Operating S&OP in Retail

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Marion Greene
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1 Operating S&OP in Retail Click to edit Master title style Content Global AA Global AA Retail Retail Metrics and Variables Cost Components Product Seasonality Executive S&Op Retail S&Op: One Step Down Product Performance and Plan Every Store is a company 2 1

2 Global AA Dollars Web 5% Units Wholesale 28% Web 8% Retail 29% Retail 64% Made in USA 250 Stores in 20 Countries Retail, Wholesale, and Web Vertically Integrated Innovative Ads Double Digit Growth 52% Gross Margin 80k SKUs and counting Wholesale 66% 3 Wholesale Business 6% 0% 2% 1% Canada Switzerland Germany U.K. US 91% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4 2

3 Raw Material Cotton Price(U.S. Cents) Mar-12 Jan-12 Nov-11 Sep-11 Jul-11 May-11 Mar-11 Jan-11 Nov-10 Sep-10 Jul-10 May-10 Mar-10 Jan-10 Nov-09 Sep-09 Jul-09 May-09 Mar-09 Jan-09 Nov-08 Sep-08 Jul-08 May-08 Mar-08 Jan-08 Nov-07 Sep-07 Jul-07 May-07 5 AA Global Retail Presence USA, 56% Australia, 2% Brazil, 0% Canada, 13% UK, 7% EU, 15% China, 1% Japan, 3% Israel, 1% Japan Korea, 2% Mexico, 0% Australia Brazil Canada China EU Israel Korea Mexico UK USA AA Retail Yr/Yr by Country AU BR CA CH CN EU IE IS JP KR MX SE UK US 6 3

4 Fashion Versus Basics 7 Retail Metrics and Variables Variables Comp % Sell Through Gross Margin % Climate, Local Weather, Demography Local Holidays and Events Fashion Trend(Colors, Styles, etc.) Open To Buy Mark down Fashion Versus Basics Impact Inventory-, Production Inventory, Production 8 4

5 Cost Components Raw Material(Fabric, Trims, Accessories) Equipment Store and facilities lease Cut and Sew Labor Fashion Basics Administrative Warehousing and Logistics Interest Expenses 9 Retail and Web Comp 10 5

6 Week_01 Week_02 Week_03 Week_04 Week_05 Week_06 Week_07 Week_08 Week_09 Week_10 Week_11 Week_12 Week_13 Week_14 Week_15 Week_16 Week_17 Week_18 Week_19 Week_20 Week_21 Week_22 Week_23 Week_24 Week_25 Week_26 Week_27 Week_28 Week_29 Week_30 Week_31 Week_32 Week_33 Week_34 Week_35 Week_36 Week_37 Week_38 Week_39 Week_40 Week_41 Week_42 Week_43 Week_44 Week_45 Week_46 Week_47 Week_48 Week_49 Week_50 Week_51 Week_52 6/5/2012 Retail Global Unit Trend Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 11 Men s Short Sleeves Men s Short Sleeves-Global AA January February March April May June July August September October November December 12 6

7 Week_01 Week_02 Week_03 Week_04 Week_05 Week_06 Week_07 Week_08 Week_09 Week_10 Week_11 Week_12 Week_13 Week_14 Week_15 Week_16 Week_17 Week_18 Week_19 Week_20 Week_21 Week_22 Week_23 Week_24 Week_25 Week_26 Week_27 Week_28 Week_29 Week_30 Week_31 Week_32 Week_33 Week_34 Week_35 Week_36 Week_37 Week_38 Week_39 Week_40 Week_41 Week_42 Week_43 Week_44 Week_45 Week_46 Week_47 Week_48 Week_49 Week_50 Week_51 Week_52 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 6/5/2012 Men s Short Sleeves Australia January February March April May June July August September October November December 13 Store Count

8 Inventory, Production, Global OH Production Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug Executive Retail S&Op What are the Goals? Revenue target versus performance Monthly inventory forecast and Year-end Inventory target by major locations versus performance Production Plan versus Actual Gross Margin target versus performance by category, region Regional sales and inventory performance versus plan Store base expansion/consolidation plan Product category performance versus plan 16 8

Executive S&Op Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Holiday Spring Spring Spring Summer Summer Summer Back to School Back to School Back to School Holiday Holiday Inventory Fashion Basics

9 Executive S&Op Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Holiday Spring Spring Spring Summer Summer Summer Back to School Back to School Back to School Holiday Holiday Inventory Fashion Basics Units Cost Location Weeks on Hand Turn Units Cost Location Weeks on Hand Turn Production Fashion Units Cost/Piece Total Cost Basics Units Cost/Piece Total Cost Fashion Basics Units Cost GM % Location Yr/Yr Comp Comp Target Units Cost GM % Location Yr/Yr Comp Comp Target 17 Retail S&Op: Product Performance and Plan Variables: Fashion Versus basics New Style(or Style-Color), Active Style, Discontinued Style Climate, Demography, Event Exclusive styles Shiny Legging for Halloween Wool Peacoat for only wherever it is cold Baby-Toddler-Youth for Family Neighborhoods and Hoodies for College Campus Shoes for Japan Intimates for Valentine's Day and Nailpolishes for Christmas Seasonal Planning: Basics: Drugstore Model Fashion: Needs planning and testing by at least a season ahead Assessment of current assortment, what to keep, what to drop, and what is new Flexibility to accommodate: Fast changing fashion trends Weather variation in either direction Inventory balancing Result: Complete assortment Optimized for Style count and Color count, Current Inventory, Time Phased Availability of Finished Goods, Projected end of season inventory Gross Margin & Projected Comp, & Productivity at an aggregate level and style-color level On-going and simultaneous assessment of in-season sales-inventory balance and future season planning 18 9

10 Retail S&Op: Every Store is a Company Retail is expensive: Lease Employee Salaries Logistics Aged Inventory Out-of-balance Inventory(Shipping Bikinis in Winter to Florida store, late launches) Shrink Raw Material Availability External Factors(Weather, H&M next Door) 19 Retail S&Op: Every Store is a Company Systemic Approach to: Treat every Store as a separate business Apply top-down approach and synchronize with regional uniqueness Plan ahead for shifts in seasonality, events, weather Constant Optimization of sales and inventory by store and apply lessons learnt globally where applicable 20 10

Milbon Co., Ltd. Financial Results Presentation Materials

Milbon Co., Ltd. Financial Results Presentation Materials Milbon Co., Ltd. FY 2014 First Half (December 21, 2013 June 20, 2014) Financial Results Presentation Materials June 26, 2014 Table of Contents P2 Consolidated Operating Results P3 6 Consolidated Sales