Report on Tommy

7/29/2019 Report on Tommy

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TOMMY HILFIGERFRM LEVEL1

SUBMITTED BY:PRACHI RATHIDISHA JAINMEDHAVINI RAI

RETAIL OPERATIONS

P E A R L A C A D E M Y O F F A S H I O N


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ACKNOWLEDGEMENT

We owe a great thanks to the people who have helped and supported us to make

this Project Report on Analysis on Tommy Hilfiger.

Our Deepest thanks to Mrs. Bhavna Chaddha and Mr. Bharat Rishi who have

mentored us and corrected our various documents with attention and care. They

have taken pains to go through the project and make necessary changes when

required.

We would also thank our institution and faculty members without whom theproject would not have been a distant reality.

Prachi Rathi

Disha Jain

Medhavini Rai


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CONTENT

S.NO. TOPICS PAGE NUMBER

1. INTRODUCTION 37

2. STORE GROWTH 814

3. KPI 1520

4. STORE ALLOCATION 2128

5. RECOMMENDATIONS 2930

6. REFERENCES 31


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CHAPTER-1

INTRODUCTION


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Tommy Hilfiger is the worlds leading

premium lifestyle brands that deliver

superior styling, quality and value to

consumers worldwide. The brandcelebrates the essence of Classic American

Cool and provides a refreshing twist to the

preppy fashion genre.

Since its debut in 1985, the Tommy Hilfiger

group has become a US $4.6 billion apparel

and retail company by offering consumers a

breadth of beautifully designed, high quality

products including mens, womens and

childrens apparel, sportswear, denim, and a range of licensed products such as

accessories, fragrances and home furnishings.

Under the leadership of Founder Tommy Hilfiger and Chief Executive Officer

Fred Gehring, the brand can be found in leading department and specialty stores,

as well as in its own expanding network of freestanding retail stores, worldwide.

When PVH Corporation acquired the Company in May 2010, Gehring also

assumed the role of CEO of PVHs international operations, while Hilfiger

remains the Company's Principal Designer and provides leadership and direction

for all aspects of the design process.

Tommy Hilfiger today has become a global brand with strong recognition and a

distribution network in over 90 countries and more than 1,000 retail stores

throughout including their premier flagship retail destinations in North America,

Europe, Central and South America and Asia Pacific. It is a Public Company,

which was incorporated in 1992. Its stock exchanges are done in New York.

The Tommy Hilfiger flag logo is recognized around the world as the symbol for

high quality, quintessential American style with a classic, cool twist.


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Companys Perspectives:

The Tommy Hilfiger Corporation is dedicated to living the spirit of the American

dream. We believe: the spirit of youth is our greatest inspiration; resourcefulness

is the key to value and excellence; in making quality a priority in our lives and

products; by respecting one another we can reach all cultures and communities;

and by being bold in our vision we continually expand our boundaries.

The two chosen stores of Tommy Hilfiger are from Westgate Mall, Rajouri and

Khan Market. The competitor chosen for the brand is Espirit.

TOMMY

HILFIGER

WESTGATE

TOMMY

HILFIGER

KHAN MARKET

COMPETITOR

ESPRIT

OPENING DATE

OF THE STORE

29th September

2009

2007

LOCATION WESTGATE KHAN MARKET SHOPPERS STOP

RAJOURI GARDEN

NUMBER OF

STAFF

8 + 1 (Manager) 4+1 (Manager) 5

AREA 1700 square feet 700 square feet 750 square feet

KIND OF

OWNERSHIP

Franchisee Franchisee Company owned

SEGMENT Premium lifestyle

brand

Premium lifestyle

brand

Premium lifestyle

brand

Table 1.1


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Westgate Tommy Hilfiger

Khan market Tommy Hilfiger


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Competitor Esprit


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CHAPTER-2

STORE GROWTH


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A set of quantifiable measures that a company or industry uses to gauge or

compare performance in terms of meeting their strategic and operational goals.

KPIs vary between companies and industries, depending on their priorities or

performance criteria. Following are the KPIs, which a store calculates to knowwhere do they stand, and are they meeting to their set standards or not.

