Ela swimwear store: designer quality at affordable prices in New York

Small Retail Stores

THE CONCEPT

Location

New York

Ela Swimwear Store

Store name: Ela

Ela represents a revolutionary concept in terms of swimwear for women, a business idea that will attempt to combine the quality of designer and stylist swimwear with the reasonable prices of regular downtown shopping. Every time that a woman needs to choose a swimwear for herself, her decision making process is usually burden from questions relating to whether the swimming suit looks good on her, to whether her partner will like it and, further on, to the even smaller issues like coloration.

Some choose to simply have a label design for them a personalized swimwear, otherwise will not afford it and prefer to spend a lot of time and nerves to select and eventually purchase a swimwear from one of the numerous department stores in the city. The aim of the Ela store is to meet both these demands at a significantly lower price than a label designer.

The first store will be open in New York. There are several reasons for choosing New York as the primary city for my business. One of these is that there is a large population in New York, so the number of potential consumers is likely to be higher than in smaller or medium-sized cities. On the other hand, unlike cities on the West Coast, for example, New York's market for swimsuit and swimwear stores is far from being saturated. Indeed, many of this type of products are generally sold only in large department stores. Rather than being individualized per each buyer in part, there is virtually a limited diversity to chose from. The need for a store with new ideas at lower prices than designer outfits is clearly seen here.

Besides the professional designer expertise we will be offering on the premises when a potential client is looking for the adequate swimwear and besides our determined emphasis on maximizing customer relations and creating a sound relationship with our clients, we will also aim at creating a portfolio of new, young and ambitious designers who will be creating products for our stores. Many of these are likely to come from countries such as Brazil, where they know the swimwear phenomenon, but have not had the chance to emerge on larger market and to produce for a larger number of clients. This will allow us to merchandise a larger variety of products, ranging from Eres swimsuits to new Brazilian designers.

Short-Term Goals

Based on the business vision to create an exclusive swimwear store and to maximize the customer relations services, we can enumerate the main strategic objectives in terms of short- and long-term goals. The short - term goals will be to create brand recognition and to ensure a solid basis for clients that can determine a constantly increasing volume of our activity. Much of the marketing activity within the first month will be directed towards fulfilling this objective. The development of the business will include importing swimwear from Brazil, as well as Brazilian designers.

Long-Term Goals

In terms of long-term goals, these will already include the diversification of our product portfolio with the inclusion of swimwear from Europe. This phase will also include a geographical expansion phase, with the inclusion of at least two other large U.S. cities with a still not fully developed market for swimwear. Financially, we plan to go with a projected 5-10% annually, but we are more interested in consolidated growth, which means that we are rather looking for a growth trend and development of the business.

Notes

1) the swimwear will sell for an average price of $60. We have estimated an average number of 6 pieces sold daily throughout the year. It is important to note that seasonality is a factor to consider, but to a lesser degree than if the store was open in a location on the West Coast. The reason for this is that purchasing swimwear in New York can determine other activities than just going to the beach, like going to one of the numerous swimming pools in the city.

2) the cost of goods sold was estimated at $15 a piece, to which we added

15% for the consultancy on the purchase.

3) the location will be in the Lower East Side, at 89-97 Avenue C. As a small location, the price per feet steadily the same at $45.00, our costs can go down. We don't really need an extravagant space in the first year of operations.

4) Extensive travel will be required during the first year in order to setup the connections in Brazil and establish the suppliers, as well as the designers with whom the company will be working.

5) the Internet will be required so as to best communicate with the suppliers in Brazil, as well as to track progress from advertising over the Internet.

6) the advertising budget will be high only during the first year, given one of the short-term objectives we have proposed: building the company brand. This sum is likely to cover the marketing campaigns we are proposing.

7) Estimated.

8) There is a 7.5% tax on corporate income in New York City.

The loss can be explained through the fact that this is the first operational year when the company will be forced to invest in things such as extensive travel and a serious advertising campaign. It is very likely that after the first year, many of the expenses can be significantly reduced, while the company operating revenues will also gradually increase, due to more people learning about the products and services that the company is offering.

Start Up Cost

Legal/Accounting: $1,500.00

Equipment:

POS System: $1,688.00

Computer in the store: $800

Telephone: $40.00

Hangers: $230.00

Security System (clothing sensors): $1,500.00

Bags/Tissue: $400.00

Couch/Chairs: $750.00

Decorating: $800.00

Total Equipment Cost: $7,708.00

IV. MERCHANDISING/MARKETIN

The store's advertising campaign will be a successful mixture of advertising in newspapers and magazines and advertising online.

Internet

Part of the advertising budget will be used to create a business/store website, which will also provide the buy online facility. Given our targeted group of consumers, we are to believe that these are active individuals spending much of their time at work or at home in front of a computer or a laptop. We will be outsourcing the website creation to one of the lower costs countries, such as India or Eastern Europe, where the cost of creating a new website, with all the mentioned facilities, including online payment, is not likely to surpass $2,000.00.

