1.

Executive Summary

1.1 Overview and Summary of Business Proposal

Proposal made by Sparkling Paradise to start up retail business in children clothing to

cater the needs for kids aged from infant to 14 years old, with good quality and latest
trends.We present an extensive range of children wear that are manufactured using
different fabrics such as cotton, wool, silk and others. Available in wide range of
gorgeous colors, designs and prints. These apparels are designed keeping in mind the
most up-to-date fashion trends by our company fashion designer.

Vision :
“To be distinguished and well-known retailer in asia-wide for the quality of products,
setting new trends and lifestyles”

Mission :
“To offer innovative, quality, convenience and interactive communication to customer”
1.2 Business Objective

My Business Objective is to provide our target customers with unique design , best
quality and comfortable apparels for their children to wear.

1.3 Overview of Market potential

The apparel retail industry consists of the sale of all menswear, womenswear and
childrenswear. The menswear market includes mens activewear, casual wear,
essentials, formalwear, formalwear-occasion and outerwear. The womenswear market
includes women's activewear, casual wear, essentials, formalwear, formalwear-occasion
and outerwear. The childrenswear market includes baby clothing, boys activewear, boys
casual wear, boys essentials, boys formalwear, boys formalwear-occasion, boys
outerwear, girls activewear, girls casual wear, girls essentials, girls formalwear-occasion,
girls outerwear and toddler clothing. The industry value is calculated at retail selling price
(RSP), and includes all taxes and levies. All currency conversions used in this report
have been calculated at constant 2010 annual average exchange rates.

The Singaporean apparel retail industry had total revenue of $2,218.3 million in 2011,
representing a compound annual growth rate (CAGR) of 4.1% between 2007 and 2011.

The Womenswear segment was the industry's most lucrative in 2011, with total revenue
of $989.5 million, equivalent to 44.6% of the industry's overall value.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of

5.8% for the five-year period 2011 - 2016, which is expected to drive the industry to a
value of $2,934.5 million by the end of 2016.

http://www.researchandmarkets.com/reports/2094489/apparel_retail_in_singapore:
Retrieved on 13.08.2012

According to Singapore Apparel Report, the sizes of kids wear market are growing
further. The volumes of market share of kid wear in the total apparel market are 22.8%,
against the 15.5% market share in 2010. Another report from Statistic Singapore,
Singaporeans are having fewer children and this show that parent are more willing to
spend on their kid with higher spending power.
2. Company Analysis

2.1 Mission of Sparkling Paradise

“To offer extended value added Product to our customer”
To achieve this, we target base on special quality, design convenience and collective
feedback from customers.

2.2 Function and feature of Sparkling Paradise

Sparkling Paradise operates with five staff. This helps to control the budget and less
overhead expenses.

Mr Tan Wei Wei

Proprietor

Designer

Supervisor

Sales Person 1

Sales Person 2
Our flagship store will be opened at Jurong Point, which happens to be the biggest heartland
shopping mall. Strategically located just beside Boon Lay MRT Station, it also has
accessible pickup points and drop-off points, easier to accommodate to the evening crowd
after working hours.

The main fuction of the business is retailing, and to prevent overhead cost, all the inventory
storage will be kept in the store. Designed by our own designer, the products are
manufactured in Thailand and Indonesia, as it is more convenient for travelling back and
forth, and also shipping and manufacturing costs are low. Thus providing a good quality
product at a low cost..

Designing kids wear is different from designing adult clothing. With the society
moving ahead towards being modern, kids nowadays go for the physical attribute of the
products through styles, designs, colors, and trends. The feature of the business is to
provide a unique design of the children wear. Our designer designs the clothes with
matching accessories to go with the tops, bottoms and skirts. This will help the customers,
which are the parents, to save time if they want to go for clothes in a set and at a cheaper
price.

2.3 Creating Market Presence for Sparkling Paradise

Sparkling Paradise is promoted via:

 Advertising
- Radio
- Magazines on parent and Kids
- Newspaper on the weekends
- Flyers
- Coupons
 Internet
- Facebook ads are one of the ways to promote and connect with people
easily.
- Websites is for customer to browse our newest product or availability
without having to come down to our stores.
- Setup free listing for business in search engine
2.4 Cost Of Production

 Fixed Cost
- Rents
- Staff Payroll
- Utility Bill
- Licenses, Permits & Registration Cost
- Website
- Insurances
- Payment for finished Goods
 Variable Cost
- Processing of Debit/Credit Cards
- Raw Materials
- Part Timer for Holiday or sales Season
- Stationary Cost

