A Work Project, presented as part of the requirements for the Award of a
Master Degree in Management from the NOVA – School of Business and
Economics.
INTERNATIONALIZATION PROCESS OF SKYPRO SHOES TO THE
EAST COAST OF THE US
EXHIBITS
ANA LUÍSA FURTADO NEVES, Nº2790
A Project carried out on the Master in Management Program, under the
supervision of:
Prof. SÓNIA DAHAB
Contents
Exhibit 1 – Skypro’s product portfolio ... 2
Exhibit 2 – Skypro’s men’s shoe ... 2
Exhibit 3 – Skypro’s Resource Based View ... 3
Exhibit 4 – Skypro’s VRIO Framework ... 5
Exhibit 5 – Skypro’s Value Chain ... 6
Exhibit 6 – Skypro’s Primary activities ... 6
Exhibit 7 – Skypro’s Secondary activities ... 7
Exhibit 8 – Skypro’s suppliers ... 8
Exhibit 9 – Skypro’s footwear competitors ... 9
Exhibit 10 – Skypro’s uniform competitors ... 9
Exhibit 11 – Interview to TAP flight attendants ... 9
Exhibit 11.1: Question 2: Did you know beforehand that Skypro is TAP's footwear supplier? ... 10
Exhibit 11.2: Question 3: How to you rate Skypro’s shoes concerning comfort? ... 10
Exhibit 11.3: Question 4: How to you rate Skypro’s shoes concerning its design? ... 11
Exhibit 11.4: Question 5: How to you rate Skypro’s shoes concerning its leather material? ... 11
Exhibit 11.5: Question 6: How to you rate Skypro’s shoes concerning its alarm-free feature? ... 12
Exhibit 11.6: Question 6: How to you rate Skypro’s shoes concerning its anti-skid feature? ... 12
Exhibit 11.8: Question 8: How to you rate Skypro’s shoes concerning its impact absorber feature? ... 13
Exhibit 11.9: Question 9: How many pairs of shoes are provided to you per year? ... 14
Exhibit 11.10: Question 10: Do you know any other brands of cabin crew shoes? ... 15
Exhibit 12 - Forecast Sales of Footwear by Category: % Value Growth 2015-2020 ... 16
Exhibit 13 – World’s largest airlines by thousands of passengers carried ... 16
Exhibit 14 – Total passenger traffic 2015 (preliminary) ... 16
Exhibit 15 – PESTEL Analysis ... 17
Exhibit 18– Employment of Flight Attendants, Airline Pilots, Copilots and Engineers, by State, in 2015 ... 21
Exhibit 19 – Annual mean wage of Flight Attendants, Airline Pilots, Copilots and Engineers, by State, in 2015 ... 21
Exhibit 21 - LBN Corporate and comfort Brand Shares of Footwear: % Value 2015 ... 22
Exhibit 25 – Memo ... 25
Exhibit 26 – Target number of Professionals ... 25
Exhibit 27.1 – Revenues Online Store ... 26
Exhibit 27.2 – Revenues third party websites ... 26
Exhibit 27.3 – Revenues Airport Stores ... 27
Exhibit 27.4 – Revenues all channels ... 27
Exhibit 27.5 – Total shoe pairs sold ... 27
Exhibit 27.6 – Costs ... 28
Exhibit 27.7 – Cash Flow Statement ... 28
Exhibit 28 – Optimistic Scenario ... 29
Exhibit 28.1 – Revenues Online Store ... 29
Exhibit 28.2 – Revenues third party websites ... 30
Exhibit 28.3 – Revenues Airport Stores ... 30
Exhibit 28.4 – Revenues all channels ... 31
Exhibit 27.5 – Total shoe pairs sold ... 31
Exhibit 28.6 – Costs ... 31
Exhibit 28.7 – Cash Flow Statement ... 32
Exhibit 1 – Skypro’s product portfolio
Women Men Unisex
Crew shoes Crew shoes Flight socks polyamid
Pilot shirts Pilot shirts Flight socks cotton
Female underwear Male underwear Classic socks
Gloves Pilot knitwear Handbags
Epaullets Gloves
Flight compression tights Epaullets
Women knee stockings
Source: Primary source
Exhibit 2 – Skypro’s men’s shoe
Exhibit 3 – Skypro’s Resource Based View
1. Specialized assets Reputation
Abotoa’s path is nothing short of good reputation. The company proudly distinguishes itself by
providing unique shoes in the aviation industry of the highest quality in the market. Not only
has it maintained its premium standards from its beginning and throughout the years as well it
has been increasingly recognized with many industry awards over time, e.g. the Etihad supplier
of the year in the Uniforms/Leather category and winner of the Onboard Hospitality Awards in
the wellbeing category, both in 2016.
