THREESIXTY JEAN BOUTIQUE

BUSINESS PLAN DEVELOPMENT

ENTR 4433- 005

PRESENTED TO: DOUGLAS MACDONALD

BECKY FREEMAN: 201234784
CHELSEY DAVIES 201494098
TERRA FILLMORE 201470549

Table of Contents
Business Concept
Executive Summary
The Opportunity Gap
ThreeSixtys Technology
ThreeSixtys Value Proposition
Company Overview
Denim Suppliers
Exhibit 1 Clothing and Accessory Suppliers
Store Layout

1
3
3
3
3
4
4
5

Market Opportunity
The Retail Industry
The Market
Technology Trend

5
5
6

Target Market
Calgary Market
Target Demographic

6
7

Location Analysis
Characteristics
Exhibit 2 2012 Census Data
Leasing Details and Costs
Location Requirements
Transportation, Parking and Traffic
Competition

8
8
8
9
9
9

Pricing Quality
Pricing Strategy
Exhibit 3.0 Price Quality of Jeans
Exhibit 3.1 Price Quality of Shirts and Dresses
Exhibit 3.2 Price Quality of Accessories

9
9
10
11

Advertising and Promotion Strategy

Exhibit 4 Advertising and Promotion Strategy
Marketing Strategies

12
13

Industry Competition
Industry Competition
Exhibit 5 The Competitive Matrix

14
16

Legal
Legal Structure
Risks
Insurance Package
Exhibit 6.0- Investment and Ownership Structure
Shareholders Agreement
Management Team
Job Descriptions

18
18
18
19
19
19
19

Exhibit 7.0- Shareholders & Key Management Team

Exhibit 8.0- GANTT Chart

20
21

Exhibit 9.0- Start Up Costs

Exhibit 10- Sales Forecast
Exhibit 11- Proforma Income Statement
Exhibit 12- Proforma Balance Sheet
Exhibit 13- Statement of Cash Flow
Exhibit 14- Ratio Analysis
Exhibit 15- Start Up Costs

22
23
23
24
25
26
26
27

Financial Information

Assumptions
Work Cited

28

ii

Executive Summary
Our focus is to provide fashion-oriented women exclusive fashions while also featuring,
made to measure, as well as ready to wear premium jeans. By using a 360-degree body scanning
technology, we can utilize an upcoming trend in the fashion industry that has not yet been
introduced into the Calgary market. ThreeSixtys belief is that providing an excellent customer
experience is just as important as selling a pair of jeans. We provide a 360-degree experience by
carrying a unique and selective clothing line of both fashionable and urban chic pieces, while our
jeans are designed by you, only for you.
The global denim market is expected to reach $56 billion by 2018 with the highest
spending in North America. Our target market is the Urban Young, with an age range from 2544, with the disposable income to spend from their upscale salaries. This target market is said to
account for at least 84% of Canadas population.
ThreeSixtys projected revenue is $650,000 in the first year and $700,000 in the second
year. This would yield a net income of $13, 042 in the first year and $36, 823 in the second year.
This will bring a return on investment of 5.22% in the first year and 14.73% in the following
year. We are seeking a cash loan of $200,000 for our company.
The legal structure of our company will be incorporated. Doing so will allow greater
access to capital, lower corporate taxes rates as well as limited liability well also permitting us to
utilize a specialized management team. Our primary partners will consist of Becky Freeman who
will be the Marketing & Communications Manager. The second partner will be Terra Fillmore,
the Operations Manager and finally, Chelsey Davies will be our accountant. All three owners are
well experienced in the retail industry and have completed their BBAs. Strong mentors support
all three partners.
ThreeSixty is set to locate them selves in Kensington at 100-10A St. NW, Calgary,
Alberta. This location is in very good proximity to our target market, is within a fashionable and
trendy area and is in a good building thats fairly new construction. This location has high traffic
flow and is also a transit hub for many major bus and train routes.
Our current competition consists mainly of other leading premium jean
companies. These competitors focus their business on providing their customers with premium
jeans, which emphasise high quality and fit. With the exception of one company, none of these
competitors offer made-to-measure jeans; while zero offer a specialized technology such as
ThreeSixtys. By offering a unique storefront with a strong specified product line and
accompanying technology, knowledgeable staff and a strong commitment to womens fashion,
we can sustain a competitive advantage.
Our pricing strategy will encompass the follow-the-leader strategy and will offer premium
products that differ in price accordingly. Our pricing will be customer based and will employ
accuracy and quality to our customers. The high disposable income and priority on high accuracy
make our target market relatively inelastic. Our promotional strategy combines a diverse group
of marketing strategies, social media exposure and public events to create a close customer

relationship and will create strong brand loyalty. These methods will require moderate funding,
but will have a large impact on our customers.
Confidentiality Agreement
This agreement is to acknowledge that the information provided by ThreeSixty Inc., in this
business plan is unique to this business and confidential; therefore, anyone reading this plan
agrees not to disclose any of the information in this business plan without the express written
permission of ThreeSixty Inc.
It is also acknowledged by the reader of this business plan that the information furnished in this
business plan, other than information that is in the public domain, may cause serious harm or
damage to ThreeSixty and will be kept in the strictest confidence.
Upon request, this document is to be immediately returned to ThreeSixty Inc.
Signature _________________________
Name (typed or printed) ____________________________
Date _________________________
This is the business plan for ThreeSixty. The presentation of this business plan does not imply an
offering of securities.

BUSINESS CONCEPT AND OVERVIEW

The Opportunity Gap
The fashion industry is always evolving and it can be quite difficult for women to find the right
fitting jeans that accentuate all the right curves. ThreeSixtys premium jeans are targeted towards
the early adopters and fashion forward women. Our purpose is to help solve this gap by
delivering customers their specific body measurements using 3D scanning technology. Once the
measurements are recorded a pattern is drawn and a product can be designed to the customers
choosing. Customers are able to choose specific fabrics and washes, pocket style, rise as well as
embroidery. The last step is fabricating and sewing the final product together. After the process
is complete clients have the option of automatically uploaded and storing their measurements
into our database. This provides customers the ability to simply return and known their exact fit.

ThreeSixtys Technology
The KX-16 Body Scanner is supplied by [TC]2 which is located out of Cary, North Carolina.
The scanner is the same size as an average retail changing room, therefore requires no additional
space. The data density on this device is about 1.5 million points for a body and is scanned from
16 fixed heads, four different angles and four different heights, this allows for accurate measures
of the clients entire body. Measurement definitions as well as print output can be completely
customized to the user. This device also operates automatically without the need of an attendant
and will provide data acquisition within seconds. This technology gives ThreeSixty the ability to
do body shape analyses, 3D product apparel development, made-to-measure clothing, as well as
clothing styling and recommendations. For 3D scanner specifications refer to Appendix A-1.2.
For specifications on operations parameters and costs of technology please refer to Appendix A1.3 to 1.4.

ThreeSixtys Value Proposition

Full body digitalization has been around for over fifteen years, however no company been able to
find a complete solution that allows for commercial success (Appendix A-1.1). Recent new
advancements in cost reduction, the introduction of more competitors into the marketplace, and
increased demand for digitalization cause make the technology more affordable. It is apparent
that ThreeSixty can help fill this gap by providing customers a proper visualization and details
before the garment is made. This is a significant benefit compared to traditional seamstresses.
Due to these advances it is said that the fashion and apparel industry will become more
interesting and therefore we will start to see an increase in these specific technologies in the
future (Appendix A-1.1). ThreeSixty has the technology and ability to penetrate this market
before any other competitors, therefore giving us a significant advantage and head start.

