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
oAcross 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
Threat of New Entrants:
High
- not materially dependent
to any one supplier
- carries wide and
diversified products
- industry is always
emerging
- trendy fashion scene
Five Forces
Buyer Power: High/Medium
- customers have low
switching costs
- limited power of raising
prices
- able to adapt to changing
demands
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
0.06
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 3.72
4
Buckle 3.38
Gap (2.87)
2
Express 0.81
0
-500
0
A&F 0.71
American Eagle 0.41
500 Pacsun -0.39
1000
1500
2000
Wet Seal-1.28
-2
-4
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
0.05
0.06
Rating
3
4
4
3
Weighted Score
0.27
0.20
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
0.12
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 Free hemming
o Gift-wrapping
o Layaways
o Buckle credit cards
o 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
(S1, O4) Expand into the international markets
to appeal to consumers and make social
advancements in foreign markets
(S3, T2) Improve inventory turnover by
increasing the demand for the unique and
diverse products
(S3, O2) Create a marketing strategy for the
diverse and unique product lines to sell more
competitive brands than rivals
(S2, T1) Gain higher awareness to stay
competitive amongst rivals, in the current 43
states
(S4,O) Build more distribution centers to
accommodate for the consumers demands of
products that need shipped in 2-3 days
(S1, T3) Build more stores to increase revenue
to compensate for the increase in labor and
product cost
SWOT Analysis
WO strategies
WT strategies
(W1, O4) Lower prices and utilize technology
by gaining a stronger social media presence
(W3, T2) Lower the dependency on foreign
producers to decrease product costs
(W2, O1) Create more full-time jobs in their
stores, help keep up with the changing
consumer demands
(W1, T4) Increase social media presence to
market to the consumers and keep up to date
on the latest trends
(W4, O3) 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
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
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
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%
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
0
0
Total-Debt-to-Equity
0
0
0
0
Long-Term-Debt-to-Equity
0
0
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 are 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