B120 Tma3

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Designer Labels
It was 15 May 2012 and Kathryn Albeit had just received an offer of £1 million for her retail stores business. The offer was tempting, especially in light of the heavy workload she was carrying and the increased pressures from her family responsibilities. She was unsure whether now was the time to sell and whether the price offered was reasonable. Kathryn was sitting in her office contemplating her business’s future. Designer Labels (which Kathryn ran as a Sole Trader) was a chain of designer clothing stores targeted at men and women in Birmingham. Originally, Designer Labels had targeted mid-aged women, but slowly, as more trendy styles were purchased, the stores developed a large young customer base of men and women between the ages of 18 and 40. The company now sold designer clothing, jeans, shoes and accessories. Customers sought Designer Labels’ authentic clothing and were willing to pay the premium price imposed by designer wear in return for the exceptional customer service provided by the store’s sales personnel. These sales personnel were trained to converse with their customers and help them select the proper fit for the clothing that appealed to them. Stores were run by two to three sales personnel with responsibilities to handle the cash register, help customers in the fitting rooms and restock merchandise. In the retail industry it was necessary to purchase merchandise one or two seasons before the period of sale. Kathryn had to predict what she thought would sell and which merchandise to purchase. For the designer clothing wear, she visited fashion shows and built relationships with manufacturers and wholesalers. When Kathryn saw a label she wanted to sell in her shops, she would contact the vendor and negotiate a contract. Vendors were usually impressed with the labels in Kathryn’s stores and her strong presence in the market, so agreeing on a deal was not very difficult. Kathryn personally selected all store locations, which were...
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