Our Company Overview

Not only does ThreeSixty provide unique and very fashionable, made-to-measure jeans, we also
have ready to wear jeans at a lower price point compared to our made-to-measure collection.
This will offer our customers the chance to buy high quality, premium jeans but at a lower price
point. Other revenue streams also include fashionable, urban chic shirts, dresses and accessories.
Our boutique will provide women with an exceptional service the second they walk in the door.
ThreeSixtys highly trained staff will be able to assist women in finding the right jean for their

body type. Our staff will educate them on how the process works, prices as well as the different
options and designs for them.
ThreeSixty is a high-end boutique located in a trendy area where our Urban Young target
demographic shops. Our storefront will portray a New York City vibe with a loft feel that is
enticing to our customers. Our tagline, Designed by you, only for you demonstrates the
innovative and unique process set in place that allows fashion oriented women to be a part of the
designing process. Premium jeans are a staple item for any woman and ThreeSixtys urban chic
environment provides a memorable and enjoyable shopping experience.
Our business strategy will permit us to satisfy these womens cravings and need for affordable
luxury items, while capturing a portion of their disposable income they are willing to spend on
staple fashion items (Appendix A-1.6). Through ThreeSixty, we will build a national brand
through our operations and marketing excellence. It will create widespread awareness of our
premium, high quality jeans as well as our innovative 3D technology, to ensure we surpass the
capabilities of our competitor brands.

Denim Suppliers
Through primary research of direct competitors we have found there to be a direct correlation
between denim fit being one, if not the most significant factor when choosing premium denim.
Legendary, Levi Strauss & Co stated that one of their current stores in San Francisco is starting
to make custom, made-to-measure jeans in house, however use the traditional method of a
seamstress at hand to take the individual's measurements (Appendix A-1.7 & 1.8). Nudie Jeans
focuses most of their effort into various fits of jeans but did stated the potential added value of
this technology to be quite applicable in the marketplace. However finds the 3D Scanning
Technology a little costly at this moment in time. After talking to Noble Jeans it was also clear
that they were intrigued by the technology and had said they considered it in the past. However
only 5% of their business model is custom patterns as their primary focus is on special U.S.
made fabrics. Through this primary research as well as our secondary research on the market, we
have discovered there is definitely a trend within custom jeans in which our technology can
address directly (Appendix A-1.7 & 1.8). This emerging technology within the fashion industry
will be examined closer in our technology trend section.
Exhibit 1 - Clothing and Accessory Suppliers
Supplier
Free People

Head Office
NYC, L.A.
& Chicago

Manufactured In
China

Key Criteria
Currently present in 1000 specialty stores
worldwide
o Women aged 25+
o Boho and contemporary style
TULLE
N.Y.C.
China
o Vintage inspired, modern clothing
o Showcases femininity and creativity
Rebecca Minkoff N.Y.C.
NYC & China
o Industry leader in accessible luxury apparel
o Extremely high quality
o Popular among young women and celebrities
Dolce Vita
N.Y.C. &
China
o Broad range of clothing
Seattle
o Stand out pieces
o 2Youthful, contemporary and relaxed
*For more information on suppliers see communications in Appendix A- 1.7
o

Store Layout
ThreeSixtys retail location will be 1,571 square feet (Appendix E-1.4). The shape of our
location is very long and narrow so therefore will be following a free flow layout, which is ideal
for small stores under 5,000 square feet, making it conducive for browsing customers. The free
flow layout is also said to be ideal when you are selling the same type of merchandise such as
fashion apparel (Appendix A- 1.5) The feature for our boutique will be our denim wall, which
showcases numerous spools of fabrics for the customer to choose from when designing their
made-to-measure jeans. There will also be glass cases throughout the boutique to showcase
specific denim designs or features of the season. Featured clothing such as dresses, tops and
accessories will be on either side of the check out counter in the front as well as the back end of
the store. This is shown in Appendix A- 1.5.

CALGARY MARKET OPPORTUNITY

The Retail Industry
We are operating in the womens retail clothing industry. This market is starting to see positive
growth as it continues to recover from the recession and is expected to continue (Appendix B1.5). The Canadian apparel market is reaching a point where intense competition is starting to
become present as brands and trends start to reach a more saturated environment. Previously
Canadians were faced with a lack of available designer brands, fast fashion trends and courant
apparel. However this is starting to rapidly change due to intense competition such as H&M,
Forever 21, Zara, J Crew and others entering the Canadian market (Appendix B- 1.8). Notably
the strength of the Canadian economy will greatly influence the success of the apparel industry
in the coming years, as both high and low end segments are expected to see very strong growth
(Appendix B-1.8).

The Market
ThreeSixty will be focusing on the accessible luxury brands, as known as affordable luxury,
within the clothing apparel market. The Canadian apparel industry has seen an increase in sales
dollars as well as volumes of products that are considered affordable or accessible luxury
(Appendix B- 1.8). Canada has a large percentage of middle and upper class incomes that have
trended towards higher spending on luxury-clothing items, which makes the accessible luxury
brands more attainable to this demographic. These individuals will ultimately seek out these
brands, in attempt to differentiate themselves from others buying the cheap-chic retailers such as
H&M and Zara, which have recently been dominating the marketplace (Appendix B- 1.8).
Asia Pacific and North America make up half of the jean market globally, however the market
for womens jeans is stronger within North America. Canada also leads the world in spending
per capita on denim jeans as seen in (Appendix B- 1.0) below. The global denim market is also
expected to reach $56 billion by the year 2018 (Appendix B- 1.9)
In 2012 it was estimated that the jean industry increased by 2% to reach total sales of slightly
over $2 billion, with premium jeans growing the fastest with the highest margin of 5% within
Canada. (Appendix B- 1.5). Over the forecasted period of the next few years, jean sales are
expected to remain mostly stagnant; nonetheless premium jeans are expected to lead the jeans
5

segment with a compounded annual growth rate of 2% (Appendix B- 1.5). According to Cotton
Incorporated Lifestyle Monitor, premium jeans have done exceptionally well even throughout
the economic downturn. A study done in the U.S. stated that 78% of consumers love or enjoy
wearing denim jeans, as it is estimated that 60% of U.S. citizens wear jeans to work and often
will wear denim up to four days a week. Within this survey only 16% of people mentioned price
as a top concern, while nearly 50% of women conveyed fit as a top priority (Appendix B-1.4).
The fact that denim shoppers are less concerned about price but focused on style and fit proves
that ThreeSixty is able to attract consumers with our premium jeans. The idea of premium denim
has changed consumers mindsets, which have been demonstrated above. It is said when,
Consumers today see jeans for $150 dollars, and they feel if the jeans fit well and are from a
visible brand, it is worth the investment. This customer's willingness to spend more money on
jeans has been stretched, which positively affects the higher-end brands. (Appendix B-2.0).

