Sac Pristine Luxury Bag Care Ltd. Co.: Business plan

Added Title

Business plan implementation of Sac Pristine Luxury Bag Care.

Date of Publication

2016

Document Type

Master's Thesis

Degree Name

Master of Science in Entrepreneurship

College

Ramon V. Del Rosario College of Business

Department/Unit

Business Management

Thesis Adviser

Raymond D. Paderna

Defense Panel Member

Brian C. Gozun

Abstract/Summary

Sac Pristine Luxury Bag Care Ltd. Co. is a duly established business offering cleaning services for luxury bags, shoes and other leather products. The company was established in July 2014 and opened its shop in the heart of Makati on October 2014. The founders of Sac Pristine are bag collectors themselves and are avid fans of Luxury Brands. They originally conceptualized a luxury bag cleaning service to answer to their own need: of wanting to have their bags maintained but couldn't find any service provider worthy of that trust. There are some existing service providers that offer bag repair, restoration, re-painting, re-gluing, re-stitching, or extensive overhauling, but these were not the unique services which the founders were interested in offering. There was nowhere to bring ones precious leather bags for simple, professional cleaning which will preserve the authenticity and unique patina developed through years of use. The concept grew into a vision as the founders started their research and development phase with a clear understanding of how high-end leather is lovingly crafted by skilled artisans since the founders themselves are connoisseurs of luxury-branded bags themselves. The founders wanted to provide an innovative service which cleans without tampering the authenticity of the bag, a one-of-a-kind service offering in the market when it was opened last year.

Sac Pristine is a niche business in a niche industry. Bag cleaning service is quite new in the Philippines and Sac Pristine is the only company that specializes in leather cleaning without repainting as most of the company's competitors automatically offer re-coloring, painting or replacement of leather parts as an auxiliary service to cleaning. Sac Pristine is known for its Vachetta Cleaning technique which no one else in the market offers. Vachetta is the untreated natural cowhide leather which tends to darken over time and this is found mostly in bags crafted by the venerable Louis Vuitton. Other companies offer painting on the leather, which does not only destroy the leather but ruin the authenticity of the bag since it was designed to be bare without any paint or dye. Part of the firms philosophy is to offer cleaning and restoration services without tampering the authenticity of the brand so the technique applied is done to improve the condition of the leather item and to restore it to its original condition.

According to Euro Monitor, the growth of luxury goods was still almost at par with the growth rates of the review period and increasing. This maintained development in 2015 was made possible by the buildup of constructive socioeconomic conditions of the country. The working portion of the population was growing considerably, which thus strengthened private consumption not only of basic but of luxury goods as well. Strong global awareness of luxury brands was made possible by consumers easy access to information through social media. Furthermore, the entrance of huge integrated resorts and casinos in the later part of 2014 also contributed to the appealing demand of luxury goods, especially in Metro Manila, which attracted even more rich foreign consumers. 2015 saw a great trend of consumers desiring to upgrade their lifestyle by trading up from premium brands, which are coveted by the masses and are thus considered non-exclusive, to luxury brands that display a more desirable higher social status. The changing lifestyle of the young adult consumers, which is in some way characterized by a financial independence through career growth and growing awareness and exposure to investments or business opportunities, benefitted luxury goods in a major way. The activities of different luxury brands towards targeting the younger generations reflected how the consumer base in the country was changing and improving. The fertility rate of the country was dropping as well, complementing the booming population of young professionals in the business processing offshore (BPO) industry. As luxury companies witness a great opportunity in the country's booming economy and higher private consumption, consumers enjoy a wide selection of brands that were formerly not available in the country. With the confidence to venture into the growing market of luxury goods, distributors and retailers bring in more luxury brands to feed the rising demand for goods that depict consumers social status and enhance their lifestyle. The Philippine industry, thus, continues to be fragmented but is significantly led by LVMH Moët Hennessy Louis Vuitton due to its encompassing portfolio of luxury goods that consumers covet. One of the reasons why luxury brands are coveted, especially by the affluent consumers, is because of their exclusivity. The more the brands are elusive and unreachable to the majority of the consumers, the more they are desired for the attached social status that an individual gains by acquiring it. This is the case of Louis Vuitton, the leading luxury brand in the country with a retail value share of 8% in 2015, its exclusiveness is maintained by its sole boutique in one of the most luxurious places in Manila. The interior design and strategic position of the store match the lavish products that it offers, complemented by the high-quality service that the staff ensures. The wide selections and wide product portfolio of Louis Vuitton also contribute to the way consumers are attracted to invest their leisure time in the store. Some consumers from distant places even fly to Manila to physically check out and purchase their desired luxury goods. The success of Louis Vuitton in the country is strongly driven by its global image. Consumers are attracted to the way its products deliver its name through the obvious logos attached to them. Because of this, consumers covet Louis Vuitton as a personal statement of ones social status. Conspicuous brands win over the attention of many consumers in the country who desire to upgrade their lifestyles and social status by noticeably displaying the brands of their goods. Following Louis Vuitton in the top position of luxury brands is Rolex, with a retail value share of 6%. In 2015 The success of Rolex in the country can mainly be attributed to the symbols and meanings that Filipino consumers attach to the purchase and use of the brand. Rolex is a very famous brand in the country as evidenced by how it is also one of the most supported imitation products by the mass consumers. A lot of middle-income and affluent consumers covet Rolex timepieces and consider them as family treasures which can be passed down from generation to generation.

