the xyz clothing-business plan

8/2/2019 The XYZ Clothing-Business Plan

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]Submitted to Prof. M P Sebastian

Towards completion of the Business Plan Course for ePGP-

03

Submitted by

Balram S Sharma - ePGP-03-109

Dhananjay Singh ePGP-03-111

Garima Dhamija - ePGP-03-113

Sachin Malhotra - ePGP-03-154

Business Plan for

The XYZ Company


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Throughout the centuries there were men who took first steps, down new

roads, armed with nothing buttheir own vision. - Ayn Rand

Private and Confidential


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Contents

Introduction ....03

About The XYZ Clothing .03

A License to Sell .05

Potential Market.05

OurStrengths .07

The Retail Industry in India ... 10

Distribution Plan ....11

Advertising Plan ... 15

Projected Income...16

Projected Expenses..17

Projected Profit . 19

Capital Expenses and Funding .. 19

Conclusion .21

Private and Confidential 2


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Introduction

The XYZ Clothing is a Startup Venture with the following USPs giving it a unique positioning in the market:

1) It has a ready market of over 15 Million people in India for itsproducts.2) Monopoly in the products it will sell. No other player in India can sell the products

being sold by The XYZ Clothing.3) Products will be sold at a price point ofbetween Rs. 400 and Rs. 750 making it a

mass market product.4) We do not need to spend money and time to build a brand since a huge brand pull

already exists for the products we will be selling.

About The XYZ Clothing

The XYZ Clothing will offer a fashionable range of Licensed Character based Apparel andNightwearforMen, Women and Children. We will be taking the licensed route for our forayand ourcollection willprimarily include licensed merchandise. We will be hiring theservices of a manufacturing facility in Tirupur, Tamil Nadu to manufacture our Apparel andNightwear. We have

already securedlicensing rights for the following World Famous

characters:

Barbie Disneys Winnie the PoohWith more than US$ 3 Billion Forbes Magazine ranks Winnie theat retail, Barbie is the #1 Girls Pooh as the second most valuableBrand Worldwide. characterwith US$ 5.6 Billion in

Global Retail Sales.

Garfield Fido DidoOver 263 Million readers Popularly known as the King ofgobble up Garfields wry wit Cool, Fido Dido isprobably the onlyevery single day. Garfield is the characterin the World to havemost widely syndicated comic gained Worldwide popularity evenstrip in the World, appearing in though he has no TV Show ormore than 2,600 newspapers. Feature Film on him.



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Our collection will include the following:

Apparel Nightwear

Round NeckTees Polo Tees Shirts Jackets Tank Tops Sweat Shirts Track Suits Sweaters Cargo Pants Bermudas Capris Shorts

Pyjamas Nightgowns / Nighty Round Neck T-Shirt and Shorts Set Night suits

The following licenses are secured by us:

Barbie NightwearWinnie the Pooh Apparel and Nightwearfor Teens and AdultsGarfield Apparel and Nightwearfor all ages 2 years upFido Dido Nightwear

Some sample designs of Character Based Apparel:



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A License to Sell

Leveraging the Power of Licensing to market products

In todays climate of increasinglysophisticated marketing methods, many companies lookto licensing toreinforce brand image, generate recognition and build brand equity.Licensing allows companies to tie theirproducts to already hot properties and that canmean a built-in audience for aproduct thats new to themarket.

Why License?

Being granted a popular, sought afterlicense can help a new company establish itselfwithin its industrysectorand it can help it acquire expanded distribution.New apparelcompanies normally face difficulty in getting shelf space at already crowded Retailstores but find a welcome mat at a retailers door afterreceiving the rights to a popularlicensed property.

Characters for youngerkids tend to work a lot like celebrities do for older people, Theappeal ofcharacters is very strong among children and always has been. Aligning a

product with the mostdesirable and sought after characters can boost sales

substantially.

Potential Market

Rememberwhen children wore what theirparents bought them? Neither do we. A retailindustry surveyconductedby MarketResearch.com for the US market reports 71 per centofmothers purchase itemsspecifically requested by theirchildren.