Trademarks
Skypro is the first brand worldwide to offer certified men’s shoes for Aviation Professionals by
the EN ISO 20347:2012 certificate. However valuable this trademark is, the brand should look
forward to a patent in order to avoid imitation from its competitors.
2. Core competences Industry know-how
One of Skypro’s core competences is its deep detailed knowledge of the industry. Several years
of presence in the footwear market and accumulate their know-how in this industry.
R&D
Its continuous focus on quality and comfort in professional shoes has allowed the company to
that no other competitor has: alarm free, cork midsole, anti-skid protection, anti-static, comfort
and impact absorber.
Quality management
Skypro’s shoes undergo a strict quality management procedure during its manufacturing
process. To preserve the premium standards of its product offering, its Quality Manager ensures
that the shoes’ quality is in order. He is also responsible for checking the raw materials applied
to the manufacturing process are in line with the standards and will not compromise the final
product.
Brand management
Skypro has recently rebranded itself from “Walk in Heaven” to “Feel the Ultimate Care” in
2015, proof of Abotoa’s concern in its brand management throughout time in order to keep
evolving and spread its core mission through its brand.
Cross-cultural management
In the past 2 years, Skypro’s sales volume distribution to foreign markets has increased from
58% to 90,5%, proving its success in managing across cultures and its concern in expanding its
geographic presence across the world.
3. Architecture of relations Strategic alliances
Skypro’s success would not be possible without a greatly established network of relations with
institutional players, suppliers and foreign partners. As for the institutional players, these
which have allowed the company to put into practice all of its know-how of the industry and
further its R&D capabilities to develop its product portfolio. Regarding the suppliers, Skypro
also relies on a series of regular Portuguese factories which allow the production of its shoes’
combination of special features. As for foreign partners, these have allowed the brand’s
expansion over the years to other markets which has resulted in a broader geographic presence.
Exhibit 4 – Skypro’s VRIO Framework
Asset Valuable Rare Inimitable Organizationally
Embedded
Specialized asset 1:
Reputation
X
Specialized asset 2:
Trademarks
X X
Core Competence 1:
Industry Know-how
X X
Core Competence 2:
R&D
X X
Core competence 3:
Quality Management
X X
Core competence 4:
Brand Management
X
Core competence 5:
Cross-cultural
management
X
Architecture of
relations:
Strategic alliances
X X
Temporary competitive advantage Competitive
Exhibit 5 – Skypro’s Value Chain
Source: Primary source
Exhibit 6 – Skypro’s Primary activities
Inbound logistics
Other rentals 456,00
HR logistics and operations 17123,29
Total 17 579,29
Activity % 0,9%
Operations
CMVMC 1 292 775,64
Total 1 292 775,64
Activity % 64,6%
Outbound logistics
Fuel 2 564,99
Transport 31 563,87
Tolls 983,65
Packaging material 3 853,28
Total 38 965,79
Activity % 1,95%
Marketing and Sales
Marketing 6 112,66
Marketing 3 231,00
Marketing 9 343,66
Events and Fairs 14 319,65 Advertising 5 294,48
Propaganda 405,00
Technology
Chemical experiments of product development
942,99 Research 14 375,53 HR Research 24711,13
Total 40 029,65
% 2,00%
Primary activities
Technology Development (2%)
Procurement (0,92%) Firm infrastructure (3,97%)
Human Resource Management (0,69%)
Other Adds 4 139,48 Travel outside national
territory
15 987,77
Travel- hotels 163,00
Roads 174,00
HR Marketing and commercial 43997,7063 Skypro communication 11 687,40
Total 105 512,15
Activity % 5,27%
Source: Primary source
Exhibit 7 – Skypro’s Secondary activities
Service
HR customer assistant 5927,8
Total 5927,8
Activity % 0,00296%
Procurement
Travel and accommodation 18 439,04
Total 18 439,04
Activity % 1%
Technology
Chemical experiments of product development
942,99 Research 14 375,53 HR Research 24711,13
Total 40 029,65
Activity % 2,00%
Human Resources Management
Human Resources 6797,031 Personnel costs - Bonuses and
Commissions
414,06 Personnel costs - Other
remunerations
Source: Primary source
Exhibit 8 – Skypro’s suppliers
Shoe factories Bags and belts factory
Gloves factories Uniform factories SMA – Indústria de
Calçado Unipessoal Lda
Zilam Luvas Raquel Confecções
Giliana
SanBru Indústria de Calçado Lda
Barbedo Gloves Primma
COMFORSYST Impetus
Fábrica de Calçado da Mata Lda
Ferreira & Oliveira Lda
Fernanda Oliveira II – Indústria de Calçado S.A.
