BY ALEXA VAN BERGEN JERICCA PEARSON Background 1948

BY: ALEXA VAN BERGEN & JERICCA PEARSON

Background 1948 - Buckle began as Mills Clothing, a men’s clothing company in Kearney, NE 1967 - Opened second store and called Brass Buckle 1970 - Brass Buckle became known for their wide selection of denim and shirts and their current CEO, Dennis Nelson, joins the company 1977 - Introduced women’s apparel and their first mall-based location opened 1988 - Distribution teams move to downtown west Kearney 1991 - Changed name to The Buckle, Inc. and developed their private label BKE 1994 - Introduced primo rewards card 1995 - Launched first private label credit card

Background count. 1997 - Moved to New York Stock Exchange with symbol BKE 1999 - First ecommerce site launched (buckle. com) 2006 - Private label accounted fro 45% of denim sales 2010 - Completes the construction of Distribution Center 2011 - Newly redesigned of website Today- operates 450 retail stores in 44 states and has grown to be America’s favorite denim destinations.

Dominant Industry Characteristics Number of Rivals o. Across the board, for both men and women o Abercrombie & Fitch, American Eagle Outfitters, Gap, Hollister, Pacific Sunwear, Tilly’s, Gap, Tilly’s, Charlotte Russe, Express, Forever 21, H&M, Maurices, Vanity, Wet Seal, and Zumiez. o They also compete with the big department stores like Dillard’s, Macy’s, and Nordstrom

Five Forces Analysis

Rivalry among existing Firms: High - highly competitive industry - specialty retailer - quality product Supplier Power: Low/Medium - not materially dependent to any one supplier - carries wide and diversified products Threat of New Entrants: High - industry is always emerging Five Forces Buyer Power: High/Medium - customers have low switching costs - limited power of raising prices - able to adapt to changing demands - trendy fashion scene Threat of substitutes: Low - few alternatives - wide range of products

EFE Matrix

The Buckle EFE Matrix Opportunities Predict and respond to changing customer demands and preferred choices more efficiently Weight 0. 10 Rating 4 Weighted Score 0. 40 Source merchandise more efficiently Continue to develop consumer perception of quality for the future 0. 08 0. 09 3 3 0. 24 0. 27 Increase in Market Share Increase in household income (increase in minimum wage) Keep up with consumer/social deployments, need to develop more technology systems 0. 06 0. 05 0. 07 3 2 4 0. 18 0. 10 0. 28 0. 14 4 0. 56 Time-sensitivity of inventory/merchandise, especially out of season articles of clothing 0. 09 3 0. 27 Rising of labor and product cost Reliability on customers spending trends/customer confidence Changing tax rates for business Growing costs of healthcare Totals 0. 06 0. 16 0. 04 1. 00 2 3 2 2 0. 12 0. 48 0. 12 0. 08 3. 10 Threats The industry is highly competitive, specifically for: fashion, selection, quality, price, location, service and atmosphere (mostly in malls)

Strategic Group Map

Strategic Group Map 10 8 Dillards 7. 79 Earnings Per Share 6 Nordstroms [Y 4 VALUE] Buckle 3. 38 Gap (2. 87) 2 -500 0 Express [Y VALUE] A&F [Y VALUE] American Eagle 0. 41 0 500 Pacsun [Y VALUE] 1000 1500 2000 Wet Seal[Y VALUE] -2 Number of Store Locations 2500 3000 3500 4000

IFE Matrix

The Buckle IFE Matrix Strengths Expansion of stores Well known in the 43 states it's located Distribution ships in 2 -3 days Diverse Product Lines, Specialized inventory to reflect local tastes Weighted 0. 09 0. 05 0. 06 Rating 3 4 4 3 Weighted Score 0. 27 0. 20 0. 18 Staff Loyalty (all members) Private-label and exclusive merchandise Little debt (no long-term) Targets ages 15 -30 Denim accounts for 45% of sales Weaknesses Fluctuations in comparable stores net sales results Very localized markets with stores that compete against each other 0. 04 0. 10 0. 08 0. 04 0. 05 4 4 4 3 3 0. 16 0. 40 0. 32 0. 15 0. 07 0. 06 2 2 0. 14 0. 12 No company-shared customer management system (store specific) 0. 06 1 0. 06 Reliant on key personnel (leadership team), small number of full-time employees Reliant on foreign producers Dependence on Single Distribution Center The change in fashion fluctuates each year Lack of social media presence (recycled instead of targeting promotions 0. 05 2 0. 10 0. 04 0. 08 0. 03 0. 05 2 4 1 2 0. 08 0. 32 0. 03 0. 10 Totals 1. 00 2. 95

Mission/Vision “To create the most enjoyable shopping experience possible for our guests. ”