1) SELL THROUGH:

Sell through is very useful in evaluating item performance as it provides a

composite measure of sales and inventory. In most cases sellthru for an item is

compared in recent periods like current week and last week, as well as in

aggregate across several months or even a year. A higher sell through value

reflects sales velocity as sterling. The formula applied to calculate it is:

2) SALES PER SQUARE FEET:

A popular sales metric used in the retailing industry. Sales per square foot are

simply the average revenue a retail business creates for every square foot of

sales space. The formula applied to calculate it is:

3) LIKE TO LIKE GROWTH:

The Growth of current year as compared to last year.

% Of Unit Sold= Unit Sold/ Unit Bought

Sales / Total Area Of Store

(Current Year Last Year / Last Year)*100


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4) MONTH ON MONTH GROWTH:

Table2.1

TOMMY HILFIGER

WESTGATE

TOMMY HILFIGER

KHAN MARKET

COMPETITOR

ESPRIT

TARGET- AUG11 25,00,000 30,00,000 16,00,000

SALE- AUG11 33,10,000 35,00,000 14,00,000

%TARGET

ACHIEVEMENT

132% (over

achievement)

117% (over

achievement)

88%

SALE- AUG10 29,60,000 20,00,000 18,00,000

LIKE TO LIKE

GROWTH

12% 75% (22%)

SALE- JULY11 22,00,000 18,00,000 13,00,000

MONTH ON MONTH

GROWTH

50% 94% 8%

SALES PER SQUARE

FEET

1947.06 5000 1,867

SELL-THROUGH %

(Current Month Last Month/ Last Month)*100


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As stated in table 2, Like To Like growth of Tommy Hilfiger at Westgate is 12%

whereas at Khan Market it is 75%. The sales for Aug 2011 of Khan Market is

more than that of Westgate. The reasons for a huge difference to it are as follows:

1) Westgates Tommy Hilfiger focuses on selling HIGHPRICE products i.e., theirAVU is higher. It implies, they sell high priced products on each bill.

2) Khan Markets store is 4 yrs old whereas Westgates store is just 2 yrs old. So,according to us it will take time to reach the level where khan market is

already running.

3) Khan markets sale has increased tremendously in the year 2011 ascompared to Westgate. There is a major reason behind it as in West Delhi 2

more Point Of Sales were affixed which were Pacific Mall, Tagore Garden &

Tommy Hilfiger at Shoppers Stop which had the same target market but got

distributed amongst the 3 different stores, which became a reason of

Westgates De-growth. At Khan Market there are very few competitors of

Tommy Hilfiger so, their like to like growth is higher than that of Westgate.

As stated in table 2, Month on Month growth of Tommy Hilfiger at Westgate is

50% whereas at Khan Market it is 94%.

1) The stock rotation at Khan Market is faster than that of Westgate. As khanmarket keeps less of merchandise and that to be Low Price Products so it is

more than that of Westgate.

2) It happened due to a seasonal revamp.


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KHAN MARKET

WESTGATE


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KHAN MARKET (SALES IN LAKHS)

WESTGATE


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CHAPTER-3

KEY PERFORMANCE INDICATORS


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1)AVERAGE TRANSACTION VALUE (ATV):

The average transaction Value is calculated by dividing the Value of alltransactions by the number of transactions on a daily, weekly, monthly, or

annual basis.

2)AVERAGE VALUE UNIT:

3) CONVERSION:

This is the percentage of visitors who comes to the store and actually

buys the product. It is the percentage of bill made from footfall.

4) Unit Per Transaction

Total number of units sold in a given period divided by the number of

customers or transaction for the same period.

Total Sales / Number Of Bills

Total Value / Quantity

Bills / Footfalls * 100

Quantity / Bills


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Table 3.1

As stated in table 3.1, conversion rate of Westgates Tommy is 30% whereasin Khan it is 54%.

1) When we look at the footfalls of Westgate it is 5290, which is muchmore than that of khan, which is only 2005. But bills made at

Westgate are less than that of khan, which is 1003 at Westgate, and

1087 at khan. So to conclude this we think that people who are

TOMMY

HILFIGER

WESTGATE

TOMMY

HILFIGER

KHAN MARKET

COMPETITOR

ESPRIT

SALES- AUG11 33,10,000 35,00,000 14,00,000

BILLS- AUG11 1003 1087 660

QTY- AUG11 1805 1717 2,640

FOOTFALL-

AUG11

5290 2005 1650

ATV 3300 2589 2,121

UPT 1.8 1.5 4

CONVERSION 30% 54% 40%

AVU 1833 1695 530


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entering khan market store have a high Purchasing power than that of

Westgate and whosoever enter do buy a product. So there is a high

conversion rate at Khan Market.

