CT Business Plan

C l a r e n c e C l i f f o r d B u s i n e s s P l a n 2012

BOOT AND SHOEMAKERS NORTHAMPTON


Contents

EXECUTIVE SUMMARY ..................................................................................................................................................................................... 1

GENERAL COMPANY DESCRIPTION ................................................................................................................................................................ 2

PRODUCT ........................................................................................................................................................................................................... 3

MARKETING PLAN ............................................................................................................................................................................................. 8

MANAGEMENT AND ORGANIZATION ............................................................................................................................................................... 5

FINANCIAL PLAN ................................................................................................................................................................................................ 7

START UP EXPENSES ....................................................................................................................................................................................... 7

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EXECUTIVE SUMMARY

Gentlemen’s shoes play a vital role in making the first impression both in the personal or business sense. Men’s shoes are currently manufactured by hundreds of companies worldwide, with some English manufacturers making it to the elite list in the global upmarket shoe industry.

Handmade shoes are an increasingly rare craft.

Clarence Clifford is a new English manufacturer of an upmarket shoe line targeted at males between the ages of 25 and 50. Clarence Clifford not only manufactures the shoes, but also supports it with advertising and promotional campaigns. The company plans to strengthen its partnership with retailers by developing brand awareness. Clarence Clifford intends to market its line as an alternative to existing shoe companies, and differentiate itself by artisanship, design, new technology, marketing strategies, exclusiveness, elegance, and high brand awareness.

The company's promotional plan is diverse and includes a range of marketing communications, focusing on social media. In the future, the company intends to develop additional lines and accessories.

Clarence Clifford is creating the highest quality hand welted shoes at the most reasonable cost for our customers.

Clarence Clifford constructs shoes based on three lines of manufacturing: ready-to-wear made to order and bespoke shoes.

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GENERAL COMPANY DESCRIPTION

Clarence Clifford is a 21st Century artisan boot and shoemaker, designing footwear with respect for tradition, whilst embracing modern technologies.

In 2012, Clarence Clifford will begin producing hand-made shoes for gentlemen in a factory in Northampton. We are aiming to gain a reputation for making ‘the finest shoes in England’.

The man behind the brand is Clarence Thompson, a property developer based in London with a real passion for shoes.

Mission

To produce shoes that will be an infusion of creative design new technology and the traditional skills of shoemaking, long established in Northampton.

Goals

Drawing on influences of old and new, it is Clarence Clifford’s goal to produce shoes of outstanding quality, comfort and style for the most reasonable cost for the customer.

The company’s goal in the next year is to make an impact on the luxury shoe market and create consumer demand for the product.

Objective

We want our shoes to be recognized, respected, and sold in the leading markets of the world.

Legal Business Description

Founded as a limited company, Clarence Clifford’s Northampton factory produces the shoes with administrative support offered from the London office.

Strategy

The Clarence Clifford strategy is to develop and market a full collection of hand welted ‘ready-to-wear’ (“RTW”), ‘made to order’ (“MTO”)” and bespoke shoes to consumers.

The company intends to market its lines as an alternative to existing shoe lines and differentiate itself through its craftsmanship, new technology, design, price, marketing strategies, exclusiveness, and brand awareness.

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PRODUCT

The luxury industry is relatively small in the terms of the number of companies. The boundaries are hard to define, but consensus would probably indicate an “industry” populated by no more than several hundred brands. However, these businesses punch far above their weight, both in terms of sales - current estimates - and perhaps more importantly, in terms of influence. This is an industry where you will find the best design, the best materials, the best merchandising and the best packaging, and hence luxury brands frequently lead the way for the rest of the world.

Almost all luxury brands have products that start at low price points, whether it is a pair of socks from Polo Ralph Lauren, a Tiffany key ring, or even a BMW 1 Series. This is both to secure aspiration sales and to lead customers into the high-ticket items.

Unfortunately, time-honoured shoe making skills are declining within the luxury industry. The traditional footwear-manufacturing climate in Britain is volatile and so few factories and workshops remaining that when the craftsman retires, their skills gained through working in the industry are lost forever, with very few apprentices trained to take their place. Along with our fellow remaining shoemakers we have become a niche manufacturing breed, making footwear that supposedly has no place in the fast paced world that holds no store with a product that is not dictated by how long it took to make and could there have been a cheaper, quicker, inferior replica.

Northampton is the heart of England’s most famous and prestigious shoe making heritage, and we are enormously proud to be manufacturing our footwear in the heart of the town in a factory that has been the home to a very well known shoe manufacturer.

Our retail showroom and office is situated in London, and clients are welcome to visit for consultation in either of our locations. Each of our clients is as individual as the footwear we craft for them. Whether you require footwear simply for style and aesthetics or your needs are comfort based, there is no limit to the time we dedicate to each client and their footwear.

Manufacturing

Clarence Clifford constructs hand-welted shoes based on three lines of manufacturing:

• ‘ready-to-wear’ (“RTW”);

• ‘made to order’ (“MTO”); and

• ‘bespoke’.

Ready-to-Wear

We will launch two collections of RTW shoes a year, a summer/spring collection and an autumn/winter collection. In addition, we plan to launch several new designs throughout the year.

The RTW collection will have a high level of handmade operations.

Made to Order

Between the extremes of bespoke and RTW has existed, since the end of the 19th century, a “grey area of shoes for which the customer was measured, but that were then made up to the closest standard size.” The distinction made here is between bespoke, created without use of a pre-existing pattern, and made to measure, which alters a standard-sized pattern to fit the customer.

