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Paolo Poffandi - Executive Summary - 2015

Apr 07, 2016

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Page 1: Paolo Poffandi - Executive Summary - 2015

L U X U R Y A P P A R E L F O R M E N

MA D E I N I T A L Y

P A O L O P O F F A N D I

Page 2: Paolo Poffandi - Executive Summary - 2015

Contact:

Paolo Poffandi

[email protected]

Page 3: Paolo Poffandi - Executive Summary - 2015

The reader acknowledges that the information provided by NPG, Inc. in this

Executive Summary is confidential; therefore, reader agrees not to disclose it

without the express written permission from any of the members of NPG, Inc.

It is acknowledged by reader that information to be furnished in this Executive

Summary is in all respects confidential in nature, other than information which

is in the public domain through other means and that any disclosure or use by

same of reader, may cause serious harm or damage to NPG, Inc. Upon Request,

this document is to be immediately returned to NPG, Inc. or deleted from any

computer or storage device.

Page 4: Paolo Poffandi - Executive Summary - 2015

CONTENT

INTRODUCTION i

CORPORATE STRUCTURE 1

LAUNCH 2

BRANDING 3

THE COMPETITION 5

THE MARKET PLACE 16

MARKETING 19

RETAIL PRICE POINTS 21

OPERATIONS 22

FINANCIALS - 1 23

FINANCIALS - 2 30

MANAGEMENT TEAM 37

ADVISORY TEAM 38

INVESTMENT 40

APPENDIX A 41

APPENDIX B 42

APPENDIC C 43

CONCLUSION 44

Page 5: Paolo Poffandi - Executive Summary - 2015

Launching a men’s luxury fashion line is like dancing with Edyta Śliwińska. She is complex and requires your undivided attention.

Who is Paolo Poffandi? His origins stem to Corfu, and farther back to Italy. He has lived in nine countries and describes himself simply as tanned. He enjoys ten-minute chess and fitness. He can speak French, Greek and some Italian.

Eight years as a stockbroker and fifteen years in project finance have helped him shape his views on the world of investments. Now, he is investing in his own creation.

The Paolo Poffandi Brand targets the ultra high net worth perfectionist. The entire collection will be made in Italy, assuring “quality” is never copromised. There are plans to open storefronts in Dubai, Beverly Hills, Milan, New York, London, Paris, Moscow, Shanghai, Beijing, Macau, and Monte-Carlo.

We will also market on the Web, through personal stylists, and top end retailers. The apparel will come ready to wear as well as custom fitted. Franchising the brand is a possibility once we have demonstrated the viability of a corporate model.

Patent pending signature accessories composed of precious metals and gems are also part of the product line.

INTRODUCTION

i

Paolo Poffandi

Page 6: Paolo Poffandi - Executive Summary - 2015

CORPORATE STRUCTURE

1

The Paolo Poffandi Brand represents the original name of its creator, a.k.a Paul Adams.

The brand is wholly owned by New Planet Group Inc., a C Corporation incorporated in the State of Nevada, USA, with Paul Adams as its sole shareholder.

Page 7: Paolo Poffandi - Executive Summary - 2015

The launch will consist of a Start-Up and Ramp-Up stage in the first two years.

The Start-Up Stage (Year 1)

In this stage, we will:

1) design an e-commerce web site 2) create samples for Spring/Summer Collection; Autumn/Winter Collection/ Evening Wear, shoes, and accessories. 3) create marketing packages for agents and distributors 5) implement accounting systems 6) launch an advertising/PR campaign

This stage will require an investment of $100,000

The Ramp-Up Stage (Year 2)

In this stage, we will:

1) invest in a storefront (please see Financials 1) 2) penetrate retail channels

This stage will require an additional investment of $1,500,000

2

LAUNCH

Page 8: Paolo Poffandi - Executive Summary - 2015

Apart from the sophisticated logo, which has garnered acclaim, and stylish clothing, how does Paolo Poffandi distinguish himself from the competition? The brand is not to be confused with a mid-luxury brand. It is a Top End Luxury Brand.