RETAIL TECHNOLOGY TRENDS

Technology Trend
It is stated that previous generations of these body scanners have been too expensive for
companies to integrate into their businesses, however Bodymetrics like our [TC]2 technology are
a fraction of the cost and can be installed within a few hours. This technology has the ability to
transform the apparel industry by providing new levels of personalized customer service as well
as reducing the number of clothing items that are returned due to incorrect fits, which is often a
significant problem for retail stores.
Bodymetrics a 3D full body scanner based out of the UK and has been installed in Selfridges
stores for a number of years already. Selfridges, a UK luxury chain has embraced this
technology, which in return has boosted their jean sales by a total of 20%. (Appendix A-1.9).
According to Lectra, a world leader of integrated technology solutions states that 3D scanners
can be a priceless competitive advantage within the fashion environment. With these new
advancements in the technology, designers and merchandisers are now able to understand the
applications more efficiently, allowing them to be creative within a few days or even hours. This
provides them with a simplified process, without having to sacrifice power. Previously
seamstresses had to measure the individual several times in order to get the persons accurate fit,
which could often be a lengthy and expensive process. This technology provides accurate
measurements in a few seconds, while also reducing cost. 3D technology at the design stage can
help companies reduce their costs and time to market, ultimately making them more efficient and
profitable in the long run. Additional benefits to this particular technology include virtual fit
checking, improved pattern modeling, increased speed to market profits as well as reduced
carbon footprint as the company no longer needs to produce numerous prototypes (Appendix A2.0)

Calgary Market
According to Canada 411, there are currently 507 womens clothing stores in Calgary (Appendix
B-2.1). This number does not indicate that these stores are all boutiques or operating in the same
consumer market, however it does give us a rough idea of how many similar stores are operating

within the same industry. Due to the size of Calgary, 507 womens clothing stores is relatively
low compared to a lot of other metropolitan cities such as Vancouver or Toronto. Our market is
not seasonal, as it will operate year round. We will bring in seasonal collections four times
throughout the year, however should not see any significant fluctuations throughout the year, as
women tend to shop year round.

Target DemographicWe will be focusing on the Urban Young demographic but more specific the Electric Avenues
and the Young Digerati demographic (Appendix B-1.1). These younger, upscale urban
trendsetters mainly consist of single or young couples as 58% of them are considered to be a
non-family, while 22.6% are couples without children. These individuals are living in
fashionable in-town neighbourhoods in metropolitan cities such as Calgary, Toronto, Ottawa and
Vancouver. This middle to high class individuals are typically aged 25-44 in white collar or
service sector jobs. These individuals are highly affluent and often live in expensive high-rise
apartments or condos mainly in inner city areas. This demographic thrives on enjoying the
liveliness of the city by trying out new bars, fitness clubs or coffee shops. These people also
enjoy shopping the latest fashions at nearby boutiques. Due to the majority of them have yet to
start families, they have both the time and discretionary income to spend money on them selves.
These two demographics have upscale average salary ranging anywhere from $85,000 to
$130,000. Within the Urban Young demographic, 42.7% is considered to be 25-44 years old.
The average household income of the Young Digerati demographic is $112, 613 back in 2008. In
2008, it was recorded that the Young Digeratis account for 79% of the entire population in
Canada. As shown in Appendix B- 1.1 the Calgary area is said to have an average penetration
level of Young Digeratis living within the city. According to this consumer, it is stated that they
are, Prepared to pay more for products that are a little bit different from those that one may not
see all over (Appendix B-1.1).
Within the Electric Avenue demographic, 84% of Canadas population is ranked within this
demographic (Appendix B-1.1). Their average household income is $78, 357. The city of
Calgary is considered to have a high penetration rate of these Electric Avenues as seen in
Appendix #. Large portions of the Electric Avenues attitudes are focused on looking good. My
confidence is greatly enhanced when I know I look my best, demonstrating the desire for
products like our own (Appendix B-1.1).
In Alberta alone there was approximately 316, 980 individuals earning $100,000 or more back in
2011 (Appendix B- 1.3). On average this is considered a very good income, therefore the
assumption can be made that this group can spend less frivolously on affordable luxury brands.
This does not assume that all these people are within our target market, however we are able to
develop an understanding of how many potential buyers there are within our income bracket that
we can potentially capture. In 2009, on average Albertans spent $3,395 dollars on clothing alone.
In 2009, Calgarians specifically were said to have spent $3,997 on clothing (Appendix B- 1.6).
Looking at the highest quintile income bracket in Canada, which in 2009 was considered to be an
income of $83,500 (after taxes) and above, the average expenditure on clothing was $5,881.
(Appendix B- 1.7) As you can depict from these statistics, there is a large market of high
quintile, or high-income individuals who tend to spend a large amount of money on clothing in

general. Due to this we believe our boutique and our accessible luxury brands we sell, will
greatly appeal to our target demographic.
The GIS map of Calgary shown in (Appendix B-1.2), highlights the downtown core of Calgary
as well as inner city area mainly in black which represents the highest average spending on
clothing in 2012. The average spending ranges anywhere from $1,425.77 to $10,336.16.
Although this is a large range, it represents the large amount of money as well as spending habits
that are apparent within Calgary. It also demonstrates the fact that the majority of this income is
located in downtown or inner city areas where our target market tends to spend most of their
time. This is also the reason we have chosen to situate our business in this area.

LOCATION ANALYSIS
Characteristics
Kensington is Calgarys urban village and considered to be one of Calgarys premiere shopping
destinations (Appendix E-1.8). ThreeSixty will be located at the heart of this trendy
neighbourhood along 10th street and Kensington Road northwest. The retail location is 1,571
square feet and located in a three-story building. The first level is underground parking, the
second level is the street level composed of retail space, while the third level is composed of 80
condo units and offices (Appendix E-1.4) The easy accessibility and the centralized location of
Kensington makes it a sought after retail location.
In the next ten years Kensington is estimated to see a 25% increase in residential populations, as
many condominium developments will be leading this change (Appendix D-1.7). The following
information, displayed in Exhibit 2 is from Census data collected in 2012 (Appendix E-1.4).
Exhibit 2
Population
Average Household
Income

1 km
19,267
$116,871

3 km
116,929
$107,897

5 km
209,510
$114,748

According to Calgary Police Services during the past three months in the Kensington area there
have been seven reported incidences related to theft which all occurred on the same day, relative
to the total violations in Calgary of 10,676 one would consider Kensington a very safe
neighborhood for both businesses and people (Appendix E-1.5).
Leasing Details and Cost
The lease term will be five years at a rate of $30.00 per square foot, which includes taxes
(Appendix E-2.0). In addition, the annual operating costs will be approximately $13.03 per
square foot plus the cost of electricity (Appendix E-1.4). Therefore the total leasing cost is
$43.03 per square foot. The leasing costs include: all exterior maintenance and improvements,
insurance, taxes, trash and sewage removal, and utilities excluding electricity. The costs not
covered are: interior improvement and renovations, electricity, and parking. Terms and condition

pertaining to escape clauses and transfer of lease must be specified and agreed upon prior to
signing of lease contract (Appendix E-2.0)
The rent expenditure that ThreeSixty will incur on an annual basis is $47,130, while operating
costs will be $20,470 per year. Thus the total annul rent expenditure is approximately $67,600,
which is equivalent to 11.27% of ThreeSixtys total revenue of $650,000. Compared to the
Canadian industry average expenditure of 11.30%, ThreeSixty will be on par with the industry
(Appendix E-1.0).

Location Requirements
Adding a business sign on the exterior space provided by the building, as well as repainting the
interior (upon approval) will be the only renovations required before commencing business.
According to the City of Calgary Bylaw, ThreeSixty is considered to be a retail dealer premises
and is subject to a new business license fee of $161, in addition to a new fire inspection fee of
$80.00 (Appendix E-1.1). This permit will allow ThreeSixty to operate at this location upon
signing the leasing agreement.

