Retailers

Importing and distributing of women's fashion laptop bags.

Registration/Expiration date	06.13.2010 / 10.11.2010
Business type	Investments
Category primary/secondary	Retail Trade / Retailers
Country	South Georgia
Description	1. Executive Summary Glamourex CC was founded in August 2009. It is a South African import company focusing on women’s fashion accessories. The founder, Helena Jaffray, has a clear vision – identifying, sourcing, importing, re-packaging and presenting unique fashion accessories for South African women. It is an exciting and innovative company with energy and enthusiasm that is required in small, entrepreneurial businesses. Having attended the Canton Fair in China recently, and specifically the manufacturers of fine accessory bags, Helena is convinced that carry-ware, luggage accessories for women marketed and sold to Boutiques and women fashion outlets will become a sustainable business. The latest bags combine fashion with practicality in unique and desirable ways. Leading, innovative, stylish and high quality bags are readily available at remarkably affordable prices. They can also be customized and re-designed. The aim is to import products that are new to the South African market, starting with a laptop bag that doubles as a handbag and briefcase – on wheels for convenience and mobility – in materials, design and colours that appeals, first, as a fashion statement for women, and second, as a functional and useful storage and filing bag. We understand the product, we know it is priced right (including shipping and import taxes), we know South African women spend a great deal of time and money on looking good, and we know the longevity the baggage and accessory retail outlets have enjoyed over the decades – good times and bad. Providing innovative, high quality merchandise to retail outlets that have walk-in clients will lead to long-term business relationships and sustainable business. Supplier agreements and requests for orders will be finalized before any business transactions are concluded with manufacturers and shipping agents. The product prices, shipping costs and minimum quantities together represent a substantial capital outlay. An estimated R250 000 is required for the first four months of operating – this includes a minimum order of 320 bags, shipping and import duties, taxes and operating costs. All investors are welcome. 2. General Company Description -Glamourex cc Mission statement To become the fashion accessory brand of choice in select SA based fashion retail outlets. To import new and unique state of the art fashion items. Starting within established product lines e.g. lap-top bags Glamourex began as an import and distribution company in August 2009. Remaining true to the Mission Statement we imported bra-clips from China and sold them through an existing agent sales network. The business was self-funded and although initial sales volumes were low, from the second month onwards sales went from 1500 to 35 000 in the fourth month. Our operating overheads were low; two offices, 10 employees, import license and taxes, shipping agent fees, packaging, printing, courier costs and local delivery costs were all contained, resulting in very lucrative margins and profitability. Imports were concluded at an average 7.2 SA Rands to 1 US$. At this stage, Glamourex is a home-based office, with the view of growing organically to form separate independent offices, warehouse facilities, dedicated staff members and specialists. Regular local and international travel will become part of annual itinerary, especially Trade Fares visits. Key activities include negotiation with suppliers and shipping agents, managing importing processes, marketing, stock control, day-to-day operations and financials. 3. The Industry & Market 3.1 SWOT Analysis 1. Strengths: Supplier relationships and contacts in China, sourcing and importing experience, product gap-analysis, product modification and materials, colours, designs and knowledge of women’s fashion. 2. Weaknesses: Limited funding, limited business experience, limited business finance experience 3. Opportunities: Customising products, multi distribution channels, building a brand, extensive retail network and outlets, burgeoning middle-class and business executive market in SA 4. Threats: Highly competitive market, US$ Rand exchange rate, new competitors. 