New York & Company

Lisa MignoliVinessa ParrettiAndrea Vogdes

A Strategy for Success

Financial OverviewFinancial Measure New York & Company Benchmark: New York

& CompanyBenchmark: Competitor #1

Benchmark: Competitor #2

Benchmark: Industry Norm

Period: Fiscal 2007 j. Crew Aeropostale  

Period: Fiscal 2008   Period: Fiscal 2008 Period: Fiscal 2008 Period: Fiscal 2008

Annual Sales Increase (Decr.)

-4.60% 0.10% 7.00% 18.50% -2.60%

Gross Margin 26.00% 28.70% 38.90% 34.70% 36.70%

Operating Expense (S,G,A)

26.90% 25.00% 32.10% 21.50% 25.30%

Net Profit Margin -1.80% -0.40% 3.80% 7.90% 4.00%

Earnings per Share--Diluted

         

Dividends per Share          

Inventory Turns 8.04 8.2 4.66 9.74 6.13

Current Ratio 1.51 1.57 1.88 2.25 2.29

Quick Ratio 0.75 0.87 0.98 1.52 1.48

Total Debt to Equity Ratio

1.05 1.04 1.73 0.85 0.67

Financial Strengths

•Inventory turn ▫ 8.04 Fiscal 2008

Financial Measure New York & Co. Fiscal 2008

Benchmark: New York & Co. Past Performance Fiscal 2007

Benchmark: Competitor #1 J. Crew Fiscal 2008

Benchmark: Competitor #2 Aeropostale Fiscal 2008

Benchmark: Industry Norm Fiscal 2008

Inventory Turn 8.04 8.2 4.66 9.74 6.13

Financial Weaknesses• Annual sales

▫(4.6)% for Fiscal 2008

Financial Measure New York & Co. Performance Fiscal 2008

Benchmark: New York & Co. Past Performance Fiscal 2007

Benchmark: Competitor #1 J. Crew Fiscal 2008

Benchmark: Competitor #2 Aeropostale Fiscal 2008

Benchmark: Industry Norm Fiscal 2008

Annual Sales -4.60% 0.10% 7.00% 18.50% -2.60%

Financial Weaknesses

•Gross margin ▫26.0% for Fiscal 2008

Financial Measure New York & Co. Fiscal 2008

Benchmark: New York & Co. Fiscal 2007

Benchmark: Competitor #1 J. Crew Fiscal 2008

Benchmark: Competitor #2 Aeropostale Fiscal 2008

Benchmark: Industry Norm Fiscal 2008

Gross Margin 26.00% 28.70% 38.90% 34.70% 36.70%

Statement of Strategy

• By intensifying New York & Company’s percent penetration of footwear from .5% to 4.5%, this will improve New York & Company’s total sales by 4.2%, or $47,742,534 and will complete the head to toe look that New York & Company strives for.

Percent Penetration of Footwear to All Apparel

Average of Retailers 4.5%

Zara 4%

Ann Taylor 5%

American Eagle 2%

Urban Outfitters 3%

J. Crew 10%

Old Navy 3%

• We shopped the above competitors and found that their penetration percents of footwear ranged from 2% -10%, giving us an average of 4.5%.

Financial Goals

•“Shoe sales have been strong for three months now. They increased 7.9 percent in October compared with the period a year ago, according to SpendingPulse, an information service by MasterCard Advisors, that estimates sales for all forms of payment, including cash, checks and credit cards. In September, sales climbed 7.8 percent year-over-year. In August, shoe sales increased 0.5 percent” (A Not-So-Guilty Pleasure, New York Times, November 5, 2009).

• “Sales of shoes were $1.5 billion in October, the highest they have been in any October since at least 2006. And major retailers like J. C. Penney, Dillard’s and Ross Stores said in sales reports last month that shoes were among their best-performing categories” (A Not-So-Guilty Pleasure, New York Times, November 5, 2009).

• “Shoe sales are trending up, without question,” said Rory Tahari, vice chairman of the clothing brand Elie Tahari. “It’s one of our better-selling categories” (A Not-So-Guilty Pleasure, New York Times, November 5, 2009).

• “The total women’s footwear market increased 6% from 2002 to 2007 in current prices to 2.7 billion” (Mintel Reports, 11/5/09).

What Customer problem will this strategy solve?

Current Assortment

Key Items and Proposed New Styles

Flip Flop Sandal

•  New York & Company currently sells flip-flops during the spring / summer season. They have proven to be successful (Interview with New York &Company store manager, 11/22/2009) and we plan to expand the selection.

▫ We propose creating a similar style sandal, which has been a best seller at J. Crew in the past summer 2009 season (Interview with sales associate 11/12/2009).

Spring / Summer

Fall / Winter

Bootie Pump

▫ ”Retailers said boots were �selling especially well. Consumers were not sticking with one type of boot for winter but rather creating entire “boot wardrobes,” buying over-the-knee boots, open-toe boots, and ankle boots” (A Not-So-Guilty Pleasure, November 5, 2009).

▫ Pumps are a classic style and necessary in every woman’s wardrobe. According Ann Taylor Loft sales associate; pumps are constantly sought after by customers, no matter what the season.

Year round style

Flats

“Any greater than normal appearance of popular new trends in women’s shoes would be expected to cause sales to exceed the forecast, especially if the trends become established, fashion staples, such as with women’s flats.”(Mintel)

Proposed Colors

Flip Flops

• Basic Black

• Taupe

• Lilac

• Bubblegum Pink

Spring / Summer

Sandal

• Chocolate Brown

• Olive Green

• Bright Orange

Fall / Winter

Bootie

• Darkened Charcoal

• Light Taupe

Pump

• Deep Navy

• Bright Red-Orange

Year Round

Flat

• Spring / Summer▫ Deep Blue▫ Aqua Blue▫ Metallic Purple

• Fall / Winter▫ Flat Silver▫ Pumpkin Orange▫ Moss Green

Visual Merchandising

Spring / Summer Fall / Winter

• On hangers in a small section of the store

• On display tables coordinating with outfits to give the do-it-yourself customer the complete head-to-toe look NY & Co strives for (Interview with Leslie Goldman).

• In display windows also giving a complete outfit.

• Under the clothing racks coordinated to make an entire outfit from head-to-toe.

• On display tables to create head-to-toe looks that can be easily seen by your customers.

• In display windows completing each look and enticing customers into New York & Company.

Implementation of Strategy • Our expansion strategy will be done over a three-year

period. We know we cannot grow the business overnight.

• Our visual merchandising strategy will help attract customers to our new footwear line and help them piece together a new head to toe look.

• We will revise and expand out current collection.

• Constantly revise and edit the slow selling items, removing them if needed.

• Expand on our bestsellers, adding new styles as applicable