Transportation, Parking and Traffic

ThreeSixty will be located on the very busy streets of Kensington Road and 10th Street
Northwest with daily average traffic volumes of 9,000 and 15,000, respectively (Appendix E1.3). Kensington is a very accessible neighbourhood with plenty of transportation options as it is
located near: the LRT Sunnyside Station; Calgary Transit bus routes from Bowness, Varsity,
Huntington; and the Community Shuttles (Appendix E-1.8).
For individuals who chose to drive there is plenty of parking options such as metered street
parking, several parkades, and free street parking after 6pm as well as Sundays and holidays
(Appendix E-1.6)
Competition
Kensington is home to over 250 unique shops, restaurants, and services. At the heart of this
trendy neighbourhood ThreeSixty will have neighbouring tenants such as BMO, Julios Barrio,
Bernard Callebaut, and Crave Cupcakes who help draw customers into the area time and time
again (Appendix E-1.4). There is no direct competition for ThreeSixty in the Kensington area.
Although there is indirect competition, as nine womens apparel boutiques are located within two
kilometers of the storefront (Appendix E-1.9). For more information on competition please see
Exhibit 5 below.

PRICE QUALITY
Pricing Strategy
For our pricing strategy ThreeSixty will encompass the follow-the-leader strategy, which is the
approach of using a particular competitor as a pricing-model. ThreeSixty is a small boutique in a
very prominent competitive industry; our store is not in a position to consider itself a price leader
as it is still to new of a concept with regards to the 3D technology (Appendix F-1.1)

Product costs differ quite substantially from piece to piece, therefore the mark-up price would
vary accordingly. The service costs associated with the customer service and design of jeans will
be built into the cost of products themselves, this is due to the substantially different product
designs and resources needed dependent upon customer desires. Although in saying that
ThreeSixty will aim to maintain a gross margin that is within the industry range of 45%.

Explanation of Exhibits
These exhibits are based on the value of sales being $1,000 per square foot for Calgarys
Chinook Centre, which was provided by Canadian Directory of Shopping Centers (Appendix F1.2). Levis Chinook also considered this number to be on par. The quality perception is solely
based on information gathered from Exhibit 5 the Competitive Matrix, as it is the most
appropriate manner of evaluating the competitors.
Exhibit 3.0: Price Quality of Jeans

Average Unit Price ($)

Price - Quality of Jeans

$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0

ThreeSixty
3x1
True Religion
Joe's
7

3x1

ThreeSixty

Levi's
Joe's
7

Levi's

4
6
8
Perceived Brand Quality (Lowest to Highest)

10

In Exhibit 3.0 The larger market share of 3x1 is attributed to the fact that they have nearly double
the square footage of every competitor. The much smaller market share of ThreeSixty is
attributed to the company being a new comer to an already established and competitive market.
In addition to this, every competitor has sales in the millions, where as ThreeSixtys prospective
sales are based on a conservative estimate of $650,000.
Exhibit 3.1: Price Quality of Shirts and Dresses

Price - Quality of Shirts and Dresses

Average Unit Price ($)

$250
$200

Joe's

ThreeSixty

ThreeSixty

Levi's

$150
True Religion

$100

Joe's

Levi's

$50

$0
0

4
6
8
Perceived Brand Quality (Lowest to Highest)

10

10

In Exhibit 3.1 excludes 3x1, as they do not sell shirts or dresses, therefore their market share is
zero. In addition both 7 For All Mankind and True Religion do not sell dresses, which means a
much smaller share as they have less products for customers to choose from. Levis only sells
denim shirts and dresses, which results in less selection and variety thereby affecting their
perceived quality. Joes sells both shirts and dresses, therefore increasing their market share.
ThreeSixtys market share is again due to a product range and variety much larger than its
competitors.
Exhibit 3.2 Price Quality Accessories

Average Unit Price ($)

Price - Quality of Accessories

$200
$150

ThreeSixty

Joe's

$100

Joe's

True Religion
7 ThreeSixty

$50

7
True
Religion

$0
0

2
4
6
Perceived Brand Quality (Lowest to Highest)

10

In Exhibit 3.2 neither 3x1 or Levis sell accessories, therefore their market share consequently is
zero. 7 For All Mankind only sells scarves and Joes only sells hats which results in both
competitors having smaller product ranges, thus decreasing their possible market share. True
Religion sells a wider variety of accessories than most of the other competitors but not to the
extent of ThreeSixty. Contrary to the competitors, ThreeSixty will have a large selection and
variety of accessories; therefore it would be sensible to have a larger market share.
For further details on the breakdown of information found in the exhibits please see Appendix F1.0.

11

Exhibit 4 - ADVERTISING AND PROMOTION STRATEGY

Media /
Description

Type of Media & Frequency

EXTERIOR
Advertising
TRANSIT WRAP
Seventy Posters
26 week term
(Back of the bus)

Circulation

Expense

Broad reach
High frequency
Powerful impact for the lowest cost per
thousand of any media
Reaches thousands of people every day

$360 per 4 weeks

26/4= 6.5($360)
=$2,340 + $75
(production cost)
=$2,415
$1,464 (including
taxes)

CALGARY
Advertising/
WOMENS SHOW Promotional
10x10 (100sq)
Only happens Twice a year

Longest running womans show

Backed by $140,000 in multimedia femalefocused advertising

AVENUE
MAGAZINE
Full page front and
back color
advertisement

Delivered to over 1600 different businesses Apprx $500/issue

Can easily promote the magazine and our ad X 5
through social media channels since majority =$2,500
accesses it through tablets, smartphones etc.
7 out of 10 readers will actually visit one of
the recommended stores

Advertising

Choosing to be present in 5
issues /year. These specific
issues directly relate to fashion or
lifestyle topics

VIP SALE
Promotional
Invite select group
of people to attend Couple days prior to grand
special event
opening

Create buzz about the event by inviting ideal

customers with influence in the community and
friends. Give them a guest pass and send them a
flyer or brochure with tantalizing details

FASHION
Advertising
FLASH MOB
Will take place in a Four times throughout the year
high traffic area of (one show for every season)
Kensington (T.M.
neighborhood)

DIRECT MAIL
Advertising
through Canada
Posts services

Advertising/
Promotional

Four times throughout the year

REUSEABLE
Advertising
Year round, will then change
BAGS
bags use guerilla
advertisement
marketing strategy

Audience

Will circulate along major city routes from the

suburbs to the downtown core
Motorists, pedestrians and transit patrons

Fashion forward suburban moms

Progressive boomers
Trendsetters

Directly targets professionals and other

businesses.
76% of Avenue readers are women, which is part
of our T.M.
Average reader has an income of over $100,000
Avenue magazine is often a medium for fashion
related articles and topics

Small refreshments Directly targets individuals within T.M. who have

and champagne
influence. This can make word spread easily and
build interest in the store
=$500 (apprx)

Unique and creative advertising, gets people

FREE
talking, builds awareness.
Takes place in trendy shopping area where
apprx 19,000-117,000 people live within 3 Will use volunteer
models
kms (Appendix E-1.4)

95% of Canadians open their mail the day it Set a budget of

=$2,500
arrives
70% of Canadians are likely to respond to
flyers

By using Canada Posts Audience & Insights

Solutions we can zero in on specific individuals based
on specific demographics

Will be given out every time a customer makes a 0.26 /Piece

purchase
10,000 bags
=$2,500

Spur conversation and catch people off guard.

