Content

Introduction………………………………………………………………………………………… i

Chapter 1 About the Brand

- Product………………………………………………………………………………….1- Price……………………………………………………………………………………...1- Promotion……………………………………………………………………………….3- Place………………………………………………………………………….………….3- Target

Market…………………………………………………………………………..4

Chapter 2 Assortment Planning

- Merchandise Classes…………………………………………………………………5- Selection Factors………………………………………………………………………

5- Merchandise 1st month’s

Inventory………………………………………………..8- Inventory of

Dresses…………………………………………………………………..9

Chapter 3 Sales Planning

- Average Monthly Sales…………………………………………………………….10- Sales Projection of 12

months……………………………………………………...11- Expenses………………………………………………………………………………12

Chapter 4 6-month Merchandise Plan

- Initial Mark-up…………………………………………………………………………14

- Final Merchandise Plan……………………………………………………………..17

- Assortment Plan for the 1st month-Dresses……………………………………….18

- Stock List………………………………………………………………………………..19

Conclusion………………………………………………………………………………………….21

References………………………………………………………………………………………… ii

INTRODUCTION

With the rise of new retail brands entering the market, it is essential to make merchandise

planning to start a new brand to meet consumers’ purchase requirements. A good

merchandise plan enables company to maximise their sales potential and minimise the

losses.

The purpose of this project is to introduce a merchandise plan for a brand that will newly be

launched in Singapore starting from July 2016. Our brand identified is Wonders Cease, the

middle-high womenswear label originated from Sydney, Australia. Wonders Cease started

their business since 2009 as an e-store. It carries smart day and occasion wear for ladies

and focuses on producing high quality fabrication with simple yet clever details on apparels.

Wonders Cease has very unique signature aesthetic, such as sharp tailing with soft detailing

and simple silhouette in luxurious fabric. In Singapore, this brand will attract the professional

women who are looking for the feminine and classy look yet timeless styles.

This report presents the merchandise plan for Wonders Cease. Assortment planning, sales

projection, inventory management, sourcing, margins, and costing for this brand are included

in our written proposal. In addition, there will be a section which discusses the 6-month

Merchandising Plan to ensure profitable merchandising.

CHAPTER 1 ABOUT THE BRAND

PRODUCT

For a brand who emphasizes more on quality than quantity, Wonders Cease has a limited

product range. This fashion label distributes tops, bottoms, dresses, jackets, and

accessories. With a simple cut and interesting design details or bold colours paired with

neutrals in a luxurious fabric, they contribute feminine, modern and timeless look as the key

styles of the brand.

PRICE

The price for accessories is around $50 in Singapore dollars. The product price range for

tops is from $150-$250. For Bottoms, the range is from $100-$300. Besides, the price of

dresses vary from $200-$400. Finally, jacket’s price line is from $300-$400.

Figure 1 Wonders Cease logo

TOPS @$218.40 BOTTOMS @$126.00

0

DRESS @$274.40 JACKET @$308.00

Figure 2 Products and Price Range of Wonders Cease

PROMOTION

Wonders Cease’s promotion is visible on online advertising and social networking such as

Facebook. In addition, they had come up with some shopping events which held in Australia

last December 2013.

PLACE

Until now, Wonders Cease does not have any brick and mortar business yet. For the

proposed project, the first store of this fashion brand will be launched in Singapore.

The first store for this brand will be located in Ngee Ann City. Ngee Ann City is a shopping

and commercial centre located at Orchard Road which has connection with many attractive

places such as Wisma Atria, ION, Wheelock Place, Isetan, Lucky Plaza and Civics plaza. On

the other hand, Ngee Ann City is a location which often holds promotional events. Therefore,

Ngee Ann City easily gathers crowds in that area which would delight visitors, especially the

target market of Wonders Cease. On top of that, Ngee Ann City has housing beauty salons,

bookstores, enrichment centres, and more than 30 Food and Beverages outlets serving

Western, Chinese, Thai, Korean, and Indonesian cuisine.

Figure 3 Ngee Ann City, Singapore

TARGET MARKET

Ladies in the age range of 25 to 40. Those are middle-upper women who generally look for

beautifully made pieces yet don’t mind spending money on quality. Smart buyers that want

something unique but not heavily trend focused, buying pieces for longevity as well as fun.

Figure 4 Target Customer

CHAPTER 2 ASSORTMENT PLAN

The main types of merchandise are Apparel.

