Womens Clothing Boutique Business Plan

De Kliek Style Studio

Executive Summary

Opportunity

Problem

There is a need for a fashion boutique that caters to the busy female professional woman who lives in Los Angeles with a household income over $250K. She enjoys the boutique fashions and wants a place where she can go to get services that meet her busy lifestyle. She has cash to burn and a job where she can’t get ahead without dressing the part. 

Solution

De Kliek will provide services such as Style Assessments, alterations, personal shopping, and special ordering to customers during store hours and by personal appointments. 

Market

Research has shown that women are stressed, have little time to shop, and would generally like help in determining the right clothes and styles to wear. With over 61 million U.S. women between the ages of 25-54 spending over $34 billion in apparel each year, there are sure to be some mistakes made in clothing choices. 

Competition

Direct Competition:

• Fish
• Fred Segal
• Girl and Her Dog
• Margaret O’Leary
• Dress
• Rabat
• Riki
• Susan of Burlingame
• The Grocery Store

Indirect Competition:

• Abigail Morgan
• Ambiance
• eLuxury.com
• Her
• The Designer’s Club
• Yoya Boutique
• All other LA Boutique Retailers

Why Us?

De Kliek is different because it provides services the others don’t such as: style assessments, alterations, personal shopping, and special ordering to customers during store hours and by personal appointments. Style Concierges who are trained within the image industry will be available to customers on a daily basis. De Kliek’s innovative Style Assessments and educational emphasis in helping women develop their personal styles will enhance our reputation as a truly unique boutique.

Expectations

Forecast

• Start-up costs include inventory for the first month, and are estimated at $117K. Financing including working capital is to include the owner with $40K, a family-member investor $45K, and an SBA loan for $90K.  
• Annual gross sales are projected to grow from $650K+ in the first year to over $1M by Year 3, with approximately 10% from customer special orders. These Sales forecasts are approximately three-quarters the average of benchmarked Los Angeles boutiques. Net profits are expected at approximately 6% through 2007, with reinvestment of 5% for growth initiatives.

Financial Highlights by Year

Financing Needed

We need 175000 to start. The owner will give 45000, an investor will give it 40,000 and there will be an SBA loan of 90,000. The loan and the investor will be paid back by year 4

Opportunity

Problem & Solution

Problem Worth Solving

Women professionals with fashion-forward needs have disposable income with no idea what works best for their bodies. There are also a significant portion of professional women who work crazy hours and have countless events and no time to shop for themselves. Women are judged on appearance so the money they raise or their job advancement is dependent on their clothes and their style choices. They have to look good to get ahead and are not sure what to buy or how to deal with their own style. 

Our Solution

De Kliek Style Studio is an upscale women’s clothing boutique that intends to open in Noe Valley in July. De Kliek means "clique or circle of friends" in Dutch; this defines the boutique and its essence of inclusion. De Kliek carries beautiful designer labels for professional women, such as the sophisticated silhouettes of Herr Frau and luxurious Jamin Puech handbags. De Kliek’s clothing selections and exclusive personal style services, which include a detailed Style Assessment that features nine different style personalities, will ensure that our customers are always well dressed.

Target Market

Market Size & Segments

(Note: the information here is not valid for re-use. Dates and details are incorrect. This is here for illustrative purposes only, as part of a sample business plan intended to be used as an example only.)

There are various economic forces that affect apparel retailers. Consumer confidence is the most important; people don’t shop when they are not feeling good. Unemployment also has an effect, in that fewer women out in the workforce means less disposable income for high-end quality clothing. Thus, the large discounters (Target, Sears and Wal*Mart) are now working with top designers to bring designer apparel to the masses. Although they can’t compete on quality, their continued development of the trend could have a direct impact on retailers who sell designer clothing during tough economic times.

Fortunately, the luxury goods market, of which De Kliek is a part due to the high-end brands it will carry, has remained recession-proof, as clearly indicated by the successful 2016 results for Coach, Tiffany and Saks. According to Women’s Wear Daily, luxury firms forecast a strong 2017, particularly for accessories and footwear. However, the strong Euro and slowdown in wealth creation are big concerns and managing a balanced quality-price ratio is the key to success for luxury retailers.

