Womens Fashion Clothing - Book Report/Review Example

Women’s Fashion Clothing Statement of Facts Ann Taylor is a specialty retail store that sells women’s fashion clothing. The target market for the store is professional women who have extra money to spend on branded clothes and who aim for a professional and sophisticated look. Ann Taylor was established by Robert Liebeskind who later gifted this brand to his son, Richard Liebeskind Sr in 1956. Today, ANN operates ‘907 Ann Taylor, Ann Taylor Factory, LOFT and LOFT Outlet stores in 46 states, the District of Columbia and Puerto Rico as of October 30, 2010 along with our e-commerce web sites anntaylor.com and LOFT.com’ (Ann Inc.). Future brands within Ann Taylor were added later. One of the most popular of such brand was the LOFT label. The LOFT label was targeted towards a trendier and chic woman; but the brand still kept the idea of selling to the sophisticated and upscale woman. This label was less expensive as compared to the original Ann Taylor (AT) brand. Along with LOFT, other Ann Taylor brands included a fragrance line and specialty shoes store. These brands were however discontinued in favor of more lucrative opportunities. Only AT and LOFT were brought forward. Ann Taylor is a developed clothing brand that has been consistently featured in fashion magazines including Women Wear Daily. Ann Taylor is recognized as the top specialty fashion clothing brand. Recently Ann Taylor reported a sharp incline in sales after the recent economic downturn. The recent economic slump did impact retail stores to close down but recently it has been observed that high end products are benefiting from an increase in sales. Furthermore, Ann Taylor is seeing a potential good selling channel which is its online stores. Retail stores however are losing their importance with the customers as professional women are becoming more attuned to the internet world. This presents a good opportunity for the brand. Statement of Strategic Issues/ Problems Specialty stores such as Ann Taylor are at a disadvantage when compared to other retail stores such as the super market. This is because specialty stores have a single product focus. In case of Ann Taylor, the focus is on sophisticated and upscale women clothing. This allows the company to remain customer driven and to keep track of the latest trends (Michman and Mazze, 94) which is imperative for a premium clothing store. However, the single product focus means that Ann Taylor cannot depend on other brands for security when the demand for its original brand goes down. This means Ann Taylor cannot depend on accessories or shoes to keep its sales volume constant when the demand for its clothing takes a down turn. Also Ann Taylor only caters to the professional chic woman and thus its product extension is quite limited. In such cases, specialty stores move towards capturing different niches in the market. For example, Ann Taylor moved from catering to professional and upscale women to professional and fun women. Even though, Ann Taylor has captured two different niches in the women clothing market, critics argue that there exists brand cannibalism within Ann Taylor. Both AT and LOFT cater to professional women. This means that the customers of AT and LOFT cross shop in both the shops and thus Ann Taylor kills its own customers in this way to a certain extent. AT should be particularly way of this brand cannibalization. This is because LOFT offers a cheaper product range for the professional women. Women may find it more convenient to shop at LOFT rather than AT since LOFT offers the same professional look but at a cheaper range. Another problem that Ann Taylor is facing right now is the constantly changing management within the company. People at important positions are resigning within the company. This leads to a leadership void that results in the lower and middle level employees being left directionless. An example of this was losing COO, Laura Weil. The responsibilities of Laura Weil included inventory and merchandise planning. This reflected poorly on the subsequent inventory management and planning at Ann Taylor. The recent economic downturn also had certain implication on Ann Taylor, even though they were limited in the case of this company. With the economic downturn, the most effected target market was the middle class. Thus luxury and discounted products were less impacted when compared with products that targeted to the mass. As the economic crisis is lessening, the sale of luxury items is on the increase as luxury brands report increased sales (Driven). However, economic downturn did impact Ann Taylor as it led to increased turnover which later led to limited shopping expenditure by professional women. SWOT Analysis Strengths 1. Strong and Established Brand Image 2. Financial Stability 3. Profitable previous year Weaknesses 1. Brand Cannibalization 2. Changing Management 3. Inventory Management Opportunities 1. Rise of e-commerce sales 2. Growing market segment for women over 35 Threats 1. The recent economic downturn 2. Managing a specialty store where brand extensions are quite limited 3. Changing Fashion Five Force Model Threat of New Entrants Threats of New Entrants in the market for Ann Taylor are low since the market is in its maturity stages. This means that the new entrants would find it difficult to establish good ground in the market. Furthermore, customers prefer the existing brands since they are familiar with it and they have an established brand image in the minds of the customers. Being a luxury clothing line, Ann Taylor is positioned strongly in the minds of the customers and when customers want sophisticated clothing, they perceive the image of a classic Ann Taylor dress. Bargaining Power of Buyers The bargaining power of the buyers in the case of Ann Taylor is limited since Ann Taylor is a premium brand. It is able to charge high prices for its products