For A pparel, we are carrying tops, bottoms, dresses and outers

Selection factors

Wonder Cease, for this range of product, the selection factors are:

1. Product Category:

4 main categories which is,

(a) Tops 50%

(b) Bottoms 20%

(c) Dresses 20%

(d) Outer 10%

2. Price Line:

(a) Tops

(i) $95-$165

(ii) $166-$245

Basic Sleeveless Tee

(iii) $325

Playsuit

(b) Bottoms

(i) Pants

$165-$275

(ii) Skirts

$95-$285

(c) Dresses

(i)$195-$375

(d) Outer

(i)$275-$395

3. Style Type:

(e) Tops

Crop Top

Tee

Tank top

Shirt

Playsuit

Asymmetry Top

Basic Sleeveless Tee

(f) Bottoms

i) Pants & Shorts

High-waisted

Petal Shorts

Gather Pants

Culotte Shorts

Capri Pants

ii) Skirts

Fold skirt

Pencil skirt

Maxi

Mini

Culotte Skirt

(g) Dresses

(i) Wrap Dress

(ii) Curvature dress

(h) Outers

(i) Jacket

(ii) Cardigan

4. Color

(a) Black

(b) White

(c) C1

(d) C2

5. Size

(a) S

(b) M

(c) L

Chapter 3 SALES PLANNING

A sales projection contains planned monthly sales, expenses, profit, reductions,

and stock turnover. The purpose of doing a sales plan is to understand the sales

objectives which work as a guidance to develop a productive planning. This

section discusses about the sales planning for the first year of Wonders Cease.

Considering the store location of chosen brand will be at Ngee Ann City which

becomes an attraction to professional women as our target market, number of

garments planned to be sold in per day will be 10 pieces.

Category Quantity Price Quantity x PriceTops 5 $ 150 $ 750

Bottoms 2 $ 300 $ 600Dresses 2 $ 300 $ 600

Outer 1 $ 450 $ 450

Total 10 $ 2,400

Calculation for average monthly sales:

1 weekday = $2,400

On weekend, it will sell more than usual = A weekday sale + 20% (approximately)

= $ 2,400 + 20%

= $ 2,880

1 week = 5 weekdays + 2 weekends

= (5 x $ 2,400) + (2 x $ 2,880)

= $ 17,760

1 month (4 weeks) = 4 x $ 17,760

= $ 71,040

= $ 71,000 (round down)

$ 71,000 is the average month’s sales.

2015 Sales Projection

Remarks Average Month

Events Percentage Sales per month

July High Grand Opening of Shop

10% $ 89,000

August Low - 6% $ 53,000September Average Hari Raya Haji 8% $ 71,000

October Low - 6% $ 53,000November High Pre-Christmas 10% $ 89,000December High Christmas 12% $ 106,500January Average Chinese New Year 8% $ 71,000February High Chinese New Year 10% $ 89,000

March Low - 6% $ 53,000April Average - 8% $ 71,000May Low - 6% $ 53,000June High Great Singapore

Sale10% $ 89,000

Total $ 887,500

On December, sales will be increasing sharply because of Christmas and New

Year Eve celebration.

Calculation for sales per month:

Average month = 100% / 12

= 8% ($ 71,000)

Low month = 6% x $ 71,000

8%

= $ 53,250

= $ 53,000 (round down)

High month = 10% x $ 71,000

8%

= $ 88,750

= $ 89,000 (round up)

(December) = 12% x $ 71,000

8%

= $ 106,500

Planned Expenses, Profit, Reductions, and Stock Turnover

For operating expenses, it is compulsory to speculate the rental expenses,

staffs, promotion, renovation, visual display and buying trip for the new store in

Singapore. Estimated rental cost at Ngee Ann City is $ 15,000 per month while

expenses for 4 staffs will be $3,500 per month. As for buying trip to overseas,

expenses are expected to be around $10,000 a year. In addition, promotion once

a year for $40,000 is needed in order to get brand awareness. Lastly, $80,000

will be purchased for visual display of the store and renovation or damages will

be counted to $10,000 annually.

Expenses Amount of money ( per year )

Rental Cost $ 180,000

Staffs $ 168,000

Promotion budget $ 40,000

Renovation $ 10,000

Visual Display $ 80,000

Buying trip (overseas) $ 10,000

TOTAL $ 488,000

Operating expenses (%) = $ 488,000 / $ 887,500 x 100%

= 54.9%

For the purpose of maintaining the brand image, there will not be too much

sales discount for a new store, reduction will be counted as much as 5% of

annual sales for shortage, employee discount, and Mark Downs for big sales

promotion once a year on December (more sales).

Sales = $ 887,500

Reduction = 5% x $ 887,500 = $ 44,375 (annually)

1st 6-Months (Jul – Dec) = 60% x $ 44,375 = $ 26,625

2nd 6-Months (Jan – Jun) = 40% x $ 44,375 = $ 17,750

Reduction (Jul-Dec) = $ 26,625 ÷ $461,500 x 100% = 5.67%

Increasing the profit to 7% high could improve the productivity of the sales.

Profit = 7% x $ 887,500 = $ 62,125 (annually)

Profit (6 month) = $ 62,125 ÷ $ 461,500 x 100% = 13.4%

Cash Discount = 1% x $ 887,500 = $ 8,875(annually)

CD (6 month) = $ 8,875 ÷ $ 461,500 x 100% = 1.9 %

Alteration Expenses = 5% x $ 887,500 = $ 44,375 (annually)

AE (6 month) = $ 44,375 ÷ $ 461,500 x 100% = 9.61%

To balance the financial investment of the new brand, new stock will be available

every 2 months. Therefore, planned stock turnover (ST) is determined to 3.

