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Store management strategy in a shopping mall
Retail management chapter 1
Retail management chapter 1
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In this episode of the profit, Marcus Lemonis visits Blue Jeans Bar. Blue Jeans Bar is a high-end clothing and accessories retailer owned by Lady Catherine Reiss-Fuller. Lady was born and raised in New Orleans. She fulfilled her passion for the fashion industry in 2004 and opened a network of boutiques she called “The Blue Jeans Bar.” She combined her inspiration from her parents’ legacies and her MBA in fashion to build a business with a soul. Lady’s mom was a model and her dad was a business.
With some issues like lack of inventory and fast expansion, the Blue Jeans Bar struggled to stay in the business and managed the high debts. Marcus Lemonis was asked to help the company regain its composure and manage the business issues. Marcus went
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• Too aggressive business expansion.
• Stagnant stocks.
• Lady Fuller and her people are inexperienced when it comes to the retail business.
• The stores have limited sizes available.
• The profit margin is horrible.
• The business does not have enough inventories.
• The merchandise is all over the place. The deal
Because of the lack of proper management, the Blue Jeans Bar was on the verge of extrication and the business in dire need of Marcus’ help. Marcus initially offered Lady $800,000 for 50% ownership. The money will be paid to the vendors and some amount will be spent as working capital. Lady countered by asking for $1,000,000 for 40% ownership.
Marcus said he recognizes the fashion ideas and artistic skills that Lady has and finally offered her on $900,000 for 50% of the business with Marcus fully in control of the spendings. Lady and Marcus settled with that amount and arrangement.
The Solutions
• Bring the inventory in.
• Take care of the vendors and supplies.
• Make a significant change in the store’s appearance.
• Pick and sell new products.
• Flatten the management/organizational chart.
• Introducing new inventory system.
• Clearing out the basement and made great
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Steps taken
After Marcus announced the deal to the employees, so many things happened. Because he lived in Chicago, he decided to visit the Blue Jeans Bar Chicago. He was disappointed to discover the lack of leadership and inventory. He called the attention of Lady, Tasha, and Amy. He described the store as underloved, dirty, unsupervised and underresourced.
Marcus initiated to identify the demographics the customers, clear the racks and basement. They made a big sale and bring some of the stocks to the other store. The Chicago store was closed and re-modelled and become the model-store. It was hard for Lady to let go of the “bar” concept and hesitated to have the bar removed. Marcus insisted to get rid of it to make more floor space.
Marcus brought Lady and Amy to Aviation Nation to look for new products to introduce and sell. They picked new products that will suit the 25 to 40 demographics. When Marcus unveiled the new Chicago store as “Denim & Soul,” Lady was blown away. The customers are happy to find their sizes and style.
Karolina Swietoniowska, the young, youthful, educated and passionate owner of Korra dancewear has been in business, trying to live her dream of designing dancewear clothes for the past three years. Sales have been however very slow for her, given that she had other priorities to take care of, she is now looking to improve her position as a businessman and increase her scale of business and expand and grow. Capital and experience constraints have been pulling her down and she is struggling to make her mark on the market. There are other very strong competitors in the market, functioning with very different
products in store and onto the shelves. As she had went and did her thing in business. She
(The retail industry main aspect includes small stores that sell products directly to consumers. Mike took over the lease of a building and wanted to transform it into a fully functional department store that offered a variety of products.)
Ron Johnson spent a great deal of time and money to promote his ideas of “stores-within-stores” by turning floor space into an area to house several branded boutiques. He did this in order to attract a target market of a wider demographic which includes age, gender, and generation. One of the m...
J. Crew, also known as J. Crew Group Inc., is a private label company known for its preppy fashions that are fashionable yet costly. Essentially, the company was owned by the Cinader family for most of its history. Mitchell Cinader and Saul Charles founded the company in 1947. It was originally known as Popular Merchandise Inc. doing business as the Popular Club Plan, in which Mitchell’s son Arthur was the overseer. The company sold women’s clothing through in-home demonstrations. In the early 1980’s, Cinader and Charles observed catalog retailers such as Land’s End, Talbots and L.L. Bean reporting rising sales in revenue. With intentions to increase sales and duplicate success of these well known companies, Popular Club Plan began its own catalog (http://www.fundinguniverse.com/company-histories/j-crew-group-inc-history/).
Another point can be the innovational shopping techniques put forward by the CEO, like the self service checkout stations which tries to provide some form of quality service for the customers.
Despite the outbreak of the First World War, the store strived to give a great service to the public, giving a meaning to the famous phrase “business as usual” (Harry Gordon Selfridge, 1914). During the period of 1919 and 1924, the company started its first expansion in Oxford Street and was selling everything from make-up to toys. So far, over 15 million had shopped in the store.
The Body Shop International case is an interesting case study into the miscommunication of owners and stockholder interests with regard to financial conditions. Anita Roddick, the founder of The Body Shop had no financial experience and thought that all she needed to do was expand her business and the financing would take shape as she developed her business. While Anita’s product concept of a natural skin-care line was good; her lack of experience in financial matters took its toll on her business.
The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
Management experience will also play a large role in the success of the forecast. The current team is quite new and will gain some needed experience over the next year in the hopes of staying on track for success. The ability of management to ensure product is readily available for the client, their training techniques with new and seasoned associates, and general management style will ensure success or spell defeat for the store.
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
The sign of moving products promptly from a designer’s table to the retail sales floor has swayed the whole global retail commerce and enticed rivalry. Customers value a “new look” that can be worn for this instant and assess the goods as a monetary fortune; not something that you will keep
MEMORANDUM From: 200096 To: Steven Clinton Date: January 22, 2008 Re: Harrington Collection Recommendation: Introduce an active-wear segment into the Vigor division to increase margins and break even. The overall product development strategy along with its estimated market share is sufficient and profitable for the Vigor active-wear product line to be launched. Problem Statement: How should Harrington Collection, a large manufacturer and retailer of high-end apparel, expand their product line in an active-wear segment?