Below, and in no particular order, are suits of mid-luxury brands by Fendi, Burberry, Louis Vuitton, Canali, Dolce & Gabbana, Calvin Klein, Gucci, Armani and Hugo Boss. Which one is the Armani suit? They are indistinguishable.* It appears that if we did nothing else but imitate a mid-luxury brand, we would still be able to carve a niche.

BRANDING

* The second suit from the right

3

Page 9: Paolo Poffandi - Executive Summary - 2015

The Paolo Poffandi Brand is synonymous with unparalleled luxury and uncompromising craftmanship.

The creation of Patent Pending jewelry, featuring men’s accessories never seen before, promises to revolutionize men’s luxury apparel. You have not seen anything, yet.

4

Key to Branding is Innovation

PICTURE OF PATENT PENDING ACCESSORIES NOT INCLUDED

Page 10: Paolo Poffandi - Executive Summary - 2015

We really have only one competitor

Stefano Ricci

A close second is Brioni

Angelo Galasso

Armani

Brioni

Brunello Cucinelli

Burberry

Calvin Klein

Canali

Caruso

Corneliani

Eddy Monetti

Fendi

Givenchy

Hugo Boss

Isaia

Jacob Cohen

Just Cavalli

Kiton

Maison Martin Margiela

Ralph Lauren

Stefano Ricci

Tommy Hilfiger

Valentino

Zegna

Zilli

5

THE COMPETITION

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6

In order to fully appreciate the Stefano Ricci Brand,

we examine his impeccable good taste

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STEFANO RICCI Flagship Store

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STEFANO RICCI Beverly Hills Store

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STEFANO RICCI New York Store

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STEFANO RICCI Moscow Store

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STEFANO RICCI Shanghai Store

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STEFANO RICCI Apparel

12

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STEFANO RICCI Apparel

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STEFANO RICCI Pen

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STEFANO RICCI web sitewww.stefanoricci.it

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The retail experience for Luxury goods is evolving. The luxury consumer expects craftmanship and ease of purchase, as has always been the case.

1. From a Forbes article(a) :

“Gucci for example has made Amazon.com their official authorized online retailer.

Why? Again, because people look to these services more and more to make purchases rather than purchase decisions. They are learning about products elsewhere such as via advertising, social media, and more traditional media. The comfort and sophistication of buying via the internet’s largest retailers is both trusted by and appealing to consumers. In the end consumers are looking for an easy way to get the things they want. The hassle of the traditional luxury buying experience is the industry’s biggest threat.

Today successful luxury brands have taken responsibility over manufacturing, creating retail demand, and finally fulfilling the demand by selling direct to consumers. The value of the middle-man third party retailer is quickly evaporating.

Conclusion: Online marketing should be an integral compoment of the marketing mix.

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THE MARKET PLACE

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2. From a Business of Fashion (BOF) article(b) :

“One of the most exciting findings is that by 2018, in the next five years, based on our predictions and based on how fast the region is growing, Asia Pacific will be the biggest region in the world for luxury goods,” Fflur Roberts, the head of luxury goods research at Euromonitor, told BoF. “This is predominantly due to China, but also the emerging Asian markets like Malaysia and Indonesia. India is also a major contributor.”

Since the start of the firm’s luxury goods research practice back in 2004, Western Europe has been the “clear leader” in luxury consumption and has accounted for more than 33 percent of all luxury spending in the past year. However, with luxury consumption in Asia Pacific expected to grow 170 percent over the next five years, the region is set to dethrone Western Europe as early as 2018.”

Conclusion: Penetrate the Asia Pacific market.

3. From a Sphere article(c) :

“Rebecca Robins and Manfredi Ricca, directors at brand consultancy Interbrand, and co-authors of 2012’s Meta-Luxury: Brands and the Culture of Excellence argue that Luxury as a term has become bloated, overused and meaningless.

They call for a refocusing on true luxury, luxury as a pursuit of painstaking craftsmanship, quality and excellence, to maintain consumer confidence and impress today’s discerning connoisseurs who aren’t fooled by luxury that isn’t credible. They argue that true luxury brands such as Hermès and perfumer Francis Kurkdijan put excellence and product first, and let business follow, and are still a commercial success because people believe in them.

