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Swinburne

University of
Technology Sarawak
Campus

MUHAMMAD BABUR
FARRUKH & SAAD
ZAFAR IQBAL

BUSINESS PLAN - LA PERLA


La Perla is an Italian influenced lingerie boutique that will provide high quality
lingerie in a wide array of sizes and styles with exceptional customer service.
The store is expected to be located in a proven retail center called Suria KLCC
Shopping Mall in Kuala Lumpur, Malaysia where the demographics are suitably
upscale, traffic counts are high, and compatible retailers offer qualified traffic
and potential referral business.
BUSINESS PLAN - LA PERLA

Contents
Executive Summary............................................................................................... 3
Company Background............................................................................................ 6
Company Summary............................................................................................... 7
Hours of Operation............................................................................................. 7
Company Ownership.......................................................................................... 7
Location.............................................................................................................. 7
Start-up Summary.............................................................................................. 8
Merchandise Assortment.................................................................................... 8
BRAS.................................................................................................................. 8
BRIEFs................................................................................................................ 8
Product Sourcing & Buying.................................................................................9
Inventory Management & Technology................................................................9
Market Analysis Summary.................................................................................. 9
Market Segmentation.......................................................................................... 10
Women 25-59 with household income of RM 70K per annum..........................10
Women 18-24................................................................................................... 10
Brides............................................................................................................... 10
Target Market Segment Strategy.........................................................................10
Industry Analysis................................................................................................. 11
Competition and Buying Patterns........................................................................11
Trends.................................................................................................................. 12
Strategy and Implementation Summary..............................................................13
Marketing Strategy.............................................................................................. 13
Marketing Objective.......................................................................................... 13
Tactics.................................................................................................................. 13
Print advertising............................................................................................... 13
On-going use of direct marketing.....................................................................14
Low or no-cost "guerrilla" marketing................................................................14
Employ strategic placement among key websites on the Internet...................15
Parties for promotion........................................................................................ 15
Brand Ambassador........................................................................................... 16
Sales Strategy..................................................................................................... 16
Sales Forecast...................................................................................................... 16

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Competitive Edge................................................................................................ 17
Location............................................................................................................ 17
Product Quality................................................................................................. 17
Customer Loyalty.............................................................................................. 17
Personnel Plan..................................................................................................... 17
Financial Plan....................................................................................................... 17
Important Assumptions........................................................................................ 18
Financials............................................................................................................. 18
Break Even Point for the business.......................................................................20
Exit Plan............................................................................................................... 21
References........................................................................................................... 22
Appendix.............................................................................................................. 23
Chart: Highlights............................................................................................... 23
Chart: Start-up.................................................................................................. 24
Chart: Partnership Breakdown..........................................................................24
Table: Expenditures by Household Income of Lingerie Purchasers...................26
Table: Expenditures by Age of Lingerie Purchasers...........................................26
Table: Start-up.................................................................................................. 27
Table: Start-up Funding..................................................................................... 28
Chart: Market Analysis...................................................................................... 29
Table: Market Analysis...................................................................................... 29
Table: Sales Forecast........................................................................................ 29
Table: Sales....................................................................................................... 30
Table: Cost of Sales........................................................................................... 30
Table: Personnel Plan........................................................................................ 30
Chart: Break Even Point.................................................................................... 31

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BUSINESS PLAN - LA PERLA

Executive Summary
La Perla is an Italian influenced lingerie boutique that will provide high quality
lingerie in a wide array of sizes and styles with exceptional customer service. The
store is expected to be located in a proven retail center called Suria KLCC
Shopping Mall in Kuala Lumpur, Malaysia where the demographics are suitably
upscale, traffic counts are high, and compatible retailers offer qualified traffic
and potential referral business.
Our budget is close to $800,000, which we are financing ourselves, along with a
silent partner who will provide interest free loan. We hope to break even in the
third year of business with good numbers on profits as early as the second year.

Competition and Challenges


The outlets for intimate apparel purchases in Malaysia are extremely limited than
markets of similar size in neighboring countries. One of the major reasons is that
Malaysians, in general, do not feel comfortable being seen shopping for lingerie
due to the fact that, it is something intimate that you buy for you or your
partner's personal indulgence. They see no reason for anyone else to know
where or what they are buying for themselves or their partner. As such, they feel
that the most appropriate place to buy intimate apparel such as lingerie is via
online boutiques. Another reason for preferring to buy online is the privacy and
comfort of their home. Also, lingerie stores are also mainly found in shopping
centers in major cities. As such, for residents living in smaller towns, shopping for
sexy lingerie via online boutiques is their best option. Through online boutiques,
residents in smaller towns have access to as much as choices as residents in
bigger cities.
Then, there are mass merchandisers and discount stores that offer mass
produced and lesser quality brands; department stores that offer mediocre
quality merchandise, but in limited sizes and with varying degrees of customer
service.
However, in recent years, introduction of some international brands like Lace
Petals, Romance Culture, La Senza and Blush Lingerie have brought the locals
out of their shell and have captured the market from online stores. These are the
only firms to cater for the upper class, who need more variety and are much
more brand conscious.

Market Potential
Three key target groups are identified in Market Segmentation part of this
business plan, based on lingerie spending patterns. The three target groups are:
1. Women 25-59 with a household income of RM 75,000 (Approx. $ 25,000)
per annum
2. Women 18-24
3. Brides
A common psychographic component that we are planning to target amongst all
three groups is the Intimate Apparel Enthusiast (IAE). An IAE is a woman who

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BUSINESS PLAN - LA PERLA

cares enough about her lingerie to want to shop at a specialty store, and is not
purchasing her lingerie at department stores.
There are large numbers of potential customers who fit these target descriptions
within a five mile radius of our store location, which captures Hawthorne Plaza
shoppers for impulse purchases, and within a fifteen mile radius for destination
traffic (Market Segmentation).

