Business Proposal By: Laura Matzel

Betwixt Business Proposal Company Overview Betwixt is a sub-brand sold at the 15 highest performing Gap adult stores in the US. It offers pre-teens ranging in age from nine to 14 basic, yet fashion forward, clothing at a moderate price point. Betwixt carries an array of product assortment and prices, including tanks for $12.50 and jackets for $88.00. Through research and first hand experience, I identified a need to offer tween products. The Betwixt sub-brand meets the consumers’ needs and adds to our market share. Betwixt strives to do this in a convenient, friendly and basic, yet fashion forward, way. Mission Betwixt views its mission as providing the tween market with the latest styles at an affordable price. Being a part of Gap Inc. motivates our company’s culture to grab onto this niche market and gain more loyal customers than ever before. Adding Betwixt to our brand, fills the current void in the market and creates brand loyalty. Customers will see Gap Inc. as a lifestyle brand that accommodates all ages and both genders. Inspiration: As a Gap employee, my coworkers and I have listened to what our customers are asking for that we currently do not offer—clothes for their tweens. At least three times a week, loyal customers come to the store with their tweens trying to force fit them into our adult or kids products. Because we do not offer clothes specifically for this age group, we are losing sales to our fierce competitors even though they are not marketing towards this demographic. By offering products for this niche market in select Gap Adult stores, we can reach more consumers and gain more of the market share to further the growth of our company as a whole. Competition Baby Gap and Gap Kids offers products to the vast children’s market. However, we do not offer and products to these children as they transition into teenagers. This preteen market has proved to be a very profitable area that Gap Inc. is missing out on. In this short time span between young children and teenagers, tweens are forced to shop at stores other than Gap. The problem with this is that those who grew up with our brand are being exposed to our competitors such as Abercrombie, Hollister, American Eagle, Aeropostale, H&M, Justice, Forever21, Target, Walmart, & Kmart. This in return pulls them away from our market share and creates the challenge of bringing them back to our Brands. Competitor Advantage Customers are regularly shopping at both Gap Kids and the Adult Gap, trying to find clothes for their transitioning children. But by not offering the proper sizes and styles for tweens, we are missing out on a profitable opportunity. Adding Betwixt to our Adult Gap stores will create the following advantages over our existing competitors: Filling a void in the retail market with basic, yet “cool” and fashion forward, clothing—specifically targeted towards tweens and their parents. We will continue meeting our

customers’ needs by focusing on comfortable, quality, stylish and trendy merchandise all at a moderate price point. We will stay ahead of the competitors and gain a share in the market with great customer service and being customer obsessed. Target Market Betwixt is a niche market catering to tweens and their parents. This gives us the opportunity to capture the market and capitalize on it, unlike our competitors who don’t even classify tweens in their market share. Tweens are defined as an age group in between children and teenagers, ranging in age from nine to 14 years old. Our target market consists of mature tweens trying to fit in with the crowd and keep up with trends such as style and technology. Their lifestyle consists of attending middle school, playing sports and following fashion, celebrities and music. They also love texting, playing video games and surfing the web. It is crucial for us to target this demographic and gain market share by offering our current customers what they have been looking for for years, which is stylish clothing between Gap Kids and Adult Gap in size and style. Our target market is looking for a lifestyle brand that can accommodate each gender and all ages, including tweens. Strategic Position We will strategically introduce Betwixt by targeting all of our Gap flagship stores along with our 10 top performing Gap adult stores that are adjacently connected to the Gap Kid stores in the US. The flagship stores are as follows: The Flood building in San Francisco, 54th & 5th in New York City, 34 & Broadway in New York City, and Michigan Ave in Chicago. In addition to rolling out this new sub-brand to the above free standing stores, we will also carry a small selection of Betwixt merchandise on Gap.com. Once we are able to collect data from the stores carrying the new line, we will perform monthly evaluations through customer and employee surveys. The gathered feedback will provide necessary information for making smart changes to promote the growth of Betwixt. This niche market has been ignored for too long and the tween market is strong and growing. Market research shows a need for Betwixt ; it is a way to answer our customers’ call for an inexpensive, convenient and fashion forward tween clothing line. Gap would not only be acknowledging the needs of loyal customers but also creating more opportunities to turn consumers into customers. Market Size According to MarketResearch.com, the US has over 25 million tweens with an average income or, rather, allowance of $80 per week. Overall, this market is worth $45 billion dollars and growing. Marketing Unlike our competitors who use risky marketing campaigns to gain the attention of consumers, Betwixt will follow Gap’s formula of offering quality merchandise and great customer service to build a loyal customer base. Quality products sell themselves and good customer service creates an enjoyable shopping environment.

The marketing campaign includes sending postcards and coupons to other Gap Inc. store shoppers. Current Gap customers living around Betwixt launch sites will receive a special postcard with a 20% off coupon for Betwixt . Those not living around launch sites will receive a postcard introducing the new sub-brand and a coupon for Betwixt products at gap.com. To reach consumers not currently shopping at Gap, the company will advertise in tween magazines like Cosmo Girl, Teen Magazine, Elle Girl, Bee Bop and Teen People. Because our target market is tech savvy, we will utilize Facebook.com and Nick.com to post coupons, upcoming events and promotions. We will also offer a V.I.P Card for all Gap Inc. shoppers to earn reward points and coupons. Customers sign up by giving their name, address, cell number and e-mail address, which then allows Gap Inc. to collect demographic information. These V.I.P. Cards will actually provide insight on non-cardholders’ shopping habits and create a better understanding as to what the company needs to do to drive business. The cards will also allow coupons to be sent via text message and e-mail. Lastly, we will partake in local fashion shows to get the line out there for people to see. It will create a level of interaction, too, for the public to talk to representatives and one another about Betwixt merchandise!

