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    Harrington Collection: Sizing Up The Active-Wear Market: Presented By: Rachit Gupta Poonam Chauhan Subhasish Das

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    Poonam Chauhan
    The document analyzes the active wear market and proposes that Harrington Ltd expand into this growing segment. It finds that active wear has higher turnover rates than Harrington's current collection and the market is expected to double by 2009. A financial analysis shows that entering the active wear market in their Vigor line could increase Harrington's overall profit margin to 18.3% from the current 9%.

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    Harrington Collection: Sizing Up The Active-Wear Market: Presented By: Rachit Gupta Poonam Chauhan Subhasish Das

    Uploaded by

    Poonam Chauhan
    2K views13 pages
    The document analyzes the active wear market and proposes that Harrington Ltd expand into this growing segment. It finds that active wear has higher turnover rates than Harrington's current collection and the market is expected to double by 2009. A financial analysis shows that entering the active wear market in their Vigor line could increase Harrington's overall profit margin to 18.3% from the current 9%.

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    Harrington

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    The document analyzes the active wear market and proposes that Harrington Ltd expand into this growing segment. It finds that active wear has higher turnover rates than Harrington's current collection and the market is expected to double by 2009. A financial analysis shows that entering the active wear market in their Vigor line could increase Harrington's overall profit margin to 18.3% from the current 9%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views13 pages

    Harrington Collection: Sizing Up The Active-Wear Market: Presented By: Rachit Gupta Poonam Chauhan Subhasish Das

    Uploaded by

    Poonam Chauhan
    The document analyzes the active wear market and proposes that Harrington Ltd expand into this growing segment. It finds that active wear has higher turnover rates than Harrington's current collection and the market is expected to double by 2009. A financial analysis shows that entering the active wear market in their Vigor line could increase Harrington's overall profit margin to 18.3% from the current 9%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    Harrington Collection:

    Sizing Up The Active-Wear Market


    Presented By:

    Rachit Gupta Poonam Chauhan Subhasish Das


    Introduction :
    Est. 1960
    Preeminent Brands for women designer, elegant, high-
    end fashion.
    Business Divided into two segment:
     Manufacturing
     Retailing
    Market Segmentation :

    Designers Harrington Ltd.

    Bridge Sopra and Christina Cole


    Better Vigor
    Financial Performance:
    From Company’s profit
    • Manufacturing Group accounted for 50.3%
    • Retail Group accounted for 49.7%
    • Three Years Financial Results:
    Year Profit Margin
    2005 11%
    2006 9.8%
    2007 8.8%

     This clearly shows the decline in profit


    Market Study:
    U.S. Women’s Apparel Market: Units Sold

    Price Point Annual 2005 Annual 2006 Annual 2007 Channels


    millions millions millions

    $ 200 + 138.3 139.2 143.2 Specialty &


    upscale
    $ 100-$200 219.0 218.9 222.2 department stores

    $50-$100 438.0 468.9 511.5 Warehouse clubs,


    Super centers &
    Under $50 489.9 524.3 584.6 others

     Consumers became very price sensitive and 50% apparels were purchased when put
    on SALE.
    Active-wear Market…
    Departmental store reports showed that active wear (consist of
    matching hoodie, pants, and tee shirt) inventory sold quickly.
    Twice turnover rate that of current Harrington collection apparel.
    2007- 7.5 million active-wear units sold
    Expected to double in 2009 i.e. 15 million
    Market share of “better” classification is expected to grow up to
    40% in 2009 from 20% in 2007
    Juicy couture by Liz Claiborne –better segment active wear
    leader and popular with Hollywood celebrities
    Potential market in stylish active wear segment
    Environmental analysis and Marketing Mix:
    consumer
    a) Target customers showed interest in Active-wear segment
    b) Loyal customers were interested in something fresh &
    comfortable rather then tailored & professional look
    c) 10% of customers purchasing apparel in $100-$200 price
    range showed interest in buying active-wear range with
    superior styling, fabric & fit was available
     product: stylish active wear apparel with less expensive
    pricing, suits the customer preference
     COMPETITION:
    a) Liz Claiborne’s Juicy Couture
    b) Jones Apparel Group
    c) Technology product and leisure-activity spending

     Differentiation :
    a) Top in house design staff
    b) Durability
    c) Marketing and
    d) Outstanding service
     CONTROL:
    a) Control over customer service
    b) Product display
    c) Sales staff
    d) Quality
    CONSTRAINTS :
     Outsourcing location
     Near by location like MEXICO to maintain quality and
    competitive advantage

     Brand name-Vigor division


     suits the segment “ trend setters” and strength to support
    less expensive line
     Broad line and advertised nationally

     Short lived Product life cycle


     Good inventory management to stay ahead of product life
    cycle
    Channel & Distribution :
    a) Excellent relationship with retail trade
    b) 7 % market share in better segment with company
    owned stores
    c) Passionate support by specialty stores
    Demand and Profitability analysis.
    Start up Cost $ 12.7 Million

    Depreciated Start up Cost $ 2.54 Million

    Total Fixed Operating Cost $ 10.5 Million

    Direct Variable Cost per Unit $ 37.92

    Indirect Variable Cost per Unit $ 8.64

    Total Variable Cost per Unit $ 46.56

    Wholesale Unit Price $ 95

    Contribution Per Unit $ 48.44

    Break even Units 269201


    Active-Wear Market Size in 2009- 15 Million Units
    Market share of “better” segment (40%) – 6 Million Units
    Harrington’s Market size in better segment- 4,20,000
    Units
    Revenue $ 39.9 Million

    Profit Before Tax $ 7.3 Million

    Profit Margin 18.3%

    Over All Profit Margin Of Harrington 9%


    Collection

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