NORIS GRUPPEN A/S BUSINESS PLAN 2003 - 2007 Table of contents: 1.0 The company ...................................................................................... 1 Founded .................................................................................. 1 Founders background ............................................................. 1 Employees .............................................................................. 2 2.0 The concept ........................................................................................ 2 The stores................................................................................ 5 3.0 The products ....................................................................................... 7 4.0 Marketing ........................................................................................... 9 The market….....................................................................…. 9 Marketing activities.......…...................................................... 10 Target group……….......…...................................................... 11 Marketing budget….......…...................................................... 12 Brand positioning….......…...................................................... 13 5.0 Analysis ............................................................................................. 14 Internal analysis ..................................................................... 14 External analysis .................................................................... 15 6.0 Goals................................................................................................... 16 Action plan ……..................................................................... 16 7.0 Use of funds – increased share capital................................................ 17 8.0 Written assumptions for Business Plan 2003-2007…......................... 18 Income..................................................................................... 18 Expenses.................................................................................. 18 Assets....................................................................................... 20 Stockholders equity................................................................. 20 Liabilities................................................................................. 21 9.0 Calculated assumptions for Business Plan 2003-2007........................ 10.0 Business Plan 2003-2007.....…………………................................... 11.0 Unaudited Interim accounts 30.06.02................................................. 12.0 Audited Annual accounts 31.12.01..................................................... 1.0 The company 1.1 Founded Noris Gruppen A/S was founded by Sigurður Róbertsson and Gunnar Björn Gunnarsson in May 2001. Noris Gruppen A/S opened its first store in Norway’s largest shopping mall, The Kvadrat Shopping Center in Sandnes on May 10th 2001. Noris Gruppen now owns a total of two stores in the Stavanger area and five stores in Oslo (where one is a temporary outlet) under the name of “ASTA”. The growth of the company has been fuelled by the drive, continued focus and efficiency of the owners, despite financial limitations. 1.2 Founders background Gunnar Björn Gunnarsson Gunnar is the chairman of Noris Gruppen A/S. He graduated with a BM from the Norwegian School of Management (BI) in 1993 and earned a postgraduate degree in Accounting and Finance, from London School of Economics in 1994. Gunnar is currently a Project Manager at Fjárstoð ehf. which is Iceland’s biggest accounting company with approximately 60 employees. Until midyear 2001, Gunnar was the Managing Director of Navision Axapta in Iceland, a distribution company for Danish business software. Gunnar is on the Board of the cultural institute "Gunnarsstofnun" on behalf of the Ministry of Culture and Education. He is a former finance director of the Icelandic government’s Vehicle Inspection and worked as an auditor at KPMG for four years. Gunnar has extensive consulting experience, has been on the board of numerous companies and has assisted two companies in public offerings on the Icelandic Stock Exchange. Sigurður Róbertsson Sigurður is the Managing Director of Noris Gruppen A/S. He graduated with a BS in Business Administration with a major in finance from California State University, Sacramento in 1994. He is the former Managing Director of the Icelandic Shoe Company which distributes shoes to approximately 20% of the Icelandic shoe market. Sigurður has extensive experience in all fields of the shoe industry. Before becoming director of the Icelandic Shoe Company, Sigurður was manager of the research department of the University of Iceland in addition to sitting on numerous boards and committees on behalf of the University. 1 1.3 Employees Noris Gruppen A/S currently employs approximately 27 full and part-time employees. The daily manager for the company’s stores in the Stavanger area is Ásta María Róbertsdóttir Meinich-Bache, the sister of Sigurður Róbertsson. Noris Gruppen A/S has managed to recruit enthusiastic employees who are determined and regard themselves as part of the team. The store managers are carefully selected with regard to being trendy, service minded and efficient. The company intends to hire a logistic manager in 2003. This is a key position in order to ensure logistic support and maintain inventory levels. 2.0 The concept The concept of the ASTA stores is all about a minimalist design of the stores and a grand open entrance. The shoes are displayed in a simple manner on large white walls with shelves for each type. Each shelve is branded with the logo of the shoe it displays. Kvadrat Shopping Center in Sandnes 2 The main colors in the stores are white, grey and red. There are very large and fashionable “image” posters placed on the walls and each store has plasma TV’s showing trendy videos with hip music to match. This creates the atmosphere the company seeks. Kvadrat Shopping Center in Sandnes In the larger stores, there is a trendy red sofa and a small table with newspapers and magazines for men. In addition to creating a “look”, this provides men with relaxation while their ladies shop. A part of the concept is to use famous brands to hype the image of the stores although the greater mark- up is gained by other brands. The stores dominate the selection in each particular brand and in this way build up consumer recognition. It is the company’s policy to locate the stores in trendy, key locations with high commute. Shopping centers and prime downtown areas are the best choices. 3 Byporten Shopping Center, downtown Oslo The idea of the ASTA concept is also to create a selection for customers focused on fashion shoes, since the shoe market in Norway is largely dominated by big shoe chains focused on low price and quantity. Storgate, downtown Oslo 4 2.1 The stores When opening new stores, Noris Gruppen A/S has access to a dedicated workforce willing to work long hours for a reasonable price. In this way, Noris Gruppen A/S has been able to construct its stores in an inexpensive and fast manner. The company’s stores have recently been fitted with IBM SurePos 500, Point of sale system (POS) which is connected online to the company’s server. The system includes Touch Screens and scanners. The company puts great emphasis on logistics and pro active control. This is a criteria for growth and increased margin. Some of the advantages of a POS system: • Monitor turnover online. • Produce statistics. • Run ABC analysis. • Conduct sale- and purchase budgets. • Observe what styles are selling, with reordering in mind. • Control discounts. • Monitor movement of inventory among stores. • Complete inventory control. • Inventory kept as low as possible. • Control the performance of individual sales people. 5 Company stores in order of opening dates: 1. Kvadrat Shopping Center, Sandnes, May 10th 2001. 2. Söregate in downtown Stavanger, Oct 10th 2001. 3. Triaden Shopping Center, Oslo, March 10th 2002. 4. Outlet in Storgate, downtown Oslo, May 1st 2002. 5. Byporten Shopping Center, Oslo, Oct 12th 2002. 6. Oslo City Shopping Center, Oslo, Nov 25th 2002. 7. Temporary Outlet in Karl Johansgate, downtown Oslo, Dec 15th 2002. Söregate in downtown Stavanger 6 3.0 The products The brands consist mainly of fashion shoes, sneakers and boots designed for mainstream customers looking for trendier alternatives. This middle market is most lucrative in terms of number of customers and price per shoe. (See sec. 4.3) It is also the intention to sell accessories that are complementary with shoes in the stores, e.g. bags, belts and socks. The ASTA concept consists of the following international shoe brands; Diesel Footwear, Skechers, Logo69, www.com, X-18, UN Iceland and will soon include; Miss Sixty. Noris Gruppen holds the distribution rights for Logo69, www.com, X-18 and UN Iceland in Norway. These distribution agreements ensure Noris Gruppen an average mark-up of approximately 3,5 - 4,0. As Noris Gruppen is also the biggest customer of Diesel Footwear and Skechers in Norway the company receives a mark- up close to 3.0. Noris Gruppen A/S intends to use high-end fashion brands to uphold the trendy image of its stores. It is however the intention to gradually develop the company’s own brand. The idea is not to design or develop its own shoe line but to brand shoes directly from factories that are producing shoes under another label. This will guarantee a much higher mark-up,