Congratulations to the groups that made the top five! Guys, you have more work to do, but we truly believe that it is worth it, as you will have a chance to get a feedback from the real-word professionals. We look forward to hear the presentations on the 3rd.

As all of you, we have been working on the final version of our feasibility report until last Wednesday and we spent the rest of the week researching and debating on possible additions to our major product line. One of them will definitely be accessories. According to the last Fairchild SIS’s report, plus-size women make strong purchases of accessories like scarves, jewelry, headwear, leather goods and sunglasses. According to our own primary research, the plus-size segment prefers plain, slimming colors, but also would love to make an accent with a bright scarf or a nice necklace. We think that we definitely will add value by suggesting a piece of accessory right next to the outfit. Another possible product line that we have been discussing was the intimates. We think that exactly the same way large women are not willing to settle for unfashionable clothing, they are not willing to settle for baggy underwear currently available. We believe that instead they want something smart and sexy. And maybe it’s not a bad idea to let them purchase it where they do their other wardrobe pieces.

November 23 TOP

This week has been good! Finally, getting positive feedback from people about our business concept!
Last Thursday, we attended the EVMA Roundtable and pitched our ideas to the two related companies that were attending, one sells sandals/hand bags for women and the other is looking into selling shoulder wraps to carry infants in. Since we had just completed our elevator speech the day before, it was easy to pitch our idea. Anyway, these entrepreneurs think we had a great idea and provided a lot of feedback on distribution channels available, apparel sales reps and industry information. The sandals company owners were young like us and it was very informative and interesting to hear their experience. They showed us their standard industry promotions sheet and told us about their costs and margins. They too were importing goods initially and now they have a plant in Indonesia and co-own it with one of their suppliers. They were able to share the terms of business and how they share the revenue, etc.
After talking to these entrepreneurs, we have also decided to take some classes at the LA Fashion School next semester and make some contacts there.
This week our final feasibility project is also due and we are working on polishing our project and creating a contact list, after which we will be almost done with our feasibility class but not with the entrepreneurial journey!

November 16 TOP

This week we have been focusing on our elevator pitch to make it both informative and interesting. We will see how well we have managed to balance these two tasks next Wednesday. Another important topic of this week discussions was the size of our target market. Initially, we were planning to go after size 14+, 35-64 year old women with high household income and college education, who prefers to shop online. Based on these assumptions, the size of our target market was only 74,000. This week we decided to include in our focus a moderate-income category and to drop the assumption about college education, as we will not be specializing in career clothing. The new size of our target market was estimated to be about 800,000 customers.

Finally, this week we have been debating on the best and the least expensive way to design our clothing collections. Thanks to Professor Allen’s suggestion, we had researched some colleges in Los Angeles area and found a few that prepare future apparel designers. It turned out (fortunately for us!) that designer students need to have complete portfolios in order to graduate and are willing to take even unpaid internship during their last year. Now, instead of deciding on clothes design ourselves, we hope to get affordable and professional students` help.

November 10 TOP

Last week we were exploring some interesting ideas that we received from Professor Allen during our consultation. One was to let a customer visualize how our closing will fit her by creating a 3-D model that would change according to customer’s body proportions. We believe that this virtual “fitting room” will both add a significant value to our site and decrease the rate of order returns. Another idea was to let women design clothing for themselves. We were previously thinking to create on our site some sort of community by designating one page for a chat room where women could share anything from favorite recipes and beauty tips to personal and career related issues; now we plan to add a designer contest to it. We believe that any woman has an idea of a perfect outfit that would fit her best. The problem is to find anything close to it at the market and this is the problem that we aim to solve by incorporating our customers fantasies into our new collections.

Another last week issue (unfortunately, not that exciting) was related to the expected rate of order returns. To gain our customer trust, we would have to offer a full “money back guaranteed” program, which, according to the industry statistics, will lead us to 10% return rate. However, we hope to decrease this number at least by a half by taking customer measurements, using stretchy fabrics and letting a client to virtually try on the outfit before it gets shipped out.