Chapter 4 6-Month MERCHANDISE PLAN

Initial Mark Up

IMU = OE + P + Re ( MD + Shortage +ED) + AE – CD x 100%

Net Sales + Re

= $ 488,000 + $ 62,125 + $ 44,375 + $ 44,375 - $ 8,875 x 100%

$ 887,500 + $ 44,375

= $ 630,000 x 100 %

$ 931,875

= 67.6%

MU (Retail) = 67.6%

MU (Cost) = (100-67.6)%

= 32.4%

Basic Stock = Average Stock – Average Monthly Sales

= (6-Month Sales ÷ 3) – (6-Month Sales ÷ 6)

= ( $ 461,500 ÷ 3) - ($ 461,500 ÷ 6)

= ( $ 153,833 ) – ( $ 76,916 )

= $ 76,917

= $ 77,000 (round up)

BOM ( X month) = Basic Stock + Sales (x month)

Month Sales Basic Stock BOM EOM

July $ 89,000

$ 77,000

$ 166,000 $ 130,000

August $ 53,000 $ 130,000 $ 148,000

September $ 71,000 $ 148,000 $ 130,000

October $ 53,000 $ 130,000 $ 166,000

November $ 89,000 $ 166,000 $ 183,000

December $ 106,500 $ 183,000 $ 151,400*

TOTAL $ 461,500 $ 923,000 $ 908,400

*EOM (December) = BOM ( From July to November) ÷ 5

6 Month Average Stock

BOM (6 months) + EOM (Dec)

6 + 1

= $ 166,000 + $ 130,000 + $ 148,000 + $ 130,000 + $ 166,000 + $ 183,000 + $ 151,400

7

= $ 1,074,400 ÷ 7

= $ 153,485

Stock Turnover = 6 Month Sales ÷ Average Stock

= $ 461,500 ÷ $ 153,485

= 3.00

Gross Margin

Month Sales Purchases (Cost) Gross Margin Dollars

July $ 89,000 $ 18,465 $ 70,535

August $ 53,000 $ 24,901 $ 28,099

Septembe

r

$ 71,000 $ 18,465 $ 52,535

October $ 53,000 $ 30,388 $ 22,612

November $ 89,000 $ 35,637 $ 53,363

December $ 106,500 $ 25,561 $ 80,939

TOTAL $ 461,500 $ 153,417 $ 308,083

Gross Margin % = $ 308,083 ÷ $ 461,500 x 100%

= 66.7%

STOCKLIST

1 2 3 4 5 6 7 8

1. Apparel- A

2. Category: Tops-T

Bottom-B

Dress-D

Outer-O

3. Style-1

Design-001

7. Colour -1

8. Size -S

-M

-L

4 5 6

Product

Name

Code Quantity Size

S M L

Tank Dress AD30011S

AD30022S

AD30033S

AD30044S

9 3 4 2

9 3 4 2

9 3 4 2

9 3 4 2

AD30011M

AD30022M

AD30033M

AD30044M

9 3 4 2

9 3 4 2

9 3 4 2

9 3 4 2

AD30011L

AD30022L

9 3 4 2

9 3 4 2

DRESS STOCKLIST

CONCLUSION

In order to start a new brand, Merchandise Plan is a business requirement to ensure the flow

of merchandising is directed. For the purposed of deciding what products should be carried,

it is important to understand the micro and macro influences of the global market in

Singapore. Finally, the outlined assortment plan, sales projection, 6-month merchandise

plan, and stockist help as a guideline to achieve the planned profit and minimising the losses

REFERENCE

Omagari, Lisa. ‘Wonders Cease’. Timeout.com. Created 27 Apr. 2011. Accessed 20 Sep. 2014 < http://www.au.timeout.com/sydney/shopping/features/9165/wonders-cease>

‘Wonders Cease Fashion Label – Australian Womenswear’. Fashionreview.com. Created 27 Mar. 2012. Accessed 20 Sep. 2014 <http://www.fashionreview.com.au/wonders-cease/>

‘Wonders Cease’. TheGrandSocial . 2014. Accessed 28 Sep. 2014 <http://www.thegrandsocial.com.au/wonders-cease>

‘The Ceaseless Wonder of Light’. WondersCease.tmblr . Created 31 Jul.2014. Accessed 28 Sep. 2014 <http://wonderscease.tumblr.com/>

‘Ngee Ann City’ . Images. Wikipedia. Last revised 3 Sep. 2014. Accessed 5 Sep. 2014 <http://en.wikipedia.org/wiki/Ngee_Ann_City>

Best Fashion Blog. ‘Nabilah Abdullah’. StyleAnywherecom . Created 11 Oct. 2012. Accessed 5 Sep.2014 <http://style-anywhere.com/2012/10/11/nadira-abdullah/>

Hunter, Josh. ‘Increase Store Profits by Increasing Mantained Markup’. TransworldBusiness,com . Created 26 Aug. 2009. Accessed 12 Sep.2014 <http://business.transworld.net/19986/features/how-to-increase-store-profits-by-increasing-maintained-markup/>

Kennan, Mark. ‘How to Calculate Gross Profit Margin Percentage’. SmallBusiness. Accessed 12 Sep. 2014 <http://smallbusiness.chron.com/calculate-gross-profit-margin-percentage-4133.html>