The MTO manufacturing allows customers to select their chosen style (from the current or archived collections) and specify their selected leather/colour and sole option. Using our patented insole technology we can offer our MTO customers four different insole options.

Bespoke Shoes

Bespoke shoes are custom made. The customer will have his own last made and with help of the gait analysis, we can offer a high tech insole.

Procedures for bespoke shoes:

• Discussion with client regarding expected outcome, to include style, leathers for uppers and linings and finally the finish.

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• Measurements of feet to be taken, outlines & possibly digital scan of feet.

• These details are given to the last maker who will then make your ‘lasts’ (wooden forms) from the outlines and measurements and a suitable toe shape and pitch (heel height) will be incorporated.

• The pattern cutter will then make patterns. These will then be used to ‘click’ (cut) the uppers (leather part) from the leather.

• The closer will then piece together the uppers and ‘close’ (stitch together).

• The uppers will then be lasted onto your lasts. After a suitable amount of time the uppers will be removed.

• A first fitting is then required, at this point there will be no sole on the footwear and a temporary heel. At this stage, any variations to fit and shape can be altered.

• If the first fit is a success and no alterations are required then the shoes are put back onto their lasts and finished to your requirements. Should alterations be needed then these will be made and a further fitting will be scheduled.

• The delivery times for made to measure footwear, is approximately six weeks to first fit, and three weeks to finish date.

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Why bespoke?

The list could be endless so here are a few of the reasons people like to have their shoes ‘bespoke’.

Your shoes will fit your feet as they are made to the exact measurements of each individual foot. No one’s feet are an exact pair in width or length but when shoes are bespoke there is no need to compromise on the comfort of one foot over the other.

You can choose the exact shoe you want. Toe shape, heel height and shape, type of sole, type of construction, for what occasion, shade of leather, and style of design and so on.

Your feet and therefore your body will benefit from shoes that are handmade for you.

People ask what makes a bespoke shoe stand out from a factory shoe. How can you tell if someone is wearing bespoke shoes? Well, there are some give away signs. The principle one is the mythical bevelled waist – that part of the sole leading up to the heel where the shoe is pulled in and given an elegant curve.

The bevelled waist is folded up against the upper using a combination of skilled skiving with a knife; preparation work; and a special iron. The result is unmistakable and cannot be reproduced well by a machine.

The effect is to narrow the waist and hide the welting stitches, giving a pleasing flow to the shoe.

Signs to look out for are the transition between the sole edge and the bevelled waist edge. This should be seamless and smooth. It is highly skilled and takes a long time to master. The other key element is the tightness of the bevelled edge to the upper. There should be no gap and you should not be able to see the ugly structural stuff underneath which is holding the shoe together.

So if you want to tell if is bespoke or not, then look at the waist. Nevertheless, you know, if you are wearing the bespoke shoes yourself, then you do not care so much about the waist, bevelled or not. Why? Because you care more about how they feel on your foot; how they fit you perfectly; how they caress instead of rub your feet; how when you are

walking all day from one place to the next you do not even notice you have them on. That to me is the joy of a bespoke shoe.

And you know what else? Once you try them, it is hard to go back. Like so many of the finer things of life...

For the bespoke shoes we have the option of using a gait analysis.

A gait analysis is a detailed look at how you walk. There is a vast amount of information that we can determine from analysing how you walk. The mechanisms by which the foot loads can affect the rest of the body. Therefore, it is for this reason that it is important that we consider a person’s foundations - their feet - this can help with the way the rest of their body is functioning.

Your foot is in contact with the ground for about 0.8 of a second when walking and about 0.25 seconds when running. This is too difficult for even the most experienced practitioner to see with the naked eye. As you walk across the pressure plate will scan your foot at 500 Hz using 4096 pressure sensors. This generates quantifiable static and dynamic measurements providing us with comprehensive data regarding the pressure distribution of your feet.

A foot scan provides a vast amount of information and by looking at the results; we are able to understand better why a person may be suffering recurrent shin splints, knee, or hip pain. If a person’s feet are sore first thing in the morning or they have pain while walking on the balls of their feet, the scan will tell us why these things are likely to be occurring.

The gait analysis enables us to make a bespoke shoe, not only in construction but in function as well.

The leathers we use are whole calf or kid skins, which are soft, subtle, and strong, keeping our shoes looking good for a long time. Factory made shoes are often made from split hides to cut costs leading to them looking scuffed or splitting quite rapidly.

Bespoke shoes are repairable. They are not disposable items that will clutter up landfill sites for generations. Trainers are reported to be a very significant part of landfill sites and the soles are almost indestructible.

Shop-bought shoes are not so cheap when looked at long term. They wear out sooner, need more time looking for replacements and often look

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very tired and wrinkled after just a short time. Bespoke shoes on the other hand can last decades, look smart, and be comfortable so keeping the wearer from feeling the passing years.

Details and individuality seem to be increasing everywhere. From what is in our food to the clothes we wear. The excitement of mass production is gone. If there really ever was any.

Clarence Clifford wants to create a business around what is missing in English and Italian shoe making – style. The UK manufactures can be a bit flat and uncreative; understated elegance, the Italian makers can be over flamboyant.

Therefore, we have struck a balance between the two, refined and understated but to the highest quality, while at the same time being a little original by trying to redefine the classic styles.

Clarence Clifford is an honest product and products like ours should be exposed more so as to give the public more of an education in quality rather than buying items simply because of what label is in it, so to clarify, Clarence Clifford means luxury, honesty, quality and of course, pleasure.