Trade sources estimate world wide licensing at US$160 billion in 2003. Entertainment /Characterlicensingcontinues to be the largest revenue category in the industry at 43%. Inthe year 2006, licensed productsgenerated nearly $12 billion in retail apparel sales in the

US, according to the "Licensing Letter," an industryperiodical. Virtually any mass marketapparel merchandiserin the US can attest to the fact that characterlicensed apparel, inmen's, women's and children's sizes, continues to be a primary vehicle for sales.

Presently, character-licensed merchandising accounts for only about Rs. 400 crores ofoverall retail sales in India. With the concept of licensed Apparel fairly new in India, wehave a huge advantage as one of the first few entrants in this arena with some of the best

brands in ourstable. Barbie, Winnie the Pooh, Garfield and Fido Dido come under thecategory of Classic brands since they have all been around for over 25 years and will bearound for along time to come. All of them have a huge growing fan following who arewaiting to buy products of thesebrands.

Below are some basic calculations on the Potential market for ourproducts:

Barbie Nightwear

Target Market 5 14 year old GirlsTotal Population in the Age Group 5 14 in India: 225 MillionApproximate Female Population: 110 MillionConsidering only 5% of Female Population in this Age Group are Barbie Fans we have alarge market ofover 5 Million Fans of Barbie who will definitely buy BarbieNightwear.



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Winnie the Pooh Apparel and Nightwear

Target Market 15 24 year old Boys and GirlsTotal Population in the Age Group 15 24 in India: 215 MillionConsidering only 2% of Boys and Girls in this Age Group are Winnie the Pooh Fans we have alarge market of over 4 Million Fans of Winnie the Pooh who will definitelybuy Winnie thePooh Apparel and Nightwear.

Garfield

Target Market 5 24 year old Boys and GirlsTotal Population in the Age Group 5 24 in India: 440 MillionConsidering only 0.5% of Boys and Girls in this Age Group are Garfield Fans we have alarge market ofover 2 Million Fans of Garfield who will definitely buy Garfield Appareland Nightwear.

Fido Dido

Target Market 15 24 year old Boys and GirlsTotal Population in the Age Group 15 24 in India: 215 Million

Considering only 2% of Boys and Girls in this Age Group are Fido Dido Fans we have alarge market ofover 4 Million Fans of Garfield who will definitely buy Garfield Appareland Nightwear.

As we can see from the calculations above we have a ready market of over 15 Million peoplein India waiting to buy Apparel and Nightwearof their favourite character. Thus a hugemarket demand is already available for the products we will be selling. Apart from thecharacters we already have a license for; we willberegularly adding new characters inour line up. Apart from classic characters which will form the base ofourbusiness, we willalso be constantly looking for characters which have a low popularity period but very highfan following during this period. Forexample, characters like Pokemon, Beybladeetc. were worldwide phenomenon during their peak. The Pokemon franchise has doneover US$ 30 Billion in Retail sales Worldwide.

We will also be regularly adding Classic characters to our line-up. Some of the otherClassic characters we can possibly add to our line-up include:PinkPanther, TinTin, Asterix, Superman, Spiderman, Batman, Casper, Richie Rich, Snoopy,Popeye, Scooby-Doo, The PowerpuffGirls, Tom & Jerry, Bugs Bunny, Mickey Mouse andDonald Duck.



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Our Strengths

We have a ready market of over 15 Million Buyers waiting to buy products beingsold by us. A fan of Barbie will definitely buy BarbieNightwear. A fan of Winniethe Pooh will definitely buy Winnie the Pooh Apparel and Nightwear.

We do not need to spend any money and time on building a brand of our own. In

licensing, where the brand pull of the characteris so high, the licensee does notneed to spend time and money in creating a brand of his own. Ourproducts willsell on the brand power of the character beinglicensed.

We have a virtual Monopoly in the products we will be retailing. Since we will beexclusive right holders to the brands we represent for the product categoriesselected by us, no other companycan manufacture and sell licensed products ofthe characters we have licensed in the categoriesselectedby us. Thus, if a fan ofBarbie wants to buy Barbie Nightwear, she will have to buy it from us since nobodyelse in Indiacan offer this product.