Unique Selling Propositions


Italy is known as one of the most romantic countries in the places to visit, with
Venice being a must-see place for travel enthusiasts. Anything exotic or sexy is
synonymous to countries like France and Italy. La Perla offers, a direct connection
to Italy, with the material being produced in the Emilia-Romagna region.
La Perla has achieved worldwide recognition as an undisputed leader in the
upscale lingerie fashion industry. Beautiful designs, exceptional fabrics and trims,
and the creative use of sheer and opaque in certain intimate apparel, set this
company's products apart.
The fame of La Perla's fit has won the loyalty of customers throughout the world.
Their secret?
La Perla fits each pattern to a body, not a mannequin. Through this process, La
Perla designers can see how the materials stretch and give support to a woman's
curves, producing garments that are both exquisite and truly form fitting.
The La Perla line is as varied as it is renowned. Bra styles include lace
confections with soft cups, in a triangle style and underwires, as well as silky
smooth tee shirt bras and bandeaus. For a company known for high style, La
Perla tee shirt bras are surprisingly popular. Customers say, they are the best
bras they've ever owned, soft and easy to wear. For those times when one is
going for a more Euro-design look, there are exquisitely delicate lace bras, some
of which are unlined and sheer. Other styles are adorned with scalloped
embroidery or eyelet lace.
Panties are offered in many styles, including G-strings, thongs, tanga pants,
hipsters and briefs. Customers love the exceptional style, perfect fit and
elegance and say these garments are worth every penny.
As such a high-end brand, La Perla is often thought of as special occasion
lingerie, but the superb fit, comfort and enduring quality of their bras, panties,
chemises and other lingerie make La Perla a go-to brand for many shoppers.
Women who appreciate the unique combination of perfect fit and comfort along
with a beautiful design sensibility choose La Perla lingerie for themselves again
and again.
A full description of La Perla's product offerings can be found in Sections
(Merchandise Assortment and Market Strategy).

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Furthermore, the highly trained personnel will get to know each customer's
individual needs, and will offer personal bra fitting and other special services, as
described in more detail in Section (Market Strategy).

Leadership and Vision


Akmal Khan, a Post Graduate in Marketing and Sales, who already has a
business, at a lower level, which will be a tremendous asset in analyzing the
customer and market potential, as well as in implementing a strong marketing
plan which will be outlined by all three stake holders, Akmal Khan, Muhammad
Babur Farrukh, Engineering Graduate, currently pursuing Masters of Management
and Sheikh Saad Zafar Iqbal, graduate in Accounting and Finance, currently
pursuing Masters of Management, as outlined in Sales Strategy; Section
5.2. As a seasoned strategist, he has a great grasp of numbers, and will utilize
his negotiating and strong network skills with vendors and clients. Running a
similar business he has extensive experience in controlling costs for businesses,
with a natural penchant for watching the bottom line.

Financial Projections
With La Perla, we expect to produce $439,500 in the first year of operation, with
aggressive growth projections of 12% in year three and 19% in year four, fueled
by expanded product lines and aggressive marketing. The store is projected to
become profitable during the second year of operation.

Objectives
1. To create a shopping environment where women (and men) feel comfortable,
pampered and stimulated by the wide array of choices that are available to fill
their needs.
2. To utilize superior customer service to create positive word-of-mouth
recommendations and repeat sales.
3. To give every customer one-to-one attention.
4. To have 50% of all customers return within six (6) months of their first purchase.
5. To be in the consideration set for all planned Intimate Apparel Enthusiast
(IAE) purchases in Malaysia, country wide, by end of year two.
6. To make La Perla the number one destination for bridal lingerie purchases by the
end of year one.
7. To have first year gross sales of $425,000.
8. To grow the business by 15% in year two.

Mission

La Perla is a specialty lingerie boutique offering classy styles, labels and sizes
that are currently unavailable in Malaysia; something the population of Malaysia
crave since the inception of Victoria Secrets Fashion shows.
Our mission is to give the discriminating lingerie shopper what she or he is
looking for, whether it is fit, comfort or style, in an atmosphere that is
comfortable, exciting and satisfying.
We want to create a connection with the Intimate Apparel Enthusiast (IAE) that
evokes the feeling that La Perla is "my lingerie store".

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Keys to Success
1. Offer superior quality products with cutting edge designs that are not available in
other outlets in the Kuala Lumpur.
2. Secure a great store location that offers high customer traffic for impulse
purchases caters to desirable demographics includes compatible stores (e.g.
Bridal, women's apparel), and is in an easily accessible, known destination.
3. Understand La Perlas target customer to ensure that the correct product mix is
available to meet their needs.
4. Offer superior, personalized customer service to create favorable word-of-mouth
recommendations and influence a high rate of repeat business.
5. Continuously monitor inventory levels, and make adjustments as needed.
6. Educate and advise customers on proper fitting and the quality/value relationship
of some of the higher priced (likely European) brands.
7. Offer a variety of price points so that customers do not feel intimidated by the
higher priced offerings.
8. Change in-store and window displays frequently to increase impulse purchases,
creating the belief that there is always something new at La Perla.

Company Background
The company was founded in 1954 by Ada Masotti in a small confection lab
named LApe. The name is inspired in the jewellery that came with the garment
and the box. In 1960s the company started a revolution in the underwear
tradition with the introduction of coloured pieces and leaving behind the white
style. By the 1970s La Perla started to used technology in its production and the
elastic strap, tulle, pleated polyester or silk-like microfibers were some of the
most important breakthroughs; also at this decade the firm launched its
swimwear line, expanding their business into different segments. With the arrival
of Alberto Masotti (son of Ada) as the new President, the companies started its
global expansion and enlarge its brand into different business such as perfumes.
At the arrival of the last decade of the century La Perla opened its first boutique
store in Milano, the capital of fashion in Italy, and launched its Pret-a-Porter
division. This was a result of the global trend amongst fashion houses in the
world through a democratization of fashion and luxury that boost revenues
across industries. By this time, the company also started to have liaison with art,
in this decade the famous photographer Mario Parizotto. In the 21st century La
Perla decided to change its looks to a more minimalistic approach by relying on
Sigurd Steinunn designs. In 2004 was a special year for the company as it
celebrated its 50th anniversary with the debut of the Pret-a-Porter catwalk in
Milano. In 2008, La Perla was acquired by JH Partners, a private equity firm from
San Francisco that specializes in investments on luxury brands. From 2010-2011,
the collections of the company will be divided in four areas: La Perla, La Perla
Villa Toscana, Studio La Perla and Miss Studio La Perla.
Emilia-Romagna develop a unique characteristic, unlike other industrial districts,
the region from the beginning of the industrial development had a strong
emphasis on collaboration due to the genesis of its creation. The region has
strong socialist backbone that promoted co-operatives and small and medium

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enterprises with a large incentive to collaboration; this added the strong


network necessary to become an Industrial district. The historical context help
the development of entrepreneurship in small and medium enterprise in the post
war Italy through external factors (Marshall Plan) and internal dynamics that
supported the flourishing of the fashion companies in the region. Specifically in
Bologna/Regio-Emilia/Modena (BREM) the development of the industrial district
was quite different than for other cities in the region. In this sense, the industrial
district of BREM had a unique advantage compare to others; the horizontal
diversification in the district had strengthen the collaboration and enlarge the
concentration of industries.
BREM has a strong heritage in the production of textile and clothing with the
presence of established fashion houses such as Bluemarine, Max Mara, Sergio
Rossi, Bruno Magli, Mandarina Duck and Piquadro. Also, the district has attracted
major companies as foreign investors in the fashion business such as:
LVMH investing in Bologna through the following firms, Calzaturificio MA.FR SRL,
Baldinini SRL and OMAS S.R.L.
Polo and Ralph Lauren investing in PRL Fashions of Europe S.R.L. also located in
Bologna.
Arpels investing in Redwall Italia Rossi 1924.

