edf40wrjww2CF_PaperMaster:Desc
From: Sam Cowan, Controller
To: Maxine D’Amour, , Owner
Re: Maxine Fashions Limited strategic plan
Executive summary
Maxine Fashions Limited(MFL)has in operation since 2003. It has 2 upscale stores, 4 regular stores and 2 clearance stores. MFL has experienced quick sale growth in the first two years of starting business and next 3 years stable sales position, however in spite of the overall industry 10% growth, MFL showed decrease sales and net profit margin in 2008. Bank require MFL to maintain net profit margin rate at lease of 6 to get finance. As the owner, Maxine, would like to expand MFL into other cities, the current MFL operation needs to be reviewed and change has to make to improve the net profit margin rate.
In this report, current situation scan was provided and alternative options were analyzed. Leasing new point-of-sale system and closing clearance stores were recommended. A net profit margin rate of 7.5 can be achieved based on the above recommendation. A implementation plan were presented to Maxine as well.
Introduction:
Maxine Fashions Limited (MFL) began operations in 2003, it possesses two upscale stores, four regular stores and two clearance stores. The sales of stores grown quickly over the first two years and stabilized over the next three years. However, in 2008 MFL has not experienced increased sales contrary to the recent Montreal retail clothing market 10% growth trend. In contrast, sales revenue dropped 9% and net profit margin decreased from 5.6% to 1.7%. The bank manager informed Maxine that MFL need to maintain a net profit margin as a percentage of sales of at lease 6% over the next three years in order to be provided financing for an ...