Final Feasibility Study

Final Feasibility Study

Pitch

Team T-Shirt offers vintage-inspired t-shirts with original designs. The t-shirts have a “retro” look, complete with faded graphics and a super-soft wash. All t-shirts feature a fitted look and feel for the funky vintage style.

The primary target customers are university students—undergraduate as well as professional. The appeal to these consumers will be the style of the t-shirts, and most importantly, the variety of unique designs offered. Consumers will be able to express themselves without sacrificing quality and originality.

Consumers will be able to purchase the t-shirts from an Internet storefront. Sales are expected to exceed 1,000 t-shirts within the first year of production through a combination of viral, guerilla and traditional advertisement-based marketing. Revenues and net income for the first of year of production will be $121,200 and $45,414, respectively. Revenues are projected to increase 25% year-over-year.

Executive Summary

The products will be 100% cotton t-shirts with unique and original designs. The supply of blank t-shirts will be procured from American Apparel. The t-shirts will feature a variety of designs ranging from college humor, adult humor, political, cultural and social satire. The underlying theme of the t-shirts will be vintage-inspired contemporary designs.

The business model will target college students as end consumers. Prototype designs will be created by an in-house research and development team (“R&D”). The designs will then be subjected to a conjoint analysis to assess their market feasibility. The conjoint analysis will capture the target segment’s preferences along various product attributes (i.e., choice of slogans displayed with multiple color schemes and multiple price points to gauge willingness-to-pay). The combination of attributes with the highest rankings will serve as a basis for production.

Customer orders will be delivered via the United State Postal Service or other competitive shipping method. Long-term strategy for growth includes contracting with boutique and specialty chain retailers to increase distribution volume.

The t-shirt industry is experiencing explosive growth with creative entrepreneurs offering products at low price points to meet customers’ needs. In 2006, the t-shirt market size was estimated at $20 billion.[1] Our first-phase target market, which include students from five universities in the Washington D.C., Virginia and Maryland area are estimated at 121,028.[2] This test market will serve as a sampling pool for our conjoint analysis in order to determine the appropriate product mix. Our customers are interested in unique fashion as a vehicle to express their individuality.

The competitors range between specialty retailers such as Urban Outfitters, mass retailers such as Target and Internet competitors such as Palmer Cash and Busted Tees. Although competitors offer a variety of t-shirts, we believe our unique and original designs will be able to exploit gaps within the current competitive space. To convey and convince prospective customers, a word-of-mouth campaign will be encouraged to publicize our consistent quality and “first-to-market” designs.

The financial projections forecast a positive net income beginning in the first year of production. We expect the business to generate positive earnings in the first year at $45,414. In years 2 and 3, the expected net incomes are $65,762 and $91,727, respectively. The burn rate for the business is low—aside from the initial setup fees of purchasing the design software at $401.70—recurring monthly fees are in domain registration, web hosting and advertising. The total expected cost of recurring monthly fees are $83.30 ($14.95+$5.95+$62.40) and will grow at an annual rate of 3% in line with the inflation rate. Our breakeven point is between 128 and 156 t-shirts. Our net present value (“NPV”) analysis points to a positive amount of $1,105,494.

Demand forecast accuracy beyond the initial launch will improve through surveys and continual refinement of our conjoint analyses based on previous sales. Our marketing campaigns will be utilized to stimulate demand and information will be gathered at the point-of-sale to fine-tune promotional efforts.

Product

The t-shirts will be printed on American Apparel’s Fine Jersey Cotton line, featuring 100% cotton construction with sizes ranging between XS and 2XL. Procurement among 37 colors will be determined by the required swatches. Both men and women’s styles will feature a slimmer cut that will flatter any body type.

The designs range between college/adult humor, political, cultural and social satire and witty taglines/slogans. In order to capitalize on upcoming trends, the R&D team will continuously perform market research to create new designs, keeping abreast of popular culture. During test market surveys, additional information will be gathered from the sampling pool to create databases which will be utilized in creating designs. The information will be a loose collection of responses to questions such as “Please describe something funny that happened to your friend(s) recently?” or “Please write five things that you associate with MySpace.” We believe that our products will be successful due to the current gaps identified in the vintage t-shirt consumer market.

To address counterfeits, we will seek legal protection to some of our designs. Admittedly, the barrier to entry in this industry is low and we anticipate “copycat” designs within a short period. We will rely on proactive R&D as a primary source of competitive advantage, instead of reactionary legal actions.

Once we establish a solid base of loyal customers who can sustain the word-of-mouth buzz, two areas will explored for related ventures. First, sweatshirts (both hooded and non-hooded) will serve as vehicle for art-based patterns and designs. Second, “trackjackets,” will offer similar patterns and designs as sweatshirts but will feature different construction (i.e., polyester/rayon versus cotton).The two product extensions will greatly differ from the t-shirt product line. The former will feature a more high-fashion appeal, making extensive use of patterns and contemporary art.