Company Summary
La Perla is an Italian lingerie boutique offering quality merchandise and
personalized service to Intimate Apparel Enthusiasts (IAEs). It is scheduled to
open in October 2013 in Suria KLCC Shopping Mall in Kuala Lumpur, Malaysia.

Hours of Operation
Exact hours of operation are to be determined. We plan to follow schedules
similar to the other women's apparel retailers in the shopping center.
Additionally, we will be sensitive to holiday hours and special group opportunities
to maximize our exposure and sales potential.

Company Ownership
La Perla will be formed as a privately held S corporation in the Kuala Lumpur,
Malaysia. The company will be owned by; Akmal Khan, M. Babur Farrukh and
Sheikh Saad Zafar in a 40-30-30 percentage model with the controlling interest
lying with M. Babur and Sheikh Saad. They will work full time as an
owner/operator, responsible for running the business, sales and buying and will
be assisted by 3 store managers and part-time sales personnel.

Location
Location is a critical element to any retail business. The right location is
paramount to the success of a lingerie boutique since a large share of sales will
likely be derived from impulse purchases and influenced by neighboring store
traffic. While it should be possible, and is definitely desirable, to build La
Perla into a destination location for lingerie purchases, a location with high foot
traffic will contribute to strong awareness and impulse purchases.

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Many locations were considered for La Perlas store with the following criteria in
mind:
a. Desirable demographic composition

b. Strong foot traffic

c. Complementary retailers

d. Open-air mall or neighborhood center vs. strip mall or indoor mall

e. Successful retail reputation

f. Relatively easy access via primary streets

Fortunately, Kuala Lumpur offers many neighborhoods with upscale


demographics. This bodes well for a store like La Perla which is selling the type
of lingerie that is a desired luxury rather than a necessity. We are very fortunate
that within one of the best neighborhoods in Kuala Lumpur metro area, we have
found the perfect location for it in Suria KLCC Shopping Mall.
Suria KLCC is Malaysia's premier shopping center, located at the base of the
PETRONAS Twin Towers in the Kuala Lumpur City Centre. It has shops on 6 floors,
with anchor tenants Isetan, Parkson Grand, Cold Storage Supermarket, Tanjong
Golden Village, Signature's Level 2 Food Court and Marks and Spencer. "Suria" is
a native Malay word derived from Sanskrit "surya", meaning "sunshine".
It houses mostly luxury and fashionable shops such as Alfred Dunhill, Burberry,
Calvin Klein, Chanel, DKNY, Emilio Pucci, Emporio Armani, Giorgio Armani, Gucci,
Hugo Boss, Jimmy Choo, Louis Vuitton, Marc Jacobs, Miu Miu, Paul Smith, Prada,
Rolex and Versace. There are also a 12 screen cinema, a concert hall, the
PETRONAS Art Gallery, and a Science Discovery Centre.
A 14-year old shopping venue, it offers the perfect mix of boutique retailers and
customers for La Perla.
According to demographic research provided by THEAN LEE CHENG, the median
household income of persons who shop at Suria KLCC Shopping Mall is 90,000
RM (Approx. $30,000) per annum. This is higher than any other major shopping
center in Kuala Lumpur.
Not only does KLCC Shopping Mall offer ideal demographic composition, but it
offers high traffic volume as well. It also offers some popular restaurants that
help to maintain high traffic counts.

Start-up Summary
Start-up expenses and proposed financing are outlined below.
La Perla will open with several months of inventory. The majority of the
company's assets will reside in inventory.

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The major start-up expenses include $300,000 in start-up inventory, $400,000 in


franchise cost, and $60,000 for lease and $20,000 for lavish grand opening
events.
Start-up requirements include sufficient working capital to help meet the running
costs for the first 2-3 months of operations.
The total start-up requirements are estimated to be $171,750.
The start-up costs will be financed through a combination of owner investment,
line-of-credit (LOC) and long-term borrowing:
Owner's investment $171,750 cash (For Saad and Babur)

Merchandise Assortment
La Perlas main inventory for sale will be bras and panties;

BRAS
THE CLASSIC BRA: - This bra is characterized by cups that almost completely
cover the breasts, with central straps and by a shaped, high back.
THE BALCONNET BRA: - This bra is characterized by the cut of the cups which
reveals and highlights the upper part of the breasts.
THE PUSH-UP BRA: - This bra is characterized by a special slant of the cups
and it highlights the breasts by pushing them up and together.
THE BANDEAU BRA: - It is, by definition, strapless or with removable straps: its
cups cover the breasts in a horizontal fashion, the back is high and it can be with
or without padding.
BUSTIER: - Descended from the old-style corset, with whalebones replaced by
softer supports that go down to the waist leaving the hips free. It highlights the
breasts utilizing underwire cups that offer support.

BRIEFs
A piece that is considered essential to go along with a brassiere, they can be
high, medium or low cut depending on the hip shape and size.
TANGA: - Reduced in size both at the front and the back and narrows the hip to
a thin strip of fabric.
G-STRING: - Briefs with much reduced dimensions at the back leaving the
buttocks completely bare.
CULOTTE: - In the more classical version they completely cover the hips and the
buttocks or the upper part of the thigh.
BODY SUIT: - The body suit is extremely versatile: it can be made of lace or
tulle or smooth and concealing fabrics.
GARTER BELT: - This item is a band that goes around the waist with four pieces
of elastic (or metal hooks) hanging down to which stockings are then attached
SHORT SLIP: - This is the "glamorous version of the well-known "slip; short so
as to reveal most of the legs and also made of stretch and smooth fabrics so as
to outline the body even more.

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BRIDAL: - We expect bridal to be a big category for La Perla since the


opportunity for personal service works especially well for this category. We will
establish a strong referral network with the bridal store that is a few doors down
as well as other bridal stores in Suria Mall KLCC.