Materials are hugely important to us. Clarence Clifford hand welted shoes are created using only the highest grade calf leather and oak bark sole material tanned in 2000-year-old tanning pits to produce a shoe of great style and exquisite comfort.

A bespoke shoe is like a glove. It feels unique as it moulds itself to the forms of the foot, adjusts to the circumference and pressure points, and respects differences in muscular density.

Clarence Clifford shoes will be priced at the high end to reflect the quality and exclusiveness associated with the brand. The company will use the best materials such as calf leather and exotic skins. When a mark-up is placed on Clarence Clifford products, customers are willing to pay the premium because of the perceived value and quality guarantee that comes with all products. The Clarence Clifford line is targeted at males between the ages of 25 and 50.

Management will rely on customer feedback, suggestions, and sales reports to introduce or eliminate certain products, styles, and sizes.

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MARKETING PLAN

Contrary to perceived opinion, the British-made footwear industry has not completely died out.

Footwear is an important sector in the country with around £6bn of footwear sold to UK consumers and another half a billion pounds exported around the world according to the British Footwear Association (“BFA”).

The UK is home to some of the world’s leading footwear brands and the most highly regarded innovative designers. Premium level menswear continues to be produced in over 20 factories, the majority of it exported across the world.

The footwear industries is highly competitive, and has attempted to lower manufacturing costs by moving production to such places as Eastern Europe and Asia. As a result, employment levels for UK manufacturing industry employees fell.

Clarence Clifford does not see cheap manufactured shoes as competition; we will be competing in a different market.

Market Segmentation

The company’s target group is regarded as having enough disposable income to spend on high priced quality footwear. The company plans to target males between the ages of 25 and 50 with a combined household income in excess of £40,000. Within this group customers have diverse backgrounds.

The Clarence Clifford customer is a versatile man who can fit into any environment and is willing to pay a reasonable price for quality footwear. The Clarence Clifford customer cares about comfort, quality, and style and he probably has his suits and shirts tailored.

UK brands translate well internationally, and many expanding economies overseas are interested in buying UK products. International business has therefore become a focus of some UK companies.

Future markets

Many footwear manufacturers see Asia, with a population of 3.8 billion, as an attractive market. Edward Green and Lobb recently opened flagship stores in Tokyo in an effort to build up their brands in Japan.

Clarence Clifford plans to distribute our shoes around the world. We are starting up in London and then expanding to Europe, the United States, and Asia.

Consultancy Bain & Co estimated luxury sales would grow 5-6% in 2012 and 2013, led by emerging markets buyers and resilient demand in Europe and the United States.

Within the next five years, China is set to become the biggest luxury goods consumer and it will be the top contributor to our growth.

Buyers from Mainland and Greater China, when counting those at home and abroad, are already the world’s No.2 luxury customers behind those from the United States distribution. Luxury sales in Mainland China rose 30% in 2010 and are forecast to grow 25% at constant currencies this year.

Japan, which was previously the world’s biggest luxury goods buyer, is now in third place behind Mainland and Greater China combined. Japan is expected to see luxury sales fall 5% this year at constant exchange rates to €17billion.

Italy’s luxury trade body, Altagamma favoured Brazil over India as the next big source of growth after China, as India’s lack of retail space and preference for traditional dress and homemade jewellery made it tough for European brands to penetrate.

“We see Brazil being a major engine of growth going forward, but of course not of the same magnitude as China”

Bain & Co

Brazil’s luxury sales totalled [CURRENCY?]1.8billion in 2010 and are set to grow 10-15% between 2010 and 2013, Bain estimated. In Russia, Bain sees sales of €4.8billion in 2010, growing 5-10% by 2013.

The Middle Eastern market, worth €4.1billion in 2010, is likely to grow 10-12% over the same time span.

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Overall, Bain said global luxury goods sales were set to reach a record €185billion this year compared with €172billion in 2010. (Reuters 03.05.11)

Strategy

Clarence Clifford plans to use a direct sales team, retailers, and the Internet to reach its markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.

As companies in these mature industries continually look for ways to compete effectively, UK apparel and footwear manufacturers have increasingly moved their production facilities to lower-cost locations outside of the United Kingdom. However, the demand for high quality shoes has enabled a small group of manufactures to remain in Northampton.

A key factor in the success of Clarence Clifford will be its distribution. The company plans to use the following retail distribution channels:

• Clarence Clifford shop

• Luxury department stores

• Shoe specialty boutiques

• Internet stores

• Clarence Clifford’s online store

• Pop-up shop

• Trunk shows

We will carefully select our partners. It is not our intention to overexpose our shoes in every store around the world because it will take away what is special about Clarence Clifford.

Clarence Clifford Shop

Having a Clarence Clifford shop in a prestigious part of town surrounded by our competitors would be a great way to market the company.

We have been looking at opening a small retail shop in the Princes Arcade. Princes Arcade is an interesting old-fashioned arcade located just off

Jermyn Street. Jermyn Street is well known as a street where the shops are exclusively aimed at gentlemen.

The Princes Arcade runs between Jermyn Street and the major shopping street of Piccadilly at the heart of London. The arcade is Victorian in origin and contains a fine selection of boutique style shops and independent retailers selling a variety of goods.

Because of the costs involved, we have decided to wait a couple of years until we have a better picture and are more established before we open the shop.

Online shop (www.clarenceclifford.com)

It will be possible to buy our RTW shoes from the Clarence Clifford website.

Internet Stores

We would like to be sold from online luxury fashion retailers such as www.mrporter.com or www.my-wardrobe.com. Online stores are great for marketing; they continuously send out emails to their customers and promote their brands.