Joaquim José Heitor S.A
Source: Primary source
Firm infrastructure
Electricity and water 411,02 Bank expenses 1 718,98 Management and accounting 3 600,00 Headquarters rent 2 690,10 Oeiras' office renting 9 000,00 Computer services 2 119,98 HR general management and
finance
32 024,47 Medicine, health and safety at
work
60,00 Tools and utensils 6 347,70 Office supplies 1 272,76 Commission on Explorer 15 000,00 Commission on Explorer
transaction
4 999,98
Cleaning 282,77
Total 79 527,76
Exhibit 9 – Skypro’s footwear competitors
Direct competitors Indirect competitors
Rosevelvet Ecco
Piccadilly Ara
Crewshoes.com Hush Puppies
Trolley Dolly Shoes Geox
Louise M. Shoes Ecoflex
Source: Primary source
Exhibit 10 – Skypro’s uniform competitors
Uniform competitors Crewoufitters
The Fields Shops
Oberhofer
Armstrong Aviation Clothing
Source: Primary source
Exhibit 11 – Interview to TAP flight attendants
In order to gain a true and transparent insight on Skypro’s shoes I conducted a series of
questionnaires to 77 TAP flight attendants.
My first question was focused on professional experience, asking for how many years had the
flight attendants been at TAP, and the answers spanned from one and half years to 29 years of
experience.
Regarding company awareness, when asked if they knew who was TAP’s footwear supplier,
Exhibit 11.1: Question 2: Did you know beforehand that Skypro is TAP's footwear supplier?
Concerning the set of distinctive footwear features, I asked what they valued the most about
Skypro’s, by asking them to rate each feature as low, medium or high. A crushing majority of
81% of flight attendants stated they value Skypro’s comfort as low, with only 10% claiming as
medium and 9% believing they value high.
Exhibit 11.2: Question 3: How to you rate Skypro’s shoes concerning comfort?
52,7%
47,3% Yes
No
9% 10%
81%
Comfort
High
Medium
As for design, the medium value stood out with 55% and low with 36%.
Exhibit 11.3: Question 4: How to you rate Skypro’s shoes concerning its design?
Leather design proved not being very important to the flight attendants, as they valued low with
60% and medium with 28%.
Exhibit 11.4: Question 5: How to you rate Skypro’s shoes concerning its leather material?
12%
28% 60%
Leather material
High
Medium
Low 9%
55% 36%
Design
High
Medium
The alarm-free feature proved to be a valuable one, with 44% of flight attendants claiming a
medium value and 37% of a high value.
Exhibit 11.5: Question 6: How to you rate Skypro’s shoes concerning its alarm-free feature?
As for anti-skid, medium also stood out with 54,1% and balanced between high and low value,
both with 23%.
Exhibit 11.6: Question 6: How to you rate Skypro’s shoes concerning its anti-skid feature?
23%
54% 23%
Anti-skid
High
Medium
Low 37%
44% 19%
Alarm-free
High
Medium
Anti-static also followed the same pattern with a medium value of 53,9% and a high value of
27,6%.
Exhibit 11.7: Question 7: How to you rate Skypro’s shoes concerning its anti-static feature?
Lastly, the impact-absorber feature was not considered valuable to the flight attendants, by only
achieving a 13% of answers of a high value.
Exhibit 11.8: Question 8: How to you rate Skypro’s shoes concerning its impact absorber feature?
28%
54% 18%
Anti-static
High
Medium
Low
13%
29% 58%
Impact absorber
High
Medium
As for how many pairs of shoes are provided to the flight attendants per year, the majority
answered 2 pairs per year. Some answered specifically that they are offered with two types of
heels per year, one pair with high heels and another one which is short or flat.
Exhibit 11.9: Question 9: How many pairs of shoes are provided to you per year?