Our pricing will position us as a mass market brand giving us access to a largepopulation who can afford ourproducts.

Gaining entry into Large Format and Small and Medium Stores which is normallyvery difficultfora new entrant will be much easierfor us.

The promoters of this company have over 30 years of experience in the FMCGindustry and hadcreated a distribution networkof over 15,000 retail outlets duringtheir association with the FMCG industry. They have vast experience in creating adistribution network through distributors.

The promoters have considerable experience in Advertising and Promotionstrategies. They have been continuously involved in various forms of Advertisingand Promotion including, Print Advertising, Outdoor Advertising, Point of SaleMaterial, Roadshows, Events, Competitions etc.

The promoters have very good contacts within the Licensing industry which willhelp the companygreatly in securing new licenses. We will be constantly lookingout for new licenses of existingand new properties (characters). Constantlyadding new licenses forms the heart of this business. Ourcontacts with some ofthe biggest companies in the Licensing business Worldwide will be a major boostfor ourbusiness.



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The Retail Industry in India

Retail is Indias largest industry, accounting for over 10 per cent of the countrys GDP andaround eight percent of the employment. Retail industry in India is at the crossroads. Ithas emerged as one of the most dynamic and fast paced industries with several playersentering the market. The future is promising; themarket is growing, government policies

are becoming more favourable and emerging technologies arefacilitating operations.

Retailing in India is gradually inching its way toward becoming the next boom industry. Thewhole concept of shopping has altered in terms of format and consumerbuying behavior,ushering in a revolution in shopping in India. Modern retail has entered India as seen insprawling shopping centres, multi-storeyedmalls and huge complexes offer shopping,entertainment and food all under one roof. The Indian retailingsectoris at an inflexion

point where the growth oforganized retailing and growth in the consumptionby the Indianpopulation is going to take a higher growth trajectory. The Indian population is witnessingasignificantchange in its demographics. A large young working population with medianage of 24 years,nuclearfamilies in urban areas, along with increasing working-womenpopulation and emergingopportunities in the services sectorare going to be the key growthdrivers of the organized retail sectorin India.

India's vast middle class and its almost untapped retail industry are key attractions forplayers wanting toenterthis market. Driven by changing lifestyles, strong income growthand favourable demographic patterns, Indian retail is expected to grow 25 per centannually. Modern retail in India could be worth US$ 175-200 billion by 2016.

According to a report by ATKearney and the Confederation of Indian Industry, retail isone of India'sfastest growing industries with a 5 per cent compounded annual growthrate and expected revenues ofUS$ 320 billion in 2012. Rising incomes, increasingconsumerism in urban areas and an upswing in ruralconsumption will fuel this growth toaround 7-8 per cent.

KSA-Technopak, a retail consulting and research agency, predicts that by 2010, organised

retailing in India will cross the US$ 21.5-billion mark from the current size of US$ 7.5billion.

Deutsche Bank's research report on 'Building up India' says India's burgeoning middleclass will drive up nominal retail sales through 2010 by 10 per cent per annum. Thecountry may have 600 newshopping centres by 2010.

Kids Retail

When it comes to Indian children, retailers are busy bonding and branding. Leading thekids' retailrevolution is the apparel business, which accounts for almost 80 per cent of therevenue, with kids' clothing in India following international fashion trends. According to

research firm KSA Technopak, the brandedsegment comprises US$ 701.7 million of thetotal kids' apparel market-size of over US$ 3 billion. Industryexperts say kids' retailing willtouch annual growth of 30-35 per cent.



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Pune Ahmednagar asik Aurangabad

Osmanabad Sholapur Satara SangliKolhapur Goa Dhule Jalgaon

agpur Bhandara Chandrapur AmravatiAkola Yavatmal anded ParbhaniBuldhana Wardha

Distribution Plan

Distribution will be divided into 4 phases:

Phase 1 Large Format Chains & Small and Medium stores in Western and Central IndiaPhase 2 Small and Medium stores in Southern IndiaPhase 3 Small and Medium stores in Northern IndiaPhase 4 Small and Medium stores in Eastern India

Phase 1 (Large Format Chains and Small and Medium stores in Westernand Central India)

We will start distribution of ourproducts through Large Format Retail Chains as well asSmall and Medium stores in Western and Central India. While we will take the directdistribution route for Large FormatStores, we will take the distributorroute for Small andMedium stores. Large Format Stores in India include:

Shoppers Stop 20 Stores

Pyramids 12 Stores

Lifestyle 11 Stores Globus 17 Stores

Big Bazaar50 Stores

Pantaloons 24 Stores

Central 3 Stores

Ourtarget will be to launch ourproducts with a presence in at least 25 large formatstores acrossthecountry.