Will influence people to stop and watch.
People will snap photos, tweet, check us out on
social media channels etc.

Directly engages our T.M. and provides them with a

reusable bag for groceries etc., which features loud
advertisement for others to see

TOTAL= $11, 879

12

The promotional and advertising strategy aims to reach our target demographic through a broad
range of initiatives. ThreeSixty is focusing on implementing unique and creative ways in order to
increase awareness and customer loyalty. Through each of our advertising and promotional
strategies, ThreeSixty will be able to effectively bring traffic into our boutique by building
advocacy among our customers and providing women within the Calgary market, a valuable
boutique for that perfect pair of jeans theyve been looking for!
Exterior Transit Wrap: Popular with local retailers as it is possible to select route to advertise
on. With that being said ThreeSixty will mainly target the inner city areas as this is where the
majority of our target market resides. Through this medium we will be able to target a broad
range of people with a high frequency and have a powerful impact to those sitting in traffic,
taking the bus or simply walking down the street.
Calgary Womens Show: By exhibiting at this tradeshow ThreeSixty will be able to interact
directly with Calgarys female decision makers. It is said that thousands of trendsetting, fashion
forward women attend this tradeshow that connects both shopping with an overall learning
experience. The tradeshow also provides us with many branding opportunities as well. Due to the
show only happens twice a year; turnout rates tend to be very high (Appendix G-1.4).
Avenue Magazine Ad: Our ad will be present in five different issues throughout the year. These
being; Fashion, Art and Real Estate, 100 Things to Love About Calgary, Power Issue (Including
Fashion), Fall Fashion Arts Preview and Real Estate as well as Spectacular Summer Guide.
(Appendix G-1.1)
VIP Sale: Through our VIP sale we will be able to build a sense of mystery and exclusivity
about our jeans and our boutique in general. We will be offering an exclusive, pre-opening sale
for friends, family as well as those in the community that have influence (money, business
women, large networks, career related fields etc.). We will be providing these guests with a guest
pass as well as sending them a flyer or brochure with tantalizing details regarding our boutique
and the special deals they will be offered. We will also provide refreshments and champagne to
create a fun and inviting experience with a group of women. Ideally we would like to host this
event one or two days before the grand opening to spread word, getting the conversation going
and build interest in the store.
Flash Mob Fashion Show: This will be a great kick-off to each season throughout the year and
free of charge to not only the audience but ThreeSixty as well! We will use volunteer models to
hit the streets showcasing new arrivals or our finest denim designs, throughout a busy area of
Kensington, preferably during an event, festival or highly populated time. The idea of this event
is to be sporadic and random, therefore we will not be advertising it anywhere in order to create
significant surprised reactions and buzz among people. This is a great, creative idea to gain
exposure as people on the street will see the crowds, seek out what it is and hopefully share the
experience through word of mouth and social media channels.
Direct Mail: By using Canada Post and their software, ThreeSixty is able to target people in
specific neighbourhoods and within our target market by directly mailing them thereby
broadening our reach (Appendix G- 1.2). ThreeSixty also plans on sending out specific deals to

13

existing customer as according to Canada Post 94% of Canadians are likely to open a piece of
mail if they already do business with the company (Appendix G- 1.4). Through this initiative we
will be able to increase profits as well track our results.
Eco-friendly Shopping Bags: ThreeSixty will order custom reusable shopping bags. Through
this supplier we will be able to use a guerrilla marketing technique to create very eye catching
and custom bags that act as a walking advertisement for our boutique. After looking at examples
(Appendix G- 1.6), our idea is to have a girls behind dressed in nice denim jeans with our,
Designed by you, only for you slogan. This technique is fairly easy and does not require much
effort on our end, as it will be the consumers acting as our promotional medium.
Social Media- Facebook, Instagram & Twitter: Using social media channels is probably going
to be one of our most important strategies due its popularity and societies strong dependence on
it. Customers want to be updated constantly and want to feel like they are a part of your network;
social media is a great platform to do so. Through these channels we will be able to advertise
promotions, communications, events, contests as well as new designs, trends or arrivals. Through
contests we can engage our followers to participate in activities to promote our business for a
chance to win a special giveaway or discount within our store. Our designed Facebook website is
illustrated in (Appendix G- 1.0).

INUDSTRY COMPETITION
Industry Competition
The North American denim industry can be a very competitive industry to break into (Appendix
C- 1.). It is filled with companies who are selling a lifestyle, not just a pair of jeans and in turn
have a very loyal customer following. It is organizations such as these that are ThreeSixtys
direct competitors. Small boutiques located in the downtown area of Calgary are not considered
the direct competition for ThreeSixty due to that face that none focus primarily on high quality,
premium jeans with a custom fit. There are boutiques who carry a small selection of lower
quality jeans, but these would not present an accurate business model of ThreeSixtys true
competition. There are currently two main trends in the fashion world, the skinny jeans and the
desire from customization (Appendix C-1.4). These trends are things that have been identified by
our direct competitors in some way or another.
3x1 is considered a direct competitor because they are the most notable store that produces
custom made jeans based on exact measurements, with the ability for the customer to customize
every detail (Appendix C1- 2). 3x1 is just as concerned with giving you an exceptional
experience as they are with selling you a pair of jeans. Although the majority of their sales comes
from their collection jeans that are sold in upscale department stores such as Barneys, they have
still detected and successfully acted on the customization trend as well as made skinny jeans a
staple in their collection (Appendix D- 1.4).
Levis is another direct competitor of ThreeSixty that has attempted to harness the customization
trend. Levis has developed Curve ID, which is meant to solve common problems women face,
while trying to find jeans that fit right. To determine which line of jeans is designed to fit your
body best, a sales associate must take different measurements that leads them to one of their
options. Although Levis in Calgary has attempted to address the desire of women to have great
14

fitting jeans by custom fits, they are not able to deliver on a customizable aesthetic and therefore
end up having generic jeans. A Levis store in San Francisco and another in New York, are more
accurately tuned into the trend of custom jeans. A customer can make an appointment with
Levis master tailor, Ryan Grant-Hays, to design and order a bespoke pair of the traditional
Levis 501s (Appendix C- 1.4). Unfortunately, this process is not available online and a
Calgarian would have to obtain an appointment with Mr. Grant-Hays and travel to one of the two
cities.
Joes Jeans, which does not have a retail location in Canada, are famous for having a wider
variety of colour selections available in the coveted skinny jeans in addition to their wide variety
of rises, leg openings, and washes. Joes also has styles that are designed for specific body types.
For example, women who are voluptuous and curvy should try their Honey Booty-Fit (Saks).
While Joes has mastered the art of creating skinny jeans that customers love, they have yet to
develop any solutions to the desire of consumers to have custom products.
7 for all mankind has developed a technology called slim illusion that they claim will make you
feel at least one size smaller by using a tighter construction and with more stretch (Appendix C1.1). Fabrics they are experimenting with include suede and leather. 7 for all mankind has
captured the skinny trend and does a good job of providing multiple styles for women to choose
from when trying to find their perfect fit.
True Religion jeans are manufactured in the United States and demand that all companies in their
supply chain adhere to ethical working practices. Consumers believe that True Religion flatters
all different body types (Appendix C- 1.3). While a variety of people feel good and believe they
look good in True Religion jeans, the brand has not taken any strides to customizing their jeans
as of yet. However, True Religion also has a large variety of skinny jeans and super skinny jeans
that are available to its customers.
Our indirect competitors are other womens clothing stores that carry our direct competitors as
well as other designer jeans under one roof. We have identified Aritzia, Holt Renfrew, and The
Bay as our top three indirect competitors. Instead of having to go to each individual store to
decide which jeans fit you best, you can try them all in one stop. The downside for a consumer is
that the indirect competitors store may not have a large selection as the direct competitors do as
well as a potential decrease in product knowledge.
All of ThreeSixtys competitors have identified and responded to the trend of super tight skinny
jeans. However, only 3x1 has truly addressed the demand for perfect with the ability for personal
style. The attention that 3x1 and ThreeSixty have given to this trend is what sets us apart from
the competition. Although Levis provides a custom fit to a person who is on a budget, they fail
to capture the other portion of the trend, which is to have a custom look. At the current time, 3x1
is the industry leader in providing super premium using traditional means of measurement. The
3D scanning technology that ThreeSixty has harnessed not only has the ability to change the
premium custom jean market but to also help mould changing industry.
For more information on ThreeSixtys direct competition, refer to The Competitive Matrix,
Figure X, located on the following two pages.