As for competitors’ awareness, more than half responded that they were not aware of any other
aviation footwear brands besides Skypro. As for other brands, 14 flight attendants mentioned
Piccadilly, four mentioned Airline Shoes, while others mentioned well known comfort shoes
brands: three mentioned Hush Puppies, two mentioned Ecco, two mentioned Camport, two
mentioned Aerosoles, one mentioned Geox and another one mentioned ProComfort.
17%
75%
4% 4% 1 pair
2 pairs
3 pairs
Exhibit 11.10: Question 10: Do you know any other brands of cabin crew shoes? (positive answers)
When asked if they were any features they would change or add to the shoes, many mentioned
more comfortable insoles, lower hills, wider front and a few mentioned the possibility of
tailored made sizes.
This information was truly important to understand not only the actual experience of flight
attendants, as well as getting a deeper insight of Skypro’s shoes and how the company can
continuously improve to achieve the best product in the market.
As TAP’s is one of Skypro’s oldest clients, it is a bit surprising that almost half of the flight
attendants were not aware that it was their footwear supplier. With this in mind, the company
should reinforce its awareness in the end customers of its B2B clients.
Skypro also needs to improve the shoe inputs towards comfort and when advertising for its
product, make the most valuable features stand out, such as alarm-free and anti-static. This will
make their value-added offering more clear and objective as well as it will distinguish the brand
from its competitors.
14
4 3 2
2 2 1 1
Piccadilly
Airline shoes
Hush Puppies
Ecco
Camport
Aerosoles
Geox
Exhibit 12 - Forecast Sales of Footwear by Category: % Value Growth 2015-2020
By % constant value growth
Category 2015/2016 2015-20 CAGR 2015/20 Total
Children 4,1 3,4 18,2
Men 4,6 3,9 21,0
Women 5,1 4,3 23,6
Footwear 4,8 4,1 22,1
Source: Euromonitor International
Exhibit 13 – World’s largest airlines by thousands of passengers carried
Airlines Passengers
Delta Airlines 129 433
Southwest
Airlines
129 087
China Southern
Airlines
100 683
United Airlines 90 439
American
Airlines
87 830
Source: The Economist
Exhibit 14 – Total passenger traffic 2015 (preliminary)
Airport Passengers (Enplaning and deplaning)
Atlanta GA, US (ATL) 101 491 106
Beijing, CN (PEK) 89 938 628
Dubai, AE (DXB) 78 010 265
Chicago IL, US (ORD) 76 949 504
London, GB (LHR) 74 989 795
Los Angeles CA, US (LAX) 74 937 004
Hong Kong, HK (HKG) 68 283 407
Paris, FR (CDG) 65 766 986
Dallas/Fort Worth TX, US
(DFW)
64 072 468
Istanbul, TR (IST) 61 836 781
Frankfurt, DE (FRA) 61 032 022
Shanghai, CN (PVG) 60 053 387
Amsterdam, NL (AMS) 58 284 864
New York NY, US (JFK) 56 827 154
Singapore, SG (SIN) 55 449 000
Guangzhou, CN (CAN) 55 201 915
Jakarta, ID (CGK) 54 053 905
Denver, CO, US (DEN) 54 014 502
Bangkok, TH (BKK) 52 902 110
Source: Airport Council International
Exhibit 15 – PESTEL Analysis
Political
The signing of the Trans-Pacific Partnership in February 2016 was to promote the international
trade relationships between 12 Pacific-rim countries which jointly represent 40% of world’s
trade. However, with the recent Presidential election won by the Republican candidate Donald
Trump, the situation might reverse, by recently declaring that he will not sign the deal.
All in all, his views of trade deals are of a much more protected and closed market, which might
be a hurdle to international trades between countries.