Target in stores date: 15th January 2012

For small and medium stores across the country we will be taking the Distributorroute.

We will be appointing distributors in Major Cities across India inphases who will distributeourproducts in their city as well as small and large cities close to their city. In Phase 1 wewill be appointing distributors in Mumbai, Pune, Nagpur, Ahmedabad and Indore.

Mumbai

The Distributor in Mumbai will cover the city and Suburbs of Mumbai

Pune

The distributorin Pune will cover the following cities:

Nagpur

The distributorin Nagpur will cover the following cities:



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Ahmedabad Vadodara Surat RajkotJamnagar Bhavnagar avsari Gandhinagar

Indore Bhopal Gwalior JabalpurDewas Ujjain Sagar Ratlam

Bangalore Mysore Tumkur ChikmagalurShimoda Belgaum Dharwad Gulbarga

Chennai Coimbatore Vellore SalemMadurai Erode Pondicherry Kanyakumari

Hyderabad Guntur Warangal KurnoolChittoor izamabad Visakhapatnam Nellore

Cochin Thiruvananthapuram Kozhikode Kottayam

Ahmedabad

The distributorin Ahmedabad will cover the following cities:

Indore

The distributorin Indore will cover the following cities:

Ourtarget will be to have a distributorin Mumbai, Pune, Nagpur, Ahmedabad and Indore by the 15

th ofNovember 2012.

With an assumption that each distributorwill be distributing ourproducts to a minimum of50 retail outlets in their territory, we plan to be in 250 small and medium stores inWestern and Central India by 15th January 2012.

Phase 2 (Small and Medium stores in Southern India)

In Phase 2 we will be appointing distributors in Bangalore, Chennai, Hyderabad andCochin.

Bangalore

The distributorin Bangalore will cover the following cities:

Chennai

The distributorin Chennai will cover the following cities:

Hyderabad

The distributorin Hyderabad will cover the following cities:

Cochin

The distributorin Cochin will cover the following cities:

Ourtarget will be to have a distributorin Bangalore, Chennai, Hyderabad and Cochin bythe 15

th ofAugust 2012.



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Delhi Noida Gurgaon Faridabad

Chandigarh Rohtak Panipat HissarShimla Ludhiana Jalandhar Amritsar

Jaipur Jodhpur Kota BikanerAjmer Udaipur Bhilwara Alwar

Kanpur Lucknow Agra VaranasiMeerut Allahabad Bareill Aligarh

Kolkata Haora Durgapur AsansolSiliguri Bhatpara Maheshtala Panihati

With an assumption that each distributorwill be distributing ourproducts to a minimum of50 retail outlets in their territory, we plan to be in 200 small and medium stores inSouthern India by 15

th October 2012.

Phase 3 (Small and Medium stores in Northern India)

In Phase 3 we will be appointing distributors in Delhi, Chandigarh, Jaipur and Kanpur.

Delhi

The distributorin Delhi will cover the following cities:

Chandigarh

The distributorin Chandigarh will cover the following cities:

Jaipur

The distributorin Jaipur will cover the following cities:

Kanpur

The distributorin Kanpur will cover the following cities:

Ourtarget will be to have a distributorin Delhi, Chandigarh, Jaipur and Kanpur by the 15thofDecember 2012.

With an assumption that each distributorwill be distributing ourproducts to a minimum of50 retail outlets in their territory, we plan to be in 200 small and medium stores in

Northern India by 15th February 2012.

Phase 4 (Small and Medium stores in Eastern India)

In Phase 4 we will be appointing distributors in Kolkata, Patna, Ranchi, Bhubaneswar andGuwahati.

