Hi JE,

 

Got your message, hopefully you get this.

 

Since you are traveling I was hoping you could read the half ass  & not yet complete business plan for my thermal thigh high idea and tell me honestly what you think.  I need a smart busines brain!  It's a damn brilliant product idea.  I just want to make a couple million $ for me and my partner and live happily ever after.  If you can't tell from the plan, I've put a lot of thought and research into this.  This is why I'd love to pick the brain of someone in the industry to gain a lot of insight. 

 

I have attached the plan following, it looks long but it isn't.  I have also included as an attachment if you want to print.  Remember....mums the word!

 

Kisses,

Catherine

 

                     Business Plan

Winter Fox, ____

  

 

OWNERS

 

Catherine Derby

425 W. 45^th Street, Apt. #1RE

NY, NY 10025

(646) 263-2627

catherinederby@hotmail.com

 

Joshua Wojcik

912 School Street

Wilton, ME 04294

(646) 765-0403

(207) 585-2538 (fax)

joshuawojcik@hotmail.com

I. Table of Contents

 

I.        Table of Contents. 3

II.       Executive Summary. 4

III.     General Company Description. 5

IV.     Products and Services. 6

V.      Marketing Plan. 7

VI.     Operational Plan. 16

VII.    Management and Organization. 21

VIII.   Personal Financial Statement 22

IX.     Startup Expenses and Capitalization. 23

X.      Financial Plan. 24

XI.     Appendices. 27

XII.    Refining the Plan. 28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II. Executive Summary

 

Winter Fox, ___ will design and sell undergarments that are warm, durable, comfortable and sexy.  It will contract with hosiery manufacturers and sell via department stores, big box retailers, boutiques, and over the internet.

 

 

 

 

 

 

III. General Business Description

 

 

Winter Fox, ___ will be a designer of undergarments that are warm, durable, comfortable and sexy.  It will contract with hosiery manufacturers and sell via department stores, big box retailers, boutiques, and over the internet.  By selling undergarments that are both warm and feminine, Winter Fox will fill a niche that the major players in the thermal underwear and hosiery industry have neglected.

 

Mantra:  Feminine warmth.

 

Goals and Objectives:

• Goal 1: Create a solvent and successful company that has a loyal customer base.
• Objective 1: positive cashflow in 2008 and breakeven by 2009;
• Objective 2: annual sales of $___ by 2010;
• Objective 3: customer satisfaction rate of 99% by 2010; and
• Objective 4: return customer rate of 95% by 2010.
• Goal 2: Create a company that promotes an open, innovative and productive spirit among its employees.
• Objective 1: sustain a manageable growth rate;
• Objective 2: provide employees with opportunities to grow, learn and move-up within the company;
• Objective 3: compensate employees fairly and provide fair benefits to employees and (if possible), their families; and
• Objective 4: establish a community improvement program within the company.

 

Business Philosophy: It is not enough for a business to flourish financially.  It must treat its customers, employees, partners, shareholders, community and the earth with respect.

 

Ultimately Winter Fox will seek to bring feminine warmth to all women ages (16-65), of all shapes and sizes in any area of the globe that experiences cold weather, including North America, Asia, Europe and South America.  Initially, however, WF will sell thermal thigh-highs to US women that meet the following criteria:

·        18-35 age range;

·        Reside in major northern cities;

·        Who currently wear long johns (janes), tights, knee-high socks or who double up on pantyhose for warmth.

 

The market that Winter Fox will first serve is a hybrid between the womens’hosiery and thermal underwear markets.  Although some of the goals of these industries are shared (i.e. keeping women’s lower extremities warm), the two markets seem to function independently of one another.  Typically, manufacturers specialize in either stitched (eg. tops and foot-less bottoms) or knit products (e.g. stockings).  The one exception to this is Hanesbrands, Inc. which has a thermal undergarment brand (Duofold) and two womens’ hosiery brands (L’eggs and Hanes Hosiery).  Given how large this company is, its possible that the three brands, rarely (if ever) attempt crossover product development.

 

The greater hosiery industry has been in decline over the past decade.  This is mainly driven by reductions in the areas of nylon and pantyhose sales due to increasingly casual dress standards for women.  Sales for garter-supported thigh-high stockings have been in decline since the creation of the modern panty-hose in the 1940’s, but this was driven by the desire to have undergarments that would not show through outer-layers.  The intimate apparel sections of major garment makers, such as Sara Lee, however (including Pretty Polly), have seen steady growth in recent years.  This is largely due to the increasing popularity of the thong and the push-up bra.  Garter-less thigh-high sales have remained stable.  They fill a niche for consumers, but have not experienced any major evolutions since Dior introduced the first elastomer-supported thigh-high in 1953.  It is likely that the thigh-high market has remained somewhat suppressed in the US due to their perceived association with erotica and smut. 

