Harrington Active Wear Case

Being a source of glamour and luxury, fashion industry is nothing more than a highly competitive business, and in order to start it a person has to conduct a thorough research in the area. Besides understanding customer’s needs, one should also consider potential competitors’ reaction, the investment level as well as calculate the risks of failure.

Due to the increasing tempo of modern life, active wear attire is becoming more and more popular, and not owning a segment producing such clothes would mean losing a sufficient income stream. In order to start the active-wear clothes production, the company has to decide if this is going to be a part of an already existing division or a completely new one. Harrington has several brands, and one of them, Vigor, is appropriate for the new line.

Harrington’s strategy could be summarized in seven steps: branding, design, buying, production, channel marketing, distribution and retailing. The company produces luxurious and stylish clothes for business ladies. However, according to the conducted poll, despite the fact that new attire would be much less expensive (the general price below $ 100 per article), it would not cheapen the mark. According to Tedlow (2008), active-wear introduction would increase the company’s current turnover twice.

The initial investment, including equipment and plant start-up costs, and excluding rent, would be $ 3 million and $ 3.5 million for pants and hoodies and tee-shirts respectively. Launch costs, with advertisement and PR-campaigns, would be $ 2 million. Besides the costs for materials, transportation, order processing and other, the company would have to pay $ 1 million per year for management salaries. It is nowadays profitable to outsource the production to China where the labor is cheaper. Nevertheless, this would interfere with proper quality control and have a negative impact on the company.

So, taking into account given calculations, and considering the company’s status and a growing demand on the product, the new line has high chances of success.