2.5 Pricing Strategy

Penetration Pricing will be our strategy for our business, since our retail business is
newly open and Singapore competition is high. We try to offer high quality product at a
low price to break into the market and try to achieve greater sales volumes.
 2.6 Revenue Forecast
Here's some detail on how to go about building financial forecasts when you're just getting your
business off the ground and don't have the luxury of experience.
1. Start with expenses, not revenues. When you're in the startup stage, it's much easier to
forecast expenses than revenues. So start with estimates for the most common categories of
expenses as follows:
Fixed Costs/Overhead
 Rent
 Utility bills
 Phone bills/communication costs
 Accounting/bookkeeping
 Legal/insurance/licensing fees
 Postage
 Technology
 Advertising & marketing
 Salaries
Variable Costs
 Cost of Goods Sold

o Materials and supplies
o Packaging
 Direct Labor Costs

o Customer service
o Direct sales
o Direct marketing

Since our business is to open up a retail store, there will be capital investment of
$300,000 for the business. Start-up Expenses including wages of staff, renovation,
material cost, advertising etc. On both weekdays and weekend we have forecast the
estimated monthly revenues into table. Please refer to the data below.

Table 2.7: Start-up Expenses for Kid Lover Retail Store

Investment Requirement $300,000
Total Investment $300,000

Start-up Expenses

Renovation $ 30,000.00
wages $ 6,000.00
Rents $ 8,000.00
Advertising $ 5,000.00
Furniture $ 10,000.00
Utilities $ 400.00
Goods $ 50,000.00

Total Start-up Expenses $ 109,400.00

Table 2.8: Revenue Forecast for Kid Lover Retail Store for Girl

Sales on the weekday Sales on the weekday

Product Unit Price Quantity
( Per Day ) ( Per Month )

         
$
Bracelet 18.90 10 $ 189.00 $ 5,292.00
$
Bags 29.90 6 $ 179.40 $ 5,023.20
$
Head accessories 9.90 25 $ 247.50 $ 6,930.00
$
Skirt 24.90 15 $ 373.50 $ 10,458.00
$
Dress 20.00 18 $ 360.00 $ 10,080.00
$
Blouse 18.90 12 $ 226.80 $ 6,350.40
$
Shoes 34.90 10 $ 349.00 $ 9,772.00
Total     $ 1,925.20 $ 53,905.60

Table 2.9: Revenue Forecast for Kid Lover Retail Store for Boy
 Sales on the weekday Sales on the weekday
Product Unit Price Quantity
( Per Day ) ( Per Month )
         
$
Bermuda 18.90 6 $ 113.40 $ 3,175.20
$
shirt 29.90 8 $ 239.20 $ 6,697.60
$
T-shirt 9.90 10 $ 99.00 $ 2,772.00
$
Polo-T 24.90 12 $ 298.80 $ 8,366.40
$
Kaki Pant 20.00 16 $ 320.00 $ 8,960.00
$
Bag 18.90 8 $ 151.20 $ 4,233.60
$
Shoes 34.90 6 $ 209.40 $ 5,863.20
Total     $ 1,431.00 $ 40,068.00

Total Revenue per month = $53,905.60 + $40,068

= $93,973.60

3. Competitive Analysis
In Singapore, there are quite a number of competitor in children wear Industry, Brand Label
like Giordano, Bossini, Hang Ten also share more than 30% share of the market. They are
also offering more affordable pricing then Jay Gee Melwani Group that have more branded
Label like Carter, Looney Tunes and Adidas Kids.

3.1 Demand will Change when price and quantity is affected

In children wear market, parents are the one who have the spending power. Buyer Incomes
affect capability to buy a good, meaning increase in income will have more buying. For
normal good demand rises as income rises but Inferior Good which demand falls as income
rises. Taste and Preferences is also affecting by advertisement, fashion, and influence of
other. Population size is also one of the effects that cause the demand to change. The
Influence of the three non-price determinants will effects of shift on Equilibrium.

Figure 1: Rise in Demand Equilibrium Curve

 S
P1
P
D1

Q Q1
The Equilibrium at Q and P when there an equal state between quantity demanded and the
quantity supplied. When the demand increase, demand curve shift to the right D1 as shown
in the Figure 1 along the supply curve and a rise in Equilibrium price and quantity.

Figure 2: Drop in Demand Equilibrium Curve

P
P1
D
D1

Q1 Q

The Equilibrium at Q and P when there an equal state between quantity demanded and the
quantity supplied. When the demand decrease, demand curve shift to the left D1 as shown
in the Figure 2 along the supply curve and a drop in Equilibrium price and quantity.