"Fashion is a requirement for those who are high in their success." -Luxury Consumer

In the luxury market, luxury consumers (defined as "affluents" who have household incomes of over $100K) spent more in 2016 than 2015. [1] Based on focus groups, United Marketing believes luxury consumers see apparel and accessories as more of a necessity than a luxury. This is good news to boutique retailers. There are over 800 clothing boutiques in the LA Area; approximately 19 percent of these generate over $500K in sales.[2] In fact, women’s clothing stores in Los Angeles have a 62% higher sales growth rate than the national average; this can be attributed to the fact that the average household in Los Angeles is considered affluent.

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1) For illustration purposes only. Original source omitted. 
2) For illustration purposes only. Original source omitted. 

Market Segmentation

Market Needs
If you were to overhear women talking in a dressing room, you would more than likely hear them comment on something they’ve tried on and question how they should wear it or what it will go with in their closet. Research has shown that women are stressed, have little time to shop, and would generally like help in determining the right clothes and styles to wear. With over 61 million U.S. women between the ages of 25-54 spending over $34 billion in apparel each year, there are sure to be some mistakes made in clothing choices. Television shows such as BBC’s "What Not to Wear" and Style’s "Fashion Emergency" clearly speak to a woman’s confusion about what looks best on her. Even women who can afford a professional stylist feel helpless and often jokingly request that their stylist come to their home every morning to help them get dressed.

"Within a decade, the companies that do the best job of marketing to women will dominate every significant product and service category." -Faith Popcorn

One gender in particular influences the majority of the retail marketplace: women. Women comprise 51% (145 million) of the U.S. population [1] and control or influence 81% of all household purchase decisions. [2] Women are now earning more college and master’s degrees than men, which translates into more senior positions & higher pay. [3] Overall, women represent 47% of the total U.S. civilian workforce and as that continues to grow, demands for their time also increase. Balancing work and family are the #1 concerns for women and almost half "hardly ever" take care of their personal needs; one out of five women would like to have time to do a little shopping! [4]

Target Market Segment Strategy

Los Angeles is rated amongst the top U.S. markets in economic and educational achievements. At an average age of 40, the Los Angeles professional is highly affluent, with an average family household income of $180,903 and a median home value of $622,170. Close to 50% have a bachelor’s degree and 40% of these professionals hold a postgraduate degree.

De Kliek customers will learn about the boutique through the following sources:

• LA Neighborhood Storefront
• Friends & Customers (word of mouth and email)
• Personal shoppers and stylists
• Women’s Fashion Magazines articles and reviews such as W, Lucky, Marie Claire and Vogue
• Local press mentions & ads
• Travel and shopping books and websites

The Primary Customer

The primary De Kliek customer is a professional woman with a household income over $100K.  Her demographics are: 

Her main characteristics are listed below:

Demographics

• Professional woman (ages 30-55)
• Household income over $100,00
• College-educated
• Lives in a higher-income LA neighborhood

Psychographics

• Looks for bargains (seasonal fashion) but willing to spend money on quality, core items
• Would like more time or help in understanding what clothing is right for her
• She wants to look her best because she wants to feel good about herself as well as make a good impression at her job

Leisure Activities

• Listens to NPR
• Supports the Arts
• Reads Vogue, New Yorker, Bon Apetit, Lucky
• Watches Bravo, BBC, HBO
• Internet savvy
• Travels, owns a passport
• She enjoys eating out as well as taking time for herself at the spa or getting a mani-pedi

Clothes Shopping Behaviors

• Spends over $2,500 for clothes each year
• Shops at Boutiques, Nordstroms, and Banana Republic
• Wears a size 6, 8, or 10
• Buys mostly tops and pants
• Looks for classic, basic items each season, with 1-2 trendy items
• She cares about how she presents herself, enjoys fashion, and looks for quality over quantity

Sources: 

Sources:

[1] For illustration purposes only. Original source omitted. 
[2] For illustration purposes only. Original source omitted. 
[3] For illustration purposes only. Original source omitted. 
[4] For illustration purposes only. Original source omitted. 
[5] For illustration purposes only. Original source omitted. 
[6] For illustration purposes only. Original source omitted. 
[7] For illustration purposes only. Original source omitted. 