“It makes the brand irreplaceable, rather than disposable. Something truly unique. Consumers today are looking for something with meaning and longevity and this is the way to achieve that,” explains Robins.”

Conclusion: Put excellence and product first, and let business follow. Become irreplaceable.

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Page 23: Paolo Poffandi - Executive Summary - 2015

The marketing mix will consist of advertising and public relations campaigns to support direct in-home sales, digital marketing, corporate storefronts, and affiliated retail chains. The Public Relations effort will consist of sponsoring artists, white paper research, TED Talk participation, social media curators, sponsorships, magazine and television publicity, and fashion shows.

40%

20%

20%

20%

Digital Storefront Clothiers Retail

Projected % Revenue By Sales Channel

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MARKETING

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Integrating a central manufacturing hub to an ecommerce web site is a matter of necessity, not choice. The internet experience must also be multi-lingual. Traffic will be directed to the web site through advertising and public relations campaigns. Internet marketing provides the most lucrative profit margins.

Email campaigns will direct buyers to the web site where they can shop online.

Wealth Window (www.wealthwindow.com) is a unique, high performing database of 18MM individuals that consistently outperforms the competition. While most providers of high-income consumers rely on information derived from census data, geo-targeting, and demographics to identify the rich, WW utilizes over 80 proprietary sources (many that are not included anywhere else) to identify positions, possessions and proclivities, at an individual level, and categorize many wealthy individuals that other resources overlook or miss. Wealth Window is an Omni-channel portal to the most affluent consumers in the US, and allows direct mail, email, digital, mobile and video messages to the same individuals in a true integrated campaign.

Outlets of Luxury brands like SHOPSTYLE.com, will also provide additional revenues, but are considered Retail channels due to the markups.

Digital Marketing

Storefronts

For those consumers who are not as adept with the internet, there is the storefront experience - and in-home fashion stylists. We are projecting opening one store. The assumption is that it will cost(d) $100,000 [$112 /sq ft] to furbish a 800 sq ft space and $500,000 per year ($625 /sq ft ) to lease in Beverly Hills’s Rodeo Drive (e). This is reasonable compared to other cities in the world (f).

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Page 25: Paolo Poffandi - Executive Summary - 2015

ClothiersEquipped with a laptop, a catalog, a tape measure and swatches, Clothiers (personal Stylists) can visit their clients in their homes or offices. A laptop is all that is needed to transmit the client’s measurements directly to the manufacturing hub. Profit margins are expected to be greater than Storefronts’ but not as great as those derived from the Internet portal.

This model has been tried and tested by J. Hilburn (www.jhilburn.com/partnerlocator) a mid-luxury men’s clothing line. The commissions they offer stylists range from 10% to 30%. The model includes team leaders which share in the succes of their teams.

Astor & Black also provides a remarkable commentary on the trends in this video.

RetailThis entails establishing relationships with luxury retailers such as Harrod’s of London. The profit margins are expected to be modest, even though revenues from this channel are expected to be double that of other sales channels. We expect retailers to command a 300% markup on our apparel, and a 100% markup on accessories. If our suits cost $500 to make, and we wholesale them for $1,000, the retail price will be in the $4,000 - $8,000 range.

Retail also includes internet outlets such as shopstyle.com.

For accessories such as a pair of Button Cuff Bars, which may cost $30,000 to manufacture, the wholesale price is expected to come in at $45,000, and retail at $90,000.

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Storefronts for luxury brands are capital-intensive and must be in the most prestigious real estate in order to gain acceptance. They must also be backed by ample advertising budgets. The interior design must border on palatial. Profit margins are expected to be the least generous. Potential cities for storefronts include but are not limited to Beverly Hills, Paris, Dubai, Abu Dhabi, New York, Beijing, Monaco and London.