Product Sourcing & Buying


We will purchase the products from directly from the regional representative in
Italy.
We plan to track and monitor inventory through QuickBooks. Saad Zafar is a
graduate in accounting and he how to use QuickBooks POS system. We are using
QuickBooks software because its a basic software that are that are kept in-stock
by suppliers will be re-ordered on a continual basis, as needed.
Furthermore, Seasonal designs will be ordered several months in advance.
Akmal Khan already owns a lingerie shop in Kuala Lumpur. We will use his
knowledge of industry and his supplier relationships to determine the ideal
styles, colors, sizes and quantities for our Kuala Lumpur target market. After we
open the shop, we will carefully monitor what is the top selling and least selling
item in our shop, plus we also plan customer feedback, and keep a careful eye
on ever-changing fashion trends to optimize future orders. We also plan on
attend 3 industry show per year to stay up to date on new trends.

Inventory Management & Technology


As discussed earlier, for our retail shop in Kuala Lumpur we plan on using
QuickBooks Pro system for cash register, inventory and customer information
tracking. This software was developed for a retail environment and has the
capacity to handle up to 40,000 SKUs. We will be continuously monitoring this
system and how it serves our needs to determine if an upgrade will be necessary
in the future.

Market Analysis Summary


There is little reason to doubt that the Suria KLCC shopping mall is a reflection of
the national and international market. Suria KLCC mall is Malaysia's premier
shopping destination located at the foot at the Twin Tower at the heart of Kuala
Lumpur City Centre, Alamanda Shopping Centre located at Putrajaya, Malaysia's
administrative capital and Mesra Mall located in Terengganu, on Malaysia's East
Coast known for its picturesque islands and scenic beaches.
With a combined area of more than 2 million square feet and over 550 specialty
outlets, the three malls cater to the diverse and discerning shoppers, both local
and international.
This portion of the plan will explore the key target audiences we have identified
as best prospects for the products and services La Perla will provide.

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Market Segmentation
La Perla will target specific market segments:
Women 25-59 with household income of RM 70K per annum
Our store location for La Perla will be on ground floor of Suria Mall KLCC which
includes many of the top designer brands from both Asia and Europe. According
to Yeow, the average income in 10miles radius of Suria mall is RM 7500/month
(approx.). Since one of our goals is to build La Perla into a destination location for
lingerie purchases, it is also pertinent to look at households with 75,000 RM
incomes in a 15 mile radius of our location.
KLCC (Kuala Lumpur City Centre) is the citys diplomatic enclave that plays host
to most of the citys top-end hotels. Plus extravagant mall is located directly
underneath the PETRONAS Twin Towers building which is the hub of tourist area.
Suria mall is surrounded by 4-5 star hotels which caters for high end, pampered
tourist who have a more refined taste and can easily afford La Perla.
Women 18-24
Women in the age of 18-24 are much more likely to be impulse purchasers. Many
in this age group are attracted towards luxury lingerie brand. However, at this
customer at this age have income under 5,000 per month but it is realistic to
assume that their boyfriend of parents can help them purchase it, as per the
culture in Malaysia where parents are open minded and more willing to pay for
their expenses at this age.
Brides
According to the statistics, approximately 10,000 women get married in city ok
Kuala Lumpur. According to statistics, 68.93% women get married in between 25-
29 and it is expected increase with time. La Perla is one of 5 star brands that can
motivate bridal to buy luxury bridal items.

Target Market Segment Strategy


Women have varying attitudes towards the role of undergarments in their lives.
This is evidenced by the different personalities that are projected through the
contents of their underwear drawers. For example, there's the "low involvement"
segment, who buy just enough lingerie to get them through the week. For them,
underwear is a functional necessity, and they really don't care if it's all white or
all black, as long as they have a clean pair of panties to wear. The fact that a
woman spends a fortune on designer suits does not necessarily translate into
designer labels on her bras.
La Perla wants to capture the attention of the Intimate Apparel Enthusiast (IAE).
According to a segmentation study done by the Cambridge Group, the IAE is
aged 18-34, wears matching bras and panties, and loves to shop for underwear,
especially on impulse. Although IAEs are only 18 percent of the market, they
account for 25 percent of the sales. Their entire underwear collection looks like
most women's "special occasion" section of their lingerie drawer.
Many of these local IAEs are currently La Senzas customers because that is the
only specialty retailer in Malaysia that offers the variety they are looking for.

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Although the young IAE is buying a lot of undergarments, she is not necessarily
the most profitable customer. Mediamark Research (MRI) from fall of 2003 shows
that adults who spend over $100 per year on lingerie tend to be in the 25-59 age
group. Adults in the age group of 25-59 account for 65.5% of all Adults 18+,
whereas Adults spending over $100 per year on lingerie account for 80.7% of
all Adults 18+.

Income is another key factor in amount spent per year on lingerie. It also
influences the types of brands that a consumer purchases. La Perla is most
interested in consumers who are spending at least $100+ per year on lingerie.
These consumers tend to have a household income of RM 75000+ ($ 25000).

Industry Analysis
Mass merchandisers lead the women's innerwear market in share, as they do in a
variety of consumer products. Mass merchandisers not only offer the
convenience of one-stop shopping for a variety of needs, but they are increasing
their selection of designer labels at lower prices.
Department stores hold second place in terms of market share, offering a wider
variety of merchandise, more high-end products, more hard to find sizes, and, if
you're lucky, some customer service.
La Senza is the leading specialty chain and garners approximately a 29% share
of the Malaysian bra market, according to NPD Group.
The rest of the women's intimate apparel sales are primarily through non-chain
specialty stores, other national chains and Internet/direct mail (catalog sales).
All of these stores lack the quality and innovation which La Perla brings to the
table.

