Charlotte Russe in Japan By: Shreelakshmi Adarsh Anoosheh Bahramipour Mohammad Ben Tarif Guillermo Barrera

Outline Country Review Business Review Market Analysis General Economy Demographics Business Review Market Analysis Opportunities Challenges Internal Analysis Marketing Strategy Conclusion and Recommendation

Country Review General Area: 377,835 sq km (slightly smaller than California) Capital: Tokyo Population: 127.5 million Literacy Rate: 99% Government: Constitutional monarchy with a parliamentary government

Country Review Economy GDP: $3.582 trillion Composition by sector: Agriculture: 1.3% Industry: 25.4% Services: 73.3% GDP real growth rate: 2.7% GDP per capita: $28,200 Est. 2003

Country Review Economy Exports: $447.1 billion Main Exports: motor vehicles, semiconductors, office machinery and chemicals Export Partners: US, China, South Korea, Taiwan and Hong Kong

Country Review Economy Est. 2003

Country Review Economy Imports: $346.6 billion Main Imports: machinery and equipment, fuels, foodstuffs, chemicals, textiles and raw materials Import Partners: US, China, South Korea and Indonesia

Country Review Economy Est. 2003

Country Review Demographics High population density: 329.5 persons per sq km 50% of population on 2% of land Total population: 0.96 male/female Age structure: 0-14 yrs: 14% 15-64 yrs: 67% 65 yrs and over: 19%

Country Review Demographics Population growth rate: 0.08% Life expectancy at birth Male: 77.74 years Female: 84.51 years Total population: 81.04 years 6th Worldwide Comparing to US of 77.43 years Est. 2004

Business Review Charlotte Russe is an American women’s clothing company. First store opened in Carlsbad, California in 1975 Trendy women’s clothing. Very reasonable prices. Targets women between the ages of 15 and 35

Business Review Products Satisfies broad range of ready-to-wear apparel to match all lifestyle needs: Casual Social Career Special occasions Dresses, shirts, tops, skirts, pants, shorts and all types of seasonal wear as well as outerwear Accessories such as shoes, jewelry, handbags etc. Prices of dresses range between $19.99 to $60.00.Average price for accessories: $12.00 Average price for accessories: $12.00

Business Review Today Charlotte Russe owns 256 stores Performance Today Charlotte Russe owns 256 stores Sales in 2003 fiscal year over $450 million Acquired Rampage stores in 1997, taking it from 16 stores to 55 stores today

The Question

Should Charlotte Russe enter the Japanese market?

Market Analysis Opportunities World’s second largest apparel market after USA: $25 Billion Women’s clothing dominates the market with the highest percentage of sales Imports of apparel increased 10.9% in 2003

Market Analysis

Market Analysis Imports from US 0.8% Value 1.6% Quantity

Market Analysis Imports from China 23.7% Value 80% Quantity

Market Analysis 2001 $32 B $16 B 2002 $27.5 B $13 B 2003 $25 B $11.5 B Year Total Market Local Production 2001 $32 B $16 B 2002 $27.5 B $13 B 2003 $25 B $11.5 B Local production decreased 20% yearly 2001 – 2003.

Market Analysis Year Exports 2001 $215 M 2002 $242 M 2003 $291 M An increase of 20% in the last year.

Market Analysis Opportunities The real success stories are in the specialty store sector. Store-based sales, that account to 80% of the total sales, increased 6.1% in Feb 2004. 2.5% increase in Sales in Feb 2004. 5% in Women’s clothing sales.

Women’s clothing sales Market Analysis Summary of Feb 2004 sales increase: Total Sales Women’s clothing sales Store-based sales +2.3% +5% +6.1%

Market Analysis Japan’s economy expanded a real 1.7% in the October-December period: the best showing in 13.5 yrs Backed by strong corporate capital investment, exports and consumer spending

Market Analysis Opportunities The average age of marriage for females 27 years and increasing Japan’s birth rate is among the lowest of the world’s advanced economies

Market Analysis Fashion-conscious women Opportunities Fashion-conscious women U.S. products have basic acceptance in the market (makes authentic U.S. apparel a popular market segment)

Market Analysis Polo Ralph Lauren Stussy X-Girl Gap Nike Levis Most popular American brand names in Japan Polo Ralph Lauren Stussy X-Girl Gap Nike Levis

Market Analysis An overall decline in the US apparel exports Challenges An overall decline in the US apparel exports A stagnant economy clubbed with effects of the Asian financial crisis. Yen continues to teeter to the US$ (making US goods more expensive to the Japanese market)

Market Analysis Challenges A very little room for error (shipments must neither be too early nor too late) Clothing produced by American companies has been traditionally designed for the Western women’s figures) Japanese are highly conscious of the quality of sewing

Market Analysis What do Japanese females demand for? Brand name Affordable price Quality of sewing Fabric texture Trendiness

Internal Analysis What does Charlotte Russe offer? Popular American brand name Good quality clothing & reasonable price Trendy Good fabric texture

Internal Analysis Stussy: $57 X-Girl T-shirt: $50 GAP: $30

Marketing Strategy 4 Alternatives for penetrating the Japanese market: Hire Japanese trading companies to act as agents to export our goods Sell directly to Japanese trading companies who can then import these goods into Japan Sell through a U.S. based company that is familiar with the Japanese apparel market and has connections with Japanese importers or businesses Sell directly to the market through specialty stores

Marketing Strategy Target Market Young female trend-setters rather than trend-followers Control the most discretionary income in Japan Are concentrated in large cities such as Tokyo and Osaka

Marketing Strategy Mail order catalogs Billboards in cities like Tokyo and Osaka Television and print advertising through select channels of media Participating in Japanese tradeshows or visiting trade shows in the United States that attract Japanese attendees

Conclusion & Recommendation Big population + Big market segment + High purchasing power + Fashion oriented women + Few U.S. competitors + Very affordable prices + Specialty stores advantage + Brand name + Nice clothing = Excellent business opportunity.

Thank You! Any Questions?