Now please calculate the 'profit margin before tax if Harrington gets 10% marketshare of the "better" active-wear segment if the number of VIGOR stores increases to 75. O 15.17% 25,93% 0 16% 25.47% Next Using data from the Harrington case, please calculate its manufacturing group sales in 2007 to department stores. $538 million O $107.6 million O $322.8 million O $258.24 million Next Retail Group Harrington Collection's retail group operated 120 company stores: 70 stores sold a combination of Harrington Limited and Christina Cole merchandise, and 50 of the stores were dedicated solely to the Vigor division Products from these divisions were also sold in upscale department stores and specialty stores. Sopra designs were sold exclusively at specialty stores. Each division also had a sophisticated e-commerce site where products could be purchased directly. Harrington Collection felt sales people were the most important factor in the consumer decision-making process and spent significant resources training its retail sales force and offering attractive commissions. Exhibit 7 Harrington Manufacturing Divisions Division Harrington Limited Product Classification Designer Product Line Focus Designer Collection: dresses, skirts, blouses, pants, suits, and coats Retail Price Range $500-$1,000+ Market Share 20% Sopra Bridge $400-$800 Evening Wear: dresses, suits 5% Target Customer Competition Sophisticated Elegance: Women age Donna Karan, St. 35 to 60, average household income John of $200k+, college educated professional seeking conservative designer clothing Status Seeker: Diane von Women age 35 to 60 with average Furstenberg, Kay household income of $150k+, college Unger New York educated professional seeking status brands Office Chic: Tahari, Dana Women age 30 to 55, average Buchman household income of S100k+, college educated professional seeking stylish, refined clothing for work Trend Setter: Theory, BCBG Max Women age 25 to 50, average Azria household income of $75k+, college educated professional seeking fashionable, yet comfortable clothing for work Christina Cole Bridge $300-$700 8% Career Wear: dresses, skirts, blouses, pants, suits, and coats Vigor Better $150-$500 7% Career Wear: dresses, skirts, blouses, pants, and coats Exhibit 6 Harrington Collection Financials 2007 $538 5806 $ $1,344 $366 $371 $737 Harrington Collection Financial Results Year Ending December 30 Sin millions 2005 2006 Sales Manufacturing $556 $542 Retatil $834 5813 Total Revenue 1,390 $1,354 Costs of Goods Sold Manufacturing $372 $366 Retail $375 $369 Total COGS $747 $735 Gross profit Manufacturing $183 $176 Retail $459 $443 Total Gross Profit $643 $620 SG&A Manufacturing $106 $108 Retail $383 $379 Total SG&A $489 $487 Profit Before Tax Manufacturing $78 $68 Retail $76 $65 Total Profit Before Tax $154 $133 $172 $435 $607 $113 $379 $490 $59 $58 $118 Exhibit 5 U.S. Retail Sales Breakout by Channel US retail sales of women's clothing, by channel 2007 Other, 2.9% Warehouse clubs Discount or Mass Supercenters, 8.1% Merchandiser Dept Stores, 11.4% Department Stores (Other than Discount), 19.0% Specialty Stores, 58.6% Change 2005-2007 % 58.6 11 -0.8 U.S. retail sales of women's clothing, by channel, 2005 and 2007 2005 2007 $ in billions % S in billions % Specialty stores s 70.2 57-5 S 77.9 Department stores s 25.5 20.9 S 25.3 19 Discount or mass merchandiser dept stores S 14.1 11.5 S 15.1 11.4 Warehouse clubs & supercenters S 7 s 10.8 Other s 3.7 3 S 3.9 2.9 Total s 122.1 $ 133.0 100 7.1 8.6 8.1 25.6 5.4 100 8.9 Source: Mintel International Group This includes retailers such as outlet stores, sporting good stores, gift shops, and food and drug stores Now please calculate the 'profit margin before tax if Harrington gets 10% marketshare of the "better" active-wear segment if the number of VIGOR stores increases to 75. O 15.17% 25,93% 0 16% 25.47% Next Using data from the Harrington case, please calculate its manufacturing group sales in 2007 to department stores. $538 million O $107.6 million O $322.8 million O $258.24 million Next Retail Group Harrington Collection's retail group operated 120 company stores: 70 stores sold a combination of Harrington Limited and Christina Cole merchandise, and 50 of the stores were dedicated solely to the Vigor division Products from these divisions were also sold in upscale department stores and specialty stores. Sopra designs were sold exclusively at specialty stores. Each division also had a sophisticated e-commerce site where products could be purchased directly. Harrington Collection felt sales people were the most important factor in the consumer decision-making process and spent significant resources training its retail sales force and offering attractive commissions. Exhibit 7 Harrington Manufacturing Divisions Division Harrington Limited Product Classification Designer Product Line Focus Designer Collection: dresses, skirts, blouses, pants, suits, and coats Retail Price Range $500-$1,000+ Market Share 20% Sopra Bridge $400-$800 Evening Wear: dresses, suits 5% Target Customer Competition Sophisticated Elegance: Women age Donna Karan, St. 35 to 60, average household income John of $200k+, college educated professional seeking conservative designer clothing Status Seeker: Diane von Women age 35 to 60 with average Furstenberg, Kay household income of $150k+, college Unger New York educated professional seeking status brands Office Chic: Tahari, Dana Women age 30 to 55, average Buchman household income of S100k+, college educated professional seeking stylish, refined clothing for work Trend Setter: Theory, BCBG Max Women age 25 to 50, average Azria household income of $75k+, college educated professional seeking fashionable, yet comfortable clothing for work Christina Cole Bridge $300-$700 8% Career Wear: dresses, skirts, blouses, pants, suits, and coats Vigor Better $150-$500 7% Career Wear: dresses, skirts, blouses, pants, and coats Exhibit 6 Harrington Collection Financials 2007 $538 5806 $ $1,344 $366 $371 $737 Harrington Collection Financial Results Year Ending December 30 Sin millions 2005 2006 Sales Manufacturing $556 $542 Retatil $834 5813 Total Revenue 1,390 $1,354 Costs of Goods Sold Manufacturing $372 $366 Retail $375 $369 Total COGS $747 $735 Gross profit Manufacturing $183 $176 Retail $459 $443 Total Gross Profit $643 $620 SG&A Manufacturing $106 $108 Retail $383 $379 Total SG&A $489 $487 Profit Before Tax Manufacturing $78 $68 Retail $76 $65 Total Profit Before Tax $154 $133 $172 $435 $607 $113 $379 $490 $59 $58 $118 Exhibit 5 U.S. Retail Sales Breakout by Channel US retail sales of women's clothing, by channel 2007 Other, 2.9% Warehouse clubs Discount or Mass Supercenters, 8.1% Merchandiser Dept Stores, 11.4% Department Stores (Other than Discount), 19.0% Specialty Stores, 58.6% Change 2005-2007 % 58.6 11 -0.8 U.S. retail sales of women's clothing, by channel, 2005 and 2007 2005 2007 $ in billions % S in billions % Specialty stores s 70.2 57-5 S 77.9 Department stores s 25.5 20.9 S 25.3 19 Discount or mass merchandiser dept stores S 14.1 11.5 S 15.1 11.4 Warehouse clubs & supercenters S 7 s 10.8 Other s 3.7 3 S 3.9 2.9 Total s 122.1 $ 133.0 100 7.1 8.6 8.1 25.6 5.4 100 8.9 Source: Mintel International Group This includes retailers such as outlet stores, sporting good stores, gift shops, and food and drug stores