2)

In West Delhi there are 3 Point Of Sales, which reduces theconversion rate at Tommy Hilfiger, Westgate whereas at Khan Market

it faces less competition as there are very few brands who are major

competitors.

As stated in table 3.1, Average Transaction value of Westgate is higher thanthat of khan market because in Westgate the number of units bought is more,

which is high price. There the merchandise is more as compared to khan

market, whereas in khan market number of units bought is less. Westgates

Tommy Hilfiger focuses on selling HIGHPRICE products i.e., their AVU is

higher. It implies they sell high priced products on each bill. Khan Markets

ATV is 3300 and Westgates is 2589. Westgates ATV is higher because its

UPT & AVU which is unit per transaction and average value per unit

respectively. Westgate sells more units per each transaction as compared to

that of Khan Market.

So, to summarize we think that if khan market wants to increase their

ATV, they can increase their sale for impulsive products.

As stated in table 3.1, Unit Per transaction of Westgate is higher than that ofkhan market, because the quantity sold on each bill at Westgate is much more

than that of Khan Market, which also leads to an increase in Higher Average

Value per Unit.

As stated in table 3.1, Average Value Per Unit of Westgate is1833 and of KhanMarket it is 1695. The reason for a higher AVU at Westgate is because they

are selling products at a higher price as compared to Khan Market.


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OPPORTUNITY LOSS

The value of a lost chance or a potential profit that was not realized because a

course of action was taken that did not permit the investor to obtain that profit.

It is reckoned as follows:

Highest unit per transaction (UPT) value * Average Value per Unit (AVU)= Average Transaction Value (ATV).

ATV * Quantity = Value

Sales = Bills * ATV

Steps to identify opportunity loss/ Performance

1) Check conversion2) Check Average Transaction Value3) Check Unit Per Transaction4) Check Average Value Unit.

TOMMY HILFIGER

WESTGATE

TOMMY HILFIGER

KHAN MARKET

AVU 1833 1695

UPT 1.8 1.5

ATV 33,00 2589

DESIRED ATV 3300 3051

OPPORTUNITY

LOST

462


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Westgate Tommy store is a benchmark for khan market. Therefore, if average

value per unit of khan market is multiplied with the highest UPT, the desired

ATV is obtained.Hence, khan market loss the opportunity by 462.

RENT FEASIBILITY

The sale per square feet data is most commonly used for planning inventory

purchases & is used to determine rent on a retail location. So for each square feet

how much inventory should be purchased keeping in mind the rental for each

square feet is very vital.

TOMMY HILFIGER

WESTGATE

TOMMY HILFIGER

KHAN MARKET

Rent per square feet Rs.300 Rs.888

AREA 1700 square feet 750 square feet

TOTAL RENT Rs.510000 Rs.666000

TOTAL SALES Rs.3310000 Rs.3500000

Rent percentage in

terms of sale

15% 19%


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And in general, rent should never exceed 15% of the total sales. Therefore,

Tommy Westgate is more financially viable than Tommy Khan market. Also,

COGS is 40% for the stores of Tommy Hilfiger. Therefore,

COST OF GOODS SOLD 1324000 1400000

MARGIN

(SALES-COGS)

1986000 2100000

Profit

(Margin-Rent)

1476000 1434000

From the above, Tommy Westgates profit less rent is higher than that of khan

market, which means that Westgate store as compared to the Khan market store

is doing really well.


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CHAPTER-4

SPACE ALLOCATION & PRODUCTIVITY


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It is the amount of shelf space in a retail outlet, reserved for display of a product.

Sales per Linear Foot of Shelf Space is calculated to know the wall units of a retail

store and other shelf space which it might want to use to determine a product orproduct category's allotment of space.

It depends upon the following factors:

1) Footfalls: The ratio of men to women in a store reflects in the salescontribution as well. Hence, while allocating space the gender receiving

higher percentage of footfalls is given due importance while space

allocation. For Tommy Hilfigers both the stores the due importance is

given to MEN. This brand is men dominated. In Khan Market footfalls is

2005 and in Westgate it is 5290.