 

The greater thermal underwear industry has seen steady sales, seeing some rises and declines over the past 50 years.  The most interesting thing that has occurred is the diversification of the products women are using for thermal undergarments.  Athletic apparel, including dance tights, and specialized high performance ski wear has cut into the market shares of some of the traditional providers.  Additionally, leg warmers have risen and fallen in popularity over the years.  Over the years, there have been efforts by some thermal underwear providers to market their products as a sexy option (for example, Cuddledud), but these efforts were primarily marketing campaigns, with few true modifications to the products, with the exception of a thermal top that includes an underwire.

 

As with all components of the apparel industry, cyclical fashion trends will continue to impact this industry.  Winter Fox is well positioned to take advantage of the current environment.  Winter Fox thigh-highs are designed to be worn under jeans and casual skirts and will thus benefit from the very forces that are eroding the formal hosiery (pantyhose) market.  In the increasingly diverse thermal underwear market, Winter Fox will provide a feminine, yet durable alternative to the classic long jane.  Furthermore, because of its thermal properties, women who would not wear thigh-highs, due to their stigma, will be inclined to try this out as a comfortable alternative to thermal underwear or tights.  Finally, as women’s fashion continues to become more casual, Winter Fox will also benefit from the elimination of traditional fashion rules.  Younger women are increasingly wearing their undergarments as a part of a meant-to-be seen wardrobe and they’re wearing shorter skirts in winter.

 

Winter Fox was born outside the box of either industry.  It is this unique position that will allow it to create and market products that provide the best of both worlds.  Its future products will continue to emerge from real needs, rather than tradition.  As an avid runner, and skier growing up in Maine , Josh Wojcik has 30 years of experience in testing and using thermal undergarments.  Catherine Derby’s business education, affinity for all things feminine have given her a unique perspective on the potential for this product.

 

Winter Fox will initially operate as a Limited Liability Corporation, however, it is conceivable that it will evolve into a for profit corporation. 

 

In a recent survey, nine out of 10 women stated that they prefer to feel cute and sexy when given the option; 12 out of 10 said they prefer to feel warm during the winter months.

 

 

 

IV. Products

 

Winter Fox will initially sell only thermal thigh-highs (Foxy Sox).  These will be simple in design, durable, comfortable, and feminine.  Winter Fox will start out with a single line made of a blended fabric 85% silk, 15% lycra (or substitute) material, with a reinforced elastomer band and a simple lace design at the top to accentuate the femininity of the user.  The design will minimize visible seam lines and minimize manufacturing costs.  Silk is an incredibly durable and comfortable fabric that weighs little and has a natural elasticity to it.  It is also an excellent natural insulator that allows moisture to evaporate and is already used in several lines of thermal underwear.

 

Because of the elasticity of the fabric used, the initial thigh-high will be sold in four sizes (common for the industry).  It will be sold in three colors: red, white and black.

 

After the initial line (Foxysox)has been tested in the market, Winter Fox will design and sell several additional thermal thigh-highs as well as other products potentially including (but not limited to) the following:

• Foxy Sox Max – Same fabric (85% silk, 15% Lycra blend) as the original, same feminine design, but specially knit to improve circulation, keeping your legs and toes extra warm.
• House Fox – A 100% cashmere thigh-high, with a faux fur top fringe.  This is designed for lazy Sundays and cold winter nights only.
• Sporty Fox – A synthetic fabric most likely consisting of some blend of micro-fibers, lycra and possibly a moisture guard.  This is designed to be used by athletes doing their thing in changing weather conditions, allowing the user to pull them down and stuff them into her socks in warm weather and pull them up when the weather turns foul.
• Fox Tops – 100% silk thermal tops, designed with an eye towards maintaining a woman’s femininity when the temperatures drop.
• Fitted tops (with/without underwire)
• Wrap tops
• Foxy Bottoms – sporty panties made from thermal fabrics.  Cute and warm, designed to match the thigh-highs and foxy tops.
• Fox  Paws – thermal socks designed in the spirit of the Winter Fox.

 

Eventually, Winter Fox may emerge from the cold and delve into the more traditional lingerie and hosiery markets, but the initial focus will stay on the thermal niche.