Competition and Buying Patterns


In Malaysia, the choice of outlets for women to purchase intimate apparel is more
limited than many other markets in their neighboring countries.
The only stores that can be classified as a lingerie boutique in Kuala Lumpur,
Malaysia are, Lace Petals, Romance Culture, La Senza and Blush Lingerie. Most of
them opened at the back end of the last decade and are primarily trendy and
youth oriented with low to moderate pricing. Although they are in high traffic
area (easy to find), they do very little promotion with little retail surrounding
it. Except for La Senza we don't consider the rest as big competition in their
current state, but they do have some awareness amongst the masses.
The fact that there is a La Senza franchise in a close by mall, across the street, is
considered a positive. Customers who are lingerie shopping and do not find what
they want at there can easily cross the street to visit La Perla. Although both
malls are, technically different retail venues, traffic patterns suggest that
consumers treat them as one destination. The challenge will be to attract the
younger customers. According to a survey conducted by La Senza, over one third
of La Senza shoppers in Kuala Lumpur are 18-24, and 56% are 18-34. Since the

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demographics of Suria KLCC Shopping Mall are bitter than that of the other mall,
we should try to encourage mothers to bring their daughters into La Perla to
shop.
Other chain specialties, Lace Petals, Romance Culture and Blush Lingerie, all
have franchises in nearby areas. However, these companies are only dealing in
regular lingerie. Being hesitant to introduce the intimate line of their brand, at
the time of inception of their franchise, in Malaysia, they are still dealing in
everyday lingerie. La Senza was the first brand to introduce their Intimate line in
Malaysia and received rave reviews. Other chains are following suite and will be
introducing their own lines of intimate underwear, but we are confident that La
Perlas reputation and better innovation will prevail over others.
Tom Wyatt, President of Warnaco--"The department store is confusing. It's hard to
find a product, there's no service and it's very sterile. Until a decade ago, the
department store dominated the bra industry. But it has ceased to be at all
inspirational. It's no longer a place where a woman shops and feels special."
According to Warnaco focus groups, women HATE the underwear shopping
experience at department stores. Bras and underwear are jammed onto racks
that are packed too close together; the layout is determined by brand rather
than purpose; and customer service is non-existent, which is a crucial
component to bra shopping, hence about 80 percent of women wear the wrong
size.
Bottom Line is LA PERLA HAS A TRUE VOID TO FILL.

Trends
The U.S. Intimate Apparel industry appears to be healthy. Women's Wear Daily
reported that for the 12 months ending October 2009, total volume in dollars
was up 4.3 percent, and total volume units were up 6 percent. The largest
percentage increases came from the daywear category with sales up 27.1
percent and units up 27.5 percent.
Women's Wear Daily reports that department stores and chain specialty stores
are losing market share, around the world. We assume that much of that erosion
is a result of the increasing confidence in Internet shopping and where available,
specialty retailers. IAEs recognize that a specialty boutique such as La Perla will
offer excellent customer service, product knowledge, personal fitting service,
custom order options and wonderful product.
Innovations in textiles and manufacturing have caught consumer's attention.
Seamless undergarments that permit a greater range of motion and a smoother
silhouette as well as new generations of microfibers that keep a body warmer,
cooler or drier have encouraged consumers to seek out garments and fabrics
that meet and exceed their demands.

13 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Strategy and Implementation Summary


Specific details regarding our strategic and tactical plans will be covered in
greater detail in the following sections. However, to create an overview of the
opportunity that exists for La Perla, we offer the following SWOT
(Strengths/Weaknesses/Opportunities/Threats) Analysis:
Strengths Weaknesses
Franchises location Suria Mall KLCC. Babur Farrukh and Saad Zafar are
Expertise in production of fashion goods. inexperienced in this industry.
Superior customer service. Closed society.
Akmal Khans experience in this industry.
Comfort and Verity.
Creativity combined with quality and
design.
Quality and pioneering techniques being
its strong features.
Opportunities Threats
Only lingerie shop in ground floor. Slow recovery from recent economic
Attractive retail environment in Suria downturn.
Mall KLCC, and especially around the Talk of Victoria's Secret adding lines
store location. from international designers in the
With high level promotion, we can let the near future.
customers know its brand value and its Victoria Secret is already available in
intimate appeal. KL International airport.
Establish relationships with
complementary retailers (e.g. Bridal
shops) to share customers.

Marketing Strategy
Marketing Objective
Generate awareness through various marketing communications tactics to
generate customer trial visits in support of the business goals and objectives
for La Perla.

14 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

1. Utilize print advertising to generate awareness among the target audience and
to emphasize key shopping periods.

2. Ongoing use of direct marketing to keep La Perla top-of-mind among a portion of


the target audience at all times.

3. Develop and implement on-going in-store promotions, guerrilla marketing tactics


and cross-retail marketing to generate on-going awareness, trial and repeat visits
to La Perla.

4. Employ strategic placement on the Internet.

5. A big parties and lavish events organized/funded on behalf of La Perla, the week
before it opens.

6. Appoint a brand Ambassador

Tactics
Print advertising
Employ key print advertising vehicles to build awareness among the target
market:
Advertise in Malaysias Premier Sunday magazine on an on-going basis to
generate awareness as well as advertise call-to-action messages during key
shopping periods, e.g. Christmas holidays, Hari Raya Holidays, Chinese New Year
Holidays, wedding/bridal season.

Advertise in the annual weddings magazine to create awareness amongst the all-
important wedding/bridal audience.
Advertisements in girls and womens magazine. The circulation is 126,000
annually.
Periodic advertising in other publications focusing on specific audiences within
the target segments to generate awareness and highlight key shopping periods,
e.g., Chinese Newspaper or any small papers with a decent circulation.

On-going use of direct marketing


Direct mail will target a portion of the trade area (defined as a 15 mile radius) on
a monthly basis. From 500 to 1,000 post-card mailings will be sent out on a
monthly basis. Messages will run the gamut from "Now Open" to introduction
of product lines to special shopping events. In the case of special shopping
events, larger quantities will be mailed (see below). Our rationale for limited
quantity mailings on a monthly basis is to keep the La Perla name a "new news"
message among a portion of the target audience at all times. This will generate
awareness, which will lead to trial visits and word-of-mouth interest.

15 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Special Shopping Event mailings will be generated to reach a higher percentage


of the target audience in the trade area. These events will include the all
important 4th quarter holiday shopping season and mark down events. For these
events, we anticipate mailing to as many as 1,500 to 2,000 customers and
prospects minimum.

As La Perla generates its track able customer data base, we will utilize direct mail
to target specific interests, whether that is based on particular products, brands
or seasonal purchases. A "preferred customer" mailing list will also be utilized to
inform those important friends in advance of special shopping events.

We intend to implement a birthday program and quarterly trunk shows to also be


driven by direct mail.

Low or no-cost "guerrilla" marketing


This will be a key strategy in the first 12-24 months that La Perla is open for
business.
Cross-promotion/marketing with complementary stores in Suria KLCC - We will
create incentives for the nearby women's apparel and specialty stores to refer
their customers to La Perla. Whether that is by honoring a similar sale incentive
(percentage off retail) or limited time discounts to employees, we will find ways
to make it worth the effort to send their customers to our shop.