3.2 The Business Opportunity The women’s fashion accessory market is well established and highly sophisticated in South Africa. There are high street shopping malls in all the major centres, stocking leading international luxury brands such as Polo, Gucci, Guess, Prada, Ralph Lauren, etc. There are chain stores such as Frasers and Stuttafords as well as individual, specialized boutiques. The local market benefits from local and international suppliers. In most cases South African outlets carry only select ranges, far less comprehensive and diverse than their international counter-parts. This creates the opportunity of exploring these different international product ranges and options and selecting those that best fit our mission statement and business intent. The business opportunity lies in these un-sourced international product items, bringing them to local retailers, and ultimately to South African women. The fashion trends in South Africa follow the seasonal fashion trends in Europe and America; this usually translates into a 6 month lag time before international products hit South African stores. This gives a lead time in which new products may be sourced and imported. It also creates an opportunity for new products not necessarily bound for South Africa. The initial start-up opportunity: Laptop bag The Laptop bag is the new handbag. Handbags are synonymous with women’s fashion expression and are mandatory fashion items – women seldom go out without one! Today they can double up in one item – the laptop bag and handbag in one. Sometimes women incorporate the briefcase with the laptop or handbag. The latest products come in variety of colours and designs and are mobile – having frames and wheels for easy transportation and access. There are four factors that distinguish our products from the opposition: - Unique and stylish laptop bags that can double up as a suitcase or handbag for women. Fashionable designs, bold colours, very high quality. - These bags are pitched at two price ranges – high end and affordable - We can customize our products according to design, size, colour, material and purpose. - We will “brand” the product with our own label / logo. Most laptops are sold without laptop bags. The customer then has to select a bag form the retailer’s limited range, usually black or grey. There is an opportunity to present the customer with a choice of laptop bags, its colour, size and shape – as one would a handbag. There is a growing market trend for individualized laptop bags. In South Africa they range between R600 and R6000. What does a women need in a laptop bag? It must be beautiful, it must be stylish, it must protect the laptop, and must be of a good quality. Who needs a lap-top bag? Students, business executives, women on the move. The business opportunity exists as a result of top quality Chinese based manufacturers producing unique and stylish products at very affordable prices. These are established suppliers servicing the USA, Europe and Australia and producing as many as 600 different types of bags. Face-to-face discussions have taken place with these suppliers and distribution licenses may be signed for regions such as Southern Africa; giving sole distribution rights. It should be noted that according to exhibitors at the Canton Fair 2010, the proposed manufacturer is the only one manufacturing these types of products expressed in this document. 3.3 The Industry The industry is well established with long-standing luxury brands and product offerings. The retail outlets are also well established; including boutiques, luggage and computer shops. Web-based outlets will also be explored as potential stockists. The main industry manufacturers and suppliers are located in China. It is important to note that the manufacturer is a direct supplier. The main barrier to entry in the importing of high cost items from China is minimum orders Vs unit price. Most manufacturers have minimum orders ranging between 150 -1000 items. 3.4 The Competition Every luggage manufacturer in the world and South African importer are potential competitors. Although the concept is a general one, the product is highly individualized. We aim to customize the product, and along with price and promotion, clearly differentiating it in the market. Key competitors will include major brands owning their own distribution outlets and retail The traditional competitors include: Busby: a leading leather handbag and accessory brand in South Africa offers a range of beautiful leather laptop bags. Abbi: Abbi is an American brand distributed internationally. The range of laptop bags and laptop folders are available at a few Luggage chain stores. Their bags tend to be very small with little storage space for items – audio or chargers. Golla: A brand from Finland specializing in Polyester laptop bags as well as camera and cell phone bags. Lou Harvey: A Durban brand working mostly with laminated floral designs. They also manufacture handbags and toiletry bags. Built: An American brand uses trendy neoprene (wetsuit material). They have a wide range of bags. They are colourful, young and funky. We plan to borrow from competitor strengths and differentiate using different colours, materials and designs. 3.5 The Target Market The target market: women on the move There is a growing laptop and fashion accessory market. With new introductions in the IT field there are growing needs for accompanying accessories. For example, new requirement associated with the I-pad and Netbook products. Most women colour code and accessorize according to occasion, function and/or destination. The need for sophisticated and stylish carry-ware will always accompany business women and travellers. The initial target market will include women in Johannesburg and Pretoria; two of the largest metropolitan areas in South Africa and certainly the largest economic centres, with the most outlets and the highest earners. 