Economic
Regarding economic factors, the US remains the largest economy in the world in terms of GDP
with $18.3 trillion. It concedes its number one place in terms of GDP based on PPP to its rival
China, remaining in second place. (World Bank Data, 2016)
Social
The US population growth has been decreasing over the decades, presenting a 0,8% growth rate
in 2015 compared to 1,2% ten years before in 1995. (World Bank Data, 2016)
Regarding the forecasted employment of aviation professionals, the projects that employment
of flight attendants will grow at a slower rate than the average of all occupations, at 2% from
2014 to 2024. As for airline and commercial pilots, its employment is projected to grow at the
same rate as the average of all occupations, at 5% from 2014 to 2024. (Bureau of Labor
Statistics, 2016)
Technological
According to the Global Innovation Index, the US ranks as 4th with a 61,4 score and an
efficiency ratio of 0,79. (WIPO, 2016) Moreover, the US ranks as first in the rankings of
Innovation quality per country in the world. (The Economist, 2016)
As for Internet penetration, the number of Internet users per 100 people per country, the US
presents a 74.55% behind Canada which has 88.47% but well ahead in the world average with
only 43.998%. The number of fixed broadband subscriptions per 100 in the US is of 31 531
The spread of broadband availability by maximum advertised speed is clearly much higher to
the East of the US than to West, which does not cover entirely all the states. The offering of
broadband technologies (DSL, cable, wireless, fiber) is concentrated to the East of the country,
along in the inland states and the coast states. The number of broadband providers is also much
more concentrated to the East, specially along the coast and in the Michigan state. (National
Broadband Map, 2014)
Legal
With the new elected President, whose views on foreign policy are anti-immigrant as plans on
immigration are set to be much tighter, these will affect the labor force and consumption. (BBC
News, 2016)
Environmental
As one of the largest economies in the world, the US is also one of biggest polluters worldwide.
Carbon consumption for manufacturing is one of the biggest fears regarding the climate change,
which is greatly due to carbon emissions. In order to minimize them, the US set an ambition
plan to the UNFCCC (United Nations Framework Convention on Climate Change) in 2015,
aiming to reduce the emissions by 28% by 2025. (The White House, 2015)
Moreover, in order to reduce it is necessary to reduce the hazardous chemicals, carbon, waste
and water reduction in the manufacturing processes. One of the biggest problems in the
footwear manufacturing is the water consumption and pollution associated to it. Due to the
complex manufacturing process, many materials are involved to complete diverse components
in a shoe (lining, sole, upper, laces, reinforcements and foams) that require water demands for
Exhibit 16 - Airlines NBO Company Shares: % Value 2011-2015
By % retail value rsp
Company 2011 2012 2013 2014 2015
American Airlines Group Inc - - 22,3 21,9 20,9
Delta Air Lines, Inc 18 18,6 18,4 18,9 19
United Continental Holdings Inc 18,7 18,6 18,1 17,8 16,9
Southwest Airlines Co 11,7 10,9 10,7 10,7 11,2
JetBlue Airways Corp 2,9 3,1 3,3 3,3 3,6
Source: Euromonitor International
Exhibit 17 – Median annual mean wages of Flight Attendants, Air Transportation Workers, Commercial Pilots, Airline Pilots, Copilots and Flight Engineers in 2015
Source: Bureau of Labor Statistics
$36 200 $44 860
$68 510 $76 150
$102 520 $117 290
Total, all occupations Flight attendants Air transportation workers Commercial pilots Airline and commercial pilots Airline pilots, copilots, and flight engineers
Median annual wages, May 2015
Exhibit 18– Employment of Flight Attendants, Airline Pilots, Copilots and Engineers, by State, in 2015
Source: Bureau of Labor Statistics
Exhibit 19 – Annual mean wage of Flight Attendants, Airline Pilots, Copilots and Engineers, by State, in 2015
Source: Bureau of Labor Statistics
Exhibit 20 – Interview with American Airlines retired pilot
In order to understand how US aviation professionals choose and buy their work shoes, it was
valuable to contact a professional with a first-hand experience. Thus I interviewed Captain
Wayne Ziskal, an American Airlines retired pilot. As someone with such a great long-term
experience in the industry, it was truly valuable to get information to understand the needs and
State Flight Attendants
New York 10 600
Florida 8 020
Virginia 4 000
State Pilots Illinois 7 610
Georgia 7 270
New York 5 270
State Pilots Florida $154 040
Illinois $138 650
New Jersey $120 630
State Flight Attendants Florida $50 770
Tennessee $49 470
Wisconsin and Michigan
With over 7 million accumulated miles, the Captain mentioned that appropriate footwear is
crucial to a pilot’s performance. A pilot everyday life includes not only the flights, but the
airport presence as well. Thus, not only are long haul flights physically demanding as well as
walking and dragging luggage through huge airports.
It took him a long time to find a good brand of shoes that suited his lifestyle, and settled with
SAS’s (San Antonio Shoemakers) lace up shoes, as slip-ons prevented to adjust to the expansion
during long-haul flights.
Therefore, the Captain mentioned the features that he valued the most were width, sole comfort
and expansion capabilities. Moreover, impact absorber and airport friendly were important
components in a shoe for him too. He also used to buy a pair of shoes per year and mentioned
that he was willing to spend $150-$200 per pair.