November 2 TOP

This week we mostly worked on our paper, expanding and correcting it in accordance with Professor’s comments. We recalculated our Financials on a quarterly basis and now know what to expect in the first three years of operations by quarter. We also have done more secondary research to find out that large-size women are not the customers to ignore: the majority shop at least twice a week, and 90 percent purchase at least one item of clothing every two weeks, spending an average of $150 to $200 per outfit. This fact came as a pleasant surprise, although, we are still debating on how it can be explained.

Another interesting fact was that all of the three major players of the plus-size women’s clothing industry, Layne Bryant, Fashion Bug and Catherine Plus Sizes, belong to one company, Charming Shoppes, making it hold over 40% of the market. We also found a lot of similarities between strategies of the companies catering to a mature women segment and the ones who cater to the plus-size market. For both plus-size and mature categories fit and comfort must be addressed before anything else and that requires great attention to fabrics and design. Exactly as women in their 60s do not want to look old, plus-size women do not want to look large. It is important for both categories to look not trendy, but trend relevant and sophisticated.

October 26 TOP

In order to complete our feasibility draft we had to process, analyze and put together our primary and secondary research information that we have been gathering for the last month. On Monday it turned out that some crucial pieces that would allow us to project the demand and estimate our manufacturing costs were missing. We decided to forecast the demand by estimating the size of our target market and went back to secondary sources to locate information about female population in the U.S., plus-size female population, female education level, income data and percentage of plus-size women’s apparel sold through E-retail channel. Based on these variables, we estimated our target market size to be 74,200 American women.
The next task was to estimate our costs. It was relatively easy to get the costs of running a web-site based company, including website development, website maintenance, internet advertising, salary expenses etc. The real problem was to forecast the cost of goods sold. If we were to outsource the manufacturing to the third party, who it is going to be? If it is cheaper to manufacture clothes in, let’s say, China what would be the cost of import? If we were to provide a manufacturer with our own fabrics, zippers, buttons etc., where we would get them from and, again, how much it will cost us? What are the average margins those manufacturers work on? We were lucky to complete this part with a help of Mr. Christopher Scharff, the Operations Manager of BGBG Max Azria, manufacturer and retailer of high-end women apparel.
Having numbers for both the demand and costs, we were able to come up with our pro-forma cash flow and income statements. Although, it looks like this project will not make us millionaires even in the third year of operations, we still eager to move forward.

October 19 TOP

This week was as much fun as last week was dull for our team. We were able to conduct in depth interviews with plus-size women who were very generous with their opinions, needs and preferences. We learned a lot of things about how potential customers in target segment think, analyze and make purchase decisions. What turns them on and off? The information we gathered was so insightful that we changed our choice of distribution based on that. We won’t discuss all the information we collected since that is going to feed into our competitive advantage but we don’t mind saying that these interviews were worth all the effort that we put into it.

The next thing on our agenda was to collect quantitative data through survey. We designed these surveys based that qualitative information collected through interviews. To get our surveys filled both of us headed towards LAX yesterday to find plus sized women willing to help us. We went to the Bradley terminal first since it has cafes and eating area outside of the boarding zone and hence can be accessed easily. When we there, there weren’t that many people in that terminal to begin with (unlike when we on our prime trip when this terminal was packed!) and fewer plus sized women. But we didn’t lose and started to approach women. We got 3 women to agree to fill our surveys, we were very excited. But that was it.

For the next half an hour anyone we approached had come from outside the US and therefore we didn’t want to mix their preferences with our potential target market which is going to be primarily women living in the US. So we started walking towards terminal 4 which houses American Airlines. There we were able to get 2 more surveys filled and one professional women working for Sun Microsystems gave us her card so that we can email her the questionnaire. All in all, it wasn’t an unproductive day. But now we are trying to email the questionnaire to more women to get it filled. Let’s see how successful we are in that endeavor.
We also visited the California Mart and checked out the fabrics available here and the costs and logistics. We weren’t too impressed with what is available but took samples of materials that were acceptable. We were surprised how much prices differed from store to store. The same material was offered at $1.50 per yard wholesale price by one store and $4.00 by another. Obviously, the second store owner thought what do we know, we are just some rich USC students who will pay any price.

October 12 TOP

This week was a little dull for us, we had to develop an interview guide for the qualitative interviews and research questionnaire for quantitative research we will be conducting with customers in our target segment. That wasn’t that difficult since one of us has market research background. The difficulty was to find plus size women who would agree to answer our questions for qualitative part. This weekend we went to the mall to find respondents but that wasn’t really successful so we are planning to hit the airport and weight control centers next weekend with renewed hope.

