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A Craving for Fashion

Bringing Forever XXI to Greenville

Prepared for

Do Wan Chang, CEO

Forever 21, Inc.

Los Angeles, CA 90058

Prepared by

JPLS Consulting

Lauren Cosnahan

Paige Hardaway

James Keel

Shari Young

12/5/2011

JPLS Consulting

1001 East Fifth Street

Greenville, NC 27858

December 5, 2011

Do Wan Chang, Founder/CEO

Forever 21, Inc.

2001 South Alameda Street

Vernon, CA 90058

Dear Mr. Chang:

We would like to formally present you with the following proposal to expand Forever 21 Inc. to include a location in Greenville, North Carolina. JPLS Consulting took the initiative, based on what we believe is a need for fashions provided by the flagship store, Forever XXI, to research the feasibility of this venture.

Our research uncovered the popularity of Forever 21 in a city that is roughly 100 miles from the nearest store. The initial inquest began with the presence of a Forever XXI demographic in Greenville in part because most Greenville citizens are young women between the ages of 15 and 29 due to the location of East Carolina University, Pitt Community College, and various public schools. However, based on the current limitations on shopping in the area, we concluded that a Forever XXI, with its expanded departments, would fare well in Greenville.

JPLS Consulting also did the work of researching a potential location, and found an excellent contender: a former Circuit City building in a shopping center (University Commons) well-equipped to accommodate the business flow of a Forever XXI.

Our primary resource was a survey conducted among East Carolina University students. We also researched demographics and statistics provided by the local census to determine if the market would be profitable for the company. The results were favorable for opening a Forever XXI in the City of Greenville.

We thank you for the opportunity to consider this proposal, and we hope by the time you complete the review of this proposal, you will feel as excited as we do in expanding Forever 21, Inc. into Greenville. We will be available any time hereafter to answer any questions that may arise or address any of your concerns at (252) 294-4100 or via email at consulting@.

Sincerely,

Lauren Cosnahan

JPLS Representative

Table of Contents

Letter of Transmittal i

Executive Summary iii

Introduction 1

Purpose and Scope 1

Assumption 1

Methods 1

Limitations 2

Criteria 2

Location 2

Competition- University Commons 2

Competition- Pitt County 3

Facilities 4

Transportation 5

Economic Factors 5

Demographics 6

Target Market 6

Pitt County 6

Conclusions and Recommendations 7

References 9

Appendix A 10

Appendix B 11

Appendix C 12

Appendix D 13

List of Illustrations

Figure 1 4

Figure 2 4

Table 1 3

Table 2 5

Table 3 6

Table 4 7

Table 5 8

Executive Summary

Forever 21’s slogan is “A Craving for Fashion,” and the Greenville, NC community is craving just that. The city is known as the home to East Carolina University, which as a result is also the home of mainly young men and women. Greenville has some fashion options available, but nothing on the level of what a Forever XXI would offer. We at JPLS Consulting believe the solution is to open a Forever XXI at University Commons off Greenville Boulevard.

1. A market exists in Greenville that would prove profitable to Forever 21, Inc.

• In spite of the national economic downturn, consumers are still actively shopping for fashion apparel in Greenville, North Carolina.

• Most shoppers spend $10-$100 dollars on a given shopping trip.

• Consumers are shopping at least once a month, and as frequently as several times a week.

• Surveys indicate an interest in Forever XXI merchandise.

2. The city of Greenville hosts the target demographic.

• A majority of citizens are men and women aged 15-29.

• Populations also exist to cater to plus sizes, girls’ youth sizes, and maternity wear.

3. The prime location is currently available.

• University Commons has an available space with sufficient square footage.

• Easily accessible by the target demographic; East Carolina University Transit and GREAT (Greenville Area Transit) serve the location.

• Businesses within the University Commons shopping center act as a lure for shoppers.

• Ample parking exists at this location.

• It is adjacent to a main highway—Greenville Boulevard—which runs through Greenville and connects Pitt County.

Introduction

Forever 21’s slogan is “Satisfying a Craving for Fashion.” JPLS Consulting believes there’s a desire in Greenville, North Carolina for vogue fashion; a craving that would be fulfilled by Forever 21, Inc.

Purpose and Scope

Forever 21 is a hip, trendy retailer of primarily young women’s clothing that would bring more shopping options to the citizens of Greenville. As the home of East Carolina University, Pitt Community College and a number of high schools, Greenville is home to target demographic of a Forever XXI, thus making it a prime location.

The desire to maintain a fashionable wardrobe is a typical concern for young men and women, especially those who reside in a location that boasts an active nightlife and the social pressure of a dense population of peers. Forever XXI, with its moderately priced retail fashion, would be the perfect solution to the lack of shopping options in the area.