 

Sustaining our Competitive Advantage

Winter Fox will seek to sustain its competitive advantage in the market in the following ways:

• All Winter Fox products will be designed with comfort and durability in mind.  A customer satisfaction rate of 95% by 2009 will be the standard.
• Although Winter Fox will not seek to compete on price alone, it will be competitively priced.
• By introducing new products into the market, it will seek to maintain interest among its growing customer base.
• By establishing the “Fox Club”, brand loyalty will be developed.  Customers will be encouraged to submit tasteful photos to our “are you foxy?” website and will be encouraged to join our marketing campaigns.
• Touchy-feely elements.  Winter Fox will utilize organically grown silks and fibers, will encourage its employees to be involved in their communities and will establish a “Fox Fund” for aspiring women entrepreneurs.

 

Product pricing will be ultimately be determined by manufacturing costs, but it is anticipated the initial line of Winter Fox thigh-highs will retail for $15-$25 per pair.  Depending on the margin, it may be possible to sell them in three-packs (one of each color) for $40-$60 per pack.

 

 

V. Marketing Plan

 

Market Analysis

Winter Fox will straddle two existing markets: women’s hosiery and women’s thermal undergarments.  These markets totaled $____ billion in sales in the US alone in 2005.  Winter Fox will sell to a fraction of consumers in each of these markets and while the potential for the size of this market is unknown, there is reason to believe that it is substantial.  This is because there are significant problems in this market that are not being addressed by the current products.  Winter Fox thermal thigh-highs will solve those problems.

 

Results of surveys with graphs,

            Problems

            Willingness to try something new

            Country mouse/city mouse

 

The blatant problems with the existing products, the recent diversification of the thermal undergarment market and the results of our surveys all indicate that there is an unmet demand in this market.  Women are seeking out new solutions to the age old problem of finding undergarments that are warm, comfortable and attractive and Winter Fox will provide that solution.

 

Market Trends

The thermal undergarments industry is in the process of diversifying.  Women are embracing tights from the dance industry as well as the ski and snowboard industry as alternatives to the classic long jane.  Innovations in this market over the past few years have focused on the performance of the fibers used, and to a smaller extent the look of the products.  Women now have the option of a variety of fabrics (cotton, wool, synthetics and silk) as well as a limited number of different designs (classic, capri and low-riders).

 

Women’s hosiery is on the decline overall due to increasingly casual wardrobe preferences among women, especially younger women.  Recent innovations in this market have focused mainly on design.  Women now have a variety of seamless options, cut out toes, and shape enhancing products, as well as a variety of thicknesses (dernier count).

 

As with all garments, fashion trends will impact the size of the Winter Fox market.  With a targeted marketing campaign, fashion trends will initially help Winter Fox to grow.  As the “buzz” wears off, however, there may be a small drop in total sales, but this is unlikely.  This is because Winter Fox products are not designed to be trendy.  They’re designed to provide users with warmth that is comfortable, durable and attractive.  This is a combination that will never go out of style.

 

Winter Fox will start small, focusing on a few key accounts and on product development.  The structure of the organization will allow for the effective management of its initial growth with very little capital.  It will contract with existing manufacturers with distribution capacity, and will sell to store buyers, rather than to the general public, thus minimizing the amount time required for sales interactions.  The growth potential, however, is tremendous – even with a small staff.

 

Discussion of growth rate???  SPANX model?

 

The barriers Winter Fox faces are as follows:

• Consumer recognition and brand acceptance – as a start up company, currently know one has even heard of Winter Fox or of a thermal thigh-high for that matter.
• High marketing costs – in order to combat this, we will engage in an aggressive marketing campaign.  Given the company’s limited funding, the emphasis of this campaign will be on guerilla marketing, pr and very target advertising.  We will also actively promote and manage a word-of-mouth campaign among our customers.
• Product acceptance – using thigh-highs as an insulator is a new idea for women.  The strategy of introducing the thermal thigh-high as the first product to launch is a double-edged sword; it’s great for publicity (finally - thermals that are warm and attractive!), but we will have to educate consumers before they will buy it.
• Coordinating the following schedules:
• buyer decisions at major department and volume retail stores for fall/winter 2007 products;
• manufacturer production schedules; and
• a marketing campaign that coincides with the launch of the product.