15

Exhibit 5 Competitive Matrix

Product:
Range

ThreeSixty (Calgary)
-Large range of products
-Custom made denim
-Ready to wear in stock
-Tops, dresses, and accessories
from exclusive designers.

3x1 (New York)

-Large range of products
-Collection
-Customize a pair from the
collection
-Bespoke

Levis (Calgary)
-Medium range of products
-Multiple different leg options,
they do not have different rises,
or petite versions.

Joes Jeans (San Francisco)

-Wide range of products.
-Different rises, leg openings
-Petite available
-Tops, skirts, dresses, shorts,
and accessories.

Unique
features

Measurements provided by the

3D body scanning technology
allow someone to order jeans that
are tailored to their own body.

You can add virtually any

unique feature you desire with
bespoke.

Levi's Curve ID is meant to

solve the common problems
people face with jeans not fitting
properly.

Quality

-High quality
-Eliminates the problem of illfitting denim
-Reputable manufacturer makes
all jeans in the USA.
-Off the rack $200+
-Custom-made $300-$425
-Dresses $150-$250
-Tops $80-$200
-Accessories $50-$150
-Youthful, chic, professionals
-People working in the downtown
core.

-Very high quality

-Zippers from Switzerland
-Hand painted buttons
-Imported denim

Target market

True Religion (Calgary)

-Wide range of jeans
-Different rises, leg openings,
washes and lengths.
-Small variety of tops and
outerwear.

Offer named styles that cater to

women with a specific body
type.

7 for all mankind (Calgary)

-Wide range of jeans
-Different rises, leg openings,
washes and fabrics.
-Petite, short inseam, and
maternity styles are available.
Small variety of tops and
accessories.
Slim Illusion technology that
allows a person to feel up to one
size smaller.

-Good quality denim

-Made from cotton that is
sustainably produced
-Manufactured in factories all
across the World
-Jeans $78-$118

-High quality denim

-Fits people of all shapes and
sizes

-High quality jeans

-Manufactured in the USA with
imported fabric.

-High quality denim

-Works on all different body
types
-Manufactured in the U.S.

-Jeans $150-$300
-Tops $50-$200
-Dresses and skirts $150-$250.

-Jeans $165-$225
-Tops and Shirts $100-$300
-Jackets/blazers $325-$1,000

-Denim $220 -$520

-Tops $75-$250
-Outerwear $250-$650

-Professional athletes
-Musicians
-Finance, tech firm people

-High school students

-Middle aged, blue-collar
workers and parents

-Older teens
-University/college students New graduates

-Older teens
-University/college students
-Young professionals

Young Digerati, Electric Avenues

Young Digerati, Electric

Avenues, Pets & PCs,

Grads & Pads, Young Digerati,

Electric Avenues

Size
Layout

1,571 square feet

-Left wall: shelving unit filled
with denim and spools
-Middle right: checkout
-Back: change rooms and 3D
scanner

Displays

-Left side: entire wall is covered

in denim, two glass display tables
-Right side: two display areas of
dresses & accessories

4,000 square feet

-Front: three glass top display
tables
-Middle: glass enclosure where
seamstresses work
-Right: wall that displays 250
types of denim fabric
-Upstairs: bespoke boutique
-Framed, glass enclosed jeans
displayed on walls
-Glass enclosed display tables
with shelving below scattered
throughout

Pets & PCs, Grads & Pads,

Electric Avenues, Young
Digerati
2,112 square feet
-Left side: Mens clothing
-Right side: Womens clothing
-Middle: wooden display tables
-Middle right: checkout
-Back right: change rooms

-Older teens,
-University/college students
-Young professionals
-Hip, young mothers.
Young Digerati, Electric
Avenues, Urbane Villagers, Pets
& PCs
1,551 square feet
-Left side: Mens clothing
-Right side: womens clothing
-Middle: display tables
-Middle left: checkout
-Back: change rooms

-Middle: three display tables

(length wise)
-Right: one display table
-Walls: denim shelving units

-Wall: shelving unit filled with

colored denim
-Tables spread throughout with
denim

-Front: display table

-Right/left side: rack with shelf of
clothing on top
-Back: display table
-Middle right wall: shelving unit

-Left/right side: Upper

shelving unit with a lower rack
-Middle: two display tables
length wise

Price range

Typical
customer

-Collection $225+
-Bespoke <$1,200

Approx 2,500 square feet

-Back right: change rooms
-Middle: checkout
-Jeans dispersed throughout

All jeans have the same

signature pocket on the back.

Grads & Pads, Electric

Avenues, Young Digerati.
1,426 square feet
-Right/Left sides: clothing
-Middle left: checkout
-Back: change rooms

16

Exhibit 5 Cont Competitive Matrix

ThreeSixty (Calgary)

3x1 (New York)

Levis (Calgary)

Joes Jeans (San Francisco)

7 for all mankind (Calgary)

True Religion (Calgary)

Ambiance

-Urban chic
-Sophisticated
-New York City loft feel
-Natural light

-Laid back
-Easy going
-Bright, natural lighting

-Casual
-Laid back
-Dim lighting

-Casual chic
-South California surfer feel
-Chandelier lighting adds class

-High fashion
-Metropolitan

-Bohemian
-Hippie
-Laid back

Storefront

ThreeSixty is located in a
traditional red brick building. The
door is centered and there are two
window displays on either side
with mannequins dressed in the
current seasons trends. There is a
hanging sign perpendicular to the
building with ThreeSixty on it. In
addition to this there are canopies
over the windows that have
ThreeSixty on them.
-Limited in front
-Pay lots located close by

Front of store has white columns

with upper windows as well as
windows in the double doors.
The store hours are displayed on
a window. A small hanging sign
is perpendicular to the building
above the door. There are no
window displays.

The storefront has a large beam

of wood across the top with
Levi's displayed on it in their
signature font. The entrance is
off centered to the right with a
small display on the right side
and a larger one on the left.
Displays consist of mannequins
dressed in the current seasons
trend.

Store is on the bottom floor of 5floor building that is glass on

two exterior walls. Joe's uses
these two walls for exterior
displays of mannequins dressed
in the current seasons trends.
Large Joes sign is located
above the door.