We at JPLS Consulting are recommending the opening of a Forever XXI as opposed to a Forever 21 that is only marketable to the junior women’s demographic. The locations we have scouted around Greenville can support not only the primary demographic, but also the fringe demographics of young men’s, girls’ youth sizes and plus sizes offered by Forever XXI. It is our intention to encourage the opening of a Forever XXI store in Greenville, NC in Pitt County.

Assumption

Based on the predispositions of young, college-aged shoppers in Greenville, a Forever XXI storefront would be successful and a boost to Pitt County’s economy during this somewhat volatile economic state. Given the affordability of the fashions offered by Forever XXI, it is the opinion of JPLS Consulting that this would be not only a profitable choice for Forever 21 Inc., but also a reasonably priced shopping solution for the young citizens of Pitt County.

We focused our research on the previously mentioned demographic, young women, in order to gain perspective on the shopping habits among those at East Carolina University. We used this information under the assumption that the results would reflect the findings of Pitt Community College students and non-students of the same age, had they been interviewed as well. Although we intend to include the male market and that of girls younger than those surveyed, we feel that, had we interviewed those groups, the results would not be significant enough to distort the findings to the point that a Forever XXI would not be warranted in Pitt County.

Methods

Our initial research and the reason we began perusing this proposal came from an article about the initiatives and success of Mr. Do Wan Chang in Bloomberg Businessweek magazine.

A majority of our sources come from online reports and articles. Personal surveys were conducted in order to obtain the opinions of the target demographic. Census information was also used in order to compare the target market to the population of Pitt County.

Limitations

JPLS Consulting, due to time and resource restrictions, had to limit our personal surveys to include only the primary demographic while unfortunately bypassing the opinion of the Forever XXI “fringe” demographics: men and elementary-aged girls.

Due to the fact that Forever 21 Inc. is a privately-owned company there is little information available to the public regarding the operations necessary to launch a new storefront.

A lack of real-world experience in business also presents restrictions to JPLS Consulting in this scenario. Three of our consultants are business majors; the fourth is an English major with a prior Associate’s degree in Fashion Merchandising. Of the business majors, two are specializing in Marketing and the other in Management. Although these diverse backgrounds provided for a multitude of professional approaches, the lack of professional business experience did hinder the development process.

JPLS Consulting attempted to retrieve information specific to the location we had in mind for our store, however multiple attempts to reach the realtor, Pam Harrelson, were met with limited response. Our initial email was unanswered, and a phone message was passed to an associate, Sue White. Ms. White called back but we were unavailable to take her call. When we called back and left a message with specific questions, she did not respond. In addition, the original leasing management company, Centro Properties Group, was bought by Blackstone Real Estate Partners VI L.P. and renamed Brixmor Properties Group Inc. These changes in management perhaps lead to the communication difficulties we encountered.

Criteria

The focus used during the course of this investigation was on rival businesses, in both the immediate area and county-wide, that might contest and/or benefit from the establishment of a Forever XXI. Additionally, the criteria were based on the location of our proposed storefront, the accessibility to on-campus students, and the economic influences of greater Pitt County on opening a Forever XXI. Finally, research conducted by our consulting firm also relied on demographic information provided by Brixmor’s website as seen in Appendix D, as well as data from the U.S. Census Bureau (2010) to determine if local demographics coincided with Forever XXI’s target market.

Location

Competition—University Commons

University Commons, located at the intersection of Greenville Boulevard and Evans Street, as seen in Appendix A, is home to a wide variety of retailers and restaurants. Some of the establishments in the area have a demographic similar to that of Forever XXI. Instead of viewing this as an obstruction to possible business at our proposed site, we at JPLS Consulting, see it as an opportunity for shoppers to expand their options without traveling an exceptional distance to shop. In other words, the presence of a Forever XXI would make University Commons a “one-stop-shop” for the fashion needs of men, women and children.

Our survey data, as seen in Table 1, shows that TJ Maxx, a fashion outlet retailer also located in University Commons, is a popular shopping site for our target demographic. In the case of outlet and bargain retailers, shoppers tend to visit multiple locations in search of multiple deals. So, in the case of University Commons, a Forever XXI would add to the options of bargain hunters going store-to-store in their pursuit of great deals.

In addition, University Commons offers the shopping opportunities of Target, Dress Barn, Shoe Carnival, Barnes and Noble, Harris Teeter, and Casual Male, among others.

Competition—Pitt County

Greenville Mall, located about a mile away from our proposed site, might serve as the largest source of competition, due to the variety of popular fashion retailers. In our research we have found that American Eagle, Belk, Charlotte Rousse, Express, JCPenney, Maurice’s and New York and Co., all of which are located in the Mall, are top stops for our demographic.