Business Model

The target customers of our venture are college students, both undergraduate and graduate. The underlying needs that these potential buyers have are: 1) the desire to express their unique individuality through fashion 2) increasing self-absorption and the resulting proliferation of consumer-generated media enabled by video-sharing and social networking websites 3) a culture of irony breeding self-deprecation as a form of self-promotion and 4) the desire to simply poke fun at things. Our purpose is to offer products that will reach the consumers’ desire for any of the previously mentioned items. Consumers who purchase and wear our t-shirts will receive gratification and realize the benefits from satisfying one of their desires.

Buyers

The t-shirt market has been exploding due to customers’ diverse needs, interests and low price points. The North American t-shirt market consumed more than 1.4 billion cotton t-shirts in 2006, with an aggregate retail value of $20 billion. It is forecasted that more than 5,000 websites would provide t-shirt products from general t-shirts to faux-vintage t-shirts. The number of websites offering t-shirts has also dramatically increased since 2005. In early 2004, there was an estimated 500 Internet stores specializing in t-shirts, however, that number has increased to 1,500 by late 2006. In total, an estimated 4,122 websites were selling t-shirts.[3]

T-shirts in general will often contain social, cultural, political and academic themes. Some groups have interesting expressions that are communicated and understood by members of the clique only, such as jargon, slang, expressions or inside jokes. Individuals are comfortable expressing themselves with printed statements because in essence, two distinct needs can be fulfilled with a single article of clothing: Desire to express oneself and a piece of clothing for Safety a la Maslow’s Hierarchy of Needs. Statements on our products fulfill the customers’ needs of establishing a social connection to their associated groups. Enjoying public gaze and newfound association, customers will continually purchase t-shirts.

The potential market size is estimated at 121,028. The size was derived from actual student populations from universities listed in Footnote 2.

Promotional activities will be executed on several fronts. First, our Internet storefront will serve as the primary vehicle to publicize our message. Indexing through popular search engines such as Google will be heavily utilized. Web advertisements on search engines and other keyword-based technology will also be utilized. Second, video-sharing and social networking websites such as YouTube and MySpace will feature our friends and colleagues who will promote our products, engaging in stunts or other consumer-generated media. Third, traditional advertisements on college newspapers such as the DiamondBack and the Daily Bruin will be leveraged to create exposure across campuses. In addition, a “street team” will be established to attend events such as Maryland Day, promoting our products with raffles, giveaways and contests.

Below is a survey data from Harris Poll Online/Datascension/Mintel in September, 2005. The survey was based on 1,211 women aged 18 and older, inquiring on their approaches toward clothing styles with the question, “Which of the following statements best describes your approach to clothing styles?”

- “I seek out and wear clothing that I feel makes me stand out from others”

- “I step out from the crowd occasionally, but usually I try not to make a statement”

- “My clothing is never a way that I make a statement”

Age	All	18-24	25-34	35-44	45-54	55-64	65+
My clothing is never a way that I make a statement (%)	43	27	29	45	49	43	55
Step out from the crowd but try not to make a statement (%)	41	44	53	39	35	42	35
Wear clothing that makes me stand out from others (%)	17	29	18	16	15	15	11

The survey illustrates that to a certain degree, consumers want to express their unique styles through fashion. Our products will target the latter two categories of consumers who wish to express themselves through unique t-shirts.

Competition

We expect significant competition within the t-shirt industry. Some of the more prominent incumbents in this space include specialty retailers such as Urban Outfitters, mass retailers such as Target and Internet retailers such as Palmer Cash and Busted Tees. Although there is significant competition, we are confident that our products occupy a gap created by the aforementioned competitors. Specifically, while all competitors are adept at creating designs with mass appeal, either based on classic popular culture or a new fad, they do not cater any of designs to a specific social group. Our aims to identify as many numerically-significant social groups as possible using surveys will exploit the underserved gap. Although the competitors may not be serving the underserved segment as of now, they certainly possess the resources to do so. We believe our two main competitive advantages are sufficient in addressing this threat: 1) Extensive groundwork provided by databases and research on social cliques and 2) Competing through speed. With the “freshest” idea on the “street” first, we will be able to stay ahead of the competitors’ product development lifecycle.

In addition to the designs, our shirts manufactured by American Apparel will be a source of differentiation. American Apparel is a Los Angeles-based garment manufacturer that is nationally known for its sweatshop-free labor. We believe that this positive quality along with American Apparel’s t-shirts which are slimmer fitting than most other manufacturers will provide us with a competitive advantage. Only a small number of competitors are offering t-shirts made be American Apparel, if any. We believe these higher quality shirts will attract customers along with its softer feel and flattering fit.

