Foxy Originals

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Group Case #2 - Foxy Originals
Decision to be Made
Partners Sara O’Neil and Julie Klein of Foxy Originals need to decide whether to continue selling at festivals as well as to retailers at different prices or to focus on a single distribution method and pricing strategy. Situation Analysis

Background: Retailers started to feel that the lower (wholesale) prices that Foxy Originals were offering at the festivals was cannibalizing their stores’ sales. The retailers were also upset that the same merchandise they were selling in their stores were being sold at low-end Festivals which was damaging to their stores’ image. Current Financial Situation: To determine Foxy Original’s current financial situation, revenues made from festival sales, from retails sales and from the two combined must be considered. 1. Festival Costs:

Floating Necklace| Berlin Bead Necklace|
Variable Costs (CAD$)| 1,526.84| Variable Costs (CAD$)| 1,719.81| Fixed Costs (CAD$)| 1,706.67|
Total Costs(CAD$)| 4,953.32|

Festival Sales:
Revenue (based on sales volumes before tax) = $12, 766
Current Profit:
$12,766 - $4,953.32 = $7,812.68
$12,766 - $4,953.32 = $7,812.68

2. Retail Costs:
Floating Necklace| Berlin Bead Necklace|
variable Costs (CAD$)| 2,475.36| Variable Costs (CAD$)| 2,775.66| Fixed Costs (CAD$)| 1,260.00|
Total Costs(CAD$)| 6,511.02|

Retail Sales:
Revenue (based on 21 accounts) = $20,700

Current Profits:
$20,700 - $6,511.02 = $14,188.98
$20,700 - $6,511.02 = $14,188.98

3. Current profits based on both revenue streams is $22,001.66 Strengths| Weaknesses|
* Financial success at festivals and retail stores * Low, affordable prices * Diverse age range of female customers * Partners’ experience with Jewellery making * Unique and trendy product offering * Handmade and Canadian-made products have a perception of high quality * 21 retailers currently carrying...