Simulation Package 2 Cost Changes Buyer Group 2 You are the women's footwear buying team for The Hudson's Bay Company (HBC), Canada's largest department store. Choose 1 team member to take on the leadership role, this person will become the Divisional Merchandise Manager (DMM). All other team members are Buyers. The DMM is there to support the Buyers in the negotiation process. The Buyers are to take the lead in the meeting and should look to the DMM for support during the negotiation. lt's November. and you are developing next Fall 2024 private label collection with The Shoe Group, your private label footwear vendor. You are scheduled to meet with the Shoe Group to discuss cost increases due to ination for next Falls collection. mm Unussousm High Heels $13.00 $39.99 67.5 3200 Booties $49.99 . Riding Boots $20.00 $59.99 . 1000 Knee Highs $24.00 $69.99 . 4500 Sneakers $14.00 $39.99 65.0% 2000 Other points to keep in mind 0 You're anticipating a 10% cost increase but won't know until the meeting. 0 Based on your trend analysis, you're forecasting a 10% decrease in your buy in high heels and knee highs and a 25% increase in booties. riding boots and sneakers. 0 You have flexibility with you unit retails. Remember this is lower quality and private label. Your cats or the cost chem ene oriation are the oilowin : 1) Negotiate unit costs a. 12% maximum cost increase 2) Maintain a minimum of 65% Tom! GM% by adjusting unit retails accordingly Pre-meeting preparation .' - Prepare multiple strategies to allow you to meet your 5 goals. 0 Understand and be able to speak to your financials. 0 Decide what nancial information you want to share with your vendor during the meeting. Other points to keep in mind You're anticipating a 10% cost increase but won't know until the meeting. Based on your trend analysis, you're forecasting a 10% decrease in your buy in high heels and knee highs and a 25% increase in booties, riding boots and sneakers. You have flexibility with you unit retails. Remember this is lower quality and private label.Fall 2023 Unit Cost Unit Retail GM% Units Boughts Total Cost Total Retail Total GM$ High Heels $13.00 $39.99 67.5% 3200 $41,600.00 $127,968.00 $86,368.00 Booties $17.50 $49.99 65.0% 5000 $87,500.00 $249,950.00 $162,450.00 Riding Boots $20.00 $59.99 66.7% 1000 $20,000.00 $59,990.00 $39,990.00 Knee Highs $24.00 $69.99 65.7% 4500 $108,000.00 $314,955.00 $206,955.00 Sneakers $14.00 $39.99 65.0% 2000 $28,000.00 $79,980.00 $51,980.00 15700 $285,100.00 $832,843.00 $547,743.00 65.8% Total GM% Fall 2024 % increase 10% Unit Cost "Unit Retail GM% Units Boughts Total Cost Total Retail Total GM$ High Heels $14.30 $39.99 64.2% 2880 $41,184.00 $115,171.00 $73,987.00 Booties $19.25 $49.99 61.5% 6250 $120,313.00 $312,438.00 $192,125.00 Riding Boots $22.00 $59.99 63.3% 1250 $27,500.00 $74,988.00 $47,488.00 Knee Highs $26.40 $69.99 62.3% 4050 $106,920.00 $283,460.00 $176,540.00 Sneakers $15.40 $39.99 61.5% 2500 $38,500.00 $99,975.00 $61,475.00 16930 $334,417.00 $886,032.00 $551,615.00 62.3% Total GM%