given its perception in the minds of the customers. The buyers, belonging to the upper class, do not want to haggle over prices since they are more concerned with the quality of the product. However, in the recent years, the economic crisis has impacted the buying power of the buyers which is one source of concern for the company. This crisis has led to a shift of consumers from buying the original Ann Taylor brand to the cheaper yet professional LOFT brand. Bargaining Power of Suppliers The bargaining power of the suppliers is also limited in the case of Ann Taylor. This is because the company has moved towards outsourcing its merchandise in over 19 countries all around the world. This means that Ann Taylor is not dependent on one supplier to provide raw materials which considerably reduces their bargaining power. Furthermore, Ann Taylor has outsourced to developing countries where the labor force is cheap and abundant. This means that the organization has the choice of shifting suppliers easily without greatly impacting the operation within the company. But with the economic crisis, wage labor has increased which means that the added costs will mean higher prices for Ann Taylor’s garments. Threat of Substitute Products and Services Threat of Substitute Products and Services are high for Ann Taylor. This is because the market is saturated with designer clothes. Top competition for Ann Taylor includes Gap Inc., Talbot, Coldwater Creek and Chicos. Chicos has explored the different niches in specialty retail clothing given its strong brand image and market position. Chicos, though may be suffering negatively from the recent economic crisis, is still strong in the minds of the consumers. Coldwater Creek has a strong online and direct sales channel that surpasses any other the competitors’ channels. Rivalry between Existing Firms Rivalry between existing firms is quite high. This is because a good number of firms cater to the market that Ann Taylor is catering too. Also these firms have been impacted by the economic crisis and in order to make sales, competition between the existing firms has increased. This means that the situation for Ann Taylor is quite competition due to the present competition yet suppliers do not have considerable power of the company. Recommendations 1. Create Distinctive Brands The most important issue that Ann Taylor needs to address is the risk of brand cannibalization within the company. The brands AT and LOFT are basically catering to almost the same target market and customers of both brands cross shop. This means that with the recent economic crisis, people are going to prefer LOFT over AT. This issue can be addressed by creating a distinction brand perception for both brands. The CEO, Krill needs to revamp the organization’s store. AT should go with a more mature classy look while LOFT can be given a trendier yet professional look. This means changing the interior design of both the brand’s outlook as well as changing the outlook of the website. 2. Capitalize on the E-commerce Opportunity Recently there has been a great surge of buying and selling on the internet. People prefer the online stores to the traditional brick and mortar stores. Even if customers do not shop online, they like to view catalogues online so that they have an idea of what the brand has to offer. This presents a lucrative opportunity for Ann Taylor where they can sell their clothes in places where they do not have a physical presence. For this, Ann Taylor needs to focus on making online catalogues, frequently updating their websites and developing a strong supply chain management for the e-commerce sales. 3. Explore more niches Ann Taylor has a strong brand appeal in the minds of the customers and they view the brand as a premium brand. Ann Taylor has been in the market for quite some long time and original target market has aged since then. This means that Ann Taylor’s original customers are no longer being catered to since they have moved up from the targeted age bracket. Also it has been observed that the market for women aged above 35 is expanding which means that Ann Taylor has to opportunity to explore a new niche. Though Ann Taylor had been planning to do this for quite some time, it needs to reconsider its original plan and go forward with it. 4. Supply Chain Management Ann Taylor has been having certain issues with its supply chain management and this has increased with the resignation of the COO. This means that while Ann Taylor is expanding into the internet world, it is left with poor inventory control. This inventory management if worked upon will allow Ann Taylor to benefit from high profits since the company has to give discounts on products that do not sell within a prescribed time limit. Updates/ Impacts The increased sales that Ann Taylor experienced in 2010 has improved with time and Ann Taylor is enjoying good profits till far. Recently, Ann Taylor is considering opening up stores in Canada after it revamped its stores to present a better perception of its brands. Ann Taylor has also taken up the concept of using celebrity endorsements using stars like Kate Hudson to improve the brand appeal of the company (Reuters) Works Cited Ann Inc. anninc.com. 2011. Web. http://www.anninc.com/aboutUs.asp “Driven, Data, Economy is in Crisis, Yet Luxury Brands, Tiffany's, LVHM Still Report Sales Growth”. Forbes 2011. Web. http://www.forbes.com/sites/annaperocchi/2011/08/05/economy-is-in-crisis-yet-luxury-brands-tiffanys-lvhm-still-report-sales-growth/ Michman, Ronald and Mazze, Edward. Specialty Retailers: Marketing Triumphs and Blunders. New York: Greenwood Publishing Group, 2001. Print Reuters. UPDATE 2-Ann Taylor parent sees bright year as designs entice shoppers Chicago. Chicago Tribune. 2012. Web http://articles.chicagotribune.com/2012-08-17/news/sns-rt-ann-results-update-2l4e8jh3ba-20120817_1_ann-taylor-loft-stores-new-york-based-ann Read More