Competitive Strategy Broad Differentiation Strategy o Offering numerous brands o Have their own brand in store o Unique and one of a kind products (“treasure hunt”) o Offers a multitude of services, including: o o o Free hemming Gift-wrapping Layaways Buckle credit cards Frequent shopper rewards cards

SWOT Analysis Strengths o 430 stores and expanding o Well known, present in 43 states o Diverse Products lines, unique inventory o Merchandise ships in 2 -3 days o Little to no debt Weaknesses o Lack of social media presence, no targeting promotions o Small number of full-time employees, more dependent on leadership teams o Depend on foreign producers o Very common market, constantly having to compete against rivals

SWOT Analysis Opportunities o Anticipate and react to the changing customer demands more efficiently o More top selling and competitive brands o Develop the customers awareness of the quality products o Design a system to keep up with consumer and social advances Threats o Retail industry is highly competitive o Time sensitivity of inventory o Rising labor and product costs o Relying on consumer spending trends

SWOT Analysis SO strategies ST strategies (S 1, O 4) Expand into the international markets to appeal to consumers and make social advancements in foreign markets (S 3, T 2) Improve inventory turnover by increasing the demand for the unique and diverse products (S 3, O 2) Create a marketing strategy for the diverse and unique product lines to sell more competitive brands than rivals (S 2, T 1) Gain higher awareness to stay competitive amongst rivals, in the current 43 states (S 4, O) Build more distribution centers to accommodate for the consumers demands of products that need shipped in 2 -3 days (S 1, T 3) Build more stores to increase revenue to compensate for the increase in labor and product cost

SWOT Analysis WO strategies WT strategies (W 1, O 4) Lower prices and utilize technology by gaining a stronger social media presence (W 3, T 2) Lower the dependency on foreign producers to decrease product costs (W 2, O 1) Create more full-time jobs in their stores, help keep up with the changing consumer demands (W 1, T 4) Increase social media presence to market to the consumers and keep up to date on the latest trends (W 4, O 3) Develop a advertising plan to raise company awareness to stay competitive amongst rivals.

Competitive Profile Matrix

CPM Buckle Critical Success Factors Advertising Company Image Global Expansion Consumer Loyalty Production Capacity Market Share Price Competitiveness Technology Management Totals Weights 0. 13 0. 14 0. 10 0. 12 0. 10 0. 11 0. 13 0. 09 0. 08 1. 00 Rating 3 4 1 4 4 3 4 Score 0. 39 0. 56 0. 10 0. 48 0. 10 0. 44 0. 52 0. 27 0. 32 3. 18 Abercrombie and Fitch Rating 4 4 4 2 2 4 3 Score 0. 52 0. 56 0. 40 0. 24 0. 40 0. 22 0. 26 0. 36 0. 24 3. 20 Express Rating 2 3 3 1 3 2 2 Score 0. 26 0. 42 0. 20 0. 36 0. 30 0. 11 0. 39 0. 18 0. 16 2. 38

Ethics For the most part they are pretty ethical Lawsuits: 1. Buckle Store Class Action Lawsuit Settlement, Dec. 17, 2013 o Consumers who made credit card purchases at a California Buckle store between 2011 and 2013 can claim a $30. 00 Credit Certificate from a class action settlement over claims the clothing store violated California law. 2. HUNTER v. THE BUCKLE, INC, May 29, 2007 ◦ Gloria Hunter and Jessica Hunter, Kansas City, MO residences, both of whom are African American, became involved in the incident which culminated with them being placed in handcuffs and removed from a retail store, after which they were released. They were shopping at The Buckle. Jessica Hunter testified in her deposition that on the three or four occasions when she had previously shopped at The Buckle, The Buckle's employees treated her differently from white customers. She testified specifically that she was not greeted immediately or offered assistance without requesting it, and that she was constantly watched by the employees.

Financials

BKE Financials 2014 2013 2012 2011 Operating Profit Margin 22. 8% 23. 0% 22. 2% Net Profile Margin 14. 4% 14. 6% 14. 3% 14. 2% Earnings Per Share 3. 39 3. 44 3. 2 2. 68 Return on Assests 31. 8% 32. 6% 29. 5% 27. 4% Return on Equity 49. 9% 50. 3% 42. 7% 38. 5% Current Ratio 2. 77 2. 15 2. 91 2. 57 Working Capital 219 148 210 161 Total-Debt-to-Assests 0 0 Total-Debt-to-Equity 0 0 Long-Term-Debt-to-Equity 0 0 66. 17 60. 78 59. 21 60. 79 Inventory Turnover 5. 52 6 6. 16 6 Net Income (in millions) 163 164 151 135 Days of Inventory CAGR 4. 82%

Recommendations Continue with its existing Target market ◦ There always going to be 15 -30 year olds Develop an additional brand or offer products that are targeted to older age group Continue to develop their competitive advantages ◦ Personalized and knowledgeable customer services ◦ Well- trained employees ◦ Unique products Narrow and deepen their product offering