October 5 TOP

This week has proven very valuable for us. We were able to interview one of the founders of Kiyonna (a clothing business catering to plus size women) who graduated from USC in 1996. Initially Kiyonna was solely distributing its products through local boutiques. But over the years it has been able to build up a very successful online business and now 90 to 95% of its business is done online through company website www.kiyonna.com
We were of course able to gather a lot of valuable information about the 4Ps, product, price, promotion and place (distribution) from this interview. But the most valuable advice I received from this person was that it is very important to keep three things in mind when choosing your partner to start a business:
• How much do you trust your partner?
• What are their motivations and commitment to the business?
• Whether they are financial sound?

The second interesting thing was that we visited Nordstrom’s plus size section and were able to see the competitive products out there. The sales person told us about the popular brands. We were glad to see that the offerings were either too expensive if at all stylish otherwise the reasonably priced items were, let’s just say, not the most sought after in look and fabric.
So once again we feel hopeful and are continuing on this most interesting journey.

September 28 TOP

We can’t believe time is flying so fast, before we know it, it will be the end of semester and we would have finished the feasibility study! That would be nice.
Before we go on about our activities this week, let us tell you a little more about ourselves. As you know, our team consists of two great entrepreneurs-to-be, Maria Chesnokova and Nissa Habib. Both are passionate about the apparel industry and don’t have a clue as to how much work it is going to be to start their own business, particularly in this industry! But as they proceed they are getting a sense of it.
Maria has background in Finance and expertise in strategic business development of newly launched ventures in the U.S. and Russia. She also used to design clothes herself and hopes to use her expertise and common sense to start an apparel business.
Nissa Habib, having 5 years Marketing Research experience, as well as retail sales experience, comes from an entrepreneurial family. She has also traveled extensively and has been exposed to Asian, European and obviously, American (both East and West coast) fashion and style.
Both of us feel that there is a great need for elegant clothing for the plus size segment. This belief is based on years of talking to other women, shopping, and discovering styles outside the US that can be introduced here.
We know we are on the right track because during a recent conversation with the President of Old Navy, we found that the company is focusing on its plus size wear and is looking into offering sizes that fit the plus size women much better than what is currently offered. Thank goodness Old Navy is into casual-wear and value-clothing which is outside our high-end target market (otherwise it would have to eventually get out of that segment! Just kidding!)
This week we are having discussions on what are some of the more appropriate ways of understanding our potential customers’ needs better and translating them into a product that would provide value to the customer. We are also looking into the various ways to calculate demand for our product. Now that is, as you know, quite difficult. But we are hoping to use secondary as well as primary research to come as close to the actual demand as we can. So stay tuned and you will see how it all unravels…..

September 21 TOP

Hi Everyone,

We would like to first introduce you to our La Femme Apparel Company. We, Maria Chesnokova and Nissa Habib, are very pleased to join forces in order to test the feasibility of our company’s business concept.

We spent this week really figuring out what kind of apparel business we wanted to be in. Initially, we were considering providing clothing in extra small sizes for really tiny women or extra large sizes for plus size women. During our business concept discussions, we narrowed it down to going for the plus size segment for the following reasons.

• More than 60% of the women in the US wear above average dress sizes yet there aren’t enough companies specializing in that segment
• A big portion of this 60% are older women with high disposable incomes
• There aren’t many companies that specializes in this segment only

We have decided to offer premium quality eveningwear to plus size women with signature designs uniquely created for their body proportions. We will focus on designs and fabrics that will make plus size women look smart and elegant without adding extra inches. We also plan to offer custom alterations at the point of purchase to make the shopping experience easy and enjoyable. Initially, we plan to start a retail outlet in a metropolitan area and based on its success would follow up with several retail stores across the US.

La Femme Apparel Company will offer premium quality, contemporary and elegant plus-size eveningwear, with signature designs tailored to large-size women’s fashion. The outfits will be offered through company owned retail outlets, which will also provide custom alterations at the point of purchase, making the shopping experience enjoyable, exciting and hassle-free.