Competition

Current Alternatives

Direct Competition:

• Fish
• Fred Segal
• Girl and Her Dog
• Margaret O’Leary
• Dress
• Rabat
• Riki
• Susan of Burlingame
• The Grocery Store

Indirect Competition:

• Abigail Morgan
• Ambiance
• eLuxury.com
• Her
• The Designer’s Club
• Yoya Boutique
• All other LA Boutique Retailers

 

Main Competition:
From a "look & feel" perspective, as well as consideration of designer lines that De Kliek will carry, Dish in Hayes Valley is considered the main competition. The following is a comparative analysis of Fish and De Kliek:

Location:

Open Mon-Sat 11-6, Sun 12-5

Plenty of places in Los Angeles cater to the well-heeled, but this area also reaches out to the adventurously heeled — and dressed.

 

Products:

Fish’s collections largely come from American designers such as Nanette Lepore, Lauren Moffat, Vince and Katayone Adeli

 

Customer Service

The owner of Fish is fashionable and knowledgeable. She is considerate of her customers and allows them the space to shop on their own (a very important aspect for women!)

 

Features and Atmosphere

Sleek and modern interior with a warehouse feel. There are three dressing rooms with linen curtains that pull a bit from the walls so privacy is not 100% guaranteed.

Our Advantages

Although De Kliek will bring high-quality clothing and value to Los Angeles women, the most significant competitive advantage De Kliek will have over all competitors is dedication to providing an approachable retail atmosphere with top-notch customer service. De Kliek’s unique selling proposition is the integrated concept of personal style services: from events and bios that educate shoppers on designers, to personalized Style Assessments, on-site alterations, and our own unique Style Concierges and wardrobe accessories. In contrast to many other boutiques, De Kliek will become a corporate member of the Association of Image Consultants so that our Style Concierges learn from the nation’s best on image consulting.

Keys to Success

Keys to Success

1. Style. We have to be out in front, known and respected.  
2. Having a good location in a high-shopping area
3. Quality product and good relationships with vendors
4. Outstanding customer service

Execution

Marketing & Sales

Marketing Plan

Positioning Statement
De Kliek provides professional women with upscale designer clothing and exclusive personal services. Our main competitive advantage is the unique Style Assessment and education emphasis in helping women develop their personal style.

Brand Positioning
 De Kliek Style Studio looks to be the leader in providing exceptional service and assistance for women’s fashion needs. The elegance of the name suggests the types of clothing and accessories that will be featured.

BRAND PERSONALITY

Innovative | Stylish | Contemporary | Modern | Fresh | Approachable | Elegant

The overall brand personality of De Kliek aspires to be fashionable, customer-oriented, innovative, refreshing, stylish and educational. The boutique is a place where women can go to transform themselves with beautiful clothes and take advantage of the Style Assessment and other services that help them determine the right clothes for their unique selves. We are a shop that educates. We help women learn about the designers, gather with their friends, and have fun during the process. We not only carry items that help them look good, but we also help our customers maintain these items. Owner Vrootje Magen will work with her top design advisors to create the atmosphere, colors and wording that encapsulates these thoughts.

Promotion
The following promotional tactics for generating buzz and awareness about De Kliek will be implemented:

• Personal selling and word of mouth via networks of friends, stylists and customers
• A well maintained and up to date Facebook page complete with customer reviews 
• Unique visual displays in storefront on a weekly basis
• PR (local and national)
• Twitter – Where we let our customers talk to us and each other. Word of mouth is important to us, we need to know if its good or bad. 
• Direct mail such as postcard notices that are targeted specifically to the customer
• Sales Promotion such as store events and bi-annual sales
• De Kliek Web Site
• Advertising will be at a minimum with regular ad placements in the Valley Voice

Other important marketing strategies, such as developing strong customer relationships (retention), will utilize a different mix of marketing programs.

Sales Plan

The appropriate merchandise — and the right amount of merchandise– are critical in building a successful clothing boutique. De Kliek will carry 15 merchandise classifications in addition to the Style Assessment. Each month, the sales forecast and open-to-buy (OTB) plan will be reviewed with De Kliek’s inventory service provider, Retail Merchandising Service Automation (RMSA), against the previous month’s sales to ascertain any adjustments and make the appropriate changes. As Open-to-Buy is planned, the percentage of merchandise that is new (i.e., Fresh ratio) will also be considered to ensure that the inventory is, on average, around 40-50% fresh.

Operations

Locations & Facilities

De Kliek will be located in an upscale neighborhood in Los Angeles. A significant proportion of the target market lives in this area.  We will have a medium-sized retail store. We have good relationships with very chic upscale lines so we keep basic looks in the store and can get specialized customer wardrobes within 24 hours. Our services will be so good, De Kliek will also attract women from throughout other Los Angeles neighborhoods as well as the few women who come to LA from out of town to shop.