For designs that are based on subculture, the consumer is likely to get confused and become reluctant to purchase a t-shirt with an unfamiliar theme. We will minimize confusion through identifying and marketing themes found in the lowest common denominator so that there is a higher possibility of a match occurring between the consumer’s preference and the product offerings.

As previously mentioned, it is going to be difficult preventing copycats from mimicking the t-shirt designs and selling them at a reduced rate to exploit the “flavor of the month.” However, our short product development lifecycle will ensure that by the time copycats are mimicking the designs and going to their silkscreeners, we would have completed multiple print runs on the same design and will also be going to the silkscreeners—but with a brand new design. This “one step ahead” approach will ensure that we fully exploit our original ideas with a complementary ability to compete on speed.

Financials

We expect the business to generate positive earnings in the first year at $45,414. In year 2 and 3, the expected net incomes are $65,762 and $91,727, respectively. The projections are highly sensitive to sales projections and estimated growth rates. We will require extensive market research and target consumer surveys to gather more information to substantiate our estimates and assumptions.

As we are an Internet outfit, the burn rate for the business is expected to be nominal. Aside from the initial set up fees of purchasing the design software at $401.70, recurring monthly fees are in domain registration, web hosting, and advertising. The total expected costs of recurring monthly fees are $83.30 ($14.95+$5.95+$62.40). Additional expenditures such as capital improvement projects will be primarily for technology upgrades (hardware and software).

Based on out cost structure, our expected breakeven units are between 128 and 156 units depending on the types of t-shirts. The breakeven number is sensitive to the sale price of the t-shirts. Although we have a uniform price of $20 per t-shirt, we may modify the price to reflect changing variable costs of printing t-shirts with differing characteristics and attributes. We expect to breakeven in the first year, but will only be confirmed of the time horizon when the first production runs are offered to the public. Sales trend analysis of the first production run will provide us with a better insight into the market demand, allowing us to make adjustments to any of our strategies. Moreover, given our minimal fixed costs, the sales volume has a great impact on the estimated time required to reach profitability.

Our ideal exit strategy is to be able to grow the company and add to the product scope by two extensions as previously described. Eventually we plan to sell the company for at least $1 million.

We forecast the venture to have positive NPV. As a caveat, continual refinement of key variables and assumptions such as estimated sales units and growth rates (revenue and expense) will be required to substantiate the forecast.

Pro Forma Income Statement 2007
Projected Revenue Growth	25%
Projected Cost of Goods Sold Growth	10%
Projected Expense Growth	3%
Tax Rate	15%
	2007	2008	2009
Net Sales Revenues:
Sales Revenues	121,200.00	151,500.00	189,375.00
Cost of Goods Sold:	(66,477.20)	(73,124.92)	(80,437.41)
Gross profit on sales	54,722.80	78,375.08	108,937.59
Operating expenses:
Selling expenses	(493.40)	(508.20)	(523.45)
Depretiation and amortization	(801.70)	(500.00)	(500.00)
Income from continuing operations before income taxes	53,427.70	77,366.88	107,914.14
Income tax expense	(8,014.16)	(11,605.03)	(16,187.12)
Net income	45,413.55	65,761.85	91,727.02

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[1] Men’s Clothing – US – November 2005. November 2005. Mintel. 7 May 2007

[2] The University of Maryland, Georgetown University, George Washington University, University of Virginia and Virginia Tech.

[3] T-Shirts Forums. 7 May 2007.

Draft Feasibility Study

Pitch

Team T-Shirt offers vintage t-shirts with original designs. The t-shirts have a “retro” look, complete with faded graphics and a soft vintage wash. All t-shirts offered by Team T-Shirts feature a fitted look and feel for the vintage style.

Team T-Shirts’ primary target customers are university students—undergraduate, graduate, Ph.D.—and everyone in between. The appeal to these consumers will be the look and feel of the t-shirts and most importantly, the variety of unique designs offered. Consumers will be able to express themselves without sacrificing quality and originality.

Consumers will be able to purchase the t-shirts from an Internet store front. Team T-Shirt expects to sell over 1,000 t-shirts within the first year of production through a combination of viral, guerilla and traditional advertisement-based marketing. Revenues and net income for the first of year of production will be $22,320 and $7,706, respectively. Team T-Shirt expects revenue to increase 25% year-over-year.


Executive Summary

The products will be 100% cotton t-shirts with unique and original designs. The blank t-shirts will be purchased from American Apparel. The t-shirts will have a variety of designs ranging from college humor, adult humor, cultural and social satire.

The business model will target end consumers, primarily college students, both undergraduate and graduate. The t-shirts’ design will be created by Team T-Shirt’s research and development department which will then be subjected to a survey of potential customers to assess its market feasibility. Once the design prototype has been deemed to have a market, it will be sold through the Internet channel. In the future, contacting boutique and specialty retailers may be an option. The t-shirts once manufactured and printed will be shipped to a central location where they will await the customer’s orders. The product to the end consumer will be delivered via USPS or any other competitive shipping method.