Visual Merchandise Displays The manner in which merchandise is displayed for Betwixt is a crucial component of the over all tween experience. Stylizing our mannequins is crucial for grabbing our target markets attention. With our mannequins and marketing displays its all about layering and tweens having fun. By being consistent with our brand through visual standards, displaying of merchandise, and styling of mannequins we will continue to create a new/fresh and inviting shop that appeals to the tween market. Sales Strategy Betwixt encourages the sales of products at full cost in order to be more profitable. We also work hard on establishing an excellent alliance with our vendors and manufactures to insure simple issue solutions and great quality products at moderate prices for our consumers. Products and Services Betwixt takes on the mission of providing the tween market with great quality products at a moderate price point. This sub-brand off of Gap adult offers comfortable, yet fashion forward clothing for both girls and boys ranging in age from 9-14. Betwixt offers tweens their basic wardrobe needs with a trendy/fashion forward spin on their merchandise. Their products range in prices starting at $12.50 for tanks to $88.50 for jackets. Above all, Betwixt is a product driven company that thrives and focuses on the 5R’s in retail. The Right Products at the Right Time for the Right Price in the Right Sizes and the Right Colors for our customers.

Product Sizing/Retail Space The merchandise assortment will consist of tween sizing. To gain a market share, additional sizes will be added to the current adult denim sizes. For women we will offer Double zero, zero, and one in all lengths. For men we will offer the waist sizes in 25, 26 and 27 with lengths 26, 28 and 30. In addition to the denim expansion, we will carry the Betwixt products in two 14 x 6 feet sections. In the set up, the girl’s tween shop will mirror the boy’s tween shop. All tween sizes will be merchandised throughout their shop flow and will reflect the Gap brand image. To maximize retail space and increase profitability in the tween sections, two white bookcases will be used in each section to house merchandise in and on top of the cubbies. Merchandising Planning Chart The same merchandising-planning chart as the Gap will be used to keep with brand consistency for the flow of seasonal merchandise. The buyers will place orders for all start up merchandise four to six months prior to select stores launching the Betwixt line. Inventory Control Based on Business needs we will utilize an On Hand Updating (OHU) system to ensure that we have the right products in the right sizes and colors for our customers. Management before or after business hours will perform this action on a biweekly basis. Financial Data Monthly sales numbers were derived using our opening month—February 2012, the first of a new fiscal year. A sales increase is projected for March, April and May due to both the establishment of our retail presence, as well as a seasonal increase in foot traffic. We anticipate June and July to be slower months with more of a secondary market going on summer family vacations. For August through October, sales will trend up as parents and tweens go back to school shopping. Our November sales are up to speed with a conservative 20% increase over opening month and an addition 5% increase in December due to Holiday sales After analyzing sales data, Betwixt anticipates a 20% growth in sales for 2013 over 2012 and a modest 5% growth for both 2014 and 2015 by maximizing sales and optimizing our product offering. With operating expenses consisting of fixed expenses for the sales projected for the first five years, Betwixt can anticipate a healthy gross profit in the early years of operation and the break even point will be reached in the first half of 2012. Sales The sales projection is broken into our product category basics: Knits, Wovens, Bottoms, Denim and accessories.

The above chart shows the projected percentage per category. To ensure the percent to sales are matching company goals for the stores offering Betwixt products, managers will utilize Field Merchandising Reports (FMR) on a biweekly and bimonthly basis. There will be a company made FMR to track tween sales within each store offering the Betwixt line. Not only will this tool be used to track sales growth but it will also be used for merchandising placement to gain sales and push product. Future Growth Plan There will be a continuous need for Betwixt to sell products and fill the gap in the tween market. To promote growth, we will increase merchandise assortment in stores and online. Based on financial data and customer response, we will expand our business by strategically positioning Betwixt at the right Gap locations at the right time. Meaning, we will look at online sales to project further expansions of the line. Eventually, Old Navy will add a similar line offering tween products at an affordable price point.

Gross Margin We will continue to use the same gross margin that the Gap stores are currently using to keep up with brand consistency at a moderate price point. This is achieved by maximizing merchandise assortment, minimizing markdowns and continuing to establish loyal relationships with current vendors and manufactures in order to lower costs and increase mark-up. Risk Analysis With all retail establishments, there is a risk of a problem with the merchandise mix, which may result in unsold goods. Our initial merchandise assortment will be based on our expertise and years of experience working in retail and on data gathered from market research. After the launch of Betwixt , sales performance can be observed and adjustments can be made, if necessary, to our merchandise assortment. In order to reduce the assortment risk initially and in the future, we will work with Gap Inc. vendors and manufacturers with which we have already established a loyal relationship. Additional potential risks are natural disasters and the unexpected appearance of competition in our surrounding areas. Exit Strategy If a situation occurs where there is a lack of business for the sub-brand Betwixt resulting in a line drop, we will markdown our entire tween line week after week until most, if not everything, is gone. If merchandise is left from the sale, the remains will be sold to discount retailers.