Emphasis on Bridal Shops - Recognizing the important role that lingerie plays in
completing a bridal wardrobe, La Perla will cross-market with area bridal shops to
provide those customers with the total positive experience. Our staff will be
available to provide advice, special fittings, and group pricing for wedding
parties.

Generate awareness - Whether it's classy introduction cards under windshield


vipers, participation in bridal and fashion shows, or telling our story to women's

16 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

groups and organizations, the staff of La Perla will look for those no-cost
opportunities to generate awareness within our target audience.

Drive increased customer traffic with a customer referral program targeting our
preferred customer base.

Employ strategic placement among key websites on the Internet


Purchase ad space on the popular wedding advisory website.

Negotiate with key product vendors for a regional listing as a key retailer for the
brand.

Negotiate with The Borneo Post, premium newspaper across Malaysia, for ad
space on its website for occasional exposure.

The following is a month-by-month overview of our marketing plans execution:


The Star
Wedding Direct
Magazin
Magazine Mail
e

Sep 1x 1,000

Oct 1x 1,000

Nov 1x 1,000

Dec 2x 1x

Jan 1x 1,500

Feb 1x 2,000

Mar 1x 500

Apr 1,000

May 1x 500

Jun 1x 1x 500

Jul 500

Aug 1x 1,500

Parties for promotion


Local night clubs will be funded to advertise the La Perla night, with small events
to be hosted by the DJs. Gifts will be provided for the participants, which will
help in introducing the brand to the party goers. One night before the Grand

17 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Opening there will be a fashion show at a 5 star hotel where models will promote
various ranges that La Perla will offer.

Brand Ambassador
We have decided to appoint Amber Chia as our Brand Ambassador for La Perla.

Amber Chia (born December 14, 1981) is a Malaysian model. She was born in
Ipoh, Malaysia, but grew up in the city of Tawau, in Sabah, East Malaysia. She
began her modeling career at seventeen in Kuala Lumpur. She gained exposure
after being a finalist in the 2004 Guess Watches Timeless Beauty Contest, which
was a model search for Guess Watch's brand ambassador. She has appeared in
her local Sony, LOreal, and Mitsubishi advertisements.
Chia was subsequently voted Model of the Year by the Malaysian International
Fashion Awards in 2004 and 2005. Her most defining features are her pouty lips
and her curvaceous figure.

Sales Strategy
1. Offer personalized customer service by well-trained, well compensated and
appreciated employees. Develop customer relationships and loyalty that creates
a desire for return visits.
2. Utilize the QuickBooks POS system to record customers' contact and purchase
information, enabling us to follow up with direct mail and/or phone calls to
communicate special events and the arrival of new products of interest.
3. Offer a 14-day exchange policy to give customers an option to return undesired
selections without losing revenue from the sale.
4. Establish two major markdown events per year and promote the events to
customers and prospects. These events will be used to move old inventory and
create a special reason to visit La Perla. Except for during the markdown events,
merchandise will be sold at full price to maintain the integrity of the quality
products we are offering. We do not want to train our customers to wait for a
sale.
5. Net purchases of 250$(750RM) and above will be delivered free of cost.

18 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

6. Network with bridal shops throughout Kuala Lumpur City to promote gift registry
and the personalized attention that La Perla offers brides and their wedding
parties.

7. Employees will receive added incentive to help meet/exceed customer service


and sales goals.

Sales Forecast
La Perla projected average transaction is $250(750RM). This figure was derived
using a couple of different sources.
Were projecting a rate of growth of 15% in year 2 and 20% in year 3. This will
come from garnering a larger market share based on increased awareness,
positive word-of-mouth recommendations, and customers adopting La Perla as
their exclusive lingerie outlet, as well as increased offerings in high demand
areas such as maternity and hard-to-find sizes.

Competitive Edge
Location
Suria KLCC has been one of the most popular tourist malls for ages. Locals
always call it a tourist mall, but still many tens of thousands come to this mall
every weekend to relax and hang out. Tourists may find many shops offer
different products that at other malls, Suria KLCC has many shops that sell
familiar international brands (and is also know for carrying western sizes). La
Perla will have edge over other brands.
Product Quality
La Perla is known for high level of quality and value to the consumer by offering
a wide range of styles and sizes, with little or no crossover of brands with other
retailers in Kuala Lumpur.
Customer Loyalty
La Perla will create customer loyalty by offering one-to-one attention to all of
their shopping needs. The following is an initial list of services that will be
offered:
Professional bra fitting.
Signature gift wrapping to reinforce the store image and make the
recipient feel special.
Online Purchases and free delivery in net purchases are at 250$(750RM)
or above.
Gift registry & wish list for wedding, birthday and anniversary. This allows
spouses and friends to know just what the recipient would like and simplifies the
shopping experience.
Bridal showers--By special arrangement, La Perla will offer space and
catering for bridal showers with incentives to purchase merchandise.
Custom/special orders.

Record of customers' size needs and purchase history.

19 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Personnel Plan
We owners, Babur Farrukh, Sheikh Saad Zafar Iqbal and Akmal Khan are ready to
work full time and have decided to share profits only. There will be on qualified
manager who will draw a full time salary of $30,000 (90,000RM) per annum. We
will appoint 3 part time sales people with a salary of $8,800 (RM 26,400) each.
These sales people will provide professional bra fitting service. The salaries are
expected to increase every year with improved performance.

Financial Plan
A line-of-credit up to $18,200 will be used to cover any monthly cash-flow
shortage and greater than anticipated inventory requirements.
Sales growth is expected to be aggressive with projections of sales increases of
15% in year two and 20% in year three.
Profits will be reinvested to reduce debt, expand product lines and increase
personnel, as and if needed.
La Perla is a retail store, and will not be selling on credit. La Perla will accept
cash, checks and all major credit cards.
Marketing and advertising will be no greater than 4% of sales.

A tax of 24% on profit will have to be paid.

Important Assumptions
We need to make sure that the rent remains the same for tenure. There should
be no fluctuations in the rent.
The crew are being given a career choice; not a job. They will be given special
training, customer care ethics from La Perlas professionals. Contracts need to be
drafted in such a way so as to discourage employees for jumping ship, and
preserve the La Perla way of things.

Financials
Following are the profit and loss account, cash flow statement and the balance
sheet for the proposed operation. Many of the figures are approximations,
although they have been taken from researches and data finding missions.