Kolkata

The distributorin Kolkata will cover the following cities:



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Patna Gaya Bhagalpur MuzaffarpurDarbhanga Arrah Munger Chapra

Ranchi Jamshedpur Bokaro Dhanbad

Bhubaneswar Cuttack Brahmapur Raurkela

Guwahati Dispur Shillong AgartalaImphal Aizawl

Patna

The distributorin Patna will cover the following cities:

Ranchi

The distributorin Ranchi will cover the following cities:

Bhubaneswar

The distributorin Bhubaneswarwill cover the following cities:

Guwahati

The distributorin Patna will cover the following cities:

Ourtarget will be to have a distributorin Kolkata, Patna, Ranchi, Bhubaneswar andGuwahati by the 15th of July 2012.

With an assumption that each distributorwill be distributing ourproducts to a minimum of50 retail outlets in their territory, we plan to be in 250 small and medium stores in EasternIndia by 15th September 2012.



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Advertising Plan

Even though we do not need to spend on Advertising and Promotion to create a brand, wewill need tospend of Advertising for the following:

To seek Distributors in India

Topromote The XYZ Clothing in International Licensing Trade Publications

Advertising to seek Distributors in IndiaAdvertising to seek distributors for ourproducts will begin from 1st week September 2012.We will be Advertising in leading dailies in India for thispurpose.

Advertising in International Licensing & Animation Trade PublicationsWe will be regularly advertising in Print and Online versions of International Licensing &Animation TradePublications so as to position ourselves as a leading Licensed ApparelManufacturerin India. Publicationswill include License Magazine, License EuropeMagazine, Animation Magazine and KidScreen Magazine, This publicity will help us securenew licenses.



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Projected Income

Particulars 2012 2013 2014 2015 2016

Number of Stores - Large Format 25 50 100 200 400

Sales per Month per Store (in pieces) - Barbie Nightwear 50 50 50 50 50Sales per Month per Store (in pieces) - Pooh Nightwear 25 25 25 25 25Sales per Month per Store (in pieces) - Pooh Apparel 25 25 25 25 25Sales per Month per Store (in pieces) - Garfield Nightwear 25 25 25 25 25Sales per Month per Store (in pieces) - Garfield Apparel 25 25 25 25 25Sales per Month per Store (in pieces) - Fido Dido Nightwear 25 25 25 25 25

Total Sales (in pieces) - Barbie Nightwear 15,000 30,000 60,000 120,000 240,000Total Sales (in pieces) - Pooh Nightwear 7,500 15,000 30,000 60,000 120,000Total Sales (in pieces) - Pooh Apparel 7,500 15,000 30,000 60,000 120,000Total Sales (in pieces) - Garfield Nightwear 7,500 15,000 30,000 60,000 120,000Total Sales (in pieces) - Garfield Apparel 7,500 15,000 30,000 60,000 120,000Total Sales (in pieces) - Fido Dido Nightwear 7,500 15,000 30,000 60,000 120,000

Total Sales from Large Format Stores 52,500 105,000 210,000 420,000 840,000

Number of Stores - Small and Medium 250 750 1,000 2,000 4,000

Sales per Month per Store (in pieces) - Barbie Nightwear 30 30 30 30 30Sales per Month per Store (in pieces) - Pooh Nightwear 15 15 15 15 15Sales per Month per Store (in pieces) - Pooh Apparel 15 15 15 15 15Sales per Month per Store (in pieces) - Garfield Nightwear 15 15 15 15 15Sales per Month per Store (in pieces) - Garfield Apparel 15 15 15 15 15Sales per Month per Store (in pieces) - Fido Dido Nightwear 15 15 15 15 15

Total Sales (in pieces) - Barbie Nightwear 90,000 270,000 360,000 720,000 1,440,000Total Sales (in pieces) - Pooh Nightwear 45,000 135,000 180,000 360,000 720,000Total Sales (in pieces) - Pooh Apparel 45,000 135,000 180,000 360,000 720,000Total Sales (in pieces) - Garfield Nightwear 45,000 135,000 180,000 360,000 720,000Total Sales (in pieces) - Garfield Apparel 45,000 135,000 180,000 360,000 720,000Total Sales (in pieces) - Fido Dido Nightwear 45,000 135,000 180,000 360,000 720,000