2.6.1 Income Effect on Demand

A parent’s income also affects the demand on the children wear, this mean when the
income of the parent rise due to increase in salary or getting a promotion the demand
of children wear will also increase. Likewise if the income falls, the demand of the
children wear will also decrease. Parents may switch to inferior goods for less quality
children wear.

2.6.2 Preference effect on Demand

The Parent preference will also impact the demand of children wear. People taste will
change over time when there is a change in the fashion or there is a celebrity doing
an endorsement for different label brand name. This might affect the sales of our
product because more parent turn to that branding.

2.6.3 Population effect on Demand

Given the statistics from the Government website, Singapore has a low birth rate.
This will affect the demand of the children wear to decrease over the years. However
it still show a positive trend for now as parent will have more spending power to buy
more since they have only one or two children.
 2.7 Change in Supply and Equilibrium price

The business is to supply unique children with high quality material help us to be
different with other competitor. Factors like fall in the cost of production, entry of new
supplier and improvement of production technology will cause the price and the quantity
supplied to change in the equilibrium.

Figure 3: Supply Increase Equilibrium Curve

S1
P1

P
D

Q Q1
The Equilibrium at Q and P when there an equal state between quantity supplied and the
quantity demanded. When the supply increase, supply curve shift to the right S1 as shown in
the Figure 3 along the demand curve and a rise in Equilibrium price and quantity supplied.
 Figure 4: Supply Decrease Equilibrium Curve
S1
S
P1

Q1 Q

The Equilibrium at Q and P when there an equal state between quantity supplied
and the quantity demanded. When the supply increase, supply curve shift to the left
S1 as shown in the Figure 4 along the demand curve and a rise in Equilibrium price
and decrease in quantity supplied.

3.2.1 Cost of Production Effect on supply

If the cost of production like Raw materials fall, there will be a increase in the supply since it is cheap
to produced more. Likewise, if the raw material cost increase there will be a drop in supply and price
of the clothing will increase. This theory applied to labour cost.

3.2.2 Entry of new Supplier effect on Supply

The increase of new sellers enter the Kid wear industry will affect the market of supply.
When there is a increase in seller the supply will increase forcing the price to drop. Therefore
some of the sellers may limit the supply by controlling the production. This is to limit market
supply and force the price to go up.

3.2.3 Production Technology effect on supply

Technology is changing very fast and there are more advance machine that can produce
more output and less labour involves. This will cost the Supply to rise and the price will fall.
 Figure 4: Supply Decrease Equilibrium Curve
S1
S
P1

Q1 Q

The Equilibrium at Q and P when there an equal state between quantity supplied
and the quantity demanded. When the supply increase, supply curve shift to the left
S1 as shown in the Figure 4 along the demand curve and a increase in Equilibrium
price and drop in quantity supplied.

3.2.2 Cost of Production Effect on supply

If the production cost for Raw materials fall, there will be a increase in the quantity supply since it is
cheap to produced more goods and services. Likewise, if the cost of raw material increase there will
be a drop in supply and price of the clothing will increase. Which , inadvertently affect the seller in
selling more goods . This theory applied to labour cost.

3.2.3 Entry of new Supplier effect on Supply

The increase in number of new sellers entering the Kid wear industry will affect the market of
supply. When there are more seller in the market, the supply will increase forcing the price to
reduce. Therefore some of the sellers may reduce the supply by producing lesser goods.
This is to limit market supply and force the price to increase.

3.2.4 Production Technology effect on supply

In, this fast rapid growing industry ,Technology is changing very fast and there are new
advance and high tech equipment that can produce more output very efficiently and less
labour involves. This will cost the Supply to rise and the price will fall.
3.3 Effect of Elasticity

Since clothing is a basic needs for everyone and especially parents love to spend more on
clothing for their childrens . This is a elastic demand where there are option to choose
because of many choices by closeness and availability of substitutes in the market.

3.3.1 Availability of Substitutes effects on elasticity

Kid Lover business operation is more on the High quality of material and lower cost but there
are still a lot of substitutes in the market like label brand giordano, hang ten also provide
affordable price and good quality product. Our business focus on exclucive design but
customer still can opt for other choice in the kid wear market. The price of the Demand is |
Ep| = 1 . Therefore to increase Total Revenue, we have to lower the price at a discount rate
to increase the quantity purchased.

