Essay on Harrington Collection

4927 Words May 31st, 2010 20 Pages
Harrington Collection
Sizing Up the Active-Wear Market

Marketing Management

1. What is your evaluation of the women’s apparel industry and Harrington’s position? How has the average price of women’s apparel changed? What is your evaluation of their financial performance?

The Women’s Apparel Industry
The U.S. women’s apparel industry market is mature, given that the average growth rate from 2005 to 2007 was 4.66%. Within the industry, there are 6 categories of clothing in which companies compete: haute couture, designer, bridge, better, moderate, and budget. Each category targets customers with different needs and different price ranges, with haute coutre and designer clothing ranging upwards from $10,000 and moderate
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In 2005, the average price of women’s apparel was $95.00; in 2006, it dropped to $94.51, which amounts to a .51% decrease. In 2007, the price fell to $91.00, a decrease of 3.71%. The trend is that customers now prefer less expensive clothes. However, Harrington Collection’s prices are higher than the average, which could deter the average price-sensitive customer.

Harrington Collection’s Financial Performance
Harrington Collection has not been performing well. The sales and margins for the past three years have been at an all time low. In 2005, sales were only 1,390 million, while in 2006, sales were 1,345 and in 2007, they were 1,344. Because of low sales,At the same time the gross profit rate has been decreasing. In 2007, the gross profit margin for Harrington Collection’s Manufacturing Group decreased 1.55%, and in the Retail Group it dropped 0.95%. This is a total decrease of 1.37%. This means that the Manufacturing branch is losing the majority of the company’s profits. The Manufacturing Group, dedicated to designing, producing, and marketing upscale women’s apparel, accounted for 50.3% of company profits in 2007. The Retail Group, focused on retail-based operations for company-owned stores, accounted for 49.7% of profits in 2007.
When the financial reports of Harrington Collection were analyzed, some important things were uncovered. Firstly, expenses are…

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