Luxury Department Stores

Clarence Clifford aims to be sold in luxury department stores like Harrods in London (www.harrods.com) and Beams in Japan (www.beams.co.jp).

Being sold in the world’s best department stores will improve the consumer perception of the Clarence Clifford brand. It will make it wider known and it will be associated with other luxury brands.

Boutiques

Small shops that specializes in elite and fashionable shoes like Leathersole and Leffot in the US (www.leffot.com)

Trunk Show

Clarence Clifford will travel extensively to the US, Europe, Asia, and the Middle East to meet our existing and new clients through trunk shows.

A ‘trunk show’ is a special sale in which vendors present merchandise directly to store personnel or select customers at a retail location or another unique venue. It allows store personnel and customers to preview

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and/or purchase merchandise before it is made available to the public. It is particularly desirable to have the actual designer present at the event.

Pop-up Shop

Clarence Clifford will try to set up a pop-up shop.

A pop-up retail space is a temporary venue; the space could be a sample sale one day and host a private cocktail party the next evening. The trend involves “popping-up” one day, then disappearing anywhere from one day to several weeks later. These stores, while small and temporary, can build up interest by consumer exposure.

Pop-up retail allows Clarence Clifford to create a unique environment that engages our customers, as well as it generates a feeling of relevance and interactively.

Retailers are finding that the temporary feel to pop-up shops can help to create a sense of urgency to buy with the creation of a “will this shop be here next week, I better buy now” idea. Existing retailers to try out different locations with minimum financial exposure are also increasingly using pop-ups.

Manufacturing shoes for other labels

High-end fashion labels and some tailors are interested in having their own shoe label produced in Northampton. Clarence Clifford will look into producing good year welted shoes for high-end labels.

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Market Trends

More people are happy to pay several hundred pounds for footwear that is a cut above your run-of-the-mill designer shoes.

“This is a slow-burn trend which is going to continue to grow,” said Jacqui Ma of trend forecasting agency WGSN. “It is part of the shift towards people buying fewer things, but better quality.” Market researcher, Mintel predicts that the UK footwear market will grow to £7.6billion by 2011, up 17% since 2006.

‘Revolution’ magazine recently came out with a story saying that: “the internet is a key driver in premium and luxury goods sales, and can be as influential as magazines and television advertising to premium consumers.” Joint research by the IAB and design magazine ‘Wallpaper’ with more than 1,000 respondents said that online advertising was the most influential in encouraging luxury goods purchase.

The research also showed that luxury consumers spend more time online than with any other media, often researching on the internet even if they then purchase in-store or by mail order.

Respondents spend more hours online (25.4hrs) than watching television (13.2hrs), listening to radio (10.1hrs), or reading magazines (5.7hrs) and newspapers (6.4hrs).

When looking for information, 75% of respondents said the internet is the first place they go. “Premium online luxury consumers are the heaviest media users of all luxury consumers. They are ferocious users of the internet and there is a huge opportunity for savvy luxury brands to talk directly to their potential customers via their favourite websites,” said Gord Ray, Wallpaper’s publishing director.

What is in a name?

In a market where consumers are barraged by advertising and marketing campaigns delivering an onslaught of lifestyle and fashion messages, a brand name is a powerful weapon. Brands have become an increasingly significant factor in apparel and footwear. Many consumers have less time to shop and are spending their disposable income more carefully. Established brand names, with their quality image, make the shopping experience easier and faster for many consumers. For manufacturers, brands build consumer loyalty, which translates into repeat business.

Many established brand manufacturers are leveraging their existing brand names by adding various accessory lines, such as sunglasses, watches, fragrances, wallets.

A company with an impressive brand name must exercise caution when entering into licensing agreements. If a new product line does not live up to the quality standards that consumers have come to expect from the brand name, the brand’s image can be tarnished. It remains to be seen how consumers will react to this onslaught of new brand name product introductions. To date consumers have embraced the extended product lines.

The company’s name, Clarence Clifford, is a competitive advantage in itself. The name is not attached to any particular group of customers and it allows entry into different segments of the industry. Another competitive advantage is the company’s marketing strategy. Using blogs, forums, advertising, promotion, and influential people, Clarence Clifford should be able to develop its presence in the market.

Marketing Communications

The key message associated with the Clarence Clifford line is elegance and creating the highest quality shoes at the most reasonable cost for our customers. Clarence Clifford’s promotional plan is diverse and includes a range of marketing communications:

Public Relations

Press releases are issued to lifestyle and fashion magazines, technical trade journals, and major business publications such as Financial Times.

Trade Shows

Company representatives will attend and participate in several trade shows in Italy, Germany, America, and Japan.

Websites

Clarence Clifford plans to establish a presence on the Internet by developing a website. Plans are underway to develop a professional and effective site that will be interactive and from which sales will be generated worldwide. In the future, this is expected to be one of the company’s primary marketing channels.

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Banner Advertising

Banner Advertising is a form of advertising on the World Wide Web. This form of online advertising entails embedding an advertisement into our web page. It is intended to attract traffic to the website by linking to the Clarence Clifford website.

Printed Advertising

Clarence Clifford will not spend much money on printed advertising. The company’s print advertising program includes advertisements for trunk shows we travel to abroad.

Blogs

The role that magazines and newspapers once played in influencing purchases has started to take a back seat to less-known (but often just as influential) blogs. In fact, it seems that blogger outreach has become “the new PR.” reasons to reach out to bloggers into four key areas:

1. Trust

People trust other consumers (bloggers) more than they trust advertising, or even major media publications.