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RETAIL PRICE POINTS

HIGH MID LOW OUR COST

SUITS $8,000 $5,000 $3,500 $300

JACKETS $4,000 $2,500 $1,000 $200

SHIRTS $2,000 $500 $200 $40

PANTS $2,000 $1,000 $500 $80

SHOES $1,200 $800 $400 $100

SWEATERS $1,200 $600 $400 $80

BELTS $300 $200 $150 $40

FRAGRANCES $400 $250 $200 $40

CUFF BARS $120,000 $90,000 $65,000 $35,000

SHIRT CUFFS $4,000 $2,000 $1,000 $500

OVERCOATS $6,000 $4,000 $2,000 $200

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Page 27: Paolo Poffandi - Executive Summary - 2015

OPERATIONS

An Operations Manager in Italy will coordinate the manufacturing of clothing and accessories. He will report to the President in Year 1. This position could also be filled by a Consultant on a retainer basis. We have sourced a Consultant who exacts $4,000 per month for his services which include overseeing all aspects of production. He also has previously consulted for the brands Stefano Ricci and Isaia.

In a best case scenatio, the VP Operations position will be created in Year 2. He will oversee the Operations Manager and Store Managers. The VP Marketing will coordinate Retail Chain sales, oversee Advertising with the President, coordinate with the Webmaster and direct the Sales Director. An in-house Webmaster will coordinate the Internet portal and will report to the VP Marketing. The VP Finance will oversee financing strategies, This position will be created in Year 2. He will have oversight of Accounting and Investor Relations.

The Store Manager will manage commissioned Sales Associates in storefronts and report to the President in Year 1, and to the VP Operations as of Year 2.

The Sales Director will oversee a commissioned direct sales force of fashion stylists. New territories will be added every 6-12 months in major cities worldwide in conjunction with storefront expansion.

The President in Year 1 will have oversight of Designers, Store Manager, the Operations Manager, Public Relations, Investor Relations, and any Consultants. An Administrative Assistant will be retained in Year 2 to assist the President and VP’s.

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MANUFACTURINGIn keeping with the ‘made in Italy” benchmark of unsurpassed quality, all manufacturing will be made in Italy.

PERSONNEL

Page 28: Paolo Poffandi - Executive Summary - 2015

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Best Case Scenario Assumptions

Aggressive Revenue Growth

$1.5 Million 2nd round financing

4 Sales Channels

Full Product Line

FINANCIALS 1

Page 29: Paolo Poffandi - Executive Summary - 2015

ORGANIZATIONAL CHART - BEST CASE

PRESIDENT

VP MARKETINGVP OPERATIONS

SALESDIRECTOR

DIRECT SALESSTYLISTS

WEBMASTEROPERATIONS

MANAGERSTORE

MANAGER RETAIL CHAINS

SALESASSOCIATE

MANUFACTURERS

VP FINANCE

24

Year 1

Year 2

ADMIN ASSISTANTCONSULTANTSINVESTORS

Year 1

ACCOUNTING

Page 30: Paolo Poffandi - Executive Summary - 2015

5 Year Personnel Salaries - Best Case ($000)Year 1 Year 2 Year 3 Year 4 Year 5

President 120 140 180 220 300

VP Marketing 100 120 150 200 250

VP Operations n/a 100 120 140 160

VP Finance n/a 100 120 140 160

Operations Manager

100 150 200 225 250

Store Manager 80 80 80 80 80

Webmaster 75 90 120 150 150

Director of Sales 50 160 170 230 290

Admin. Assistants n/a 120 120 120 120

Total 525 1,060 1,260 1,505 1,760

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Page 31: Paolo Poffandi - Executive Summary - 2015

5 Year Sales Projections - Best Case ($000)Year 1 Year 2 Year 3 Year 4 Year 5

Channel Retail Web Direct Store* Retail Web Direct Store Retail Web Direct Store Retail Web Direct Store Retail Web Direct Store

Suits 200 100 100 100 400 200 200 200 600 300 300 200 800 400 400 200 1000 500 500 200

Revenue $200 $350 $350 $350 $400 $700 $700 $700 $600 $1,050 $1,050 $700 $800 $1,400 $1,400 $700 $1,000 $1,750 $1,750 $700

Shirts 400 200 200 200 800 400 400 400 1200 600 600 400 1600 800 800 400 2000 1000 1000 400