Total Sales from Small and Medium Stores 315,000 945,000 1,260,000 2,520,000 5,040,000

Total Sales (in Pieces) 367,500 1,050,000 1,470,000 2,940,000 5,880,000

Average Buying Price (in Indian Rupees) 125 125 125 125 125Average Selling Price to Distributor(in Indian Rupees) 200 200 200 200 200Royalty Payable per Piece (in Indian Rupees) 24 24 24 24 24Profit per Piece (in Indian Rupees) 51 51 51 51 51

Total Sales (in Amount) (in Indian Rupees) 73,500,000 210,000,000 294,000,000 588,000,000 1,176,000,000

Gross Profit (in Indian Rupees) 18,742,500 53,550,000 74,970,000 149,940,000 299,880,000

Notes:

We have not taken into account sales of new properties (characters) we will sign upin the comingyears. This will add to the existing projections.

Distributormargin considered at 15% mark-up and retailermargin considered at 40%

mark-up

Margin for Large format stores considered at 45% mark-down.



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Particulars 2012 2013 2014 2015 2016

TeamCEO 2,000,000 6,000,000 7,200,000 8,640,000 10,368,0

Head of Sales and Marketing 400,000 1,200,000 1,440,000 1,728,000 2,073,6Regional Sales Manager - Western and Central India 0 600,000 720,000 864,000 1,036,8Regional Sales Manager - Southern India 0 400,000 720,000 864,000 1,036,8Regional Sales Manager - Northern India 0 200,000 720,000 864,000 1,036,8Regional Sales Manager - Eastern India 0 0 600,000 864,000 1,036,8

Head of Admin, HR and Finance 0 600,000 720,000 864,000 1,036,8Accountants 80,000 600,000 1,440,000 1,728,000 2,073,6

Head Designer cum Merchandiser 120,000 360,000 432,000 518,400 622,0Junior Designer cum Merchandiser 60,000 180,000 216,000 259,200 311,0

Executive Assistants 80,000 240,000 288,000 345,600 414,7Receptionist 40,000 120,000 144,000 172,800 207,3Office Boys 40,000 120,000 144,000 172,800 207,3

Office ExpensesRent 400,000 1,200,000 1,260,000 1,323,000 1,389,1Electricity 80,000 240,000 264,000 290,400 319,4Communication 80,000 360,000 480,000 576,000 691,2CEO Travel Expenses 0 414,000 815,000 978,000 1,173,6CEO Boarding and Lodging Expenses 0 189,000 315,000 378,000 453,6Sales Team Travel Expenses 25,000 100,000 200,000 300,000 450,0Sales Team Boarding and Lodging Expenses 25,000 100,000 200,000 300,000 450,0Designer's Travel Expenses 25,000 50,000 60,000 72,000 86,4Designer's Boarding and Lodging Expenses 25,000 100,000 120,000 144,000 172,8

Advertising in Licensing Magazines (International) 0 0 4,200,000 5,040,000 6,048,0Advertising for Distributors 1,500,000 2,500,000 1,000,000 0PR (Domestic) 150,000 0 1,200,000 1,320,000 1,452,0

Miscellaneous Expenses 100,000 500,000 600,000 720,000 864,0

Total Expenses 5,230,000 16,373,000 25,498,000 29,326,200 35,011,95

Projected ExpensesI



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Explanation for Expenses:

2 Accountants in 2012, 5 in 2013 and 10 from 2014 at a salary of Rs. 10,000 each, increasing at

2 Executive Assistants. 1 each for CEO and Head of Sales and Marketing. Salary of Rs. 10,000 ea

year from 2012.

2 Office Boys at Rs. 5,000 each, increasing at 20% every year from 2012.

Office Space on Rent 2,000 sq. ft X Rs. 50 per sq. ft. per month increasing at 5% every year f

Electricity Rs. 20,000per month in 2012 and 2012, increasing at 10% every year from 2012.

Communication Includes Phone, Fax, Internet and Mobile. Rs. 20,000 per month in 2012, RsRs. 40,000 per month in 2012 increasing at 20% per year thereafter.

