P R O D U C T B R A N D I N G S T R AT E G Y PROPOSAL

AUGUST | 2013

CONTENTS

B R A N D S T R AT E G Y O V E R V I E W T R AV E L R E TA I L OVERVIEW S W OT A N A LY S E S P R O P O S E D S T R AT E G Y N AT I O N A L A C C O U N T S S W OT A N A LY S I S P R O P O S E D S T R AT E G Y FINAL PROPOSAL

BT FASHIONS BRAND EVOLUTION

R E TA I L PRICE

$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
EXTENDED PREMIUM

T R AV E L R E TA I L

N AT I O N A L A C C O U N T S

TRAVEL RETAIL

BRAND AWARENESS

*Results polluted by Grupo Adixion a Mexican musical act

A / B

STRENGTHS
40 year history. Strong brand awareness and presence in the travel retail industry. Houses a wide portfolio of product categories. Trademark-protected in international markets.

WEAKNESSES
Poor, and declining, brand awareness amongst consumers. Brand equity has been tarnished by decline in perceived product value.

OPPORTUNITIES
Wide presence in over 400 locations across 60 countries. Seen as a leader in affordable fashion in the travel retail segment. Renew the brand under new ownership.

THREATS
Association with the $10 price point limits margin opportunities, and hurts product quality and limits categories that we can provide as costs continuously increase. Entrance or development of stronger brands in the channels we operate in.

STRENGTHS
Multi-price structure allows for greater margin. Higher prices can support a wider breadth of categories. Not directly associated with the Bijoux Terner brand freeing it from the constraints of that brand.

WEAKNESSES
No clear brand identity or denition. No dened sourcing strategy or store rollout strategy. Low brand awareness both in the travel retail industry and amongst consumers. Inconsistent product mix. Negative connotation.

OPPORTUNIT Y
Luxury segment of the travel retail industry is expected to grow 25% between 2012 and 2014.1 Young brand with limited distribution that can be tweaked and molded to maximize growth potential. Existing customers have expressed an appetite for higher margins.

THREATS
Powerful brands are entering (Tiffany & Co., Hublot) and expanding (Este Lauder Cos, LVMH, etc.) their presence in the higher-end luxury space in travel retail Direct competition from SNIs similar multi-priced concept B-Iconic. Common brand name leading to brand confusion or potential intellectual property disputes. Trademark protected only in a handful of countries.

1 Wealthy travelers boost airport sales of luxury brands - The Guardian

2 PRIMARY NEEDS
M U LT I - P R I C E D B I J O U X T E R N E R O P T I O N ( E c o n o m y P r i c i n g T i e r )
Allows us to offer modestly higher margins, improve product quality, and maintain categories.

H I G H E R E N D M U LT I - P R I C E D B R A N D ( M i d - T i e r B r a n d )
Targets a higher-end, more discriminate consumer allowing us to seize and offer larger gross margins and to gain a foothold in the growing segment.

DEFINING PRICE TIERS

JEWELRY BAGS
$25 - $35

SCARVES

S A L E S I N A D I X I O N S TO R E S ( J & H ) B Y R E TA I L P R I C E
$300,000

ECONOMY TIER

$3.80 - $24.80

$10.80 - $32.80

$6.80 - $16.80

$5.99 - $19.99

$22.99 - $49.99

$7.99 - $10.99

$250,000

$5.95 - $24.95 $200,000

$24.95 - $49.95

$9.95 - $14.95

$29.95 - $54.95

$15.99 - $29.95

$150,000

MID-TIER

$10 - $98

$59.90 - $79.90

$29.90 - $34.90

$100,000

$16.95 - $49.95

$29.90 - $79.95

$24.99 - $36.90

$50,000

$10 - $44

$49 - $120

$34 - $39

$9.99 - $55

$20.99 - $198

$17.49 - $34.99

PREMIUM

$0 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00

$16.90 - $59.90

$35.90 - $249

$19.90 - $59.90

$18 - $148

$78 - $448

$38 - $88

NEW BRANDS WHOLESALE SALES BY PRICE

JA N UA R Y 2 0 1 1 J U N E 2 0 1 3
Sales (Thousands)
$2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 43 44 47 50 59

Thousands

Price ($)