Pro Forma Profit and Loss


Year 1 Year 2 Year 3 Year 4 Year 5
Sales $600,000 $690,000 $720,000 $800,000 $912,000
Direct Cost of Sales $300,000 $325,000 $350,000 $397,000 $412,000
Other Costs of Goods $0 $0 $0 $0 $0
Total Cost of Sales $300,000 $325,000 $350,000 $397,000 $412,000
Gross Profit $300,000 $365,000 $370,000 $403,000 $500,000

Expenses
Payroll $56,400 $59,000 $61,300 $62,600 $64,900
Marketing and
$35,000 $30,000 $34,000 $36,000 $38,000
Advertising

20 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Depreciation $3,000 $3,000 $3,000 $3,000 $3,000


Lease $60,000 $0 $0 $0 $0
Rent $5,000 $5,000 $5,000 $5,000 $5,000
Packaging $2,500 $2,500 $2,500 $2,500 $2,500
Cell Phone $1,000 $1,000 $1,000 $1,000 $1,000
Travel $2,250 $1,200 $1,200 $1,200 $1,200

Web Design $1,420 $1,000 $1,000 $1,000 $1,000


Insurance $2,500 $2,600 $2,800 $3,000 $3,200
Credit Card Fees $10,110 $11,626 $13,604 $14,204 $15,908
QuickBooks $3,000 $0 $0 $0 $0
Other Start-up expenses $26,300 $0 $0 $0 $0
Franchise Cost $400,000 $0 $0 $0 $0
Total Expenses $608,480 $116,926 $123,204 $129,504 $135,708

Profit Before Interest and ($308,480


$248,074 $246,796 $371,920 $364,292
Taxes )

Taxes Incurred (24%) $0 $59,538 $59,231 $89,260 $87,430

($308,480
Net Profit $188,536 $187,565 $282,660 $27,6862
)

Pro Forma Cash Flow


Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received

Cash from Operations


Cash Sales $600,000 $690,000 $720,000 $800,000 $912,000
Subtotal Cash from
$600,000 $690,000 $720,000 $800,000 $912,000
Operations

Additional Cash Received


Sales Tax, VAT, HST/GST
$0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities
$250,000 $0 $0 $0 $0
(interest-free)
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current
$0 $0 $0 $0 $0
Assets
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0

21 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Subtotal Cash Received $850,000 $690,000 $720,000 $800,000 $912,000

Expenditures Year 1 Year 2 Year 3 Year 4 Year 5


Expenditures from
Operations
Cash Spending $56,400 $59,000 $61,300 $62,600 $64,900
Subtotal Spent on
$56,400 $59,000 $61,300 $62,600 $64,900
Operations

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid
$0 $0 $0 $0 $0
Out
Principal Repayment of
$0 $0 $0 $0 $0
Current Borrowing
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $56,400 $59,000 $61,300 $62,600 $64,900

Net Cash Flow $796,300 $631,000 $658,700 $737,740 $847,100


$1,231,0 $1,889,7 $2,627,4 $3,474,54
Cash Balance $600,000
00 00 40 0

Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets

Current Assets
Cash $121,325 $108,546 $131,215 $164,765 $207,864
Inventory $20,790 $43,185 $51,413 $47,900 $57,548
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $142,115 $151,732 $182,628 $212,665 $265,412

Long-term Assets
Long-term Assets $15,000 $15,000 $15,000 $15,000 $15,000
Total Long-term Assets $12,000 $9,000 $6,000 $3,000 $0
Total Assets $154,115 $160,732 $188,628 $215,665 $265,412

Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5

Current Liabilities
Accounts Payable $31,234 $32,113 $35,623 $36,001 $41,042
Current Borrowing $0 $0 $0 $0 $0
Other Current
$0 $0 $0 $0 $0
Liabilities
Subtotal Current
$31,234 $32,113 $35,623 $36,001 $41,042
Liabilities

Long-term Liabilities $140,092 $129,552 $117,697 $104,729 $90,544


Total Liabilities $171,326 $161,665 $153,320 $140,730 $131,586

22 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Paid-in Capital $21,750 $21,750 $21,750 $21,750 $21,750


Retained Earnings ($38,550) ($38,960) ($22,684) $13,558 $53,185
Earnings ($410) $16,277 $36,241 $39,627 $58,891
Total Capital ($17,210) ($934) $35,308 $74,935 $133,826
Total Liabilities and
$154,115 $160,732 $188,628 $215,665 $265,412
Capital

Net Worth ($17,210) ($934) $35,308 $74,935 $133,826

Break Even Point for the business


Break even point is the point where the total cost equals to total revenue. For
this business, we are expecting to recover the total cost to be recovered in year
three.

Exit Plan
A good exit strategy, although a last resort, should always be included along with
the business plan. Having an exit plan does not necessarily mean that we expect
our business to fail, but is more of an assurance for the investors the measures
we plan to take if it does not work out. This will dictate how we operate our
company.
Here are some of those measures that we have in mind in the eventuality that
this goes south:
Other companies might want to acquire our business, particularly if we are doing
well. We will make sure that the sale price is equal to our own valuation of the
business. This is so that we do not incur any losses.
We could sell the company outright for an easy exit. We will make sure that our
business is sold at the right price so that we do not make any losses (preferably
make a large profit).
If either partner decides to leave the company we will split the company into
two. The financials that the leaving partner receives will be directly proportional
to the profit the company is currently making.
In case of the company being a success, we would like to expand it and introduce
new franchises in Penang, Kuching, Kota Kinabalu and Johor Bahru. We would
also like to introduce new lines which we have so far not introduced; for example,
the perfume range, night wears, swim wears and mens undergarments.

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References
1. http://www.jhpartners.com/overview
2. http://www.jhpartners.com/investments
3. http://www.steinunn.com/Home/BIO/
4. http://sam223.hubpages.com/hub/Sexy-Lingerie-Malaysia
5. http://www.lasenza.com.my/
6. http://www.lacepetals.com/
7. http://www.blushlingerie.com/#/en/home/
8. http://www.romanceculture.com/
9. http://www.herroom.com/la-perla.shtml
10.http://investing.businessweek.com/research/stocks/private/person.asp?
personId=33961307&privcapId=33451880&previousCapId=33451880&previous
Title=Intimacy%20Management,%20LLC
11. http://blendnewyork.com/fashion-dictionary/pret-a-porter.htm
12.http://www.just-style.com/news/la-perla-to-enter-market-with-murjani-
deal_id95582.aspx
13.http://www.suriaklcc.com.my/about-us/leasing-information.dot
14.http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/12296/0/0
15.http://www.travelblog.org/Photos/1432435
16.http://www.backpackingmalaysia.com/things-to-do/suria-klcc-shopping-
mall/kuala-lumpur
17.http://www.suriaklcc.com.my/corporate/about-us.dot
18.http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/12296/0/0

