Case of study

Dubai Clothiers was founded in 2013 to make high-quality clothing for outdoor sports, such as hiking, skiing, fly-fishing, and white-water kayaking. Dubai Clothiers offers its products through three retailing options: catalogs, retail outlets, and its website. The Company strives to provide excellent, high-quality products at reasonable prices. The Company offers its products principally through regular mailings of its monthly catalogs in Saudi Arabia, Kuwait, Oman, Bahrain and Jordan. Dubai Clothiers has 10 outlet stores in the UAE, 4 in Saudi Arabia., 2 in Kuwait, 2 in Bahrain and 1 in Jordan. The Company also offers its products over the Internet (www.DubaiClothiers.com). During 2017, the Company expanded its global presence by launching sites in Morocco, Egypt, and several Middle East countries.

Outdoor Clothing Industry

During 2019, the Company mailed 12 issues of its regular monthly catalog with an average of 75 pages per issue. Worldwide, the Company mailed approximately 160 million full price catalogs. Dubai Clothiers views each catalog issue as a unique opportunity to communicate with its customers. Products are described in visual and editorial detail, and the Company uses such techniques as background stories and distinctive covers to stimulate the readers interest. Each issue of the regular catalog offers certain basic product lines for men and women.

Customer database

A principal factor in the Companys success has been the development of its own list of active customers. At the end of 2019 the Companys mailing list consisted of about 21.1 million persons, approximately 7 million of whom were viewed as customers because they had made at least one purchase from the Company within the last 24 months. The Company routinely updates and refines the database before mailing catalogs to monitor customer interest as reflected in criteria such as the recency, frequency, dollar amount, and product type of purchases. Dubai Clothiers believes that its customer database has desirable demographic characteristics and is well suited to the products offered in the Companys catalogs. A survey conducted by the Company in the GCC region during 2019 indicated that approximately 50 percent of its customers were in the 3554 age group and had median incomes of $65,000. The Company advertises nationally to build its reputation and to attract new customers.

Product development

Dubai Clothiers concentrates on clothing and other products that are aimed at customers interested in outdoor activities. The Companys products are styled and quality crafted to meet the changing tastes of the Companys customers rather than to mimic the changing fads of the fashion world. At the same time, the Company seeks to maintain customer interest by developing new products, improving existing core products, and reinforcing its value positioning. The Company continues to incorporate innovations in fabric, construction, and detail that add value and excitement and differentiate Dubai Clothiers from the competition. In order to ensure that products are manufactured to the Companys quality standards at reasonable prices, product managers, designers, and quality assurance specialists develop the Companys own products. Dubai Clothiers deals directly with its suppliers and seeks to avoid intermediaries. All goods are produced by independent manufacturers except for most of its soft luggage, which is assembled at the Companys facilities. During 2017 the Company purchased merchandise from approximately 300 domestic and foreign manufacturers. One manufacturer and one intermediary accounted for about 14 and 29 percent of the Companys received merchandise, respectively, in 2017. In 2017 about 80 percent of the Companys merchandise was imported, mainly from Asia. The Company will continue to take advantage of worldwide sourcing without sacrificing customer service or quality standards.

Accounting and Control Systems

With the complexity of Dubai Clothiers s customer database reaching 21.1 million people, and sales occurring through catalogs, retail outlets, and the internet, the company realized in early 2011 that it was in need of a new, upgraded accounting information system. The company switched to a new, integrated central accounting system in early 2015. The transition to the new system was overseen and implemented by KPMG. This new system maintains integrated inventory, accounts receivable, payroll, and general ledger software modules. Although the implementation of the new system was expensive and laden with problems, by the 3rd and 4th quarters of 2015 the problems were largely resolved and the company began to see the benefits. The new system integrates the companys operations and accounting systems and allows Dubai Clothierss sales force to promise next day delivery to telephone and internet customers. As a result, customer satisfaction has increased.

Risk factors	Response	Any risk associated?
a. What are the entitys major sources of revenue, including the nature of its products and/or services?	The company generates revenue mainly through the sale of high quality clothing for outdoor sports, such as hiking, skiing, fly-fishing, and white-water kayaking. The companys product lines also include casual clothes, accessories, shoes, and soft luggage.	No. The company uses conservative methods to record revenue and provides an adequate reserve for returned merchandise.
b. Who are the entitys key customers?
c. Who are the entitys key suppliers?
d. What is the entitys organizational structure?
e. Where are its major locations?