Sac Pristine is a niche business in a niche industry. Bespoke bag cleaning is quite a new service in the country and Sac Pristine is the only one in the market that specializes in leather cleaning without repainting as most of our counterparts automatically offer re-coloring, painting or replacement of leather parts, etc. Sac Pristine is known for our vachetta cleaning technique which no one else in the industry offers. Vachetta is the untreated natural cowhide leather (found mostly in Louis Vuitton bags) which tends to darken over time. Other companies offer painting on the leather, which does not only destroy the leather but ruin the authenticity of the bag since it was designed to be bare without any paint or dye. Part of the company's philosophy is to offer cleaning and restoration services without tampering the authenticity of the brand therefore, whatever techniques we apply to improve the condition of the leather item, is done to restore it to their original pristine condition. Major competitors of Sac Pristine Luxury Bag Care Ltd. Co. are: A. Bag RX (Your Bag Doctor) - 3 branches, 1. White Plains, Katipunan ext., Ortigas, Quezon City 2. Westgate Center, Filinvest, Alabang, Muntilupa City 3. PowerPlant Mall, Rockwell Drive, Makati City. Strength: first mover Advantage since they started 7 years ago, most of their clients are old rich women who really care about their luxury goods. The Owner of the company studied leather care in Europe and that is the main strength of the company. They were also featured at RATED K hosted by Korina Sanchez Roxas last 2013, and they became more popular after the show. Weakness: Bag RX cleans bags and leather goods by recoloring the item to make it new again. They use leather spray paint sourced from Europe which according to them is the newest technology for bag restoration; B. Doctor Leather 7 branches 1. Greenhills Shopping Center, Greenhills, San Juan 2. Mall of Asia, Pasay City 3. Glorietta 5, Makati ave., Makati City 4. Greenbelt 5, Makati City 5. Eastwood mall, Libis, Quezon City 6. Alabang Town Center, Alabang, Muntilupa 7. Trinoma Ayala Mall, Quezon City. Strength: They have several branches all over the city and steadily expanding. They also buy and sell a variety of luxury goods in their stores as an additional offering for their clients. Weakness: Their pricing scheme appears to be a weakness since the cost of the bag cleaning service is pegged on the brand of the handbag. For example, cleaning an Hermes bag may cost the owner P5,000.00 while a Louis Vuitton tote may just cost P3,500.00 to clean. This company is also very particular in the bag they accept for cleaning. They are known to decline cleaning requests for bags by Michael Kors, Kate Spade, and Coach to name a few. C. Lovin my bags 2 branches 1. SM Aura, Taguig City 2. Greenhills Town Center, Ortigas ave Ext., Quezon City Strength: Bag Restoration company Franchised from United States of America. they also sell various bag cleaning products of their own such as bag protection cream, leather cleaner and conditioner, water repellent spray, rain coat for expensive bags and more. Weakness: They charge minimum of 4,000.00 and up. even for small wallet for cleaning and restoration will costs 4,000.00. D. Vintage Restore - 3 Branches 1. White Plains, Katipunan ext. Ortigas, Quezon City, 2. Jupiter St., Makati City 3. The Podium, ADB avenue, Ortigas, Mandaluyong City Strength: One of the oldest bag restoration stores in the Philippines. They are experts in cleaning vintage bags that may require extra care and replacement of broken parts. In addition to repairing bags, the service is also available for shoes and clothes.They also sell hand made exotic bags as additional income of the company Weakness: The manner by which the bags are repaired may be a weakness for this company. Since they are known to reconstruct a bag from scratch, the original stitching is no longer preserved and the authenticity of the item is thus tampered. E. Besas Shoes and Services 10 Branches 1. Edsa Shangri-la Plaza 2. SM North Edsa 3. Trinoma Ayala Mall 4. Market! Market! Taguig City Business Plan 11 5. Alabang Town Center 6. Festival Mall, Alabang 7. Greenhills Shopping Center 8. Marque Mall, Angeles City, Pampanga 9. San Antonio Plaza, Forbes Park, Makati, 10. Glorietta 1, Makati City Strength: The oldest Shoe Repair Service in the Philippines since 1950s. They started doing bag repair and restoration in 2013 when the demand for this service was starting to boom. They can replace any leather parts but they also charge very high for this service. Weakness: It takes a lot longer for Besa's to complete repairing a bag; lead time for major repairs can take anywhere from 2 to 3 months to complete. Moreover, they are not known to clean fine leather bags properly. F. Color Wash Philippines 3 branches 1. Serendra Mall, Taguig 2. Power Plant Mall, Makati City 3. Edsa Shangri-la Plaza, Mandaluyong City Strength: Specializes in color restoration, re coloring and color makeover of different kinds of bag but more on leather bags. Like Bag RX, they also use spray paint Technology tool for recoloring. Weakness: They dont know how to clean any kind of bag. Their main goal is to recolor and restore its color and to look new again. For small purse costs 5,000.00 for color make over meaning they will change the original color to another color of clients choice. For small bag costs around 7,000.00 and up depends on the clients request. And lead time is approximate 6 to 9 weeks upon accepting the item for service.

