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EXECUTIVE SUMMARY Introduction The fashion industry has had revenue of $38,000 million in the year 2009. In the past, women have been reluctant to rent but the recession has changed the purchasing power of many. The clothing rental industry’s growth has been driven by this recession and women who still want to wear designer brands. A gap in the industry is the lack of designer clothing available for women to rent. Designer Rentals will fill that gap by creating a user friendly website that focuses exclusively on fashionable women. Company Description Designer Rentals will begin as a web accessible business that will develop into a store front business. The merchandise will be stored and delivered out of Los Angeles. The urban city of Los Angeles is an ideal location for the business- the garment district is close and young professionals are the majority of the population. The business will feature as assortment of clothing from casual wear to formals and will be available in a broad range of sizes. There will also be customer assistance and personal shopper options once the store is opened. Fashion is a volatile industry and it is a unique challenge for the business to maintain merchandise to meet each customer’s style. It requires a knowledgeable management team to purchase the necessary merchandise and remain competitive by understanding customer needs. As result we will provide customers with (1) high quality merchandise, (2) a broad range of sizes in all departments, and (3) website assistance and online personal shopper recommendations. Industry Analysis Designer Rentals will compete in the “ Formal Wear and Costume Rental in the US” (NAICS 53222). The industry is in the mature stage of the life cycle. This industry is
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very fragmented and is dominated by formal wear rentals for men, which is not our competition. The rental women has only 14% of the market share and we will not be faced with numerous corporate competitors. Growth is being driven by the recent recession as well as the need to dress appropriately for different occasions at an affordable price. The industry’s biggest challenge will be seasonal merchandise and availability of sizes provided by department stores. The industry is competitive. The key success factors include the ability to control stock on hand, the economies of scope, being part of a franchise team, economies of scale, and maintenance of excellent customer relations. Market Analysis Designer Rentals trade area will be Los Angeles County, CA. In Los Angeles County there are 4,815,233 women, and 50% of them are aged between 15 and 50 years old, it makes 2,407,616 people in the target market. We estimate that approximately 1% of women rent clothing in LA County once a year, the average cost of renting is $200, so the total size of Designer Rentals target market for 2010 would be $9,630,466. Marketing Plan
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