Extended

Premium

WHOLESALE SALES BY PRICE TIER

J U LY 2 0 1 1 J U LY 2 0 1 3
$350,000

$300,000

$250,000

$200,000

Orders for Fredericks of Hollywood

$150,000

$100,000

$50,000

$0

-$50,000

Extended

Premium

WHOLESALE SALES | ADIXION PREMIUM VS. EX TENDED

JA N UA R Y 2 0 1 3 J U LY 2 0 1 3
$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0 January-13 -$10,000 February-13 March-13 April-13 May-13 June-13 July-13

Extended

Premium

ECONOMY PRICING TIER

Sell-in BTX categories no longer offered by BT (handbags) to existing BT stores $10 Develop an entirely new multipriced brand tied to the BIJOUX TERNER name (BTX) Remove all mentions of $10 from branding / marketing Sell-in BTX into new stores using new store design with expanded product portfolio Replace store signage containing Luxury at $10 as part of store redesign Offer to move more BT categories into BTX pricing model to give margin while renegotiating costs

MULTI-PRICE

BTX
MULTI-PRICE

Develop marketing campaign to increase awareness of the new brand

YES

Do we want to extend the life of BIJOUX TERNER?

NO

Develop an entirely new multi-priced brand (Z)

Develop marketing campaign to increase awareness of the new brand

MULTI-PRICE

Z
$10

Sell-in Z into new stores using new store design with expanded product portfolio

MULTI-PRICE

Slowly decrease then cease branding activities

Offer to remodel stores to new Z stores to offer higher margin.

MID-TIER
BTX
ECONOMY TIER
EXTENDED
Lower Price Points Develop marketing strategy
MULTI-PRICE MULTI-PRICE

Higher Price Points

Develop product strategy

PREMIUM
YES

Do we want to a separate brand to target Price Tier 2?

NO

BTX
MULTI-PRICE MULTI-PRICE

NATIONAL ACCOUNTS

STRENGTHS
Multi-price structure allows for greater margin. Higher prices can support a wider breadth of categories. Awareness is building in the food and drug channel. Not directly associated with the Bijoux Terner brand freeing it from the constraints of that brand.

WEAKNESSES
Brand identity constructed with no research or market feedback. Relies on a re-ticketing strategy leading to high supply chain costs, and increased lead time. Low brand perception caused by association with food and drug channel No unique product, marketing, or merchandising strategy.

OPPORTUNIT Y
Has a presence albeit small in several large, massmarket national retailers. Distribution can increase to several thousand stores with successful tests and relationship building.

THREATS
Trademark protection not secured and currently under dispute. Common brand name leading to brand confusion or further intellectual property disputes.

BRAND AWARENESS
Bijoux Terner LLC Launches BYou

F D C B

The BYous
A lifestyle brand empowering girls and women to be themselves. Have lines of fashion accessories and apparel.

Telecom company

Toy company

Singer in band

NATIONAL ACCOUNTS

ECONOMY TIER

CONVENIECE CHANNEL
MULTI-PRICE

S P E C I A LT Y CHANNEL

BTX
MULTI-PRICE

or

MULTI-PRICE

MID-TIER

FINAL PROPOSAL

MULTI-PRICE

Sell-in BTX categories no longer offered by BT (handbags) to existing BT stores $10 Develop an entirely new multipriced brand tied to the BIJOUX TERNER name (BTX) Remove all mentions of $10 from branding / marketing

Replace store signage containing Luxury at $10 as part of store redesigns

Offer to move more BT categories into BTX pricing model to give margin while renegotiating costs

MULTI-PRICE

BTX
MULTI-PRICE Lower Price Points Higher Price Points

Sell-in BTX into new stores using new store design with expanded product portfolio

Develop marketing campaign to increase awareness of the new brand

ECONOMY TIER MID-TIER

EXTENDED

Develop marketing strategy

Develop product strategy

PREMIUM

SHORT TERM PL AN
R E TA I L PRICE

$80 $70 $60 $50 $40 $30 $20 $10 $0

BTX

T R AV E L R E TA I L

N AT I O N A L A C C O U N T S

LONG TERM PL AN
R E TA I L PRICE

$80 $70 $60 $50 $40 $30 $20 $10 $0

T R AV E L R E TA I L

N AT I O N A L A C C O U N T S