Harrington Collection:
Sizing Up The Active-Wear Market
Presented By:
Rachit Gupta Poonam Chauhan Subhasish Das
Introduction :
Est. 1960
Preeminent Brands for women designer, elegant, high-
end fashion.
Business Divided into two segment:
Manufacturing
Retailing
Market Segmentation :
Designers Harrington Ltd.
Bridge Sopra and Christina Cole
Better Vigor
Financial Performance:
From Company’s profit
• Manufacturing Group accounted for 50.3%
• Retail Group accounted for 49.7%
• Three Years Financial Results:
Year Profit Margin
2005 11%
2006 9.8%
2007 8.8%
This clearly shows the decline in profit
Market Study:
U.S. Women’s Apparel Market: Units Sold
Price Point Annual 2005 Annual 2006 Annual 2007 Channels
millions millions millions
$ 200 + 138.3 139.2 143.2 Specialty &
upscale
$ 100-$200 219.0 218.9 222.2 department stores
$50-$100 438.0 468.9 511.5 Warehouse clubs,
Super centers &
Under $50 489.9 524.3 584.6 others
Consumers became very price sensitive and 50% apparels were purchased when put
on SALE.
Active-wear Market…
Departmental store reports showed that active wear (consist of
matching hoodie, pants, and tee shirt) inventory sold quickly.
Twice turnover rate that of current Harrington collection apparel.
2007- 7.5 million active-wear units sold
Expected to double in 2009 i.e. 15 million
Market share of “better” classification is expected to grow up to
40% in 2009 from 20% in 2007
Juicy couture by Liz Claiborne –better segment active wear
leader and popular with Hollywood celebrities
Potential market in stylish active wear segment
Environmental analysis and Marketing Mix:
consumer
a) Target customers showed interest in Active-wear segment
b) Loyal customers were interested in something fresh &
comfortable rather then tailored & professional look
c) 10% of customers purchasing apparel in $100-$200 price
range showed interest in buying active-wear range with
superior styling, fabric & fit was available
product: stylish active wear apparel with less expensive
pricing, suits the customer preference
COMPETITION:
a) Liz Claiborne’s Juicy Couture
b) Jones Apparel Group
c) Technology product and leisure-activity spending
Differentiation :
a) Top in house design staff
b) Durability
c) Marketing and
d) Outstanding service
CONTROL:
a) Control over customer service
b) Product display
c) Sales staff
d) Quality
CONSTRAINTS :
Outsourcing location
Near by location like MEXICO to maintain quality and
competitive advantage
Brand name-Vigor division
suits the segment “ trend setters” and strength to support
less expensive line
Broad line and advertised nationally
Short lived Product life cycle
Good inventory management to stay ahead of product life
cycle
Channel & Distribution :
a) Excellent relationship with retail trade
b) 7 % market share in better segment with company
owned stores
c) Passionate support by specialty stores
Demand and Profitability analysis.
Start up Cost $ 12.7 Million
Depreciated Start up Cost $ 2.54 Million
Total Fixed Operating Cost $ 10.5 Million
Direct Variable Cost per Unit $ 37.92
Indirect Variable Cost per Unit $ 8.64
Total Variable Cost per Unit $ 46.56
Wholesale Unit Price $ 95
Contribution Per Unit $ 48.44
Break even Units 269201
Active-Wear Market Size in 2009- 15 Million Units
Market share of “better” segment (40%) – 6 Million Units
Harrington’s Market size in better segment- 4,20,000
Units
Revenue $ 39.9 Million
Profit Before Tax $ 7.3 Million
Profit Margin 18.3%
Over All Profit Margin Of Harrington 9%
Collection