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BUSINESS PLAN - LA PERLA

19.http://marriage-statistics.findthedata.org/d/d/Malaysia
20.http://en.wikipedia.org/wiki/Amber_Chia

Appendix

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BUSINESS PLAN - LA PERLA

Chart: Highlights
1,000,000.00
900,000.00
800,000.00
700,000.00
600,000.00
Sales
500,000.00
Gross Profit
400,000.00
Net Profit
300,000.00
200,000.00
100,000.00
-
Year 1 Year 2 Year 3 Year 4 Year 5

Chart: Start-up

800000
700000
600000
500000
400000
300000
200000
100000
0

26 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Chart: Partnership Breakdown

27 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Table: Expenditures by Household Income of Lingerie Purchasers

Night/Bras/Panties/Shape

HH Income 18+ <$50 $50-99 $100+

<$25K 22.3 20.0 12.9 7.7

$25-35K 11.4 11.2 7.6 6.1

$35-45K 10.7 10.4 9.7 11.1

$45-60K 13.7 14.6 15.3 12.6

$60-75K 11.4 11.4 11.3 9.2

$75-100K 12.9 14.0 19.0 20.6

$100-150K 11.1 11.9 14.8 21.2

$150-200K 3.6 3.7 5.7 7.4

$200K 2.9 2.8 3.7 4.2

28 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Source: MRI Fall 2003

Table: Expenditures by Age of Lingerie Purchasers

Nightwear/Bra/Panties/Night/Bras/Panties/Shape
<$5 $100 <$5 $100 <$5 <$5 $100
18+ $50-99 $50-99 $50-99 $50-99
0 + 0 + 0 0 +

18-24 13.1 10.8 14.5 10.4 12.8 10.1 10.2 11.5 14.0 12.0 12.6 10.1

25-29 8.5 8.3 10.0 11.1 7.8 9.5 9.3 8.6 9.2 8.3 9.0 10.2

30-34 10.0 9.9 9.9 16.9 9.6 10.8 13.2 10.3 10.3 9.9 10.6 13.2

35-39 9.9 12.7 9.2 11.0 10.5 10.0 12.4 10.7 11.4 10.7 10.2 12.0

40-44 11.23 13.1 11.9 6.7 10.6 11.9 17.7 11.3 15.1 11.5 12.9 16.2

45-49 10.0 8.9 10.2 10.9 10.5 13.6 11.1 10.5 12.4 10.4 12.3 11.4

50-54 8.9 10.1 13.2 13.2 9.8 11.5 8.7 10.1 10.1 9.8 11.0 9.2

55-59 6.9 8.7 8.1 9.1 8.6 7.4 7.7 8.0 7.0 8.0 7.6 8.5

60-64 5.4 5.1 5.4 6.4 5.7 5.1 4.0 5.4 3.8 5.4 4.7 4.0

65-69 4.3 4.1 2.2 2.8 4.4 3.8 2.5 4.4 2.1 4.3 3.3 2.4

70-74 3.9 3.0 2.1 1.5 3.6 2.8 1.8 2.9 2.4 3.3 2.8 1.5

75+ 7.9 5.4 3.4 0.0 6.2 3.6 1.5 6.4 2.1 6.3 3.1 1.4

Source: MRI Fall 2003

29 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Table: Start-up

Start-up

Requirements

Start-up Expenses

Lease (24 months) $60,000

Rent $5,000

Legal $3,000

Logo, Stationery, Business Cards $1,000

Utilities & Telephone $1,000

Packaging/Sacks/Boxes $2,500

Hangers $300

Business Supplies $600

Grand Opening Event $20,000

Signage $1,000

QuickBooks $3,000

Bank Card Machine & Supplies $400

Business & Inventory Insurance $2,500

Travel-Market Buying Trips $2,250

Other $0

Total Start-up Expenses $102,550

Start-up Assets

Cash Required $18,200

Start-up Inventory $300,000

Franchise Cost $400,000

Other Current Assets $0

30 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Long-term Assets $0

Total Assets $718,200

Total Requirements $820,750

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $102,550

Start-up Assets to Fund $718,200

Total Funding Required $820,750

Assets

Non-cash Assets from Start-up $115,000

Cash Requirements from Start-up $18,200

Franchise Cost $400,000

Cash Balance on Starting Date $18,200

Total Assets $533,200

31 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $250,000

Total Liabilities $250,000

Capital

Planned Investment

Investment CashAkmal, Babur and Saad $570,750

Investors $0

Other $0

Additional Investment Requirement $0

Total Planned Investment $570,750

Loss at Start-up (Start-up Expenses) $102,550

Total Capital $468,220

Total Capital and Liabilities $718,200

Total Funding $820,750

32 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Chart: Market Analysis

Table: Market Analysis

Market
Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Growt CAG
Customers h R
Women 25- 5% 82,529 86,953 91,614 96,525 86,953 1.31
59, RM 75K+ %
Women 18- 20% 7,140 8,568 10,282 12,338 8,578 4.69
24 %
Bridal 0% 45,000 45,000 45,000 45,000 45,000 0.00
%
Total 1.07% 134,66 140,52 146,89 153,86 140,53 1.07
9 1 6 3 1 %

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Sales

Lingerie $600,000 $690,000 $720,000 $800,000 $912,000

Other $0 $0 $0 $0 $0

Total Sales $600,000 $690,000 $720,000 $800,000 $912,000

33 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Lingerie cost $300,000 $325,000 $350,000 $397,000 $412,000

Other $0 $0 $0 $0 $0

Subtotal Direct Cost of


$300,000 $325,000 $350,000 $397,000 $412,000
Sales

Sales
1,000,000.00
800,000.00
600,000.00 Sales
400,000.00
200,000.00
-

Table: Sales
Table: Cost of Sales

Cost of Sales
500,000.00
400,000.00
300,000.00 Cost of Sales
200,000.00
100,000.00
-

Table: Personnel Plan

Year 1 Year 2 Year 3 Year 4 Year 5

34 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR


BUSINESS PLAN - LA PERLA

$30,00 $32,00 $34,00 $35,00 $37,00


Manager
0 0 0 0 0

Salespeople $8800 $9000 $9100 $9200 $9300

Total People 4 5 5 5 5

$56,40 $59,00 $6130 $6260 $6490


Total Payroll
0 0 0 0 0

Chart: Break Even Point

35 MUHAMMAD BABUR FARRUKH AND SHEIKH SAAD ZAFAR