Revenue $40 $80 $80 $80 $80 $160 $160 $160 $1,200 $2,400 $2,400 $160 $1,600 $3,200 $3,200 $160 $2,000 $4,000 $4,000 $160

Jackets 80 40 40 40 120 60 60 60 160 80 80 60 200 100 100 60 240 120 120 60

Revenue $16 $64 $64 $64 $24 $48 $48 $48 $32 $64 $64 $48 $40 $80 $80 $48 $48 $96 $96 $48

Cuff Bars

40 20 20 20 60 30 30 30 80 40 40 30 100 50 50 30 120 60 60 30

Revenue $1,800 $1,800 $1,800 $1,800 $2,700 $2,700 $2,700 $2,700 $3,600 $3,600 $3,600 $2,700 $4,500 $4,500 $4,500 $2,700 $5,400 $5,400 $5,400 $2,700

Other** $100 $50 $50 $50 $200 $100 $100 $100 $300 $150 $150 $100 $400 $200 $200 $100 $500 $250 $250 $100

Total Revenue $2,156 $2,344 $2,344 $2,344 $3,304 $3,708 $3,708 $3,708 $5,732 $7,264 $7,264 $3,708 $7,340 $9,380 $9,380 $3,708 $8,948 $11,496 $11,496 $3,708

Total $9,188 $14,428 $23,968 $29,808 $35,648

* Assuming only one store (in Beverly Hills) will be operational in the first 5 years. The store could also be located in Dubai, or Monte Carlo - it rmains to be determined.

** Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

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Page 32: Paolo Poffandi - Executive Summary - 2015

5 Year Cost of Goods Sold - Best Case ($000)Year Year 1 Year 2 Year 3 Year 4 Year 5

Product Units Cost Units Cost Units Cost Units Cost Unis Cost

Suits 500 150 1000 300 1400 420 1800 540 2200 660

Shirts 1000 40 2000 80 2800 112 3600 144 4400 176

Jackets 200 200 300 300 380 380 460 460 540 540

Cuff Bars 100 3,500 150 5,250 190 6,650 230 8,050 270 9,450

Other* TBD 100 TBD 200 TBD 280 TBD 360 TBD 440

Total 3,990 6,130 7,842 9,554 11,266

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*Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

Page 33: Paolo Poffandi - Executive Summary - 2015

5 Year P&L - Best Case ($000)Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 9,188 14,428 23,968 29,808 35,648

COGS 3,990 6,130 7,842 9,554 11,266

Gross Profit 5,198 8,298 16,126 20,254 24,382

Retired Debt* 150 150 150 150 1,650

Accounting/Legal 200 200 200 200 200

Beverly Hills Store 600 500 500 500 500

Personnel** 222 443 690 938 1,185

Personnel 525 1,060 1,260 1,505 1,760

Advertising/PR 600 1,200 2,000 2,000 2,000

Total Operating Expenses 2,297 3,553 4,800 5,293 7,295

Net Profit Before Tax 2,901 4,745 11,326 14,961 17,087

* Debt represents a $1.5 Million obligation to investors, repaid with interest only payments at 10% p.a. and the principal in one balloon payment at the end of the 5th year

** 20% commissions paid to sales associates involved in Storefront and Clothiers, which collectively make up 40% of Gross Revenues

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Page 34: Paolo Poffandi - Executive Summary - 2015

Year 1 - Cash Flow - Best Case ($000)Q1 Q2 Q3 Q4 Cash at Beginning of Year:

$1.5M

Cash Received from Clients 400 900 2,500 5,300 9,100

Cash Paid for Inventory -200 -450 -900 -2,440 -3,990

Wage Expenses -187 -187 -187 -187 -748

G&A -50 -50 -50 -50 -200

Advertising / PR -150 -150 -150 -150 -600

Interest n/a n/a n/a -150 -150

Storefront -225 -125 -125 -125 -600

Net Change in Cash -412 -62 1,088 2,198 2,812

* Estimated time to set up a store is 3 months at a cost of $100,000

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FINANCIALS 2

Revenues are low and remain flat

Initial Injection of $100K

Limited Product Line

2 Sales Channels

Worst Case Scenario Assumptions

Page 36: Paolo Poffandi - Executive Summary - 2015

ORGANIZATIONAL CHART - WORST CASE

PRESIDENT

WEBMASTEROPERATIONS

MANAGER

RETAIL CHAINS

MANUFACTURERS

31

Year 1

Year 2

ADMIN ASSISTANTADVISORSINVESTORS

Year 1

ACCOUNTING

DISTRIBUTORS

Page 37: Paolo Poffandi - Executive Summary - 2015

5 Year Personnel Salaries - Worst Case ($000)Year 1 Year 2 Year 3 Year 4 Year 5

President 50 100 150 150 200

VP Marketing n/a n/a n/a n/a n/a

VP Operations n/a n/a n/a n/a n/a

VP Finance n/a n/a n/a n/a n/a

Operations Manager

50 80 100 120 120

Store Manager n/a n/a n/a n/a n/a

Webmaster 50 90 100 150 150

Director of Sales n/a n/a n/a n/a n/a

Admin. Assistants n/a 80 80 80 80

Total 150 350 430 500 550

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5 Year Sales Projections - Worst Case ($000)

Year 1 Year 2 Year 3 Year 4 Year 5

Retail Web Retail Web Retail Web Retail Web Retail Web

Suits 100 50 200 100 300 150 300 150 300 150

Revenue $100 $175 $200 $350 $300 $525 $300 $525 $300 $525

Shirts 200 100 400 200 400 200 400 200 400 200

Revenue $20 $40 $40 $80 $40 $80 $40 $80 $40 $80

Jackets 40 20 60 30 120 60 120 80 120 80

Revenue $8 $32 $12 $48 $24 $96 $24 $128 $24 $128

Other** $50 $25 $100 $50 $100 $50 $100 $50 $100 $50

Total $178 $272 $352 $528 $464 $751 $464 $783 $464 $783

Total $450 $880 $1,215 $1,247 $1,247

** Other items include belts, shoes, fragrances, socks, cufflinks, watches, sweaters, pants and ties.

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5 Year Cost of Goods Sold - Worst Case ($000)

Year 1 Year 2 Year 3 Year 4 Year 5

Product Units Cost Units Cost Units Cost Units Cost Unis Cost

Suits 150 45 300 90 450 135 450 135 450 135

Shirts 300 12 600 24 600 24 600 24 600 24

Jackets 60 6 90 9 180 18 200 20 200 20

Other* TBD 20 TBD 40 TBD 40 TBD 40 TBD 40

Total 83 163 217 219 219

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5 Year P&L - Worst Case ($000)

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 450 880 1,215 1,247 1,247

COGS 83 163 217 219 219

Gross Profit 367 717 998 1,028 1,028

Retired Debt* 10 110 n/a n/a n/a

Accounting/Legal 30 30 30 30 30

Personnel 150 350 430 500 550

Advertising/PR 40 50 70 80 100

Total Operating Expenses 230 940 530 610 680

Net Profit Before Tax 137 177 468 $418 $348

* Debt represents a $100,000 obligation to investors, repaid with interest only payments at 10% p.a. and the principal in one balloon payment at the end of the 2nd year

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Year 1- Cash Flow - Worst Case ($000)Q1 Q2 Q3 Q4 Cash at Beginning of

Year: $100,000

Cash Received from Clients 50 100 100 200 450

Cash Paid for Inventory -10 -20 -30 -23 -83

Wage Expenses -38 -37 -38 -37 -150

G&A -10 -10 -10 -10 -40

Advertising / PR -25 -25 -25 -25 -100

Interest n/a n/a n/a -10 -10

Total Cash Paid -83 -92 -103 -105 -373

Net Change in Cash -33 8 7 95 77

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Page 42: Paolo Poffandi - Executive Summary - 2015

MANAGEMENT TEAM

PRESIDENT

OPERATIONS FINANCE

Mr. Paul Adams (born Paul Poffandi) has 15 years experience in project finance, and 8 years as a stockbroker. He has consulted for such personalities as Richard Waryn CEO of YTR, and formerly a Director of the World Bank in the CIS; Darryl Quarles, director of the TV series Family Ties; and, Larry Namer, CEO of E ! Entertainment. He is the designer of patent pending accessories for men’s suits. Mr. Adams has lived in 9 countries, speaks 4 languages, and is the father of 6 children.

