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Part I – Key Considerations
Leaderin the Italian apparel market with 5.29%
market share (Jan.-Dec. ’02)
3buying offices (Hong Kong, New Dehli-India,
Dhaka-Bangladesh)
5.619 EFT in Italy
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Part II – Foreign Supply System
It supports purchasing activities abroad through
the following services:
Quality Control (EU area)
Vendor Scouting (EU area)
Import/Export (customs formalities
compliance, logistics)
O.B.S. (non EU area)
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Part II – Foreign Supply System
64% of group turnover comes from Oviesse
Oviesseaccounts for 93% of Group
purchases from China
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Part II – Merchandise
Foreign purchases account for 60% of
Oviesse assortments (207 million Euro in
2002).
35% is directly traded with the Supplier.
25% is traded with import agents
Gross margin before mark-downs on Far
East goods is 15% higher than that of EU
countries
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Part II – Purchase Brake-Down By Source
Channel
China +
Importers Hong Kong
25% 17%
India +
Bangladesh
12%
Others
Italy 6%
40%
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Part II – Purchase Brake-Down By Origin
Italy
40% China +
Hong Kong
24%
Others non EU India + Bangladesh
20% 16%
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Part III – O.B.S.
It is 100% run by Gruppo Coin
O.B.S. acts like an agent (3.5% commission)
O.B.S.’s headquarters located in Hong Kong
since 1994
Liason offices:
Bangladesh since 1996
India since 2001
Amounting to a total of 95 staff members
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Part III – O.B.S. Service
Main services catered by O.B.S.:
Far East sourcing both for garments and
fabric producers
Services and assistance for Buyers
Orders follow-up
Quality inspections (through-out and after)
Shipping management (logistics, custom
formalities)
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Part IV – The Key Factors in Sourcing
Decisions
Quality Service
Fabrics and Time to market
accessories Terms of payments
Finishings Merchandise returns
Style Problem solving
Price Country Risk
FOB Currency
Insurance, Fright, Political instability
Duty, Clearance,
Dead time
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Part IV – Quality
Quality is a process
It takes time to be built
It’s the outcome of a long lasting
cooperation with the supplier
It is long-term investment
Gruppo Coin is costantly seeking to
protect and develop this key factor in
different countries but with different
expectations from country to country
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Part IV – Price
Price is the prime key factor that encourages
the retailer to search for new sources…
…but…
…The search ends only when you find the
right balance between all four key factors
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Part IV – Service
Service = Flexibility
Reduction of the time span between the
finalization of the order and the in-store
delivery
Working Capital Reduction
Higher rotations
Flexibility is influenced by: distance,
technological development, facilities and
others
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Part IV – Country Risk
Insourcing decisions a retailer must deploy its
resources in order to reduce the possible damage
that may occur from one single country
Natural desasters (i.e. floods in Bangladesh)
Political instability (i.e. strikes, riots)
Currency volatility
Deseases (i.e. plague in 1994 in China, SARS
in 2003 in China)
Change in the economic and trade policy
framework
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