3.4 Current Macroeconomic effect

In the service sector, movement in quarter 4 remain at level similar to the preceding quarter.
The weakness in trade-related service weighing on the whole sector performance. Tourism
show a strong sign in visitor arriving in Singapore from 11,638,663 in 2010 and 13,171,303
in 2011 an increase of 13.1%.It also aspect the number of tourist to increase to 14,290,00
this year 2012.

Employment estimated to have grown by 27,400 in first quarter of 2012.The increase was
lower than the seasonal high of 37,600 in the fourth quarter and the 28,300 in the first
quarter of 2011. The bulk of employment gains in the first quarter of 2012 continued to
come from services, which added 19,800 workers. Construction continued to register strong
increase of 8000.Manufacturing employment declined by 500. Service employment gain of
21,000 mainly come from the two Integrated resort to push the service sector to a greater
height.

MAS core Inflation, exclude the accommodation and transport cost, was shown a decrease
to 2.2% in quarter 4. Increase in price for oil-related and food rise higher in quarter 4
because of commodity price and growing domestic cost pressure. It was partly offset by a
moderation in services cost inflation.

Current service sector is still growing but due to the inflation increase in accommodation,
transport, food, etc the consumer will have to tighten their home expenditure. Consumer will
source for better bargain before buying and searching through other online buying from
other country.
3.4.1 Future Macroeconomic effect

According to the report, the cost of fabric materials will continue to increase from 1% to 3%
on the first half of the year. The businesses of some small and medium-sized retailers
become unsustainable due to the lacking of funds, hence reducing the businesses’ credit.
The prices of fabrics will still go softly in a steady trend. Fabric material is a commodity and
causes a global effect and the quantity supplied in the market will fluctuate and costs will
rise.

4. Industry Analysis

Children’s apparels in the market is a growing trend in Singapore is in a monopolistic

position where there are tough barriers to entry. Market in Singapore is small for children’s
wear so we will need to take on larger number of retail outlets.

The total Singapore’s market for clothing industry is $167 millions, out of which the share of
the kid wear from 6-14 years old is $82 million which was $46 million in 2010, almost
increasing by 50% since previous years.

International branding like Giordano, Bossini and Hang Ten will be our main competitor as
they provide more affordable pricings and more retail outlets in almost most shopping malls.

Penetration Pricing will be the strategy for our business, since our retail business is newly
opened and Singapore is known for its highly competitive market. We are targeting to offer
high quality products at low prices to break into the market and to achieve greater sales and
revenue volumes. Advertising through our website and social networking Medias like
Facebook are also one of the awareness platforms.

Our main focus as each of our designs are produced not more than 15 pieces to retain the
uniqueness of every design so consumer will not worry about buying the same pieces of
clothing as we limit the production of individual design.
5. Conclusion
Clothing industry signifies an individual’s uniqueness and the wearer's economic status.
Parents always want their children to dress in better and distinctive way. New firms entering
the kids wear market comes up with fresh new ideas with good services and discounts to
capture their own piece to share. Below are some of the recommendations for future growth:

 Trainings staffs for better services

 Setup E-commerce to serve overseas markets
 Customized apparels
 Opening up new branches in Orchard as there are more tourists
6.Referencing

1. Sample Business Plan

http://www.bizplancorner.com/samples/Retail-Kids-wear-store-business-
plan.pdf retrieved February 05, 2012

2. Overview of India kid wear Market

http://www.fibre2fashion.com/industry-article/pdffiles/16/1530.pdf Retrieved
February 06, 2012

3. Industry and Market Assessment

http://www.business-plans-guide.com/industry-and-market-analysis-
example.html Retrieved February 05, 2012

4. Economics Basic: Elasticity

http://www.investopedia.com/university/economics/economics4.asp#axzz1lV
wt78Nk Retrieved February 05, 2012

5. Recent Economics Development Singapore

http://www.mas.gov.sg/resource/eco_research/eco_dev_ana/Recent_Econo
mic_Developments.pdf Retrieved February 06, 2012

6. Competitor Analysis

http://www.slideshare.net/srivastavashivangi/competitor-analysis-2459474
Retrieved February 06, 2012

7. What Determines Elasticity

 http://www.infoplease.com/cig/economics/determines-elasticity.html
Retrieved February 06, 2012

7.Referencing

8. Retail Sales Index

http://www.singstat.gov.sg/news/news/mrsnov2011.pdf
Retrieved February 06, 2012

9. Analysis Of Market and Demand Of Kid Wear

http://www.scribd.com/doc/5556825/ANALYSING-MARKET-DEMAND-OF-
KIDS-WEAR Retrieved February 04, 2012

10. Textiles Index

http://en.kqindex.gov.cn/Comments/ Retrieved February 04, 2012