We are pursuing an aggressive timeline focused on launching the thermal thigh-high in the fall of 2007.  In order to do this, we will target the major buyers first.  We are keeping a close eye on our milestones and making necessary adjustments as needed.  If it becomes obvious doing a major launch in the fall of 2007 will be impossible, we will consider three options: 1) roll out the product on a smaller scale at boutiques, which have more flexible schedules – thus giving us the option of an early winter 2008 launch; 2) launch in a market in the southern hemisphere first; 3) delay the launch until the fall of 2008

 

Product Benefits

For the first time in history, women will be able to buy a thermal undergarment that accomplishes ALL of the following benefits:

• warmth where its needed (legs, feet and toes) and only where its needed;
• unfettered movement in any outfit;
• total comfort;
• impressive durability;
• easy care;
• makes the user feel beautiful, sexy and confident;
• promotes the advancement of women everywhere (including mother earth).

 

Plus, Winter Fox will offer a 100%, no questions asked, refund for any customers who are unsatisfied with the product.

 

Customers

Winter Fox will ultimately seek to provide feminine warmth to women of all ages, shapes and sizes, but initially, the marketing campaign will be more focused.

 

Winter Fox has two very different types of customers: consumers and retail buyers.

The target demographic for the consumer class can be described as follows:

• Female;
• Age 18-30;
• Located in major cities of the northern united states;
• Income level will vary widely from being dependant on parents up through successful professionals;
• Education level will similarly vary widely, but one trait will be consistent – they are intelligent enough to see that the status quo is imperfect and they are open to trying new things;
• Active;
• Secure in their femininity; and
• Concerned with style.

 

The target demographic for retail buyers is as follows:

·        Women’s hosiery specialist;

·        Women’s thermal undergarments specialist;

·        Women’s intimate apparel specialist;

·         Buyer categories will be prioritized as follows, but within these groups, there is no prioritization:

o       Department stores (we need to check which of these stores are affiliated with each other under umbrella corporations)

§         Federated

·        Macy’s

·        Bloomingdales

§         Nordstrom

§         JC Penney

§         Belk?

§         Saks?

§         Bon Ton

§         Bon Marche ’

§         Kohl’s

§         Sears

§         Dillard’s

§         Daffy’s

o       Discount Retailers

§         Target

§         TJ Max

§         WalMart

§         Kmart

o       Retail Boutiques

§         Ricky’s

o       Online retailers

§         Stockingirl.com

§         Thighhighstudios.com

§         Stockingshq.com

§         Vermontcountrystore.com

·        Size of firm – within each category, targeting prioritization will be partially determined by how large each of these stores are with respect to our target consumer demographic;

·        Location – any of these stores that have major market coverage in northern cities;

·        Trend setters vs. trend followers – within each category, targeting prioritization will also be partially based on which stores are selling to the trend-setters.  Ultimately, stores that sell to trend-followers will also be targeted.  Should this set the prioritization among the different classifications too?  In other words, if trend-setters tend to shop at boutiques rather than at department stores, should we instead target boutiques first?

·        Corporate responsibility? social/environmental track record?

·        Track record with regard to women’s issues?

 

 

Competition

Winter Fox will compete with three categories of companies.  None of them are actually direct competitors as there are currently no known sellers of thermal thigh-highs.   

 

The biggest competiton will be from companies selling classic thermal undergarments.  Women have the longest history with long janes and long janes still represent the largest segment of the thermal undergarment market.  The following are the major competitors in the womens’ thermal undergarments market:

• Duofold (Hanesbrands, Inc.)
• WinterSilks, LLC.
• Hot Chillys (Performance Apparel Corp.)
• Jockey
• Medalist
• CuddlDuds
• Morgan Mills
• Smart Wool
• Under Armour

 

The second tier of competition will come from companies that sell athletic tights, which have recently emerged as the most common alternative to long janes.  The following is a list of the major companies that sell athletic tights to women:

• Danskin
• Shoe companies (Nike, Asics, Adidas, etc…)
• Jockey
• Insport
• Fila
• Under Armour

 

Finally, women’s hosiery companies are the third area of competition.  Within women’s hosiery, there are three areas which Winter Fox will compete against.  The first is the pantyhose market.  Pantyhose alone, are not a competitor, but women often double up on pantyhose for extra warmth as a less bulky alternative to long janes or tights.  The second competitor from the womens’ hosiery market comes from over-the-knee knit socks.  Women wear over-the-knee socks for two reasons.  Some women wear them as an alternative to long janes, because the socks don’t bunch up around the waste.  Women also wear over-the-knee socks with skirts during the colder months.  The thigh-highs that are currently on the market are not considered competition for Winter Fox.  The vast majority are made from Nylon and even those that are knit (sold by two known companies) are not designed for warmth.  Companies that sell thigh-highs, however, are worth mentioning, because, depending on how successful the Winter Fox thermal thigh-high is, it is likely that it will be these companies that eventually compete directly with Winter Fox.  The following is a list of the major players in the women’s hosiery market:

• Victoria ’s Secret (Limited Brands)
• L’eggs and Hanes Hosiery (Hanebrands, Inc)
• No Nonsense (Kayser-Roth Corp.)
• Pretty Polly? (Sara Lee?)
• La Perla
• Berkshire Hosiery
• Golden Lady
• Spanx, Inc.