T-shirt market is growing explosively with creative entrepreneurs and cheap price point to meet customers’ needs. In 2006, t-shirt market size was $20 billion and our target segment with undergraduates, graduates, or academic clubs is estimated with the size of minimum 1,500 to 15,000 in major five regional universities around Maryland, Virginia, and Washington DC areas. Our customers are interested in themselves to be seen different from others and to look pride in their future careers. In a test market, we find out our successful designs to roll out in bulk through Internet, retailers, and university channels.

The competitors range from specialty retailers such as Urban Outfitters and Target. Internet competitors include Palmer Cash and Busted Tees. Although the mentioned competitors carry a variety of t-shirt product lines, Team T-Shirt believes that its designs are truly unique and original to capitalize gaps identified within the current competitive space.

The financial projections forecast a positive net income beginning with the first year of production. We expect the business will generate positive earnings in the first year at $63,577.79. In year 2 and 3, the expected net incomes are $96,796.40 and $138,839.40, respectively. The burn rate for the business is low. Aside from the initial set up fees of purchasing the design software at $401.70, the recurring monthly fees are in domain registration, web hosting, and advertising. The total expected costs of recurring monthly fees are $14.95 + 5.95 + 62.40 = 83.30 and grow at an annual rate of 3% in line with the inflation rate. Our breakeven point is between 128 and 156 t-shirts. Our NPV analysis points to a positive amount of $34,506.


Product

Team T-Shirt’s products are printed on American Apparel’s Fine Jersey Cotton product line. These t-shirts are made of 100% cotton and are available in sizes between XS and 2XL. T-shirts are available in a variety of colors (37 total) and will be determined by the graphics and designs. The t-shirts will be offered for both men and women, both featuring a slimmer cut that will flatter any body type.

The t-shirts will feature unique and original designs ranging from college humor, professional/workplace humor, adult humor, witty taglines, cultural and social satire. In order to capitalize on upcoming trends, Team T-Shirt will continuously research and create new designs to keep abreast of popular culture. Team T-Shirt believes that its products will be successful due to the current gaps identified in the vintage t-shirt consumer market.

Team T-Shirt is concerned with possible threats to its intellectual property and will seek legal protection to some of its designs. At the same time, the barrier to entry in this industry are low and expects “copycats” to mimic the designs within a short amount of time. To counter this constant threat, Team T-Shirt will rely on research and development as a primary source of competitive advantage.

Once Team T-Shirt establishes a solid base of loyal customers, it will venture into two additional areas. First, and closely related, Team T-Shirt will offer unique designs and graphics on hooded sweatshirts and “trackjackets.” The designs and graphics offered through these products will greatly differ from the ones offered on the t-shirts. The hooded sweatshirts and trackjackets will feature a more high-fashion appeal and will make extensive use of patterns and designs. Second, Team T-Shirt will venture into basic men’s wear including denim and button shirts. The denim will feature a boot cut leg and a vintage wash. Button shirts will be a combination of vintage and contemporary patterns and designs.


Business Model

The target customers of our project are students that include both graduate and undergraduate. The underlying need that these potential buyers have is the desire to poke fun at things. Our purpose is to design T-shirts that catches some of the humor of various disciplines such as finance and computer science. When our customers wear these t-shirts, they feel connected with the messages that those t-shirts convey.


Buyers

T-shirt market is exploding with different customers’ needs and cheap price. The T-shirts market is growing in North America in that more than 1.4 billion cotton t-shirts were sold in 2006 with a retail value of $20 billion. It is forecasted that more than 5,000 websites would provide t-shirt products from general t-shirts to faux-vintage t-shirts. The number of websites has been exploding since 2005. In the early 2004, there was about 500 t-shirt websites but it increased to 1,500 by three times and in October, 2006 it was estimated that more than 4,122 websites were selling t-shirts. (source: T-shirts forums site: www.t-shirtsforums.com)

T-shirts contain social, cultural, political, academic, and professional characteristics. Some groups have interesting expressions communicated and understood by the members: jargons, slang, funny words or expressions. These statements stand out their current feelings or future expectations such as successful or rich people. Undergraduates, graduates, or academic clubs can be target customers. People are much more intended to express themselves with printed statements without speaking. Statements on our products express the customers’ feeling of social connection to their groups. Enjoying public gaze, customers purchase t-shirts with printed statements that others can see and understand what they want to express without saying it.

Its market size is estimated as minimum 1,500 to 15,000 in major five regional universities around Maryland, Virginia, and Washington DC areas. Its assumption is each university has about 30,000 students and its market share is minimum 1% to 10% of them.

We advertise our products via our own website and popular websites such as MySpace, and contact universities to give product information or join university festivals, for example, Maryland Day. Before we launch our new products, we should test its marketability in focus group. After testing market with samples and pinning out attractive designs, some of successful products can roll out in bulk to be sold through Internet, retailers, and university channels.

Here’s a survey data from Harris Poll Online/ Datascension/Mintel in September, 2005. The survey was based on 1,211 women aged 18 and older and asked them about their approaches toward clothing styles: Which of the following statements best describes your approach to clothing styles?

"I seek out and wear clothing that I feel makes me stand out from others."
"I step out from the crowd occasionally, but usually I try not to make a statement."
"My clothing is never a way that I make a statement."

Age All 18-24 25-34 35-44 45-54 55-64 65+
My clothing is never a way that I make a statement (%) 43 27 29 45 49 43 55
Step out from the crowd
but try not to make a statement (%) 41 44 53 39 35 42 35
Wear clothing that makes me stand out from others (%) 17 29 18 16 15 15 11

Showing others a unique style is important to them. They have not much reluctance to wear t-shirts showing these noticeable statements and enjoy the public gaze that they look different from others. They are proud of themselves on getting pieces no one else has seen. They are willing to take advantage of opportunities of current market trend to provide customers with finding, reviewing, and buying unique styles.


Competition

Team T-Shirt expects significant competition within the t-shirt industry. Some of the more prominent incumbents in this space include specialty retailers such as Urban Outfitters, mass retailers such as Target and Internet retailers such as Palmer Cash and Busted Tees. Although there is significant competition, Team T-Shirt is confident that its products occupy a gap created by the aforementioned competitors. Specifically, while all competitors are good at creating designs, either based on classic popular culture or a new fad, it does not cater any of its designs to a specific social group (e.g., college students majoring in chemistry). Team T-Shirt aims to identify as many numerically-significant social groups as possible based on several dimensions to market its products. Then, through research and development, it will create designs that will appeal to these social groups in their efforts to express themselves.

In addition to the designs, Team T-Shirt plans on offering shirts manufactured by American Apparel. American Apparel is a Los Angeles-based garment manufacturer that is nationally known for its sweatshop-free labor. Team T-Shirt believes that this positive quality along with American Apparel’s t-shirts which our slimmer fitting than most other manufacturers will provide us with a competitive advantage. Only a small number of competitors are offering t-shirts made be American Apparel, if any. Team T-Shirt believes the higher quality shirts will attract customers along with its softer feel and flattering fit.

For designs that are not based on classic popular culture, the consumer is likely to get confused and reluctant to purchase a t-shirt with an unfamiliar tagline. Team T-Shirt will minimize this through stratifying its categories so that there is a higher possibility of a match occurring between the consumer’s preference and the product offerings.

Without legal intellectual property protection, it is going to be difficult fending off “copycats” from mimicking the t-shirt designs and selling them at a reduced rate to exploit the trend of the moment. However, Team T-Shirt will not rely solely upon legal protection; rather, it will focus its efforts on research and development, designing innovative and unique products that are not available anywhere else. By the time copycats are mimicking the designs and going to their manufacturers, Team T-Shirt also expects to go to the manufacturer, but with a brand new design. This “one step ahead” mechanism will ensure that Team T-Shirt constantly stays abreast of trends.


Financials

We expect the business will generate positive earnings in the first year at $63,577.79. In year 2 and 3, the expected net incomes are $96,796.40 and $138,839.40, respectively. The projections are highly sensitive to sales projections and estimated growth rates. We need to gather more information to substantiate our estimates and assumptions.

The burn rate for the business is low. Aside from the initial set up fees of purchasing the design software at $401.70, the recurring monthly fees are in domain registration, web hosting, and advertising. The total expected costs of recurring monthly fees are $14.95 + 5.95 + 62.40 = 83.30 and grow at a annual rate of 3% in line with the inflation rate.

Based on out cost structure, our expected breakeven units are between 128 and 156 units depending on types of t-shirts. This number is sensitive to the price we charge on the t-shirts. Although we have a uniform price of $20 per t-shirt, we may change these numbers to reflect the differing variable costs of printing t-shirts with differing properties. We expect to breakeven in the first year, but we are in the process of accessing the expected market demand in order to gauge the time it would take to breakeven. Given our low fixed cost, the sales of the t-shirts have a great impact on the estimated time to reach profitability.

Our ideal exit strategy is to be able to grow the company and add to the product scope. Eventually we plan to sell the company for at least $1 million.

We expect this project to have positive net present value. Although we need to substantiate our assumptions in key variables such as sales units and growth estimates.


Pro Forma Statements

Investment Return

fashion trend

This is also from Mitel.

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Figure 12: Attitude to clothing with obvious display of brand name, by age, September 2005

"How much do you agree with the statement?"
Base: 1,093 women aged 18 and older


Q. I won't buy clothes that display a brand name too obviously, such as on the front of a shirt
All 18-24 25-34 35-44 45-54 55-64 65+
% % % % % % %

Strongly agree 26 20 21 16 30 31 36
Somewhat agree 22 27 17 23 19 24 23
Total agree 48 47 38 39 49 55 59

Source: Harris Poll Online/Datascension/Mintel

Women between the ages of 18 and 24 are significantly less likely than their older counterparts to be turned off by obvious displays of a brand name. Among this group, a clothing brand choice is a method of self-expression and, therefore, wearing that name is more acceptable. Also, it should be mentioned, those 18-24 are less likely to have the restraints of an office dress code.
While brand name is clearly key among fashion-conscious, young, female shoppers, showing a unique style is also of great importance to many. The following Figure shows the results, by age, to Mintel survey questions which asked female respondents:

"Which of the following statements best describes your approach to clothing styles?"
"I seek out and wear clothing that I feel makes me stand out from others."
"I step out from the crowd occasionally, but usually I try not to make a statement."
"My clothing is never a way that I make a statement."

----------------------------------------------------------------------------
Figure 13: Approaches toward clothing styles, by age, September 2005
Base: 1,211 women aged 18 and older


All 18-24 25-34 35-44 45-54 55-64 65+
% % % % % % %

My clothing is never a way 43 27 29 45 49 43 55
that I make a statement

Step out from the crowd 41 44 53 39 35 42 35
but try not to make a statement

Wear clothing that makes me 17 29 18 16 15 15 11
stand out from others

Source: Harris Poll Online/Datascension/Mintel

Nearly three in ten respondents between the ages of 18 and 24 say they wear clothes that provide the means to 'stand out,' 12 percentage points higher than average. From magazines and the Internet to trunk shows and email forwards, there are numerous opportunities to find, review and buy unique styles. Lucky Magazine, a women's magazines about clothes and beauty shopping, had a circulation of more than 1 million in August 2005. The subscriber-based Daily Candy emails feature clothes, footwear, accessory and restaurant recommendations from around the world.

In the 1980s and 1990s, the fashion goal was to get pieces no one else had. Today, the fashion elite pride themselves on getting pieces no one else has seen.

market trend

Hi, all.
This material comes from Mintel.
See the highlight for t-shirt.

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Shirts (market segment)
Sales of shirts, which are described in the following Figure, consist of all types, including knit, woven and dress.
Figure 12: Sales of shirts, at current and constant prices, 2000-2005


Year Sales at current prices Sales at constant 2005 prices*
$ million Index % change $ million Index % change

2000 13,604 100 - 15,371 100 -

2001 11,295 83 -17.0 12,409 81 -19.3

2002 11,588 85 2.6 12,533 82 1.0

2003 11,775 87 1.6 12,451 81 -0.7

2004 12,071 89 2.5 12,433 81 -0.1

2005 12,254 90 1.5 12,254 80 -1.4
(est.)

* Adjusted for inflation using the All Items CPI
Source: Mintel/AAFA

Between 2000 and 2005, the men’s shirt market has witnessed an overall decline of $1.3 billion, or nearly 10% in current terms. Men’s shirt manufacturers and retailers are apparently aware of lackluster performance in the market and have begun to raise prices in response to falling sales volumes. An NPD study reports a fair degree of inflation in the men’s dress shirt category: the average retail price of a men’s dress shirt was $16.53 in 2004, compared to $14.77 in 2003.

One key logistical constraint to growth in the men’s shirts market is the fact that men often do not need to (or even consider) purchasing a new shirt when they purchase a new suit, or other article of tailored clothing. Those men who are currently swept up in the suit and formal dress craze may be perfectly content to purchase new suit jackets and pants to wear over their existing formal shirts. In addition, the current trend towards creative combinations makes it stylistically acceptable to wear an old T-shirt with a new suit jacket. As fashion dictates more and more of an extreme contrast between clothing elements, men’s interest in upscale T-shirts—particularly those noteworthy enough to wear with suit components—may be poised for increase. Juicy Couture is one of the latest competitors to enter the upscale T-shirt category, selling high-priced T-shirts with bawdy or humorous statements emblazoned on them.

While some types of shirts are not doing well, others are keeping the segment afloat. An STS Market Research report found that knit shirts declined in sales by 1% in 2004, while woven shirts increased by 12%. The polo shirt may be the one redeeming feature of this market. Occupying a dress space somewhere between formal and casual, the polo has been a sales success in stores such as Men’s Wearhouse and Casual Male, where many men have gone to shop for new suits and tailored clothing in 2004-2005.

Social Capital Exercise III

Hyosuk Roo

- She used to be a freelancer as a graphic designer but after she got a graduate degree from Hong-Ik University in Seoul, South Korea, she joined a company. She taught multimedia classes for several years in college. She is a hard worker and willing to help and work together with people who need her help. She is active in providing best quality products with supporting follow-up service of final products if there are needed some amendments.

- She and I worked together in my company to develop user interface for a Windows-based computer system. She was charged of the design tasks. She developed screens, colors, and icons on screens. She not only easily understood what I asked but also brought out new ideas about improving user-friendly interface.
- She can help us with t-shirt design by using a graphic software and web design if we launch our web site.

Sungmoon Kwon

- One of my wife’s college alumni lived in the same apartment building where we lived. Her husband worked for KTB Network, a venture capital company, during his graduate school days. Now he has been studying a doctoral program of computer science at University of Maryland, College Park here. Four months ago, I was introduced to him and realized that he is also my alumnus with the same major, computer engineering in college.
- He has been touch with Mr. Kwon, the CEO of the venture capital since he was involved with his projects in his graduate school. The CEO’s wife visited last winter break to take care of her child in the Child Care Resources On-Campus (CRC) winter camp at University of Maryland. My alumnus said that the CEO has many experiences of investing startups and handling M&A cases, and so our team can get advice from him about feasibility of our team project. The CEO can help us with how to plan, finance our team project, and come into a real product.

Insik Joh

- He is one of my close friends and alumni. He has become a venture capitalist for several months. Two weeks ago, I chatted with one of my friend in Korea over the MSN messenger. The friend told me that Mr. Joh entered a venture capital because his business failed but he did not have any information about the detail of the failure. He was involved in an IT venture company that developed and manufactured a touch screen targeted on cellular phones. He was one of the four cofounders, one of whom had a patent on the technology. He can give us the way not to fail in starting up a business.
- He has some experience as a salesperson in a telecommunication industry for several years as well. I guess he has a human network for us to use.

Social Capital Exercise II

Uzoma Ajeroh
Uzzy is a friend of my who is deeply into fashion. He once made a trip to New York and scoured SOHO for t-shirts he liked. Uzzy would be a source of knowledge that I can tap into in regard to the current trend and what are the do's and don'ts of vintage t-shirts. Uzzy can also provide me with a list of his friends who may also be into vintage T-shirts. Since he is very connected with other college students, Uzzy may be able to shed some lights on how other college students get their t-shirts and whether they are satisfy with the available options and processes.

T-Line Printing
T-Line Printing is one of several online printing companies that offer T-shirt printouts. The online site offers volume discounts it's located in Chestertown, MD. Since the company is in the Maryland area, we would be able to visit the company and talk to the people there in person. If this is a good source for T-shirt printing, we could just scan and email our design files in photoshop formats and have them print for us. Of course, we can also do some comparative shopping and use this company as a benchmark to measure other suppliers of T-shirt printouts. Although I do not personally know anybody from the company, I should be able to find someone to talk to through emails or phones.

Asher Eptein
Asher is the managing director for entrepreneurship at the Dingman Center. We had the opportunity to hear what he had to say about the Entrepreneurship program at the University of Maryland and feel that he is a source of knowledge and connections. We should take the opportunity to go up to the Dingman Center and ask for his feedback on the business concept. Asher may also provide us with ideas on who we should talk to if any. Most importantly, Asher may be able to provide us with objective view of the concept. We may be able to find Asher by simply going up to the Dingman Center.

Social Capital Exercise

Lawrence Lee
Mr. Lee has been in the printing business for the last 20+ years. I am a friend of his son Andrew through church, but my contact with Mr. Lee has been limited. Since we would be a customer of his business, I am optimistic that he would be able to provide a cost breakdown of printing on t-shirts in various configurations (e.g., one color on color, two colors on white). Additionally, I believe if we became his customer, he would be able to provide the best pricing for any screenprinting jobs.

The strategy for establishing contact will be straightforward. I will ask my friend Andrew to provide his father’s business telephone number in Los Angeles. Next, I will inform Mr. Lee that I am in the process of starting a t-shirt business and would like his opinion and expertise on the matter.

Since I am seriously pursuing the venture, I will defer directly contacting Mr. Lee until after graduation. I will wait until I am in Los Angeles after graduation to discuss in person at his business location. However, I was able to contact Andrew via email to retrieve Mr. Lee's business telephone number.

Frank Giambattista (American Apparel)
American Apparel is made in the U.S., free of sweatshop labor. Additionally, they have an exhaustive line of blank apparel with endless color swatches and all of their product lines are fitted so that you are not swimming in your clothes. I specifically wanted to contact American Apparel because of these two criteria. I own many of their products and they provide a superior fit versus any other brand I have purchased. The fabric's texture also is of higher quality versus other brands and there is minimal shrinkage during washing and drying.

The strategy for establishing contact will be through email. I will inquire within their wholesale department to find out what types of bulk discounts are available, if any. I will also gather information on which product lines are best for screenprinting and ink transfers.

I have applied for a wholesale account through their website. I have not received a confirmation, but am optimistic about getting my account approved. By having an approved wholesale account, I will have full access to view bulk discount amounts and also directly place an order through their website.

Urban Outfitters
Urban Outfitters is a leader in “funky” fashion. By having Urban Outfitters carry our product line, we will be able to gain national and international exposure for our products. This will directly increase sales as well as amassing a loyal fanbase.

The strategy for establishing contact will be through the Internet. The purpose of establishing contact will be to learn the formal channel for placing products in the Urban Outfitters retail stores. I imagine the process akin to sending a photo or prototype to their corporate buyers to have them review, assessing quantity and pricing the products.

Since I currently do not have a prototype or a business established, I will defer contacting Urban Outfitters until prototypes have been created for showcasing.

Preliminary Feasibilty Study

Preliminary Feasibility Statement

The T-shirt. The t-shirt is not only an important part of daily fashion, but also a vehicle for individual expression. There have been many trends that centered around t-shirts—white with the sleeves cuffed (a la James Dean), tie dye, Generra Hypercolor and loud logos of rock bands from the 80s. The newest trend, vintage or faux-vintage t-shirts, has been spotted in virtually all social and cultural circles. From hipsters and scenesters in the Meatpacking District in Manhattan and Silerlake in Los Angeles to celebrities on MTV. The t-shirt designs have been as diverse as its owners. From the faded Miami Vice logo to a commemorative 1977 Bob Marley Germany tour design.

The Product. The product will be mostly t-shirts with an assortment of hooded sweatshirts and track jackets. All products will feature at least one faux-vintage characteristic (e.g., faded color, softness, contrast stitching, etc.). The fit will also be critical in creating the vintage appearance. The fit will be slimmer and will be snug compared to an ordinary t-shirt. The quality, or softness of the t-shirt, will also be creating the vintage appeal. It will be very soft, as if it had been washed many times prior to the purchase. The designs will be very diverse and will feature an element of popular culture or counterculture. The design will range between slogans, logos, taglines, and graphics.

The Buyers. The buyers will also feature a wide variety of demographics, from 20-something scenesters, teenyboppers to post-MBAs! Common characteristics between the buyers may be followership towards a certain popular culture (or sub/counterculture) theme and keen fashion sense (either legitimately derived or self-promoted!).

The Competition. The current competition appears to be entrenched in three major areas: major retailers such as Urban Outfitters, Internet one-offs and the brick-and-mortar boutiques. The major retailer offers a large selection. However, the designs are somewhat sanitized and its “hip factor” is usually in its mature-to-decline phase. The Internet one-offs also offer a large selection and are usually ahead in the “hip factor” curve. However, the t-shirts are not always vintage-based and are sometimes esoteric. The brick-and-mortar boutiques vary on its selection. The designs will be likely high-profile (i.e., Jessica Simpson was photographed in InTouch with the t-shirt) but the price points will also gravitate toward the extreme.

The Bottom Line. The venture in this preliminary analysis will provide a bridge among all the great characteristics exhibited by the competitors: great designs, significant “hip factor,” and quality. The aim will be to straddle the sweet spot between esoteric and mainstream.

Since product sales will be driven primarily by the designs, no special equipment or knowledge will be required. The critical element will be to stay ahead of culture and be readily adaptable. Virtually all phases of the workflow can be outsourced, which will reduce some operating costs and will allow the venture to be sustained through an Internet store front.

Team Contract

Team Contract

I. Team Name

Team T-Shirt

II. Team Members

Ben Hsieh (BH)

Graham Kim (GK)

MyoungSeok Song (MS)

III. Activities, Roles and Responsibilities

Activity/Stage	Participation	Purpose
Ownership of ideas	GK	Idea generation
Collaborative brainstorming	All	Idea generation
Research	All	Product/operations research
Benchmarking	All	Competitive benchmarking
Design	MS	Design e-commerce platform
Operations	BH	Blog management
Documentation	All	Document activities/processes
Presentation	All	Final presentation

IV. Team Procedures

a. Meetings

Team members will meet every Tuesday between 1100 and 1200. Additional ad-hoc meetings will be conducted as needed.

b. Communication

Preferred methods of communication will be the team blog (http://teamtshirt.blogspot.com) and email. Telephone conferencing will be conducted as needed.

c. Decision-making Policy

All team decisions will be made on a consensus basis.

d. Documentation

Each team member will be responsible for documenting individual activities and processes as outlined in the section: Activities, Roles and Responsibilities. If team participation is required for an activity, documentation responsibilities will be equally distributed among all members.

V. Accountability and Agreement

By signing below, the team member understands and agrees to the outlined team contract. The team member also understands and agrees that (s)he is expected to perform quality work that is consistent with a MBA-level course and will be subject to peer review for all submitted materials.

Signature	Name (Printed)	Date
______________________________	Ben Hsieh	March 6, 2007
______________________________	Graham Kim	March 6, 2007
______________________________	MyoungSeok Song	March 6, 2007