dressbarnA STRATEGY FOR SUCCESS

Debra Lee Cipolla

Jessica Dzienius

Naoko Ishikawa

Yanine Veliz

FM 422-705 Merchandising Strategies

1. Current Assessment2. Financial Overview3. Financial Strengths4. Financial Weaknesses5. Statement of Strategy6. Substantiation7. Goal8. Benefits for dressbarn9. Setting the Financial Goal10. Merchandising Issues11. Implementation12. Conclusion

Outline

Current Assessment Dressbarn is a specialty retailer allowing a

woman to be able to dress fashionably without breaking their budget.

The wide selection of contemporary fashion pieces from sizes 4-24 targets women between 35 and 54 years of age, who are balancing careers and families.

The nationwide store locations within strip malls that require a cheaper rent is an advantage for them to lower the operational expenses.

The locally-based locations help provide a quality service and convenience to their shoppers.

Financial Overview

Financial Strengths

Dressbarn’s performance in annual sales was an increase of 3.5%, which exceeds industry norms and their own past performance

Comparable- store sales had a 10% increase Net Profit is 0.7% above the industry norm

and exceeds that of their competition

Financial Weaknesses

Dressbarn’s Operating Expenses (S, G,&A) is at 28.3%, which is 3% higher than the industry norm.

Inventory turns at 4.73 times, which is lower than the industry norm of 6.13 times and lower than that of its competitors’ inventory turns.

Financial Measure

dressbarn Performance

Period: July 2009

Benchmark: dressbarn’s

Past Performance Period:

July 2008

Benchmark: Competitor #1 Ann Taylor

Period: Jan 2009

Benchmark: Competitor #2

New York & Company, Inc.

Period: Jan 2009

Benchmark: Industry Norm

Apparel Specialty Chain Stores

Period:Jan 2008

S,G, & A 28.3% 27.5% 52.9% 27.2% 25.3%

Inventory Turns

4.73 times 4.74 times 4.93 times 8.66 times 6.13 times

Financial Weaknesses

Statement Of Strategy

By intensifying petites size for career wear from

9% in 2009 to 11.4% in 2010, Dress Barn will be

able to improve its annual gross margin from

38.5% in 2009 to 39.4% in 2010 as well as

increase their inventory turn from 4.73 in 2009

to 6.13 in 2010. In turn, this will increase

dressbarn's sales to $996.1M from $970.0M.

Substantiation: Demographic Data

• Today about 19 million, 43% of women age at 35–54 are

categorized as petite. (US Census Bureau) • Since current petite retailers accounts for only 23%,

4.37million, the remaining 14.6 million, 77% are our new potential market in addition to the existing one. (Mintel)

Substantiation:Petite is a Growing Market

• According to Mintel, the petite market has been increasing and is expected to grow an average of 2.4%.

• This substantiates our reasoning for intensifying DB’s petites section from 9% to 11.4%.

Kohl’s extended petite and plus-sizes to two of its fashion-forward private labels: apt. 9 and Daisy Fuentes. (Mintel)

Banana Republic launched five stores, targeting petite women exclusively. Additionally, the retailer extended the full-line of petite clothing to 26 of their stores in the same year. (Mintel)

According to Mintel, there are around 43% of women in the U.S. that could be categorized as petite, which is 5’4’’ or shorter frames. Moreover, Mintel’s exclusive survey states that petite clothing was

only purchased by 23% of the respondents.

One in two respondents report that there are not enough stores that carry petite clothing. (Mintel)

As stated by the EVP of Merchandising for Dress Barn, only 400 stores carry petites while close to all of Dress Barn stores (837) carry career wear. That is 400 stores that do not cater to a significant demographic, which aids to loss of business. (Keith Fulsher)

Substantiation:Petite is a Growing Market

This will increase petite sales from $87.3M to $113.4M, which will add to an overall $26.1M increase in dressbarn’s total sales. Gross margin

To offer a wider selection of merchandise for petite career women. Inventory turn

To reduce out-of-date fashions in petite casual and special occasion, and replace with contemporary career-wear. Inventory turn

Better availability of sizes, buy more items. Gross margin and Inventory turn

In increasing percentage of petite sizes for career wear, a wider demographic of women will be attracted.  

Goal

If petite career wear is increased, customer traffic will increase.

The 43% of women, who are petite but do not shop accordingly, will be more compelled to shop at dressbarn for their career wear.

By offering more fashionable petite career-wear:1. Build a stronger customer loyalty2. Reinforcement of brand.

Women will look to dressbarn for their professional wardrobe while remaining on a budget.

Benefits for dressbarn (1)

A cleaner, direct sales floor1. Assessed that the petite’s section was over

saturated with casual wear, in which the career wear had a little to no chance of being noticed.

