Glue Store Launches New Brand ‘Macho Vintage’ For Men’s Clothing

Brand Description and Trend Analysis

The main issue faced by Glue Store is of late deliveries and increased cost prices associated with The Academy Brand which causes a reduction in profits. To overcome such issue buying head wants to design a new house brand to replace The Academy Brand business across Glue Stores.

Name: “Macho Vintage”

Description: Macho Vintage will be a new brand of Glue Store that will be a modern and sophisticated label for fashion conscious men. The Macho Vintage will market its clothing towards adults and teenager who are looking for affordable, yet chic items to complete their wardrobe. Looking towards the demand for designer clothes, the brand will more focus on the newest and latest style. The new brand will concentrate to achieve the aim of Glue Store which is to deliver the products on time and reduction in operating cost. This brand will be specifically directed to design cloths for young males nowadays. The Glue Store is known for offering quality products. However, it shows that the people behind the brand are knowledgeable in selling and have presented a great idea.

“Men’s Quality clothing that will allow customers to enjoy the great outdoors while staying warm and looking stylish.”

From a long-run menswear market has taken a backseat, and the world of fashion was more focused towards women’s wear, but now the things have been changed, and male counterpart has grown into a metrosexual, even they are more interested in looking dapper and stylish. Considering this fact, designers and brands have shown curiosity towards modifying such market segment. The current market of menswear is segmented into different categories such as active wear, formalwear, casual wear, outerwear, and essentials (Fibre2Fashion.com. 2017). This trend is significantly associated with the rise of a new age in working environments of the corporate sector that has set free their employees from work uniform. Adding this, it was noticed that the coming age of masculine men has started focusing towards personal grooming and.

Table 1 Sales Forecast for High Summer

Product Class	Unit Sold Academy	Unit Decline %	Unit FC	Average Sell Academy	Sell Prices Reduction	New Price Points	Sales Growth	Sales FC ($)
Trees	7000	30%	4900	30	5	25	-35%	122500
Tanks	4500	30%	3150	20	5	14	-25%	44100
Shirts SS	2700	30%	1890	45	5	38	15%	71820
Swim Shorts	5500	30%	3850	40	5	32	8%	123200
Walk shorts	6000	30%	4200	50	5	41	9%	172200
Chinos	1700	30%	1190	90	5	80	6%	95200
	27400		19180				FC	629020

Table 2 Calculation of Sales Growth

Previous sales unit	Less : 20% margin Previous sales unit which are unsold	Current sales unit	% Sales Growth
7000	5600	8641	-35%
4500	3600	5761	-25%
2700	2160	900	15%
5500	4400	3703	8%
6000	4800	4000	9%
1700	1360	847	6%

Sales Forecasting is the estimation of business’s sales in the future (Ma, Fildes and Huang, 2016). As per the given information new brand is going to launch in high summer starting October 1. It has been estimated that new brand to sit $5.00 under the average Academy price points across all categories. The Glue has added 4 new stores since last summer taking the total stores to50 stores Australia wide in which the new brand will be launched. It has also been considered that heavy demand of Tees and Tanks expect unit sales to shrink by 20%. As the brand is expected to reach 70% of the Acad Brand Sales, so unit Decline is estimated to 30 %. So, the total unit forecasting is based o 70% of actual unit. The total sales forecast for High Summer for all thee months is $629020.

Brand Essence

Table 3 Calculation for Open to Buy

Product Class	Planned Sales	Planned Markdowns	Planned End of Month Inventory	-Planned Beginning of Month Inventory	Open-To-Buy (retail)
Trees	122500	9072	12250	$150000
Tanks	44100	3499.2	4410
Shirts SS	71820	4898.88	7182
Swim Shorts	123200	8731.8	12320
Walk shorts	172200	12247.2	17220
Chinos	95200	6554.52	9520
	629020	45003.6	62902	$ 150000	$ 586925.6

