In 1978 Susan White, a sole owner, started Cabriole as a custom leotard and body wear primarily for theater and dance clientele. Cabriole’s product proved to be superior to anything on the market for two reasons:
one for designed to move with body and excellent in quality and retained their shape despite rigorous exercise and washing
secondly for the designs sculpted body and were flattering to the wearer.
In 1980 Susan moved operation form her home to a 2500 sft retail store located in a town just outside of the city of Boston. By 1985 sales grew to the extent that the more space was needed, and Susan decided to look for a larger facility and managed to 14500 sft of space only short distance form her rented facility and found tenants to fill the space.
In 1985, Susan hired a experienced production manager with his assistant Jim and move to the new building and also operation being computerized whom were the main cause to fail the company. Form 1985 to 1987, revenue continued to climb, but overall profit and margin declined From 1988 to1990, Susan also had a problem with the excess space at the new warehouse. One tenant could not keep up with payments and failed to use its infrastructure.
In 1989, Calie,susan daughter, had joined the company in Jan. as the director of sales. The best months for Cabriole had been Sep.1990 through March 1991. In the spring of 1991 Susan felt that if profit continue through July. Cabriole could offset many of losses. But that time venders were in great trouble as the store was ugly and the price of material was increasing. In September of 1991, the recession was still impacting the retailer. Susan had not seen the upturn she hoped for. In October of 1991 she decided to close the company.
Financial performance of Cabriole
Activity ratio reflects a company’s efficient or efficient uses of resources
Inventory turn over (sales/inventory)=5.23
As a high inventory is more efficient because the company did not have many asset tied up in inventory.
was presuming using its asset effectively in general sales.Total asset turnover (sales/assets)=2.82The asset turn over ratio is high so that the company
Leverage ratio indicates a company’s financial risk, that is, the relative proportion of its debt to its equity.
Debt ratio=3.85(total liabilities/total asset)
Debt to equity =1.37(total liabilities/total equity)
It is shown that the company was high risk because debt ratio was very high as a result the company was not able to pay the creditor’s payment and additional investment
Liquidity ratios measure a company’s capacity to meet its short term financial obligation
(total current asset/total current liabilities)
Quick ratio=0.187(total current asset-inventory)/total current liabilities.
Lastly, Cabriole had to face a tied competition for the bellow cause:1.Low quality of raw material
2.Customer response was poor as low quality product
3.High competition with fifty competitors
4.Higher price than other competitors
Rivalry was limited in six first but lastly it was fifty competitor.
Customer was satisfied for quality product but denied for low finally.
Suppliers was enough with good quality but later their quality of goods was inferior with ugly to look at
Designing body wear primarily for theater , dance clientele and professional performers Order fulfillment
Focused more on style, functionality and quality.
Manufacture a high quality line that is classical in appearance and also perform well.
Balanced cash flows
The fabrics are excellent in quality and retained their shape despite rigorous washing.
The products are combination to style and functionality.
No real project (merger/accusation/strategic alliance) was taken by Cabriol management
to increase market power
Though there are scope for sharing structure within Cabriole yet no such initiative is taken to run business
No proper leadership
No organized plan
No organizational chart
No organized financial plan
Can tie up with the other organization with same feature
Intensify the relationship with distributor
Develop marketing plan targeting a special segment of customers