2. Career-wear only occupied a small fixture of out-dated professional fashions.

3. Thus, if career-wear was emphasized the selling floor would have a distinct direction and less out-dated fashions.

Benefits for dressbarn (2)

Petite CategoriesWithin 9%

(Before 2.4%

Increase)

Within 11.4% (After

2.4% Increase)

Casual-Wear 5% 5%

Special Occasion 3% 3%

Career-Wear 1% 3.40%

Total Percentage Penetration 9% 11.40%

Setting The Financial Goal

Before

Dress Barn Petite Sales 9.00% $87.3M

Dress Barn “Everything Else” Sales

91.00% $882.7M

Total Dress Barn Sales 100.00% $970.0M

After

Dress Barn Petite Sales 11.40% $113.4M

Dress Barn “Everything Else” Sales

91.00% $882.7M

Total Dress Barn Sales 102.40% $996.1M

Dollar Amount Increase

-$970.0M

$26.1M

Financial Outcome

Career wear selection was lacking One fixture contained all five merchandise

categories of career wear. Dresses didn’t seem to be selling well

because of the poor assortment

Merchandising Issues

Career Wear-Petite Merchandise Classification

Classification Talbot's Ann Taylor

dressbarn

Average of Market Leaders

Trousers 15% 17% 10% 14%

Jackets 10% 17%

30% 19%

Skirts 15% 17%

10% 14%

Tops 25% 35% 30% 30%

Career Dresses35% 14% 20% 23%

Total 100% 100% 100% 100%

A balanced merchandise mix for business attire

The selection of items must be versatile and easy for styling.

Using Talbot’s and Ann Taylor as our benchmark1. Each merchandising category will be the

average percentage between the two competitors.

Increase the penetration for trousers

Goal within the classification

Petite Career Wear Merchandise Classification Proposal

Classification Talbot’s Ann Taylor Dress Barn Today

Dress Barn Proposal

Trousers 15% 17% 10% 16.0%Jackets 10% 17% 30% 13.5%Skirts 15% 17% 10% 16.0%Tops 25% 35% 30% 30.0%

Career Dresses 35% 14% 20% 24.5%

Total 100% 100% 100% 100%

ClassificationDress Barn

Today

Dress Barn

Proposal△%

Change

Trousers 10% 16.0% 6.0%Jackets 30% 13.5% -16.5%Skirts 10% 16.0% 6.0%Tops 30% 30.0% 0.0%

Career Dresses 20% 24.5% 4.5%Total 100% 100%

Petite Career Wear Merchandise Classification Proposal

Key Item

1. Talbot’s increased their petite selection of pants in light-weight fabrics in its Fall Collection.

2. Our store research at New York and Co., Inc.(100% of Trousers within their petite classification) proves the necessity of increasing volume of trousers.

Substantiation for Increasing Trousers

Step One: Allocation Adding 60 stores to carry the petite carrier collection in

addition to our existing 400 stores.

* The benchmark’ store ratio is Talbot’s, which carries its petite collection: 55%=290/535stores.

As a result, 55% among 837 stores is 460 dressbarn stores that can carry the petite collection.

Implementation

Today, dressbarn Petite Career Assortment is very limited

Step Two: The Product

Trend Research for Career Wear The career-wear selection is not selling because of the

lack styles that are offered. After visiting the store, we observed that most styles offered were bland and lack variety of silhouettes and colors.

If a variety of silhouettes were implemented into the selection, as well as a broader range of colors, more women would be attracted to this section.

Implementation

New Style Suggestions:Easy Styling and Versatile

“Trousers” Key item

New Style Suggestions:More Choices to Look Trendy ShirtsJacket SkirtsDresses

Trend Research: Key ColorsPetite Career Collection for Next Season

o The collection is primarily produced in basic colors: black, white, gray, beige, navy, and brown.

o Therefore, key colors were carefully chosen by seasonal trends.

(STYLE SIGHT Trend Board: S/S11 Key Colors)

Step Three: Merchandising Strengthen the window display for promoting the career collection. Once the selling floor has been re-evaluated and seasonal

styles/colors have been selected, Dress Barn can effectively remodel their Petites’ section.

Implementation

* Bring the petite career collection up to the front of the section.

Aisle

Register

Petite

Career

Entrance

MissySpecial Occasion

Step Four: Sales Promotion/MarketingTo improve the inventory turn, developing a

personalizedsales promotion is essential.

Using social networking such as Facebook, dressbarn has 22,164 members. They can offer personalized sales promotions in real time to these fans.

Interactive Marketing: Developing the fan photo section to make dressbarn’s homepage more interactive such as Burberry’s “Art of The Trench.”

Implementation

What is on their Facebook now?“Fan Photo”

Go beyond the Fan Photo!

ProposalMore interactive Homepage

“Post Your dressbarn style”

Once all facets of intensifying petites size for career wear are addressed, this will hopefully generate an increase of 2.4%. Subsequently, Dress Barn will be able to improve its annual gross margin from 38.5% in 2009 to 39.4% as well as increase their inventory turn from

4.73 to 6.13times in 2010.

Conclusion