Cheap Clothes and its Effects Shopping for clothes is a part in American people's lives. When a holiday is coming, people rush to the shops for clothing on sale. Cline, the author of the book "Overdressed: The Shockingly High Cost of Cheap Fashion," said that in 1991, people bought about 38 pieces of clothing per year, but right now the number has increased to 68 and the number the pairs of shoes are 8. The demand for purchasing clothes increase day by day, especially the demand for low- priced clothes. However, just a few numbers of people know about the consequences behind those cheap clothes.
Kohl’s Corporation versus JC Penny Corporation The retail climate in America has been especially weak this past year with little economic information forthcoming to change the downward direction of sales at most retailers. Especially challenged are the so-called mid-tier retailers named such as they sit between the discounters like Target and Wal-Mart and upper end department stores such as Macy’s and Bloomingdales. Two of the leading mid-level retailers in the U.S. are Kohl’s and JC Penney’s. In attempt to determine which one of these corporations is set to not only withstand, the current economic downturn but poised to enhance their market share. Within the last year JC Penny Corporation reached a 52 week high of 54.74 per share, while Kohl’s Corporation stock reached as high as 56.00.
Laura Ashley is a global clothing and furnishings retailer based in the United Kingdom. They had grown at a very fast rate from operating 231 retail stores in 1986 to 481 stores in 1990. Unfortunately, its profits were not increasing as expected due to the inefficiency of its logistics management. Overall, it could be considered that the company grew too fast and without the infrastructure to support the growth. Information technology investment was also considered to lag behind the level that was required to initially support the growth and also to support the company in their ongoing global operations.
High unemployment and underemployment remains an important long-term challenge. The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force in March 2007, boosting investment and exports and reducing losses to the Asian garment industry. In the middle of 2008, however, the Dominican Republic's economy started slowing after several years of strong GDP growth, as the global recession had a significant negative impact on tourism and remittances. The financial crisis and the US recession caused GDP to dip in 2009. The information is mostly updated until 2009, but that doesn’t matter too much, as long as the information is correct and I assure you it is.
Shoes, athletic (except rubber or plastics soled with fabric upper), manufacturing. Vinyl upper athletic footwear manufacturing. Friday, February 24, 2012 2 Major Economic Characteristics of the Industry • Billion dollar industry • This market is beginning to decline somewhat, however experts expect there could still be some small bursts of growth occasionally. • Characterized by having a small number of large players. Friday, February 24, 2012 3 Industry Driving Forces • Fashion trends (+) • Change in society (healthy lifestyle) (+) • Changes in consumer sports preferences (sport popularity) (++) • Changes (rise) in manufacturing costs (--) Friday, February 24, 2012 4 5 Forces Model Substitute Products (of ﬁrms in other industries) M Suppliers of Key Inputs M Rivalry Among Competing Sellers Buyers S W Potential New Entrants Friday, February 24, 2012 5 W 5 Forces Model: Rivalry STRONG • Strong because industry is shrinking in the U.S. •
However, the company is not doing well financially today, due to the financial crisis of 2008. General Motors was founded by William Durant, the leading manufacturer of horse-drawn vehicles, September 16, 1908, and GM held the Buick Motor Company (GM). During the acceleration period of 1910-1929, GM started the innovation of marketing, design, and production (GM). After World War II, consumers were eager to buy more goods, and this brought more optimists to GM, and therefore, the sales were increasing (GM). From 1960 to 1979, society was concerned about environmental changes; however, GM responded to the concern by creating engines that could “run on low lead or unleaded gasoline” (GM).
Supplier Power (SIC 3861) is low. Equipment components are specialized and likely not many customers. Threat of Substitutes is medium/high due to many options including theme parks, sporting events and live theater. The cost of these substitute products may be prohibitive to many if consumers enjoy movies due to their relatively low cost. Rivalry Among Existing Firms (SIC 7812) is low.
Reed’s executives attributed decline in sales in last five years to encroachments by superstores & warehouses. Because of Reed’s emphasis on the quality & service, customers perceive its prices to be high & same was endorsed by a study. Because of higher prices & its full service offerings, Reed’s average value per transaction was higher than the national supermarket average. There are many competitors in the Columbus market which had different positioning as compare to Reed supermarket. The details of major competitors are as follows, a) Delfina was considered high-end & had 9.58% market share b) Galaxy Chain had medium-end products, was poorly located & marginally profitable.
Such a decline (and such a low percentage) indicates that management is not efficient in employing the company’s assets to make a profit. Also, the Return on Capital Employed had an even more significant decline – from 15.6% in Year 12 to (29.9%) in Year 14. This indicates very poor performance for FBN. In order for FBN to become profitable (efficiently, that is) ROCE should be higher than the rate at which the company borrows. In FBN’s case, their long-term debt ratios alone are 55.7% and 81.5% in years 12 and 13, respectively (and they’ve incurred interest rate increases); and ROCE in the same two years is 15.6% and 6.4%.
Premium Denim industry overview The origin of denim jeans had place in 1874, but the premium jeans concept was popularized by Calvine Klein in late 1970’s. Since then premium denim market has been encountered alternately sales growth and slowing down following fashion trends changes, but remains until today highly fragmented industry. Currently Porter’s 5 forces model of premium denim industry is characterized by low entry barriers as there is low initial capital required and high margins and returns. That’s why even if this sector is already saturated, still encounters new players entrances. Bargaining power of denim fabric suppliers is low due to the low margins and intense competition.