorest selling Poorest selling brands under The Dune Group- resulting in SALE stock each season

Strategy 2
Introducing an ordering service for the Dune concessions and expanding the new ordering service in solus stores. Why?
Dune concessions in department stores do not have this service Daily requests from customers to order in sizes not in stock The recent introduction of the HARRY ordering system- hand held device in selected stores to order from warehouse to customers home address Proven success by increased sales from using the HARRY in selected stores

Strategy 2- Justifications
Lack of consumer confidence on Debenhams website order points in store Table shows in week 38- extra 22,601 was taken over 265 extra transactions Increased sales and therefore profit for the company, otherwise wouldnt have received

Strategy 3
Introducing The Dune Groups own range of shoe care to be sold in Dune solus stores and concessions on all brands.
Why? No shoe care used or sold in solus stores or concessions Consumers have used other brands of shoe care on Dune Group products ruining shoe materials Extra add on sales for the company- increased profit Include: Leather Protector, Suede Protector, Leather Reviver, Suede Reviver, Full length insoles, Half Insoles, Heel Grips, Deodorizer Spray, Black and Clear Shoe Polish, Suede Brush.

Strategy 3- Justifications
Do you think The Dune Group and the Shoe Studio brands under our name would benefit from an exclusive range of shoe care products? Definitely. The Dune Group are missing out on vital add on sales and losing them to the concession host stores. However, the company would need to introduce a training program for staff on how to use and link sell the products effectively. - Daniel Owen, Dune Concession Manager

The Dune Group lose sales to host department stores- consumers purchase their shoe care Specific range suited to Dune and subsidiary brand productsimproved company and consumer relationship regarding product care Intensive staff training program- how and when to use products: maximize add on sales and increase product knowledge amongst staff

Summary
Strategies:
Move younger Shoe Studio brands Head Over Heels and Madden Girl to New Look, Dorothy Perkins and Jane Norman Stores Introduce an ordering service to the concessions Introduce shoe care products to be sold in store and concessions By following the recommendations I feel The Dune Group, Head Over Heels and Madden Girl brands will improve in the UK market.

Thank You For Listening Any Questions?