After De Kliek launches, we will have a website presence where fashionable customers throughout the country can go to learn more about the boutique, the Style Assessment, how to wear certain items for the day, evening and weekend, and make personal shopping appointments. 

Milestones & Metrics

Milestones Table

Key Metrics

Our Key Metrics for our success: 

Inventory measure: Our goal is to turn inventory five times throughout the year and generate $800 in sales per square foot.

Profit Margin Measure: We wish to maintain profit margins at 15-20% through close attention to expenses and cost of goods sold.

Facebook: Promote our new inventory and sales on last season inventory on our Facebook. We will track these customers with an easy to remember code that gives them additional sales. While these are harder to measure they will have an overall effect on sales of 2 to 4 percent. 

Twitter – Monitor and respond to what our customers are saying about us on Twitter. Our clientele are very social media savvy and we need to make sure the buzz is good. This will also have an overall sales  increase of 2 to 4 percent. 

Website – Measure our traffic as it goes through the sales funnel from searching for our website all the way through to making an appt online. We will give our customers the ability to chat with us online or call us with any questions they have before making an appt. We want our customers to feel comfortable trusting us with their style 

Company

Overview

Ownership & Structure

De Kliek has been established as a simple LLC due to the ease of formation, and simplicity of the structure and tax record keeping. In the future, De Kliek will look at forming an S Corporation when another location is opened.

Mission Statement

• To provide women with a boutique that offers a comfortable and approachable environment
• To showcase quality, well-constructed fashions from prominent and cutting-edge designers
• To offer a variety of beautiful and high-end fashion accessories
• To help women learn what clothing and styles go best with their unique personalities
• To generate buzz and sales through top-notch exclusive services

Keys to Success

1. Having a good location in a high-shopping area
2. Quality product and good relationships with vendors
3. Outstanding customer service

Objectives

• To turn inventory five times and generate $800 in sales per square foot
• To maintain profit margins at 15-20% through close attention to expenses and cost of goods sold
• To drive awareness and build sales through mentions in both local print and the nation’s top fashion magazines

Team

Management Team

Vrootje Magen | Owner 
Vrootje Magen has 20 years of work experience that is directly relevant to managing and operating a successful clothing boutique. The first eight years of her professional work experience were spent in retail sales and banking, and the last 12 years have been dedicated to a professional career in marketing. The sum of these experiences truly integrates the key disciplines for running a successful business: sales, finance, and management.

Ms. Magen’s initial experiences in retail and business sales were formative insofar as they helped her early on to understand how to best work with all types of personalities, meet individual needs through listening, and develop strong creative problem-solving skills. Much of this experience was spent "in the trenches," developing practical skills on the floor at retailers including JCPenney, Gottshchalks and Ann’s Boutique. She has an understanding of what it takes to work in a retail environment, from stocking the sales floor and utilizing loss prevention skills, to ringing up a sale and counting back cash, and most importantly, reading a customer. Her five years as a Financial Service Representative at two banks directly benefit the day-to-day operations of the boutique.

With a successful and award-winning career in corporate marketing for the last 12 years, Ms. Magen understands how to create successful communications and marketing strategies and have experience marketing fashion for top retailers, such as Levi Strauss and Gap Inc. Much of this work involved developing and maintaining high profile campaigns that were structured around generating increased customer sales within the store environment and through sales associate training. She has led successful teams, which involved qualified and thoughtful selection of employees and consultants to help ensure the success of a project.

Her current efforts toward opening De Kliek Style Studio have heavily depended on all the skills and abilities that she has developed in her past professional lives. Her combined skills and knowledge of the right types of clothing a woman should wear based on her body type and personality are enhanced by her retail experience, and her current training within the Association of Image Consultants International for the last two years has solidified her expertise.

Ms. Magen is extremely dedicated and motivated to creating a thriving clothing boutique and feels confident in succeeding based on her well-rounded experience, established sound vendor and customer relationships, and strong work ethic.

Advisors

Team of Advisors

Lisa Bakke, Certified Image Professional
As a personal stylist, Lisa Bakke has helped people look and feel great for fifteen years. Known as the Shopping Sherpa, she is dedicated to leading people to their style destination. Lisa was born with a remarkable, discerning "eye" for beauty and detail and started winning national art awards at age twelve.