We at JPLS Consulting have chosen NOT to open a Forever XXI location in Greenville Mall for a variety of reasons. Foremost, while scouting locations around the greater Greenville area, we found that no available sites in the Greenville Mall would reasonably accommodate a Forever 21, let alone a Forever XXI. As evidenced by the reputation of large retailers outside of the mall (e.g. Kohl’s, Ross), we believe that a Forever XXI would prove profitable at a location outside of the Greenville Mall.

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Table 1. Variety of shopping opportunities in Greenville, NC.

Facilities

The square footage of the building in question can most certainly accommodate a Forever XXI. The average size of a Forever XXI is 24,000 square feet, a statistic no available mall facility could provide. The proposed building hosts anywhere between 22,000 and 28,500 square feet of sales space; depending how much of the facility is used for storage, employee relief areas, and office space, etc.

Because the building is located at the end of the shopping strip, it is privy to a parking area that is likely to be used exclusively for its own customers. Also, if customers wish to do so, they might park near any of the other shopping locations within University Commons and walk between their intended destinations.

As the former location of a Circuit City, the building, as seen in Figure 1, features the company’s signature red block storefront design above the entrance. This would have to be altered to better suit the Forever XXI business model, shown in Figure 2, and barring any restrictions by the building’s owners.

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Figure 1. Storefront of proposed location.

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Figure 2. Possible makeover for proposed storefront.

Transportation

University Commons is conveniently located on the East Carolina University Transit Route 303 Blue. This would make the location readily available to East Carolina students living on campus or otherwise without access to their own form of personal transportation. The convenience of this transit system makes Forever XXI accessible to its target demographic.

Additionally, GREAT (Greenville Area Transit) also services stops at University Commons. Routes also include downtown and the outer fringes of Pitt County, potentially bringing business into town and boosting economic activity.

Economic Factors

Given the recession of 2008, and the sluggish economy we are currently experiencing, JPLS Consulting, in addition to professional economists, feel it is necessary for businesses to take risks. We feel that the addition of a Forever XXI to the economic community of Pitt County and Eastern North Carolina would boost growth of the market.

Pitt County has a poverty rate of 25.5%, versus a North Carolina rate of 16.2%. This census is designed for permanent residents however, and does not include the non-permanent residents that compromise a majority of the target market—students. A majority of incoming freshman for the 2010-2011 school year moved here from Wake County, North Carolina, which has a poverty rate of only 10.2% which is far less than the state average. In sum, non-permanent resident students are coming from wealthier parts of the state to gain access to higher education, and these students are members of the prime demographic we’re appealing to with the addition of a Forever XXI in Greenville.

Our surveys to ECU students, found in Appendix B, show students shop at least once a month, and most shop several times a month as shown in Table 2. Almost no one spends less than 10 dollars, which could easily be done at a Forever XXI, but is not likely to be done based on the habits of East Carolina University student shoppers as shown in Table 3.

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Table 2. Information regarding shopping trips per month.

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Table 3. Representation of surveyed students shopping expenditures.

Demographics

Target Market

The main demographic for women’s junior sizes can range from students in middle school to college-aged young adults. Forever XXI has a wide variety of styles, as well a wide variety of sizes, which can reach outside the typical demographic. For example, professional style clothing at a low price can appeal to women just out of college and entering the work force.

One of the advantages of opening a Forever XXI as opposed to a Forever 21 is the wider range of choices for women, including the newest offering—maternity clothing.

Additionally, Forever XXI has options for men. Styles for men focus mainly on the scope of casual wear with a few accessories, such as ties and hats, with just a few semi-professional options. The age group for these young men could be anywhere from 14-25.

A few Forever XXI stores also cater to the girls’ youth market. These clothes can be sold to elementary-aged schoolgirls, aged 5-12.

Pitt County

Within 10 miles of the proposed site for our Forever XXI, 29 percent of women aged 15 to 29 reside, as seen in Table 4. This is made up of mostly college students at East Carolina University and Pitt Community College, and directly correlates with the primary demographic of a Forever XXI.

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Table 4. Demographics within a 10 mile radius of proposed location.

Over half of the women within the same 10 mile radius are of child-bearing age, which may appeal to a potential maternity market. Pitt County birth rates are on par with the national average.

The men’s market in the area is similar to the women of the same age; 28.9 percent of the population within 10 miles of the proposed site is men ranging in age from 15 to 29.

A market exists for elementary-aged girls, as well. Within the same 10 mile radius, 11.4 percent are girls aged 5 to 14.

