Executive summary Harry Rosen case
Customers:
Classic customer with high income and fashion customer with medium income.
Those with regular sales associate spend more
Competitors:
Independent quality clothing retailer and small regional chain specialty stores, in Edmond and Calgary – Henry
Singer, in sports – more competition, e.g. Gap.
Existing issues
1.
Selected stores performance
2.
Hugo Boss line
3.
Harry II
1. Selected stores performance evaluation can be divided into 2 parts :
Company’s rapid and successful expansion led to increasing number of stores. Evaluation is needed to decide if they should all remain in operation
Metrics: inventory turns per year taking profit margins into account
Inventory turns are
•
Low in stores B,D
•
Decline rapidly in stores B,E
•
Decline moderately in stores F,J,K
Profit margins are
•
High in stores A,C,F,H
•
Low in stores D,G
Conclusion: store D performance can be questioned, but on the other hand it is a new store and needs time to for a statistically valuable profit history to be created.
Increasing store size
Metrics: sales per square foot
A
F
H
Sq.F. 1988
4851
7334
7527
Sales 1988
1185
1146
1042
Sales/Sq.f 88'
0,24427953
0,156258522
0,138434967
Sq.F. 1989
6325
8407
15728
Sales 1989
850
945
987
Sales/Sq.f 89'
0,134387352
0,112406328
0,062754323
Change (%)
-44,98624106
-28,06387347
-54,66873388
Conclusion: significant decrease in sales per sq. foot, especially where the increase of store space is high - the strategy of increasing store sizes double should be overlooked.
2. Boss line expansion:
•
Lower than average invertor turnover
•
But this gives an opportunity to kick out competitors
Metrics: to evaluate the impact we need to compare the increase Boss to the decreases in profits from Avantanza.
Marginal profit from Boss is 710718, from Avantanza -484794.
Net marginal profit is still positive.
If we take profit/inventory the numbers are 875624 and -344590, so our
Classic customer with high income and fashion customer with medium income.
Those with regular sales associate spend more
Competitors:
Independent quality clothing retailer and small regional chain specialty stores, in Edmond and Calgary – Henry
Singer, in sports – more competition, e.g. Gap.
Existing issues
1.
Selected stores performance
2.
Hugo Boss line
3.
Harry II
1. Selected stores performance evaluation can be divided into 2 parts :
Company’s rapid and successful expansion led to increasing number of stores. Evaluation is needed to decide if they should all remain in operation
Metrics: inventory turns per year taking profit margins into account
Inventory turns are
•
Low in stores B,D
•
Decline rapidly in stores B,E
•
Decline moderately in stores F,J,K
Profit margins are
•
High in stores A,C,F,H
•
Low in stores D,G
Conclusion: store D performance can be questioned, but on the other hand it is a new store and needs time to for a statistically valuable profit history to be created.
Increasing store size
Metrics: sales per square foot
A
F
H
Sq.F. 1988
4851
7334
7527
Sales 1988
1185
1146
1042
Sales/Sq.f 88'
0,24427953
0,156258522
0,138434967
Sq.F. 1989
6325
8407
15728
Sales 1989
850
945
987
Sales/Sq.f 89'
0,134387352
0,112406328
0,062754323
Change (%)
-44,98624106
-28,06387347
-54,66873388
Conclusion: significant decrease in sales per sq. foot, especially where the increase of store space is high - the strategy of increasing store sizes double should be overlooked.
2. Boss line expansion:
•
Lower than average invertor turnover
•
But this gives an opportunity to kick out competitors
Metrics: to evaluate the impact we need to compare the increase Boss to the decreases in profits from Avantanza.
Marginal profit from Boss is 710718, from Avantanza -484794.
Net marginal profit is still positive.
If we take profit/inventory the numbers are 875624 and -344590, so our