Lastly, when asked if he preferred to have had the choice to having the shoes supplied by the
company, the Captain answered that considering particular issues with his feet and low choice,
he preferred having his own power to buy anyway.
Source: Own source
Exhibit 21 - LBN Corporate and comfort Brand Shares of Footwear: % Value 2015
By % retail value rsp
Brand 2015
Clarks 1,1
Hush Puppies 0,4
Exhibit 22 – Porter’s 5 Forces
Source: Own source
Exhibit 23 – Skypro’s indirect competitors’ presence in third-party shoe websites
Brand Zappos Shoebuy.com DSW
Clarks x x x
Dansko x x x
Ecco x x x
Geox x x x
Hush Puppies x x x
Source: Third-party shoe websites 0
1 2 3 4 5
Buyer's Power
Supplier's Power
Threat of New Entrants Threat of substitutes
Intensity of Rivalry
Industry Forces
Exhibit 24 – Minute and Money
Activity Duration (months) Money (US$)
All
Footwear manufacturing at factories 1 483 414
Exporting to Skypro LLC 1 5 198
Duty Taxes ¼ 48 341
IATA partnership ½ 25 000
Advertising (magazines) 1 6 000
Online Store
Monthly payment to Skypro LLC 1 3 000
Hire new commercial collaborator 1 125 000
Online advertising (Facebook, Google AdWords and Double Click)
2 16 560
Airport Stores
Contract partnership with Crew Outfitters and The Fields Shop
2 0
Third party Shoe Websites
Contract partnership with Zappos,
Shoebuy.com and DSW
2 0
Total investment 745 513
Exhibit 25 – Memo
Objectives Target Initiative Measurement Financial Increase sales
revenues and expand B2C segment
6% of growth in the B2C segment Contract with airport stores and third-party shoe websites Volume of sales
Customer Increase brand awareness in the US Become a reference to the aviation professionals 90% of customer satisfaction Customer after sales questionnaire Number of visitors of the online store and third party websites; customer’s surveys after 1 month of purchase Internal Increase
presence in physical stores in the US
Be present in 3 different states Establish contract with other aviation product stores Number of stores in different areas
Learning Invest more in R&D
Patent
Create an authentic shoe for women Patent the men’s shoe
Official patent Cost of R&D Cost of patent
Source: Own source
Exhibit 26 – Target number of Professionals
Professionals Number of pairs of shoes
Flight attendants 64 160
Pilots 39 510
Exhibit 27 – Pessimistic Scenario
Exhibit 27.1 – Revenues Online Store
Online Store 2017 2018 2019 2020
Men
Quantity sold (3%) 1 185,30 1 244,57 1 306,79 1 372,13 Growth rate 5% 5% 5% 5%
Unit price 179,95 179,95 179,95 179,95 Revenues 213 294,74 223 959,47 235 157,45 246 915,32
Women
Quantity sold (5%) 3 208,00 3 368,40 3 536,82 3 713,66 Growth rate 5% 5% 5% 5%
Unit price 139,95 139,95 139,95 139,95 Revenues 448 959,60 471 407,58 494 977,96 519 726,86 Revenues Online Store 662 254,34 695 367,05 730 135,40 766 642,17 Commission to LLC (2,5%) 16 556,36 17 384,18 18 253,39 19 166,05
Final Revenues Online Store 645 697,98 677 982,88 711 882,02 747 476,12
Exhibit 27.2 – Revenues third party websites
Third party websites 2017 2018 2019 2020
Men
Quantity sold (4%) 1 580,40 1 643,62 1 709,36 1 777,74
Growth rate (6%) 6% 6% 6% 6%
Unit price 179,95 179,95 179,95 179,95 Revenues 284 392,98 295 768,70 307 599,45 319 903,43
Women
Quantity sold (6%) 3 849,60 4 080,58 4 325,41 4 584,94