Email: [email protected]

TBA. TBA.

MARKETINGTBA.

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Mr. Christopher Paro

Mr. Paro is an international award winning jeweler with thirty five years experience in the jewelry industry. As a Master Jeweler, he has created countless fine jewelry items for some of the finest jewelry retailers throughout the United States and Canada.

With a focus on engineering and product quality, Mr. Paro now consults with a select few manufactures and retailers, while maintaining an exclusive list of very discerning retail clients around the world.

Email: [email protected]

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ADVISORY TEAM

Mr. Jordan Hill

Mr. Hill is currently Director of Finance at Jukin Media Inc., and was previously an Accounting analyst with MarVista Entertainment.

Email: [email protected]

Page 44: Paolo Poffandi - Executive Summary - 2015

Following the Start-Up Stage, we will seek an investment of $1,500,000 in the form of equity or loan secured by inventory and store improvements bearing an interest rate of ten (10%) percent per annum. Interest only payments to be paid quarterly over the first five years. The principal to be repaid in its entirety at the end of the fifth year.

INVESTMENT

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The Start-Up Stage

The Ramp-Up Stage

We seek an initial investment of $100,000 in the form of equity or loan secured by inventory bearing an interest rate of ten (10%) percent per annum. Interest only payments to be paid quarterly over the first 2 years. The principal to be repaid in its entirety at the end of the second year.

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References:

(a) http://www.forbes.com/sites/arieladams/2013/05/23/luxury-consumers-value-products-not-buying-experiences/

(b) http://www.businessoffashion.com/2013/10/euromonitor-coach-michael-kors-louis-vuitton-versace-fflur-roberts.html

(c) http://www.spherelife.com/future-trends/

(d) http://www.reedconstructiondata.com/rsmeans/models/retail-store/

(e) http://articles.latimes.com/2013/aug/20/business/la-fi-mo-retail-rents-20130819

(f) http://retailindustry.about.com/od/famousretailers/a/Highest-Retail-Store-Rental-Prices-In-The-World-Global-Comparison-2007-2012.htm

APPENDIX A

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PO FINANCINGFinancing the manufacturing will be accomplished by a PO financing credit facility, once Purchase Orders are present.

The credit facility will use the PO from the retailer as a guarantee to lend up to 90% of the PO value to pay the manufacturers. This form of financing cannot be employed for the creation of samples or for consignment sales.

PO financing is a function of the creditworthiness of the retailer and the reliability of the manufacturer.

The following PO Purchasing credit facilities are interested in servicing our accounts once we are rolling:

1. Crossroads Financial

2. H&A Commercial Capital

3. Commercial Finance Partners

4. HRH Funding Solutions

5. Plus Funding Group

6. RCR Development / International Finance

BrandFactory

Retailer

CreditFacility

1. Production is Funded at 90% of Invoice value

2. Invoice paid upon acceptance of inventory

3. 10% balance - minus fees - paid to Brand

APPENDIX B

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APPENDIX C

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www.paolopoffandi.com

Page 48: Paolo Poffandi - Executive Summary - 2015

CONCLUSION

44

The climate for luxury goods has never been better, especially in parts of the world where affluence never goes out of style. Superb Quality and Personalized Service will always valued at a premium.

The Paolo Poffandi Brand has strong market appeal, and with the right Advertising and PR mix can easily be identified as one of the premiere top-tier luxury Italian brands.

The competition’s Storefront, Clothier, Retail, and Digital marketing models have weathered the test of time and can be easily replicated.

In addition, the Paolo Poffandi Brand offers innovative patent pending signature accessories which will go far in distinguishing the Brand as an innovator in the luxury men’s fashion arena.

Finally, at the heart of the Brand is it’s creator, a youthful looking, stylish, multi-lingual maverick with an uncompromising passion for excellence.

From a PR perspective, the Paolo Poffandi brand is a sure winner.

Page 49: Paolo Poffandi - Executive Summary - 2015

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