2) Sale Contribution: it affects the buying budget and the gendercontributing maximum percentage in sales is bought a lot more as

compared to the other. Hence, space required to display that product is

more.

3) Benchmark: Many a times brands have standard figures in terms ofspace allocation for different product categories.

Total Net Sales / Linear Feet Of shelving =

Sales Per Linear Feet


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CALCULATION OF LINEAR SHELVING OF KHAN MARKET

KHAN MARKET MEN WOMEN DENIMS

Number of walls3 3 1

Wall sizes

1.4ft * 8ft

2.10ft * 8ft

3.8ft * 8ft

1.4ft * 8ft

2.10ft * 8ft

3.2ft * 8ft

1.4ft * 8ft

Linear shelving

4ft * 6

Total: 24 linear ft.

10ft * 15


8ft * 12


4ft * 6


10ft * 15


(2ft * 5)


4ft * 6

Total: 24 linear

ft.

TOTAL LINEAR

SPACE

270 linear ft. 184 linear ft. 24 linear ft.


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LINEAR SHELVING OF KHAN MARKET

1.Total sales: 35,00,000

2.Total linear space: 478 linear feet

3.Sales per linear square feet of shelving: Rs7322.17 per linear feet

KHAN

MARKETMEN WOMEN DENIMS

TOTAL LINEAR

SPACE

270 linear ft. 184 linear ft. 24 linear ft.


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CALCULATION OF LINEAR SHELVING OF WESTGATE

WESTGATE MEN WOMEN KIDS BAGS

Number of

walls

5 3 2 1

Wall sizes

1.10ft * 8ft

2.8ft * 8ft

3.8ft * 8ft

4.10ft * 8ft

5.10ft * 8ft

1.8ft * 8ft

2.8ft * 8ft

3.10ft * 8ft

1.10ft * 8ft

2.4ft * 8ft

1.8ft * 8ft

Linear

shelving

10ft * 17

Total: 170 linear ft.8ft * 12


8ft * 12


10ft * 12


10ft * 12Total: 120 linear ft.

1.8ft * 10

Total: 80 linearft.

1.8ft * 10

Total: 80 linear

ft.

1.10ft * 14

Total: 140 linear

ft.

1.10ft * 19

Total: 190linear ft.

1.4ft * 10

Total: 40 linear

ft.

1.8ft * 12

Total: 96linear ft.

TOTAL

LINEAR

SPACE

602 linear ft. 300 linear ft. 230 linear ft. 96 linear ft.


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LINEAR SHELVING OF WESTGATE


2.Total linear space: 1228 linear feet

3.Sales per linear square feet of shelving: Rs2695.43 per linear feet

WESTGATE MEN WOMEN KIDS BAGS

TOTAL LINEAR

SPACE

602 linear ft. 300 linear

ft.

230 linear

ft.

96 linear ft.


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ESPRIT- SPACE ALLOCATION


2.Total linear space: 160 linear feet3.Sales per linear square feet of shelving: Rs8750 per linear feet

TOMMY

HILFIGER

WESTGATE

TOMMY

HILFIGER

KHAN

MARKET

ESPRIT

Sales per linear

square feet of

shelving

2695.43 7322.17 8750

Area 1700 sq ft 700 sq ft 750 sq ft

Total linear space 1228 478 160


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CHAPTER-5

RECOMMENDATIONS


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1. Khan market Tommy Hilfiger store should more sell its high pricedproducts that is should increase its average selling price so as to increase

its profit margin.2. Also to increase the footfalls, khan market store should more focus on its

window display also the visuals of the store so as to attract customers.

3. Khan market store should also keep limited women bags. They can docolor segmentation for their merchandise. That is store can maintain

same colored bags with the same looking merchandise.

4. Tommy Hilfiger as a whole can attract more customers by providing themwith more. They can do photo shoots which will lead to higher footfalls,thereby leading to more sales.

5. Khan market store should increase its merchandise for men as Tommy isa men centric store.


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REFERENCES

Tommy Hilfiger Westgate and khan market Simar Kaur Westgate mall Neha Khan market www.google.co.in

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