 

Winter Fox thermal thigh-highs will compete well with the products sold by all of these companies.  Here’s why:

• Long Janes, tights and doubled up pantyhose bunch around the waste causing discomfort and excessive perspiration in the waste and crotch areas.  This is really not surprising given that long janes were modeled after the classic long john, which is, of course, designed for men.  Because mens’ and womens’ bodies are designed differently, however, their heating needs are different too.  Women’s cores tend to stay warmer, while their extremities stay cooler;
• Long Janes are often thick, causing them to snag on pants, which are, increasingly, the bottom outer garment of choice;
• Long Janes are not attractive under skirts and dresses;
• Over-the-knee socks worn by younger women with short skirts require constant maintenance to keep them above the knee;
• Long Janes, tights and leg warmers do not keep feet warm;
• The few “thick” thigh-highs that are in the market are either nylon or acrylic and lycra blends and are neither warm, nor comfortable; and
• Long Janes, tights and pantyhose – when worn for warmth, make women feel unattractive.

 

The following chart summarizes how the Winter Fox thermal thigh-high stacks up against the competition.  The importance to customer column is ranked on a scale of 1 (most important) to 5 (least important).:

 

 

 

 

When it comes to comparing the actual products, the thermal thigh-high from Winter Fox performs favorably compared to other products.  Among the women surveyed, it performs equal to or ahead of the competition in the two most important areas (quality and price).  As a start-up, it is at a disadvantage in the areas of company reputation and sales locations.  And it is impossible to rate Winter Fox thermal thigh-highs in some areas (such as reliability).  An effective marketing campaign, combined with the high-quality of the product will combat these disadvantages.

The Winter Fox Niche

Given the advantages of the established companies, Winter Fox cannot compete toe-to-toe in the existing markets of hosiery and thermal undergarments.  But our thermal thigh-highs are not intended to compete directly.  We will compete by occupying the niche where these markets overlap (where warmth overlaps with attractive).  To put it simply, existing thermal undergarments are not attractive and existing hosiery products are not designed for warmth.  Our thigh-highs are designed to be both.

 

Marketing Strategy

1)      Target trend-setters – College students, hipsters, young professionals

a.       Emphasis of campaign on edginess/sex appeal

b.      Target Free Media Outlets

                                                               i.      FlavorPill.com

                                                             ii.      Sheckys.com

c.       Paid Advertising

                                                               i.       

d.      Consumer Events –

                                                               i.      Girls Night Out (Sheckys.com – sponsor

                                                             ii.      Design School Events?

                                                            iii.      Ski resort parties?

e.       Target buyers at boutiques in trendy neighborhoods of major markets

                                                               i.      Williamsburg , NYC

                                                             ii.      East Village , NYC

f.        B List celebrity Endorsement (someone punk-ish or rebellious)

                                                               i.      Snow-boarders?

                                                             ii.      Skiers?

2)      Target main stream shoppers

a.       Name the thermal thigh-high brand something non-thigh-high-ish… eg. Foxy Sox –

b.      Emphasis of campaign on comfort, warmth and cuteness

c.       Target Free Media Outlets

                                                               i.      Oprah!

                                                             ii.      Shape Mag

                                                            iii.      ???

d.      Consumer Events…?

                                                               i.      Back to school events (mom’s buy for daughters)

e.       Target buyers at Department Stores and Discount Retailers

                                                               i.      Liberal Cities First – NYC

f.        A List celebrity endorsement (someone mainstream)

                                                               i.      Actress/Singer?

                                                             ii.      Rockettes?

3)      Actively manage word-of-mouth campaign

a.       “Are you foxy?” Campaign…  customers can submit tasteful photographs of themselves in thigh-highs and appear on our website and in our 2008 ad campaign?

b.      Encourage customers to submit designs for next line of products…

c.       Fox Troupe – Corp