Lisa graduated from Colorado College in 1979 with a bachelor’s degree in art and education. By 1989, Lisa played a key role in launching a women’s ready-to-wear line by designing, marketing and selling it via hugely successful trunk shows. It was then that she recognized women wanted one-on-one attention in helping them determine their optimal clothing designs and colors. In 2000-2001, Lisa served as president of a prestigious international organization for image consultants. She is also the editor of a 12-page publication for image consultants. Today, Lisa regularly shops for clients in Paris.

Rilke Szanku, Creative Director & Principal, Blue42
Throughout her 15 years of experience in the design industry, Rilke Szanku has found that her best work has harnessed the power of striking visuals grounded in solid strategy to meet client objectives. She founded Blue42 to provide cutting edge print and web design. Prior to founding Blue42, Rilke was the Creative Director at COmpany X. Her work for top clients has been widely acclaimed.

Nicco Q. Smore, Architecture & Design
Nicco Smore received his B.A. from Florida State University in 1991 and his Masters in Architecture from the University of Florida in 1997. Since 1998 he has worked for Big Architecture in California and has been involved in the design and construction of diverse project types, including educational, civic, and religious facilities, as well as several residential projects. Much of his current work includes design and construction administration of renovation, and modernization of existing secondary educational facilities.

Schulden F. Kopff, CPA 
Schulden Kopff has been a CPA for more than ten years and is certified in two states (California & Missouri). [Private information removed for confidentiality.] Mr. Kopff currently operates his own tax practice in Los Angeles.

Fanny Packer, Attorney 
Fanny Packer, J.D., M.B.A., C.P.A., is an attorney in independent practice who provides business law counseling and transactional support to entrepreneurs and growing business organizations. Fanny is an experienced professional who has worked in the legal profession since 1998, and has been heavily involved in sophisticated business transactions and major business contract negotiations in various roles for over 20 years. Her core legal competencies are in corporate, contracts, intellectual property, and commercial real estate law.

Gordon Grido, VP Merchandising Analyst, RMSA 
De Kliek is working with Merchandising Analyst Gordon Grido to develop a specific plan that will guide the company through making purchasing decisions, as well as planning and inventory management. Gordon has been with Retail Merchandising Service Automation (RMSA) for 17 years, working with LA Area retailers similar to De Kliek. His focus is to enable merchants to make merchandising decisions that keep a healthy cash flow with maximum profitability as the main goal of business operations.

RMSA has maintained its status as the leading provider of inventory management and forecasting tools for retail businesses nationwide. RMSA Forecasting is a merchandise planning service that combines information from a retailer’s sales and inventory with RMSA’s extraordinary retail database to help retailers forecast and improve the performance of their retail operations.

Hugh Enmity, Fashion & Merchandising Instructor, Academy of Art 
Mr. Enmity has spent over 20 years in retail as an executive with a leading traditional department store (Macy’s), off-price chain (Ross Stores) and mall-based chain store (Footlocker). His background is primarily in Menswear with extensive experience in tailored clothing, shoes, sportswear, activewear, dress furnishings and basic furnishings.

Astrix Komma, Copywriter/Creative Consultant 
With nearly 20 years of solid direct response, advertising and Web experience for agency powerhouses up and down the West Coast, Astrix Komma has been a lead creator on high profile marketing campaigns. Her creative work has won numerous industry awards including a Clio and Communication Arts award and a host of direct marketing accolades, including multiple John Caples awards.

Personnel Table

Financial Plan

Forecast

Key Assumptions

Having a good location in a high-shopping area makes a huge difference. We need our customers to be able to find us and be able to park easily 

Quality product and good relationships with vendors make a huge difference. We will keep inventory, however we lose our customers if they have to wait around for key pieces of their wardrobe to come in. 

Outstanding customer service will make our customers return.  Every browser is a opportunity to make a sale. We will make sure personnel have the right blend of sales technique with knowledge of high fashion 

Revenue by Month

Expenses by Month

Net Profit (or Loss) by Year

Financing

Use of Funds

We estimate startup expenses as follows: 

And, of course, for planning purposes we round up to an even $50,000. 

We will also need startup assets including: inventory and getting the tailoring equipment we need to fit our clothes to our clients, plus of course cash on hand as reserve. 

 

Sources of Funds

We will need $175,000 to get this up and running. The owner will invest $40,000. The cofounder will invest $45,000 and we intend to take out a business loan, from [name omitted bank] with an SBA guarantee, for $90,000. 

Statements

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement