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
Monday, April 23, 2007
Sunday, April 8, 2007
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.
-----------------------------------------------------------------------
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.
This material comes from Mintel.
See the highlight for t-shirt.
--------------------------------------------------------------------------------------
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.
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