Large lightly stained wood beam

across the top with 7 for all
mankind wrote on it in their
signature font. Beneath the beam
there is glass with an opening off
to the right side, which serves as
the entrance. Behind the glass on
the left are mannequins dressed in
the current seasons trends.

The storefront is outlined with

medium stained wood and
glass inside. True Religion is
displayed above the double
doors in the center.
Mannequins are located behind
the glass dressed in the current
seasons trends. An American
flag is displayed in one
window.

-Limited Street parking

-Almost unlimited

-Limited Street parking

-Almost unlimited

-Almost unlimited

Accessibility

-Very accessible (vehicle, bus,

foot)

-Very accessible (vehicle, cab,

metro, foot)

-Very accessible (vehicle,

bus/train with short walk)

-Very accessible (vehicle, street

car, foot)

-Very accessible (vehicle,

bus/train with short walk)

-Very accessible (vehicle,

bus/train with short walk)

Visibility

-Very good visibility

-On high traffic street
2-3 sales associates on the floor at
all times.
-Very high skill level for working
scanning machine
-Great knowledge of products

-Poor visibility

-Below average visibility

-Bad location in mall
3 sales associates were on the
floor at the time of our visit.
-Good skill level at measure
customers for Curve ID
-Good knowledge of product

-Good visibility
-Good location
At least 3 or 4 sales associates
are working at a time.
-Sales staff is very
knowledgeable about products

-Very good visibility

-Good, open location
2-3 sales associates on the floor at
all times.
-General overall knowledge
-Associates know more about
their own genders jeans

-Very good visibility

-Moderately friendly (depending

on which employee you meet)

-Very friendly
-Ask if customers need any help

-Friendly
-Ask if customers need any help

Major social media sites as well

as blogging, testimonial videos
from famous clients and features
in various magazines

Major social media sites.

Major social media sites, videos,

and blogs.

Major social media sites and

videos.

-Very friendly
-Assist customer with entire
buying process
Major social media sites and
videos.

3x1 has over 5,000 likes on

Facebook, and is featured in
many famous magazines and
newspapers.

Levi's has over 20 million

"likes" on Facebook and
340,000 followers on Twitter.

Joe's has almost 65,000 likes on

Facebook and about 16,000
followers on Instagram.

7 for all mankind has over

260,000 "likes" on Facebook, and
30,000 followers on Twitter.

Parking

Staff:
Number
Skill and
knowledge
level
Friendliness

Mode

Effectiveness

-Very friendly
-Assist customer with entire
buying process
Major social media sites, exterior
transit wrap, tradeshows, print
magazines, flash mob fashion
show, VIP sale invite, direct mail,
and reusable shopping bags.
There is potential for
effectiveness but at the current
time it is undeterminable.

The number of employees

working at a given time varies.
-Very experienced with great
knowledge of product.
Specialists on hand for bespoke
and customization processes.
-Friendly and helpful during
interview via telephone

There are 2 sales associates

working on the floor
-Knowledge of overall
products and details about
being worn

True Religion has well over

1,000,000 "likes" on Facebook,
and more than 10,000
followers on Instagram.

17

LEGAL
Legal Structure
ThreeSixty Boutique will be a privately owned, incorporated business. There are both advantages
and disadvantages to being incorporated. The considerations for this choice of structure was
based around the combination of having the ability to have a specialized management team,
easily transferable ownership, access to capital and also having the possibility of receiving a tax
advantage if the company qualifies as a small business (Appendix I-1.5).
ThreeSixty began with three main business partners Becky Freeman, Terra Fillmore and Chelsey
Davies in January 2014. Each of these three members currently hold 33.3% ownership of
ThreeSixty Boutique. ThreeSixty is looking to expand within the next two years to add new
employees to their team.

Risks & Insurance

Although the retail industry has fewer risk factors than most industries, it is still important to
look at. As with any retail store there is risk associated with employee and customer safety,
premise protection and vicarious liability. As preventative measures ThreeSixty will enforce
policies and tasks to alleviate these associated risks. For the safety of all ThreeSixty customers
there will be a strongly enforced minimum standards of cleanliness. In doing this ThreeSixty
Boutique will maintain the high quality look of the storefront and help to prevent dangerous
situations such as slipping and falling. Through ThreeSixtys employee policy and training
program the staff will be notified of the policies set in place to ensure employee safety and give
them the necessary tools to complete their duties. In order to reduce vicarious liability and the
risks associated with employees behaviour, ThreeSixty will introduce a detailed outline of each
employees specific duties for their position, which will narrow the scope of responsibilities.
Having this document in writing will ensure we reduce our risk from employee actions by
reducing the number of risky actions that occur.
ThreeSixty Boutique will purchase a Commercial General Liability (CGL) insurance package
which will cover four areas; bodily injury and property damage, personal injury, medical
payments as well as tenants legal liability. This particular insurance package from Kanetix will
ensure that if any physical injuries or property damage occurs, ThreeSixty will not be held
responsible and will be covered for any compensatory damages. The personal injury liability
aspect of the package will ensure ThreeSixty is protected if ever accused of libel or slander. The
medical payments of the CGL policy provide coverage that pays for minor medical expenses
from an accident that occurs on our own premise or as a result of our businesses operations.
Lastly, tenants legal liability will protect against fire, explosion, smoke damage etc. This
coverage will pay the compensatory damages and ensure ThreeSixty is not held legally
responsible for causing the incident for as long as they are renting the premise. ThreeSixty has a
commercial general liability limit of $1 million in the case that they are sued for injury or
damage to the property. This insurance package will cover $32,000 of tools and equipment,
including our 3D scanning technology. Lastly, ThreeSixty will have a $150,000 maximum
amount of coverage for any stock if it is stolen or destroyed. This particular package will cost
18

$1,771 per year or $148 a month. For information regarding the insurance package please see
Appendix I- 1.3.
Exhibit #6 Investment & Ownership Structure
Partner
Investment
Ownership Structure
$83,333
33.3%
Becky Freeman
$83,333
33.3%
Terra Fillmore
$83,333
33.3%
Chelsey Davies

Shareholders Agreement
By drawing up a shareholders agreement, each partners rights and duties are stated explicitly in
writing. A lawyer will be hired to draw up the agreement, which will include the following key
factors:
Date the shareholders agreement was formed
Names and addresses of each partner
The name of the business and place of business: ThreeSixty Jean Boutique located in
Calgary, Alberta
Statement of business purpose: ThreeSixty provides fashion-oriented women, exclusive,
made to measure, premium jeans by using emerging 3D scanning technology.
The term of the business: Commences on the date of the agreement and will continue
until terminated as followed
Amounts invested by each partner and the ownership structure
How the profits and losses will be shared
The rights of each partner
Provisions for accounting records and accessibility to shareholders
The duties required of each partner
The exit strategies other than death, these are the ways a shareholder can exit the
company: shotgun clause, liquidation, sell the business completely, pass it down to a
family member
Provisions to protect surviving shareholders, decedents estate in the event of a partners
death: the company can keep going after the death of a shareholder

MANAGEMENT TEAM
Job Descriptions
Becky Freeman is the Marketing and Communications Manager; she is taking care of the
strategy along with setting up promotions for the year while sticking to the promotional budget.
Becky will work on organizing events, advertising and promotional activities, designing window
displays and maintaining social media channels. She will also suggest new products to add or
remove to the Operations Manager, by monitoring customer desires and changing trends. Becky
is accountable for maintaining positive relations and helping to build relationships within the
community to promote growth and cross-promotional support. Becky will also work part-time as
a sales associate in the store.

