FINANCIAL HIGHLIGHTS
· The 5-year target is 1,000,000 items per year, averaging 4000 per product, per SKU
· Average unit price: $140
· The forecasted sales in the 1st year is $36,000,000 reaching $75,000,000 by the end of the 5th year
· Annual growth of 20%
THE USE OF FUNDS
Company setup
· Offices and warehouse acquisition
· Hiring of employees
· Production of the first collection/s
· Implementation of dynamic marketing strategy, including studio time for photo & video shoot, digital presence, sponsorships, partnerships with humanitarian organizations, press, media, etc..
RISK FACTORS
The minimum risk is assessed based on the following factors:
· The business is based on high-profit margin from production to retail, which tremendously minimizes the risk
· The e-Commerce project is a worldwide operation at low operational cost
· The products will be signed and endorsed by globally renowned individuals, which promotes trustworthiness and immediate exposure
· Minimum production quantity will be maintained to avoid over-stock, decreasing depreciation and making failure probability extremely low.
MARKET STUDY
Following the footsteps of luxury powerhouse LVMH, let's take a quick look at their simple 4-factor success:
1. Decentralized organizational structure
Decisions are made by mid-level or lower-level managers, instead of the head. Each "Maison" or brand at LVMH
operates autonomously across functions and is therefore able to respond quickly.
2. Vertical integration
The group completely controls its value chains, including production and distribution. Luxury is always attached to
history and history is attached to a culture, a place, a city. This is why LVMH manufactures its top products in their place of origin.
3. Investment in innovation
To foster organic long-term growth, LVMH invests heavily on product innovations, creative teams, and initiatives
around art, discovering young, up-coming designers to keep up with the ever-changing trends.
4. A balanced international portfolio
LVMH has expanded strategically with selective retailing and via acquisitions of local luxury brands such as US brand Tiffany & Co. The approach allows the group to stay balanced without depending on a particular market.
LVMH has invested over $200B on acquisition and taking stake in others over the last 35 years.
Their equity value is over $317B reaching a turnover of $90B. Furthermore, their direct-to-retail business model insures a full margin allowing the group to devote substantial budget in marketing and communications