You are the management accountant at Luxe Fashion Retail Limited (LFR) reporting to the CFO, Mark Newson. LFR is a company listed on the Australian Securities Exchange. LFR has eight stores across Australia and New Zealand, with its flagship store situated in central Melbourne. Its stores stock luxury clothing, footwear and accessories, as well as cosmetics and beauty products for both men and women. LFRs strategy is to be the leading retailer of luxury goods in Australia and New Zealand, providing the best of lifes luxuries to customers and a superior return to shareholders as it continues to expand and grow the business. The company has a reputation for stocking the best quality and range of products. Careful consideration is given at a senior management level to the product lines and brands stocked, to ensure that the companys reputation is maintained. The following information is provided to assist you with completing the tasks below. Product range LFR stocks an extensive range of many well-known luxury brands (e.g. Chanel, Gucci and Burberry). It also stocks a number of lines under exclusive agreements with suppliers, ensuring it is the sole local retailer. As a result, approximately 30% of product stocked by LFR is not available anywhere else in Australia or New Zealand. LFR head office employs a highly skilled buyer to manage its stock lines and to determine customer pricing. Although the company does stock a number of locally designed and made product lines, the majority of its stock is imported Purchasing A key area of focus for the board relates to the purchasing of stock. Depending on the nature of the product, lead times between placing a non-cancellable order and receiving the stock can be significant. For example, clothing collections often need to be ordered 12 months in advance. In-store experience Similarly, the in-store experience of customers is considered pivotal for LFR, particularly in light of the increasing popularity of online retailers. Sales staff are trained to provide a personalised shopping experience for each customer. Many of the sales staff have developed close relationships with their customers who they have been serving for many years, and who buy most of their wardrobes from LFR. The ambience of the store, which refreshes its displays regularly, is seen as critical to attracting new customers and retaining existing customers. High-value existing customers are issued with a LFR gold privileges card and their preferences are recorded in a customer database. While in the store, they are served coffee or champagne. All other customers are offered a bronze privileges card, if they do not show a card at time of purchasing. Store manager responsibilities Each of the eight stores is run by an experienced store manager. They are responsible for the store opening hours, store layout and design display, resupply of stock from the central warehouse, staff management and the customer experience while in the store. Instructions For this activity you are required to complete the following tasks: 1. Develop a balanced scorecard for LFR at the organisation level by: a) Identifying at least one LFRs strategic objectives in each of the perspectives (i.e. financial, customer, internal process, and learning and growth). b) Developing a measure in the form of a KPI for each objective identified. Use the template below in completing task 1 Objective comments KPI comments

2. Now apply the balanced scorecard you have developed at the store level. (You have recognised that the measures appropriate for each store may differ from those developed at the organisational level.) a) Describe why internal perspective measures that are appropriate at an organisational level may not be appropriate at an individual store level. b) Develop two (2) new KPIs which would be appropriate to include in the internal process perspective of a balanced scorecard for the individual stores. c) For each measure included explain how it links back to LFRs strategy. Use the template below in completing task

KPI COMMENTS Link to DDR's