19

Terra Fillmore is the Operations Manager. Terra will maintain ThreeSixtys resources for the
functionality of the business. She will be responsible for order replacement and new inventory
purchases as well as maintaining supplier relations. Terra will also update and maintain prices
for inventory, complete hiring processes to fill position requirements, maintain positive customer
relationships and resolve customer issues and complaints should they arise. Lastly, Terra will
also be accountable for training sales associates and ensuring they have the proper knowledge to
complete their responsibilities. Terra will also work part-time as a sales associate in the store.
Chelsey Davies will be our accountant/bookkeeper. Chelsey will maintain accounting files
including daily reports, monthly financial statements and well as yearly reports. She will manage
all transactions of the store and ensure revenues are recorded accurately to prevent loss. Chelsey
will also be accountable for maintaining positive customer relations and resolving issues. She
will help customers find the products they are looking for and recommend outfits in a friendly
and professional manner. Chelsey will work to ensure the storefront is kept clean and organized
as well as restocking of any inventory when necessary. Chelsey will also work part-time as a
sales associate in the store.
Please refer to Exhibit #8 Duties to Complete GANTT Chart for information on the breakdown of task three months prior to opening.
Exhibit #7 Shareholders & Key Management Team
Team
Skills
Tasks & Duties
Becky
Freeman

Terra
Fillmore

Bachelor of Business,
Marketing. Previous marketing
& communication corporate
experience. Advertising, social
media & promotional
experience.
Bachelor of Business,
Accounting. Previous
leadership/management
experience. Financial
understanding and control.

Ownership & Title

PT (20 hrs/week
marketing & comms)
PT (20 hrs/week sales)

Marketing &
Communications Manager/
Sales Associate. Has 33.3%
ownership and share of
dividends declared.

PT (20 hrs/week ops

management)
PT (20 hrs/week sales)

Operations Manager/Sales
Associate. Has 33.3%
ownership and share of
dividends declared.
PT Accountant & Sales
Associate. Has 33.3%
ownership and share of
dividends declared.

Chelsey
Davies

Bachelor of Business,
Accounting. Accounting, tax
planning and previous
retail/sales experience.

PT (20 hrs/week
bookkeeping)
PT (20 hrs/week sales)

Sales
Associates
(3)

At least 2 years of past retail

experience, management
experience is desirable. High
school diploma. Motivated and
fashionable.

Part time hours (20

hours/ week)
$15.62/hour X 960
hours per year
=$14, 880

Mentor

Bachelor of Entrepreneurship.
Has much experience starting
small businesses in the Calgary
area, specifically retail stores
(family member).

Provide advice &

guidance on setup of
business, constructive
criticism & advice to
assist in the
development & growth

Salary & Benefits

$42,500 first year
$1,000 drug maximum
per year w/ 80% direct
bill & $1,000 dental
coverage
$42,500 first year
$1,000 drug maximum
per year w/ 80% direct
bill & $1,000 dental
coverage
$42,500 first year
$1,000 drug maximum
per year w/ 80% direct
bill & $1,000 dental
coverage

$14,995 each

Hired during setup time

only
$1,500 for services
($50/hr X 30 hours)

*For resumes of management team please see Appendix I-4.

**For breakdown of Wages and Benefits and their calculations please see Appendix K-1.6 and I-1.2.
***For industry standard salaries please see Appendix I-1.1

20

Exhibit #8 Duties to Complete GANNT Chart

21

FINANCIAL INFORMATION
Type of Financing
As advised by RBC Royal Bank, a non-revolving loan will be used to fund ThreeSixtys shortterm cash shortfalls. Kelly Nisgard, Senior Account Manager, stated the loan will be $100,000.
The loan has the following condition: the interest rate will be RBC prime plus 3% therefore as
RBC prime is currently 3% the set rate will be 6%; and the full loan amount will have to be
repaid in three years. After further discussion it was determined that no collateral was necessary
as RBC Royal Bank does not require it for loans under $100,000. For more information on the
loan and the repayment schedule please refer to Appendix J-1.6.
A summary of ThreeSixtys financial information can be seen in Exhibit #9 through to #13.
Exhibit #9 Start-Up Costs

*For assumptions made please refer to Appendix K-1.1

22

Exhibit # 10 Sales Forecast

Exhibit #11 Proforma Income Statement

23

Exhibit #12 Proforma Balance Sheet

24

Exhibit #13 Proforma Cash Flow

25

Exhibit #14 Ratio Comparison

*For assumptions made please refer to Appendix K-1.9

Exhibit #15 Break-Even Analysis

*For assumptions made please refer to Appendix K-1.8

26

ASSUMPTIONS
Ratio Analysis
From a liquidity stand point ThreeSixty is doing well as reflected in their current ratio and acid
test being higher than the industry average. The current ratio tells us that for every dollar of
short-term liabilities ThreeSixty has 7.34 dollars in current assets to pay it back in 2015.
Although there is a slight decrease in the current ratio in 2016, it is still well above the industry
average. As ThreeSixty is a new retail company and does not have the ability to set payment
terms with suppliers and therefore does not have accounts payable, this could be the reason for
the large difference between their current ratio and industrys.
The majority of ThreeSixtys profitability ratios are on par with that of the industry. One
exception is the return on investment (ROI) ratio. A large portion of the difference can be
attributed to how established the company is. The industry average encompasses large, multimillion dollar companies that are able to spread out their expenses over multiple stores and
therefore increase their net income and ROI. ThreeSixty shows promising growth through the
increase of 9.51% in their ROI from the first to the second year of operations.
Through the interest coverage ratio ThreeSixty demonstrates a good position compared to
industry when it comes to their stability ratios. In the first year ThreeSixty has an interest
coverage ratio more than 2% great than the industry average, which means that they are less
burdened by debt than industry. In 2016 this ratio continues to increase which demonstrates how
little the ThreeSixty is controlled by debt. It is clear that ThreeSixty will not have difficulties
repaying their loan.
As far as efficiency ratios are concerned ThreeSixty is only comparable to industry on one level,
inventory turnover. Although the average amount of time it takes inventory to turnover in
industry is just over 2 days that is not realistic for a small boutique such as ThreeSixty. The
industry average encompasses large box stores such as Forever 21, and H&M who have a lot of
inventory, but sell their clothing at a discounted price. Although the amount of inventory that
goes through their store is higher, their sales might not be. This type of situation would cause the
inventory turnover ratio to be significantly lower than a boutique that has fewer inventories and
sells their clothing at a premium price.
From a general standpoint, ThreeSixty Boutique is preforming well in their first two years of
operations and show growth potential through the improvement of their ratios from 2015 to
2016.

Break-Even Interpretation
The break-even point is designed to determine how many sales in units or dollars is required to
have an operating income of zero dollars. This means that for ThreeSixty to be viable they must
sell at least a weighted average amount of 5,288 units, which will result in revenue of $429,088.
Although at this point ThreeSixty will not be losing money they will also not have any earnings
to contribute to their following years operations. For ThreeSixty to be viable in the long-term
they must exceed their break-even point. Based on the first and second year forecasted sales of
$650,000 and $700,000 respectively they will be viable.

27

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