Giordano Ppts

vOverview and Introduction v v v v v v

Background • Was founded by Jimmy Lai in the year 1980. • “GIORDANO” – Italian name. Named after a famous New York restaurant. • Started selling casual clothes under Comitex group. • Set up its own retail shop in Hongkong in 1983 • Began expansion in Taiwan through a jointventure.

Background • Opened its first retail outlet in Singapore. • In 1987, Giordano changed its strategy. • Around 1990, Lai had around 200 Giorgano stores in Mainland China & Hongkong. • In 1994,Lai was under pressure from the Chinese Govt. • Lai left the company and Peter Lau Kwok Kuen takes over as

Management values and style • Lai always tried to do things in an innovative way • Success factor was there sales staff • Only those candidates were selected who matches the employee profile • All the employees had to work in a store for one week • Attractive salary, respect , good incentive helped to retain good employees

Strategies of Giordano

Product Strategy Ø Retailer of unisex apparel Ø Ø Customer service as a part of a product Ø Ø Tags were removed from some of the products Ø Customers were asked to set a price for jeans

Business Strategy

Corporate Strategy

Product positioning • “Value-for-money” or “quality merchandise at affordable prices” • “Gio Ladies” was the product introduced • Mid price positioning • Bluestar exchange(BSE)-budget cautious customer • During 1990, it tried to reposition its brand.

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Giordano’s key success factors • • • •

Using Porter’s five forces framework, the key success factors can be explained •

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RISK OF ENTRY BY POTENTIAL COMPETITORS = MODERATE � Investments in brand building, and retail outlets needed

BARGAINING POWER OF SUPPLIERS = LOW � Suppliers can be replaced easily

RIVALRY AMONG ESTABLISHED FIRMS = HIGH � Price and non-price competition increasing in intensity, slower demand growth

THREAT OF SUBSTITUTE PRODUCTS = LOW� Lack of substitutes for casual clothes

BARGAINING POWER OF BUYERS = MODERATE � Low switching costs but no collective bargaining power

Competitive Advantages Excellence in design: Ø Fast and market-driven new product development, Ø Excellent organizational communication Ø Dedication to the needs of customers (e.g., style, fabrics, etc.) Excellence in management of operations, logistics and information technology systems: Ø Effective supply chain management, Ø Inventory control ,distribution Ø Integration of purchasing and selling functions. Ø Cost savings from efficient operations are transferred to customers, thus delivering “value-for-money”.

Excellence in marketing and branding: Ø Strong positioning, Ø Brand equity for excellent service and ability to deliver “value-for-money”, Ø Consistent execution of advertising and promotion to strengthen brand image. •Excellence in service: Ø Excellent customer service Ø Human resource policies (e.g., selection, training and remuneration of frontline staff) Ø Information systems, and performance monitoring (e.g., regular evaluations of service standards at store level and mystery shopping) •Good site selection: •Giordano’s location strategy provides a competitive advantage because of its direct impact on ability to generate high volume customer traffic while keeping low margins •

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Competition • Main Competitors

• • Similar strategies but different markets

• • The Theme’s direct Competition

• • Heavy Ads, sales Promos, attractive prices

• • No question asked exchange policy

• • The Gap – Giordano Unisex

Competitor's Positioning FIRMS Giordano The Gap Espirit Bossini Baleno Hang Ten

POSITIONING Value for money – Trendy fashion Value for money – More market than TrendyUp fashion Giordano Low Price Value for money – Youngfor Age casual Value Money, wear Sporty Lifestyle

TARGET MARKET Unisex casual wear for all ages Unisex casual wear Specialized for all ages lines for children and menBoth Unisex apparelyoung and old young Unisex appeal, adults Wear and Casual sports wear, Teen and young adults

Giordano’s growth strategy

International expansion Ø Established store in China, Malaysia, Singapore, Taiwan , Japan , Korea, Saudi Arabia, India, etc. Ø Different Strategies in different market. Ø Slowdown due to Asian crises, SARS and Iraq war. Ø Expansion beyond Asia. •

Australia, North America , Europe , Middle East.

Ø Network of over 2000 stores in 30 countries

Future View

opportunities Challanges

AWARDS Awards The fourth Hong Kong Awards for services Grand Award ( Giordano International) Grand Award ( Giordano ladies) Business to Consumer Services Suppliers Award. Dubai Services Excellence Scheme Award. Hong Kong Super Brands Award. Top Service Award( 9th time). Most Innovative Company by Wall Street Journal Asia. Dubai Services (excellence performance award)-3rd time consecutively. Hong Kong Corporate Governance Excellence Award. Best Services Performance ,Brand for Excellence in customer Care.

Year 2000 2002 2002 2002 2003 2004 2004 2007 2008 2008 2009

ANALYSIS OF FINANCIAL DATA PARTICULARS Turnover ( HK$ Millions) COST Operating Profit (HK$ Millions) Operating Profit Margin Profit Available To Shareholders ( HK$ Millions) Return On Sales Earning Per Share(HK$) Inventory Turnover Ratio Current Ratio

2008 5048

2007 4950

2006 4372

2005 4413

2004 4003

325

384

376

518

491

6.4%

7.8%

8.6%

11.7% 12.3%

311

295

205

406

387

6.2% 20.80

6.0% 19.80

4.7% 13.80

9.2% 27.50

9.7% 26.70

23

33

35

31

30

2.3

1.9

2.1

2.6

2.4

Data related to stores PARTICULARS Directly Managed Number Of Stores Retail Floor Area(In 000’s of sq ft) Comparable Store Sales Total Stores

2008

2007

2006

2005

2004

1036 1046

1000 995

962 957

914 918

811 846

(2%) 1970

2% 1895

(3%) 1767

(1%) 1694

7% 1585

DATA RELATED TO STORES

Any Questions …

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