4. The Strategy Glamourex aims to position itself strategically as a leading fashion accessory brand in South Africa. Glamourex aims to have its own label in the following areas: 1. Laptop bags 2. Baby bags for new mothers 3. Business folders 4. Suitcases 5. Briefcases 6. Overnight bags 7. Handbags 8. Travel wallets 9. Filo-faxes Glamourex will differentiate its products according to style, design, colour, fabric, materials, size and price. Our value-proposition “stand-out products, innovative styles that are functional and affordable” Initial research has been conducted regarding outlets’ willingness to purchase the lap-top bag. The response has been encouraging; of the 40 outlets we have contacted 35 are willing to look at a new range like ours and 20 said that if they saw the samples they would be willing to place preliminary orders. Product samples are needed as the first step in securing these orders. An estimated order number could influence the initial start up costs. The first strategic step (Pre Start-up) will be to: order specific samples from the suppliers and approach potential outlets. The aim: to test the market reaction and responses and to note requests and preferences – as preliminary research. Part of the research questioning will be an estimated order from retail outlets i.e. how many products they would order based on their projected market demand e.g. 20 laptop bags. 5. The Business Model It follows an importing retail distribution business model, with design and modification requests from source, seasonal and once-off products (colours and designs). Purchase price + shipping + import duties + tax = wholesale price + 100% mark-up = retail price. Retail prices will range between R300 and R900 per bag at an exchange rate of 8 Rand to 1 US$. Stock control and availability are critical factors as import lead times can be as much as 70 days from request to order. Minimum orders from manufacturers determines the need for capital but also simultaneously creates the distribution and selling opportunities through retail outlets who may only request 5 or 10 products at a time; not wanting to carry the risk of 1000 items in one outlet Our business model takes timeframes and costs into account, paying particular attention to the risk associated with inventory and the time based value of money. This means we are attentive to supplier timeframes and importing clearance process, the distribution effort and time to get the products to retail, and payment terms. The key drivers of cost are: 1. Inventory, 2. Operations and 3. Sales and Marketing. Pre Start-up An estimated R25 000 will be required for the Pre Start-up phase. This includes the purchasing of 2 samples from each line and operational costs. Duration (1 – 2 months) Pre Start-up Costing R 25,000.00 Samples: 4 x Samples (inc courier, duties and VAT) R 10,448.00 Operating Costs: Telecommunications R 1,600.00 Petrol R 1,200.00 Entertainment R 500.00 Office equipment, stationary and equipment R 2,000.00 Advertising and Marketing R 1,252.00 Salary (Helena) R 8,000.00 TOTAL R 14,552.00 Start-up An estimated R250 000 will be required for startup. This includes initial stock of 321 items, import duties and tax, shipping, operating cost for 4 months, sales and marketing material. The projected break-even timeframe is 9 months. Based on the initial order it is expected that a minimum 107 bags a month will need to be sold. (As based on Outlet commentary for May 2010, Pretoria) Duration: 4 months Appendix 1. Start-up costing 6. Team – Management and Organisation The founder and manager of Glamourex is Helena Jaffray (29). She has a Diploma in Travel and Tourism, and a Certificate in Small Business Management and several computer courses. She is married to Tim who has 20 years experience in business. Helena has traveled, lived and worked overseas. She has experience in retail, sales, office administration, research and customer service. She recently travelled to China meeting with various suppliers at the Canton Fair in Guangzhou, China. She also visited South Korea. Preliminary supplier and manufacture relationships and contacts are in place. She has formal agreements with reliable and reputable shipping company, a valid importing license, a management accountant and experience in importing products from China and selling in SA. She started Glamourex because of a desire to run her own business, use her creativity and apply her business skills and entrepreneurial skills. From her initial business dealings she has learned that being an entrepreneur is tougher than she thought it would be – but

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