To take the risk, invest capital and to enter either as global partners or franchisees. A number of clients from Canada, USA, and Dubai are regularly asking the Founders if they are open for Franchising because the innovative Vachetta-cleaning technology is not done by many professional bag cleaners. In the Philippines, Sac Pristine is acknowledged as the only one using this unique cleaning technology which preserves the authenticity of fine leatherware. Sac Pristine is open for Venture Capitalists; expansion plans will be open nationwide - Cebu City, Davao City, Baguio City, popular malls in Metro Manila like Power Plant Mall in Makati, Greenbelt, Ayala in Makati, Alabang Town Center, Nuvali in Laguna, Marquee Mall in Pampanga, Fairview Terraces in Quezon City, Robinsons Galleria in Ortigas are some of the Business Plan 12 possible outlets where Sac Pristine may be located. Future plans also include outlets in New York, Toronto, Sydney, Dubai, Riyadh, Hong Kong and Tokyo. During the first year of operations, Sac Pristine aims to generate 1,800,000.00 PHP or 60% of the start-up costs/ beginning capital. For the second and third year of operations, we will be planning to expand locally and globally with the help of our Venture Capitalist.

Bank Financing is the basic way to borrow fund for expansion because Sac Pristine is planning to open the 2nd company owned mall branch in Quezon City in 2017. Sac Pristine also need to relocate the existing store because the building administrator of the Colbella Development Corp. released a notice to all tenants that the 40 years old Colbella Arcade will be demolished by the month of June or July 2016..

Abstract Format

html

Language

English

Format

Electronic

Accession Number

CDTG007194

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 computer disc ; 4 3/4 in.

Keywords

Business planning--Philippines; Business enterprises--Philippines

This document is currently not available here.

Share

COinS