Additionally, a local SEO will be hired to promote the store website with different search engines and to optimize its presence in Google searches for key words such as swimwear, swimsuit, summer, store, pool etc. All it services will be outsourced, as mentioned.

Part of the advertising budget will be used for online advertising. The most useful sites where the store banner can be placed are fashion or social magazines, such as Cosmopolitan. The scenario would encourage us to believe that our targeted client will take a break at work to look over the new online number of Cosmopolitan and will see our banner. Upon clicking it, our potential client will be taken to the company store website, where she will be able to browse through our products and decide on whether to make a visit to the tore or not. We can also offer online consultancy, but it is likely that she will choose to come to the store in order to be able to browse more carefully through the products and actually benefit form a face-to-face conversation with our consultant.

Newspapers and Magazines

We plan to advertise in magazines whose profile we have already previously identified as 'social' magazines. These magazines, like Cosmopolitan or Vogue, are an excellent opportunity for exposure for our business, since this is the type of magazine that our targeted potential client is likely to look through.

Participating to fashion fairs

This is a good opportunity for our business to meet potential clients, as well as potential suppliers from the U.S. And from the international market. Since presence to this type of events is generally quite expensive, we are going to be participating only in one annual such event. This should most likely be either in Brazil (where extensive travel will be done during the first year of activity) or around New York, so as to save additional travel expenses.

Promotion event in Brazil

This event can be held once or twice a year in Brazil and would provide an opportunity for the local producers and designers to present their new ideas. The company will benefit from this because it would thus be offered a possibility to have an initial selection of potential collaborators and designers who could produce the next lines of swimwear.

Pricing

Our pricing strategy is important, because the price we offer shall cover both the cost of the product itself (the swimwear), as well as the cost of the consultancy. This will be included in the former and will amount to 15%. As previously shown, the price of a swimwear will be $60, but we will have different pricing campaigns to encourage the development of a network of clients, as well as to increase the degree of customer retention.

The pricing policy is not determined by direct competition, given the fact that, as we have previously seen, this is a unique idea in New York. Depending on the volume of sales during the first year, the pricing policy may vary in time. Additionally, given the cooperation with Brazilian designers and producers, we may segment the pricing to promote a certain designer or a certain line of products.

Arial View of Store Layout

V. STORE POLICIES

The store will accept any recognized form of payment, including here payment with all different types of credit card (the performing POS we will be purchasing should ensure that), check or even wire bank transfer for larger orders. Pay Pal can be accepted for the online orders, but this will be integrated in the online payment application that will be installed on the store website. The store will itself use wire transfer for all payments to suppliers in Brazil, but will negotiate a three shipment total for each of the payments it will make.

The store will offer discounts based on regular shopping in our store, as well as for bringing new customers. The former can be demonstrated by simply showing a receipt from a previous purchase and is rewarded with an exponential discount, starting at 10%. For each previous purchase, the discount increases with 10%, so that the tenth piece purchased in our store will be free. If several pieces are purchased, the discount applies to one piece, the cheapest of the set. Employees get 15% off on all merchandise in the store, after 3 months of working with our company.

All products can be returned, provided that the client shows the purchase receipt and provides a reason for returning the merchandise (the return is not conditioned by the reason provided, but it will help us see what has gone wrong).

The store will operate according to the following schedule:

Closed on Wednesdays

Mondays and Tuesdays: 12-8

Thu - Sun: 10-8

We assume that our clients will be more inclined to shop during the weekend, so this is why our store will be opened longer hours during that time.

Employment

We will initially hire a single assistant in the shop, because the consultants will be paid as a percentage of the cost of goods sold (15%, as previously mentioned). The assistant will be paid $30,000 a year, to which we can also add Holiday bonuses and the discount for purchasing things in the store. The assistant's job will be to welcome clients into the store, perform payment and wrapping duties, as well as post-sale activities, such as encouraging the shopper to visit us again. All purchases and travel to Brazil for contact with the new designers and producers will be done by me. Regular monthly meetings with the assistant will ensure that I am aware of the most important things going on at the store, of how the business is going, what clients have returned etc. Twice a month, I will personally sit in the store and chat with the clients walk in, partially taking the role of the assistant.

The interview with the potential employee will aim at ensuring the honesty and integrity of the assistant rather than her previous experience or studies. As mentioned, he or she will be solely in charge of managing the store in my absence, working with company money and operating the store. It is essential that the individual is someone to be trusted.

As an owner and manager, I will not be receiving a salary, but a participation on profits. During the first year, this is obviously not possible, but the subsequent years will certainly cover the loss suffered in the beginning.