2. Cost Effective

The cost of reaching out to bloggers is significantly less (and often more effective) than reaching out to magazine editors, and even more significantly affordable than advertising in those same publications.

3. Measurable ROI

If you know what to look for you can start to build in ROI metrics. How many readers have read the posts? How much interaction (comments, re-tweets, etc.) did you receive?

4. Potential to go viral

It is a lot easier to share a good blog post than it is to share a magazine clipping.

Facebook (and other social media like Twitter and LinkedIn)

Clarence Clifford will use its Facebook page to promote the company. We aim to get 10,000 friends within a year and we will post pictures and updates weekly, with links to blogs and online retail sites. A fan page is easily shared with friends, and your fans are sharing your page with their friends even when they do not mean to!

Shoe Shiners

Clarence Clifford plans to set up a shoeshine stand to attract potential customers.

Newsletter

A monthly newsletter emailed to customers who have signed up and to other email addresses in our database.

Gift cards

We will design a beautiful boxed gift card to use towards purchasing a pair of Clarence Clifford shoes - the perfect gift for the man that has everything.

Influential People

We will use our network and hope to get the right people to wear our shoes. We will give away 10 pairs and maybe have a few celebrities design their own pair of shoes.

The Sales Strategy

Our marketing strategy will not exceed 5% of our annual gross sales. We will use a wide range of approaches, including our website with free shipping, postcards, business cards, newsletter, Facebook, twitter, blogs, and word of mouth.

Sales Strategy

Our key to sales strategy is the unique product. Other strategies will be the price and a great buying experience, every time. On entering our showroom, customers will be welcomed with refreshments while they shop and assistance offered on an ‘as required’ basis. We will have comfortable chairs for friends to sit while waiting.

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Our sales goal is to generate repeat business and strong word-of-mouth advertising based on this great buying experience. Word of mouth tends to spread to family, friends, co-workers, football team members and people we depend on to provide us with a service (barbers, tailors, dentists, doctors, etc.) We also plan to have software to collect customer contact information for example, names, addresses, email address and phone numbers, shoe preference and size.

Web Plan Summary

The website for Clarence Clifford will serve as a main channel for business. Selling direct from the web will give us the highest mark ups. The consumer will be able to:

• view and purchase their shoes and accessories online

• see our collections

• purchase gift cards

• take a virtual tour of the factory

• read company/shoe FAQs

• contact us

• sign up for Clarence Clifford’s news and updates

Website Marketing Strategy

All of our customers will be encouraged to use our website, domestic and international, for faster service. Shoes and accessories will be sent out via next day delivery, Fed-Ex, or signed for, depending upon how fast the customer prefers to receive the purchase. The website will include a special “buying shoes online” section, where customers can print out the footprint of each model at actual size, to see how it compares to their foot shape.

The website will be integral in Clarence Clifford’s marketing effort as the site is a key sales tool for both local and distant customers. Promotional material will always include the URL address to encourage people to view the concept and products on the Clarence Clifford website. In additional to inclusion in the traditional marketing campaigns, Clarence Clifford will

submit their website to a variety of search engines, significantly increasing the number of inquiries from people searching out handmade shoes.

Development Requirements

The website will be designed in-house, and a contractor will do the coding of the website. We plan to have the website officially up and running by August 2011.

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Competition

There are a handful of UK competitors, such as Edward Green, John Lobb, Gaziano & Girling and George Cleverley - all traditional English shoemakers based around Northampton and London. We will also be competing with Italian and French companies like Stemar, J.M.Weston, Berluti and Pierre Corthay.

English shoes have traditionally been more about craftsmanship with less emphasis on the design and style, and as a result English shoes tend to be bigger and bulkier than the shoes from the continent (although there are exceptions).

Clarence Clifford will combine the English craftsmanship with own unique style.

In addition to our other USPs, we will be introducing a revolutionary use of gait analysis technology for MTO and bespoke shoes.

The technique involves computer-aided equipment that produces high sampling speeds which enables the detection of subtle changes in the mechanics of the foot allowing the most accurate analysis of data and customized insoles.

English Competition

Gaziano & Girling

Shoes: Ready to wear, made to order and bespoke

Founded: 2006

Factory location: Kettering, Northamptonshire

London address: Chittleborough & Morgan, 12 Savile Row, W1S 3PQ

Web: www.gazianogirling.com

Edward Green

Shoes: Ready to wear and made to order

Founded: 1890

Factory location: Northampton

London address: 75 Jermyn Street, SW1Y 6NP

Web: www.edwardgreen.com

John Lobb

Shoes: Ready to wear, by request and bespoke

Founded: 1866


London address: 88 Jermyn Street, SW1Y 6JD

Web: www.johnlobb.com

Crockett & Jones

Shoes: Ready to wear, made to order and hand grade

Founded: 1879


London address: 69 Jermyn Street, SW1Y 6JD

Web: www.crockettandjones.co.uk

George Cleverley

Shoes: Ready to wear, semi-bespoke and bespoke

Founded: 1958

Factory location: No factory

London address: 28 Old Bond Street, W1S 4SL

Web: www.gjcleverley.co.uk

European Competition

Berluti

Shoes: Ready to wear, MTM & bespoke

Founded: 1895

Factory location: France

London address: 43 Conduit Street, W1S 2YJ

Web: www.berluti.com

Bontoni

Shoes: Ready to wear and made measure

Founded: 2004

Factory location: Italy

London address: Harrods

Web: www.bontoni.com

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Magnanni

Shoes: Ready to wear and made measure

Founded: 1954

Factory location: Spain


Web: www.magnanni.com

J.M.Weston

Shoes: Ready to wear

Founded: 1891


London address: 3-5 Burlington Gardens, W1S 3AZ

Web: www.jmweston.com

Stemar


Founded: 1969



Web: www.stemarshoes.it

Tom Ford


Founded: 2010 [query]



Web: www.tomford.com

Corthay

Shoes: Ready to wear, MTM & bespoke

Founded: 1990



Web: www.corthay.fr

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Factor Clarence Clifford Strength Weakness Gaziano & Girling Edward Green Importance to Customer

(5 being very important)

Products Great design and craftsmanship X Very nice shoes, the best looking on the market, but unsure about the quality.