This only includes the marketable demographic provided by Brixmor Properties Group, which can be found in Appendix D, within a 10 mile radius of the proposed site at University Commons. We at JPLS Consulting believe a market exists beyond this area. In Pitt County there are 12 elementary schools, four middle schools, three high schools, four colleges, and nine private schools. These establishments of education all cater to our target demographic and exist within 15 miles of the proposed location.

Conclusions and Recommendations

Based on information retrieved by JPLS Consulting, we believe there is great potential for Forever 21, Inc. to expand their market into the greater Greenville area.

1. A market exists in Greenville that would prove profitable to Forever 21, Inc.

• In spite of the national economic downturn, consumers are still actively shopping for fashion apparel in Greenville, North Carolina.

• Most shoppers spend $10-$100 dollars on a given shopping trip.

• Consumers are shopping at least once a month, and as frequently as several times a week.

• Surveys indicate an interest in Forever XXI merchandise as shown in Table 5.

1. The city of Greenville hosts the target demographic.

• A majority of citizens are men and women aged 15-29.

• Populations also exist to cater to plus sizes, girls’ youth sizes, and maternity wear.

2. The prime location is currently available.

• University Commons has an available space with sufficient square footage.

• Easily accessible by the target demographic; East Carolina University Transit and GREAT (Greenville Area Transit) serve the location.

• Businesses within the University Commons shopping center act as a lure for shoppers.

• Ample parking exists at this location.

• It is adjacent to a main highway—Greenville Boulevard—which runs through Greenville and connects Pitt County.

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Table 5. Formal representation of interest in a Forever 21.

References

Berfield, Susan. "Forever 21's Fast (and Loose) Fashion Empire - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. Web. 5 Sept. 2011.

"Brixmor." Splashpage. Web. 01 Dec. 2011.

"Demographics - Radius." Chart. Brixmor. Web. 11 Nov. 2011.

"ECU Fact Book 2010-2011." ECU Academic Affairs. Web. 5 Nov. 2011.

Forever 21 Inc. Www.. Web. Sept. 2011.

"Model-based Small Area Income & Poverty Estimates (SAIPE) for School Districts, Counties, and States - U.S. Census Bureau." Census Bureau Home Page. Web. 26 Oct. 2011.

"Pitt County QuickFacts from the US Census Bureau." State and County QuickFacts. Web. 26 Oct. 2011.

"Sit Plan & Roster." Map. Brixmor. Web. Oct. 2011.

Appendix A

Appendix B

JPLS Consulting Survey

• How often do you go shopping for clothing and/or accessories (circle one)?

o Once a month

o Two to three times a month

o Once a week

o Two or more times a week

• How much do you spend on a typical shopping trip (circle one)?

o Under $10

o $10-$49

o $50-$99

o $100-$199

o $200 or more

• What stores do you frequently shop at in Greenville (check all that apply):

o Aéropostale

o American Eagle

o Belk

o Catalog Connection

o Charlotte Rousse

o Ché Bella Boutique

o Express

o Fusion

o JC Penny

o Kohl’s

o Maurice’s

o Monkee’s of Greenville

o New York and Co.

o Ross

o TJ Maxx

o Other (please list)_________________________________________

• Do have any interest in a Forever 21 opening in Greenville?

o Yes

o No. If so, why not?________________________________________

Appendix C

Survey Data

n=40

|Shopping Trips Per Month |Total |Percentage |

|Zero Times Per Month |0 |0% |

|Once a Month |12 |30% |

|Two-Three Times a Week |15 |38% |

|Once a Week |9 |23% |

|Two or More Times a Week |4 |10% |

|  | |  |

|Total $ Spent Per Trip |Total |Percentage |

|Under $10 |0 |0% |

|$10-$49 |13 |33% |

|$50-$99 |13 |33% |

|$100-$199 |10 |25% |

|$200 or more |4 |10% |

|  | |  |

|Locations of Shopping |Total |Percentage |

|Aéropostale |0 |0% |

|American Eagle |23 |58% |

|Belk |17 |43% |

|Catalog Connection |10 |25% |

|Charlotte Rousse |31 |78% |

|Ché Bella Boutique |9 |23% |

|Express |14 |35% |

|Fusion |6 |15% |

|JC Penny |4 |10% |

|Kohl’s |28 |70% |

|Maurice’s |8 |20% |

|Monkee’s of Greenville |0 |0% |

|New York and Co. |17 |43% |

|Ross |4 |10% |

|TJ Maxx |17 |43% |

|Other |11 |28% |

|  | |  |

|Interested in Forever 21? |Total |Percentage |

|Yes |39 |97% |

|No |1 |3% |

Appendix D

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A Craving for Fashion

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