Table 4 Calculation of mark down value

Product Class	Sales FC	Sales Through	Unsold Stock	MD	MD value
Trees	151200	80%	30240	30%	9072
Tanks	58320	80%	11664	30%	3499.2
Shirts SS	81648	80%	16329.6	30%	4898.88
Swim Shorts	145530	80%	29106	30%	8731.8
Walk shorts	204120	80%	40824	30%	12247.2
Chinos	109242	80%	21848.4	30%	6554.52
	750060

Open-To-Buy (OTB) is significantly refers to merchandise budget that created for purchase by a retail store for a specific time duration which is not yet ordered. In other words, it is a concept of how much inventory can be purchased without getting into trouble (The Balance, 2017). As based on the given data, sell through rate of 80% and remaining 20% is mark down by 30%. The ending inventory is estimated at 10% of the total Sales Forecast and the beginning Inventory leftover Academy stock which affects OTB estimation. The date indicates that $150,000 worth of Academy Brand that is considered as beginning Inventory and thus, used for OTB calculation

Formula used for OTB =Planned Sales + Planned Markdowns + Planned End of Month Inventory – Planned Beginning of Month Inventory

There are two forms to calculate Open-To-Buy, either units or dollars; however the best is to calculate it in dollars as there can be some variations in costs of products. Total open to buy inventory is $586925.6. As prior to calculate OTB, Mark-down percentage to the unsold stock value is used to obtain mark down value.

Table 5 Range plan

Product Class	Range Makeup	OTB per class	Avg selling price	Units required	Total Stores	Units per SKU per store	Quantity per SKU	Total SKU required
Tees	30%	216021	25.00	8640.84	50	12	600.00	9240.84
Tanks	12%	86408.4	15.00	5760.56	50	12	600.00	6360.56
Shirts SS	5%	36003.5	40.00	900.088	50	10	500.00	1400.09
Swim Shorts	18%	129612.6	35.00	3703.22	50	10	500.00	4203.22
Walk Shorts	25%	180017.5	45.00	4000.39	50	12	600.00	4600.39
Chinos	10%	72007	85.00	847.141	50	8	400.00	1247.14
Total	100%	720070		23852.2				27052.23

The OTB per class has been obtained by multiplying the total OTB by their respective range markup. The units required are calculated by dividing the OTB per class by average selling cost. The quantity per SKU is attained by multiplying the total stores of each category by the SKU per store of each product class.

Range planning is an important part of the overall planning process regarding the assortment of the collection which a store wants to maintain. This comprises of making decisions related to the amount of merchandise choice a store wished to keep. This also includes the variety in terms of various sizes that will be presented to the customers (Samli, 2015). The breadth of stock refers to the number of different kinds of commodities, and the depth of merchandise is the quantity of SKU’s in each kind.

Determination of right merchandise range is crucial to meet financial targets of a retail business and also meet the demands of their customers by making them available merchandise of their choice. If the variety and number of theproductare not according to the customer needs, the retailer likely loses the customer may be forever (Bianchini&Tricase, 2016). Thus, range plan is a careful balancing of the stock since overstocking will led to low inventory turnover and fewerprofits while under-stocking leads to lost sales and unsatisfied customers.

Sales Forecast for High Summer

Table 6 Calculation of Target Cost

Product Class	Target Sell	GP	FOB Price	Pick and Pack	Storage	Shipping	Custom Duties	Landed Cost (AUD)	New GP
Tees	25	65%	24.69	0.5	0.15	0.7	10%	8.64	65.4
Tanks	15	65%	14.94	0.5	0.15	0.7	10%	5.23	65.1
Shirts SS	40	55%	40.00	0.5	0.15	0.7	10%	17.99	55.0
Swim Shorts	35	61%	34.85	0.5	0.15	0.7	10%	13.59	61.2
Walk Shorts	45	55%	44.87	0.5	0.15	0.7	10%	20.19	55.1
Chinos	85	60%	84.85	0.5	0.15	0.7	10%	33.94	60.1
Total

In the above table, the new landed cost, and the new G/P have been ascertained. The landed cost is obtained by adding additional costs to the original cost price plus 10% of the total amount. The FOB is reduced up to the point till the New G/P is equal to the required G/P. The following has been explained in detail below-

Tees-