Great craftsmanship, a bit dull.

5

Price High - but lower than our competitor. Value for money.

X High, £700+ High 3

Quality Very high. X 5

Selection Wide X 4

Service X 5

Reliability N/A X New company, only five years old. Old company, lots of history. 5

Stability N/A X ? Old and Stable 3

Expertise High X High High 5

Company reputation

No reputation but being based in Northampton and also our shoemaker’s reputation

X They are working on it. Very good reputation. 4

Location Northampton – in Edward Green’s old factory

X Kettering, not as good as Northampton

Northampton 4

Appearance Brand focused X Boring? 4

Sales Method Website, online retailers, department stores, trunk shows and pop-up shops

X Not impressive - trunk show and small retailers and tailors. No online.

Have own shop in Jermyn Street. No online.

4

Credit Policies 2

Advertising X 3

Image X 4

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The craft of shoemaking is experiencing something of a renaissance. Over the last few years, as heritage brands have been rediscovered by a new generation of customers, especially young men, labels once seen as relics of English office wear now have an unexpected cool factor, stocked by stylish boutiques and obsessed about on fashion blogs.

Luxury Marketing

Luxury brands have often been associated with the core competencies of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but also the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these expensive items.

The 6P’s of Luxury Marketing

As we start to define the dimensions of the 6P’s of Luxury Marketing: people, product, passion, pleasure, purpose, and price, it is good to keep in mind two key points about marketing. At a recent market research conference, Dell Computer’s, Keith Kozac reminded the audience of two prerequisites for successful marketing (whether it is luxury marketing or, as in the case of Dell, mass marketing).

1. Listen to the customer

2. You are not the customer!

In other words, it is not up to marketers to define what the key characteristics of a luxury product are, or what is pleasurable and what is not. It is for the consumer to say and for the marketer to listen. Listening to the customer has led us to define six key areas to which luxury marketing must pay attention. These areas, which fully cover what matters most to luxury consumers, have been identified based on years of experience in observing and communicating with high net worth individuals at work, at play, at home and all the places in between. Clarence Clifford is seriously considering the 6P’s as an integrated framework, and understanding the reciprocity of the P’s within this framework, will greatly influence the way luxury marketers approach their customers and allow them to create unique relationships throughout the buyer’s journey.

People - People will increasingly rely on strong personal relationships that differentiate their trusted network from larger, non-exclusive networks associated with mass offerings. The ways to help forge bonds with affluent consumers include participation in the charitable, social, and cultural events that they support.

Product - Through extensive interviews with luxury goods consumers, French marketing professor, Bernard Dubois identified six key characteristics of luxury that are inherent in a product and/or its brand. First, luxury is synonymous with excellent quality. The components are of an exceptional nature and manufacturing the product involves high level of expertise.

Second, a luxury brand will typically have a history, a heritage that gives it an authentic aspect and helps give the brand a unique identity. Clarence Clifford is a new brand and has little history, so creating authenticity may mean building a compelling story that blends many aspects of the shoe heritage, in particular focussing on Northampton. Clarence Clifford will use various subtle marketing techniques to convey lineage. Maintaining integrity is also essential for luxury brands. This can be demonstrated by ensuring stylistic consistency, committing to traditional production practices or by using history and culture as reference in branding. A fourth luxury attribute is price. The price of a luxury product is assumed very high, especially in comparison to its utilitarian counterpart. Indeed, research shows that the perception of quality is positively linked to price of the product or service (i.e., a higher price can confer a quality halo effect´), with consumers often judging the quality of a product according to its price when choosing between different brands. Consumers who believe the price is an indicator of quality also associate high price with prestige. Fifth, luxury products are expected to be scarce. Clearly, items that are in limited supply have high value, while those readily available are less desirable. Rare items command respect and prestige. Finally, luxury can, to some extent be superfluous, even useless. This does not mean that the product is innately superfluous. More likely, it is the extravagant, the indulgent, aspects of the product that are not strictly necessary. Because of their means, the affluent are often able to move beyond meeting needs in their purchases, and move toward indulging their wants.

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Passion - The pursuit of luxury is often a passionate endeavour and the affluent can be very passionate consumers. In many instances, their passionate nature has put them in the position to access the luxuries that comprise their lifestyle. Whether they are collectors, connoisseurs or communities of like-minded individuals, passionate consumers are brand advocates respected by their peers and brand marketers best allies.

Pleasure - Pleasure derived from luxury consumption comes from the experience. A luxury experience implies an emphasis on senses and emotions. Clarence Clifford needs to ensure that our customers have the opportunity for sensory connection with our shoes, and we would consider emotional appeals in the marketing campaigns.

Purpose - Although luxury might be superfluous, it also serves a purpose. Most luxury products have a utilitarian aspect, which is more or less important to different individuals.

Luxury marketers should arm themselves with a combination of practical, factual information, and ways for customers to connect to the pleasure aspects of their products. Luxury customers will place varying weights on the importance of pleasure vs. purpose. Marketers need to be prepared for all possible combinations

Price - Money matters to the affluent, who tend to spend rationally, even if they seem to spend a great deal. Aware of the many downsides of ownership, the affluent increasingly favour fractional ownership.

Clarence Clifford is creating the highest quality shoes at the most reasonable cost for our customers.

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MANAGEMENT AND ORGANIZATION

Manufacturing

Three to four multi- skilled permanent workers and two to three part-timers (depending on workload) to operate the different rooms:

Clicking Room

The clicker cuts out the upper parts of the shoe from the leather. Personal care and skill is needed for this work in order to gain maximum use of a skin.

Closing Room

In the closing room, the uppers are received from the clickers. Opening, marking, lining, printing, size-stamping and fancy stitching. These are followed by skiving, beading and perforating. After the uppers have been through these operations, they are ready to be stitched and this involves quarter-seaming, lining-marking and through to vamps, lacing and passing.

Making Room

The operatives would be responsible for joining the soles and uppers together using a foot-shaped last which they then attach a heel

Finishing Room

The finishers trim, smooth, colour and polishes the shoes or boots.

Apprenticeships and Internships will be considered in due course.

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Managing Director Clarence A Thompson

Shoemaker B. Goral - 3rd Generation Shoemaker

Apprentice Shoemaker K. Goral - 4th Generation Shoemaker

Pattern Maker D. Pallett

Last Maker Spring Line Ltd

Marketing Executive Camilla Cavol Skjølsvold BA Visual Communication (Graphic Design), (South Australia) BA Media, (Norway)

Designer Lisa McNair BA (Hons) Fashion Freelance Footwear Designer and Consultant

Solicitor Phillip Ross & Co.

Accountant TBC

Insurance agent TBC

Bank Lloyds TSB

Consultant

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FINANCIAL PLAN

The financial plan consists of Start Up Expenses, a 12-month profit and loss projection (a four-year profit projection is included in the appendix), a cash-flow projection, a projected balance sheet, and a break-even calculation.

START UP EXPENSES

Item £ Item £

Clarence Thompson 100% 80,000 Advertising and Promotional Expenses

Other Investor Advertising 2,000

Total Investment 80,000 Signage 300

Printing 2,000

Bank Loans Travel & Entertainment 2,000

Bank 1 Web site social media 3,000

Total Bank Loans Total Adv. and Promo expenses 9,300

20,000

Other Loans Other Expenses

Source 1 Research and Development

Total Other Loans Photography 1,000

Video 1,000

Leasehold Improvements Total Other Expenses 22,000

Roof & gutter repair 1,500

Electrics & air compressor 12,000 Reserve for Contingencies and Working Capital

40,000

General repair 25,000

Total L / H Improvements 38,500

Capital Equipment List

Furniture 3,000 Summary Statement

Equipment 5,000 Sources of Capital

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Fixtures 2,000 Owners' and Other Investments 60,000

Machinery 70,000 Bank Loans

Lasts and Tools 20,000 Other Loans

Total Capital Equipment 100,000 Total Source of Funds 60,000

Location and Admin Expenses

Rent and Rates 16,000

Utility Deposits 1,000

Legal and Accounting Fees 2,500 Start Up Expenses

Prepaid Insurance 1,500 Leasehold Improvements 38,500

Total Location and Admin Expenses

31,600 Capital Equipment 100,000

Location and Admin Expenses 31,600

Opening Inventory Total Inventory 8,000

Leather, soles insoles & heels

5,000 Advertising/Promo Expenses 9,300

Accessories 1,000 Other Expenses 22,000

Packaging 2,000 Reserve for Contingencies and Working Capital

40,000

Total Inventory 8,000 Total Start Up Expenses 249,400

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Cost Description Fixed Costs (£) Variable

Inventory or Materials 8,000

Direct labour (includes payroll taxes) 100,000

Other expenses -

Salaries (includes payroll taxes) 105,000

Supplies 5,000

Repairs & maintenance 6,000

Advertising 24,000

Car, delivery and travel 12,000

Accounting and legal 4,800

Rent 12,000

Telephone 2,400

Utilities 6,000

Insurance 2,400

Taxes (Real estate, etc.) 3,600

Interest -

Depreciation -

Other (specify) -

Miscellaneous expenses 6,000

Principal portion of debt payment -

Owner's draw -

Total Fixed Expenses 297,200

Total Variable Expenses

Breakeven Sales level 47,5520

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HM Land Registry Map and Plan

The factory is located at

74-76 Cowper St, Northampton, Northamptonshire NN1 3QR

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Trade Fairs

PITTI UOMO

Where: Florence, Italy

When: 10-13 January 2012

What:

Who:

Cost:

Web: www.pittimmagine.com

Expo Riva Schuh

Where: Palafiere Riva del Garda, Trentino (Italy)

When: 14-17 January 2012

What: One of the most important trade shows in the large-scale distribution footwear business. A meeting point for those in the business. 32,000m

2 exhibition area, 1,211 exhibitors

(847 foreigners), 11,000 visitors expected.

Who: Many, though none of Clarence Clifford’s competitors

Cost:

Web: www.exporivaschuh.it

Couromoda

Where: São Paulo

When: 16-19 January

What: The International Shoe, Sporting Goods and Leather Goods Fair is the most important event held in Latin America, promoting business and fostering networking in the footwear market. The fair brings together more than 1,000 shoe and leather goods exhibitors and receives qualified buyers from all over Brazil and 64 other countries.