Growth rate 6% 6% 6% 6%
Unit price 139,95 139,95 139,95 139,95 Revenues 538 751,52 571 076,61 605 341,21 641 661,68 Revenues Online Shop 823 144,50 866 845,31 912 940,66 961 565,11 Commission (15%) 123 471,68 130 026,80 136 941,10 144 234,77
Final Revenues Online
Shop
Exhibit 27.3 – Revenues Airport Stores
Airport stores 2017 2018 2019 2020
Men
Quantity sold (6%) 2 370,60 2 512,84 2 663,61 2 823,42
Growth rate (5%) 5% 5% 5% 5%
COGS 27,90 27,90 27,90 27,90 Unit price 179,95 179,95 179,95 179,95 Revenue Margin 152,05 152,05 152,05 152,05 Store commission (23%
margin)
34,97 34,97 34,97 34,97
Revenues 343 686,03 364 307,19 386 165,63 409 335,56
Women
Quantity sold (8%) 5 132,80 5 389,44 5 658,91 5 941,86
Growth rate (5%) 5% 5% 5% 5%
COGS 27,90 27,90 27,90 27,90 Unit price 139,95 139,95 139,95 139,95 Revenue Margin 112,05 112,05 112,05 112,05 Store commission (23%
margin)
25,77 25,77 25,77 25,77
Revenues 586 055,40 615 358,18 646 126,08 678 432,39
Total Revenues 929 741,44 979 665,37 1 032 291,71 1 087 767,95
Exhibit 27.4 – Revenues all channels
Revenues 2017 2018 2019 2020
Total Revenues All Channels
2 275 112,24 2 394 466,76 2 520 173,29 2 652 574,41
Exhibit 27.5 – Total shoe pairs sold
Pairs sold 2017 2018 2019 2020
Exhibit 27.6 – Costs
Costs 2017 2018 2019 2020
Shipping costs PT to US 5 198,01 5 471,83 5 760,27 6 064,12 Duty taxes (10% on COGS) 48 341,49 50 888,02 53 570,52 56 396,35
Personnel Costs 125 000,00 125 000,00 125 000,00 125 000,00 Costs with advertising
(magazines)
6 000,00 6 000,00 6 000,00 6 000,00
Costs with online advertising 16 560,00 17 388,00 18 257,40 19 170,27 Management Online Store
(SKYPRO)
20 174,40 21 183,12 22 242,28 23 354,39
Shipping costs Online Stores (SKYPRO and 3rd Party)
122 791,25 129 214,46 135 979,81 143 105,80
COGS 483 414,93 508 880,18 535 705,18 563 963,47 IATA Partnership 25 000,00 25 000,00 25 000,00 25 000,00
Total costs 852 480,08 889 025,61 927 515,45 968 054,40
Exhibit 27.7 – Cash Flow Statement
2017 2018 2019 2020
Revenues 2 275 112,24 2 394 466,76 2 520 173,29 2 652 574,41 Costs 852 480,08 889 025,61 927 515,45 968 054,40 EBITDA 1 422 632,16 1 505 441,15 1 592 657,83 1 684 520,01 Depreciation 0,00 0,00 0,00 0,00
EBIT 1 422 632,16 1 505 441,15 1 592 657,83 1 684 520,01 Tax rate (40%) 569 052,86 602 176,46 637 063,13 673 808,01
NOPAT 853 579,29 903 264,69 955 594,70 1 010 712,01
Operating Cash Flow 853 579,29 903 264,69 955 594,70 1 010 712,01
Inventory 40 284,58 42 406,68 44 642,10 46 996,96 Account payables 80 569,16 84 813,36 89 284,20 93 993,91 Account receivables 189 592,69 199 538,90 210 014,44 221 047,87
Changes in Net Working Capital
149 308,11 7 824,11 8 240,13 8 678,57
Investment Cash flow -149 308,11 -7 824,11 -8 240,13 -8 678,57
Free Cash Flow 704 271,18 895 440,58 947 354,57 1 002 033,44
Discount factor (7%) 0,93 0,87 0,82 0,76 Discounted cash flow 658 197,37 782 112,48 773 323,53 764 446,51
NPV $2 978 079,89
Source: Own and primary sources
Exhibit 28 – Optimistic Scenario
Exhibit 28.1 – Revenues Online Store
Online Shop 2017 2018 2019 2020
Men
Quantity sold (6%) 2 370,60 2 512,84 2 663,61 2 823,42 Growth rate (10%) 10% 10% 10% 10%
Unit price 179,95 179,95 179,95 179,95 Revenues 426 589,47 452 184,84 479 315,93 508 074,88
Women
