FOXY Originals case Note PDF

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Summary

The first case in second term...

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FOXY ORIGINALS U.S. Expansion  Potential increase in profit and growth due to larger market  No need for external financing – no debt, no loss of control  Americans are more trendy o Classic jewellry (50% of merchandize) most likely won’t sell as well o Demand on design  Brand loyalty, nationalism is not present therefore hard time building brand loyalty  Bigger market means production must likely increase o Also means more competition  New market therefore avoid oversaturation of CDN market Qualitative – Trade Shows  Increased number of potential buyers therefore direct audience to sell to  Get ideas for new products  keep up to date on trends  Diverse attendance  difficult to predict where merchandise will be sold  Time consuming  80 days per year  Many other exhibitors  potential competitors, hard to stand out  Many upfront costs before revenue is guaranteed Qualitative – Salespeople  Sales reps are experienced  minimal training required  Faster way to enter the market  meet 6 month goal  Owners can focus their time elsewhere o Ex. work on designs, maintain retailer relationships  Reps also carry other brands, many of which sell for more $ therefore more commission o May have to provide an incentive to sell Foxy  Only in major fashion hubs  harder to reach the broad market Fixed Costs – Trade Shows

Registration Samples & Promo Shipping of Booth Travel Booth Depreciation TOTAL Investments: Booth Fixed Costs – Sales Rep

Per Show $3,000 $2,800 $1,500 $2,000 $133 $9,433 $4,000

Fiscal Year $30,000 $28,000 $15,000 $20,000 $1,333 $94,333

Rent Sample Boards Promo Supplies Bookkeeper TOTAL

Per Rep 2,400 2,900 600 480 6,380

Fiscal Year 9,600 11,600 2,400 1,920 25,520

Per $8.05 $5.50

Per Order $201.25 $66 $267.25

Per $10.60 $7.30

Per Order

Variable Costs – Trade Shows

Necklace Earrings TOTAL Variable Costs – Sales Rep

Necklace Earrings TOTAL

$352.60

Selling Price Per $17 $12

Necklace Earrings TOTAL

Per Order $425 $144 $569

UC/CMR – Trade Shows

Necklace Earrings Per Order

SP $17 $12 $569

VC $8.05 $5.50 $267.25

UC $8.95 $6.50 $301.75

CMR 53% 54% 53%

SP $17 $12 $569

VC $10.60 $7.30 $352.60

UC $6.40 $4.70 $216.40

CMR 38% 39% 38%

UC/CMR – Sales Rep

Necklace Earrings Per Order Breakeven

Order (FC/UC) Dollar (FC/CMR)

Trade Shows 32 orders $17,798.11

Sales Reps 30 orders $16,789.47

Trade Shows $227,600 ($106,972) $120,628 ($94,333) $26,295

Sales Reps $273,120 ($169,334) $103,786 ($25,520) $78,266

Trade Shows $512,100 ($240,687) $271,413 ($94,333) $177,080

Sales Reps $409,680 ($254,002) $155,678 ($25,520) $130,158

Low Sales Assumption

Sales Less: VC Contribution Less: FC Profit

High Sales Assumption

Sales Less: VC Contribution Less: FC Profit...