Who: Many, though none of Clarence Clifford’s competitors

Cost:

Web: www.couromoda.com/english/

Japan Grand Shoes Collection

Where: Japan, Kobe-shi

When: January

What: Exhibition of new collections of chemical shoes. Held three times every year. January event for Summer fashion, May event for Autumn/Winter fashion, October event for Spring fashion.

Who:

Cost:

Web: www.expopromoter.com

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IFF - International Fashion Fair

Where: Tokyo

When: January 2012

What: IFF - The 14th International Fashion Fair is the only Global Business-Oriented Fair in Japan. Exhibit items includes ladies wear, men’s wear, casual item, children’s & maternity wear, inner wear & leg wear, leather & fur clothing, bag, shoes, accessory, display, information & system.

Who:

Cost: Single booth unit: 3m × 3m=9 m2. For 1 to 3 booth space

charge ¥388,500 per booth

Web: www.exporivaschuh.it

Copenhagen International Fashion Fair

Where: Copenhagen, Denmark

When: 2-5 February 2012

What: Copenhagen International Fashion Fair has become Europe’s fashion fair no 1.

Who:

Cost: Basic stand rental per m2: DKK1,380.00/€186.00 (min.

9m2) +25% VAT

Web: www.ciff.dk

The WSA Show

Where: Las Vegas, USA


What: WSA is the most comprehensive footwear and accessories show in the world. The twice-yearly event gathers exhibitors showcasing, thousands of brands, attracting category leaders, industry newsmakers, top designers, as well as retailers from every market segment, retail and distribution channel.

Who:

Cost:

Web: www.wsashow.com

Pure London

Where: London


What: The UK’s leading buying fashion event for sourcing contemporary ... young creative fashion for men and women, accessory and footwear brands

Who: Not many, footwear new to the exhibition.

Cost: Basic stand rental per m2: 260-345

Web: www.purelondon.com

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Magic

Where: Las Vegas, USA


What: Men’s apparel and accessory tradeshow, founded in 1933, by the Men’s Apparel Guild in California. Get exposed to buyers from all 50 states and over 80 countries worldwide with an audience of over 60,000 attendees—including 85% of the top 50 retailers.

Who: American

Cost:

Web: www.magiconline.com

London Fashion Week

Where: London

When: February 2012

What:

Who: Women’s footwear only.

Cost:

Web: www.lfw.com

Moda

Where: Birmingham


What: Moda, the UK’s largest fashion trade event for womenswear, menswear, footwear and accessories

Who: Limited footwear

Cost: Moda Footwear’s basic package stand rate is £172 + VAT per m

2

Web: www.moda-uk.co.uk

Toronto Shoe Show

Where: Toronto


What: Toronto Shoe Show is the largest and most comprehensive selection of footwear and accessories in Canada.

Who: Query - Limited information on web page

Cost: Query

Web: www.torontoshoeshow.com

MICAM

Where: Milan

When: 18-21 September 2011/ 4-7 March 2012

What: Micam Shoevent, the leading international footwear exhibition, is held twice a year in Milan in the new fairgrounds of Rho Fiera, offering a preview of the spring/summer and autumn/winter collections of the following year.

Who: Crockett & Jones, Loake (54 men luxury)

Cost: Registration fee: €77, Rate for participation per m2: €163

(free area)

Web: www.micamonline.com

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Shoe Market of the Americas

Where: Fort Lauderdale

When: March 2-4, 2012 June 24-26, 2012 September 9-11, 2012

What: The Shoe Market of the Americas (SMOTA) conducts three trade shows yearly at The Greater Ft. Lauderdale Broward County Convention Center and The Hilton Ft. Lauderdale Marina Hotel. The markets showcase the entire spectrum of footwear companies, from high-fashion designer collections to the large branded businesses in all the categories: women’s, men’s, and children’s footwear.

Who:

Cost:

Web: www.smota.com

China International Footwear Fair (CIFF)

Where: Shanghai

When: 6-8 September 2011

What: The market for high quality footwear in China is buoyant and opening unprecedented ‘once in a lifetime’ opportunities for international footwear manufacturers.

Held annually, in Shanghai, The China International Footwear Fair (CIFF) and Moda Shanghai offer an unparalleled platform for entering China’s fast-growing domestic retail market for footwear products, leather garment, travel ware, handbags and fashion accessories.

Many of China’s best-known footwear brands exhibit at CIFF.

Who: Looks like it just Asian companies

Cost: Query

Web: www.ciffchina.com

Tokyo Shoe Fair

Where: New York

When: 12-13 October 2011

What: TSF Tokyo Shoe Fair, the largest trade fair of footwear industry in Japan, the leading makers, wholesalers and related material suppliers of footwear industry joins twice a year. 2010: 200 exhibitors and over 5000 visitors - small?

Who: Query

Cost: Query

Web: Query

FFANY

Where: New York

When: 30 November - 2 December 2011

What: There is no better place to unveil your newest collections than right here in New York, where thousands of retail buyers come four times a year to make their seasonal buys.

Our New York Shoe Expo brings independent owners, boutique buyers, department store merchants and industry press here to the fashion capital in search of the next big trend

Who:

Cost:

Web: www.ffany.org

Clarence Clifford 74-76 Cowper St Northampton Northamptonshire NN1 3QR United Kingdom

Tel: +44 (0)1604 622 426

Fax: +44 (0)1604 621 599

Email: [email protected]

www.clarenceclifford.com www.facebook.com/bespokeshoes

CT Business Plan

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