Clothing Manufacturer Business Plan Example

Clothing Manufacturer Business Plan

New Look intends to leverage its position as an established men’s clothing business to become a manufacturer of an upscale clothing line for males aged 20-40. New Look develops and supports the clothing line with advertising and promotion campaigns, aiming to strengthen its partnership with retailers and differentiate itself through marketing strategies, exclusiveness, and brand awareness.

The key message associated with the New Look line is classy, upscale, versatile, and expensive clothing. The company’s promotional plan includes a range of marketing communications. In the future, New Look plans to develop lines of accessories for men, women, and children, including cologne/perfume, jewelry, eyewear, watches, etc.

Solution

New Look develops and supports the clothing line with advertising and promotion campaigns, aiming to strengthen its partnership with retailers and develop brand awareness.

Market

Our customers are males aged 20-40 with a disposable household income. Within this group, there are no color barriers, and customers have diverse backgrounds. The New Look customer is a versatile man who can fit into any environment and is willing to pay a high price for quality clothing.

Competition

Companies in the apparel industry can operate as retailers, manufacturers, or both. Gap, Inc. is an example of a vertical retailer that manufactures and markets its own apparel and accessories, while VG Corporation is a manufacturer that sells solely to retail channels. Tommy Hilfiger does both, selling products to both retailers and consumers through retail outlets.

Why Us?

We are an alternative to existing clothing lines, offering exclusivity and unique marketing strategies. We are highly aware of trends and brands, making our customers the envy of all their fashion-forward friends.

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Expectations

Forecast

The company’s goal is to expand from retail to online sales and establish its own branding. We also plan to sell our products in other retail stores by the end of the period.

Financial Highlights by Year

Financing Needed

We are looking to expand our design line, with our owner contributing $65,000 and seeking a $115,000 business loan. Both will be paid back by our second year using our established customer base and relationships.

Opportunity

Problem and Solution

Problem Worth Solving

The New Look strategy is to expand and grow our existing retail clothing business by aggressively developing and marketing our own brand. We aim to differentiate ourselves through marketing strategies, exclusiveness, and brand awareness. The goal is to make an impact on the fashion industry and create high consumer demand.

The long-term goal is to venture into women’s and children’s clothing and license a range of accessories. According to Standard & Poor’s, women’s apparel accounted for 52% of total apparel sales in 2015.

Nashville Connection

The company has strategic alliances with Music Records and the Entertainment Group, providing exposure for its line and associating its products with celebrities. Celebrities receive free clothing for interviews, concerts, and music videos.

Our Solution

New Look clothing line offers classy, upscale, versatile, and expensive clothing. Our current customers are males aged 20-40. We develop and support the clothing line with advertising and promotion campaigns. Our prices are in the mid to upper level of the market, and our clothes are top-notch, making our customers feel like smart, fashion-forward shoppers.

Target Market

Market Size & Segments

The company plans to target males aged 20-40 with a combined household income of over $40,000. Within this group, there are no color barriers, and customers have diverse backgrounds. The New Look customer is a versatile man who can fit into any environment and is willing to pay a high price for quality clothing.

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S&P’s reports that in the men’s apparel segment, much of the growth in spending is being driven by consumers with annual household incomes over $60,000. Spending in this segment increased around 13% in 2010.

As growth slows in the U.S. apparel and footwear markets, companies are looking overseas for growth opportunities. Many expanding economies are interested in buying U.S. products.

Distribution

New Look plans to use a direct sales force, retailers, and the Internet to reach its markets. These channels are most appropriate for time to market, reduced capital requirements, and fast access to established distribution channels. Manufacturing will take place in Mexico for denim and locally for sweaters initially, before expanding to Italy and Hong Kong.

Trends

Leaner inventories, but continued pricing pressures

After several years of inventory build-ups, the apparel industry’s inventory-to-sales ratio declined steeply. Prices of women’s apparel declined, and S&P’s expects some degree of pricing pressure to persist in the near future.

Modest growth in ’16

S&P’s expects sales for the apparel industry to rise about 4% in 2016, with brands like Tommy Hilfiger, Gap, Abercrombie & Fitch, and Jones Apparel Group expected to perform well. The trend toward casual dressing continues, sustaining the need for new wardrobes or alterations.

Apparel outlook still positive

S&P’s expects the overall apparel industry to continue to post modest gains through 2016. Branded apparel companies selling to the department store channel of distribution are expected to grow somewhat faster than the overall industry.

Buy now, wear now

Consumers are buying apparel closer to or during the season, causing companies to shorten design, development, production, and distribution cycles. This trend has forced companies to reevaluate their manufacturing processes and establish production sites closer to distribution points.

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What’s in a name?

Established brand names make the shopping experience easier and faster for consumers. Brands build consumer loyalty, resulting in repeat business. Many companies use licensing to extend their product lines, but caution is needed to protect brand image.

Competition

The Apparel Industry

The U.S. apparel industry is large, mature, and highly fragmented. Domestically produced apparel accounts for less than imported goods. Apparel is sold through various retail outlets, with national brands accounting for 30% of wholesale apparel sales and the remaining 70% comprising small brands and store goods.

Current Alternatives

Restructuring and technology adoption are common practices in the apparel industry to improve profitability. Companies can operate as retailers, manufacturers, or both. Consolidation has been prevalent, with larger companies gaining leverage in market position and cost cutting.

Our Advantages

Our name, New Look, is versatile and allows entry into different segments of the industry. Our marketing strategy, which includes celebrity endorsements and in-house advertising, differentiates us. Brand names and quality products give us a competitive advantage.

Keys to Success

It’s about fashion, style, and distribution. Establishing ourselves in retail is critical, and our brand name is a powerful weapon.

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