CEOs travel, boarding and lodging expenses will be for International Trips to be made to secureinclude:

1 trip to the US for The Licensing Show in June, 1 trip to London for Brand Licensing Europe

Hong Kong for Hong Kong Licensing Show in July. Class of travel will be Economy Plus in 2thereafter.

Boarding and Lodging expenses calculated at US$ 300 per day for trips made in 2012 and onwards. 5 days pertrip.

Sales Team travel, boarding and lodging expenses will be for sales trips made to respective terr

Designers travel, boarding and lodging expenses will be for trips made to manufacturing facilit



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Particulars 2012 2013 2014 2015

Gross Profit 18,742,500 53,550,000 74,970,000 149,940,00

Expenses 16,373,000 25,498,000 29,326,200 35,011,95

Net Profit 2,369,500 28,052,000 45,643,800 114,928,05

Projected Profit

12000

11000

10000

9000

8000

in lakhs

7000

6000

5000

4000

Sales

Net Pr

3000

2000

1000

0

2012 2013 2014 2015 2016



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Capital Expenses and Funding

Particulars Year0 Year1 Total

Advance Royalty 2,500,000 0 2,500,000

Advertising forDistributors 1,500,000 1,250,000 2,750,000Team Cost 2,820,000 5,310,000 8,130,000Office Expenses 910,000 1,325,000 2,235,000

Total Capital Expenses 7,730,000 7,885,000 15,615,000

Promoters Contribution 2,720,000 4,320,000 7,040,000

Investors Contribution 5,010,000 3,565,000 8,575,000

Advance RoyaltyAdvance Royalty ispayable to Licensors on signing of a license agreement. Thisadvance Royaltyisadjusted in royalty payable on sales. Once the Advance Royalty

paid is completely adjusted, westartpaying royalty on a monthly basis.

Advertising for DistributorsAdvertising to seek distributors for ourproducts will begin from 1st week September2012 for seeking distributors in Phase 1 and 1st week June 2012 forseekingdistributors in Phase 2. We will be advertising in leading dailies in the respectiveterritories in India for this purpose.

Team Cost and Office Expenses

As per Projected Expenses. Pre-Operative expenses for the period September2012to December2012 and for the first six months of2012.

Proposed FundingThe Promoters will contribute Rs. 70,40,000 of the funding required. We are seekingan Investor tocontribute the balance Rs. 85,75,000. The funding from the Investorcan be split in two instalments with the first instalment of Rs. 50,00,000 required

by 15th August 2012 and the second instalment of Rs. 35,65,000 required by 15thDecember 2012.

Equity on offer to Investor

We are ready to offer the Investor15% Equity in The XYZ Clothing Private Limitedfor theInvestment of Rs. 85,75,000. As per our Business plan we estimate thecompany to be valued at a minimum of Rs. 100 Crores within 5 years ofstartingoperations.



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Conclusion

Our Mission is to be the Largest Licensed Apparel Brand in India. Taking intoconsiderationthecharacters we have already licensed and ourcontacts withsome of the largest licensorsinternationally, we are well poised to become amajor player in the Licensed Apparelindustry in India.

Ourstrength lies in the characters we license and the fan following of thatcharacter. Licensed Apparel of the characters we have licensed, are doingMillions of Dollars of Sales every year in various countries around the Worldand we anticipate the same response in India.

Unlike other investments in start-up brands, where a major portion of theinvestment isspent on Advertising and Promotion to createbrand awarenessand returns on theinvestmentstart after3 to 5 years, returns on ourinvestment will start from year 1 since we do not need time to establish our

brand.

With strong brands and a ready market available for us, the risk of failure of

this business is very low and thus the risk of the investorinvesting in thisproject is very low.

We are confident of generating very good returns for the investor. TheInvestor has the following exit options wheneverhe wishes to exit:

Private Placement Buy Back of Equity held with the Investor by the Company / Promoters

IPO

Finally, we would like to thank you for showing interest in ourproposal and as mentioned earlierwe are confident that this investment will generate verygood returns for you.

ThankYou


the xyz clothing-business plan

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