Quantity sold (10%) 6 416,00 7 057,60 7 763,36 8 539,70 Growth rate (10%) 10% 10% 10% 10%
Unit price 139,95 139,95 139,95 139,95 Revenues 897 919,20 987 711,12 1 086 482,23 1 195 130,46 Revenues Online Shop 1 324 508,67 1 439 895,96 1 565 798,16 1 703 205,34 Comission to LLC (2,5%) 33 112,72 35 997,40 39 144,95 42 580,13
Final Revenues Online
Shop
Exhibit 28.2 – Revenues third party websites
Third party websites 2017 2018 2019 2020
Men
Quantity sold (7%) 4 491,20 4 805,58 5 141,97 5 501,91 Growth rate (10%) 10% 10% 10% 10%
Unit price 179,95 179,95 179,95 179,95 Revenues 808 191,44 864 764,84 925 298,38 990 069,27
Women
Quantity sold (13%) 8 340,80 9 425,10 10 650,37 12 034,92 Growth rate (10%) 10% 10% 10% 10%
Unit price 139,95 139,95 139,95 139,95 Revenues 1 167 294,96 1 319 043,30 1 490 518,93 1 684 286,40 Revenues Online Shop 1 975 486,40 2 183 808,15 2 415 817,31 2 674 355,66
Comission (15%) 296 322,96 327 571,22 362 372,60 401 153,35
Final Revenues Online
Shop
1 679 163,44 1 856 236,92 2 053 444,72 2 273 202,31
Exhibit 28.3 – Revenues Airport Stores
Airport stores 2017 2018 2019 2020
Men
Quantity sold (10%) 3 951,00 4 267,08 4 608,45 4 977,12
Growth rate (8%) 8% 8% 8% 8%
COGS 27,90 27,90 27,90 27,90 Unit price 179,95 179,95 179,95 179,95 Revenue Margin 152,05 152,05 152,05 152,05 Store comission (23%
margin)
34,97 34,97 34,97 34,97
Revenues 572 810,05 618 634,86 668 125,65 721 575,70
Women
Quantity sold (15%) 9 624,00 10 393,92 11 225,43 12 123,47
Growth rate (8%) 8% 8% 8% 8%
Store comission (23% margin)
25,77 25,77 25,77 25,77
Revenues 1 098 853,88 1 186 762,19 1 281 703,17 1 384 239,42
Total Revenues 1 671 663,94 1 805 397,05 1 949 828,82 2 105 815,12
Exhibit 28.4 – Revenues all channels
Revenues 2017 2018 2019 2020
Total Revenues All
Channels
4 642 223,33 5 065 532,54 5 529 926,74 6 039 642,64
Exhibit 27.5 – Total shoe pairs sold
Pairs sold 2017 2018 2019 2020
Total pairs 35 193,60 38 462,12 42 053,19 46 000,54
Exhibit 28.6 – Costs
Costs 2017 2018 2019 2020
Shipping costs PT to US 10 558,08 11 538,64 12 615,96 13 800,16 Duty taxes (10% on COGS) 98 190,14 107 309,33 117 328,40 128 341,50
Personnel Costs 125 000,00 125 000,00 125 000,00 125 000,00 Costs with advertising
(magazines)
6 000,00 6 000,00 6 000,00 6 000,00
Costs with advertising 165 600,00 182 160,00 200 376,00 220 413,60 Management Online Store
(SKYPRO)
30 974,40 32 523,12 34 149,28 35 856,74
Shipping costs Online Stores (SKYPRO and 3rd Party)
270 232,50 297 514,05 327 741,36 361 249,34
COGS 981 901,44 1 073 093,26 1 173 283,96 1 283 414,99 IATA Partnership 25 000,00 25 000,00 25 000,00 25 000,00
Exhibit 28.7 – Cash Flow Statement
2017 2018 2019 2020
Revenues 4 642 223,33 5 065 532,54 5 529 926,74 6 039 642,64 Costs 1 713 456,56 1 860 138,39 2 021 494,95 2 199 076,33 EBITDA 2 928 766,77 3 205 394,14 3 508 431,79 3 840 566,31 Depreciation 0,00 0,00 0,00 0,00
EBIT 2 928 766,77 3 205 394,14 3 508 431,79 3 840 566,31 Tax rate (40%) 1 171 506,71 1 282 157,66 1 403 372,72 1 536 226,52 NOPAT 1 757 260,06 1 923 236,49 2 105 059,08 2 304 339,79
Operating Cash Flow 1 757 260,06 1 923 236,49 2 105 059,08 2 304 339,79
Inventory 81 825,12 89 424,44 97 773,66 106 951,25 Account payables 163 650,24 178 848,88 195 547,33 213 902,50 Account receivables 386 851,94 422 127,71 460 827,23 503 303,55 Working Capital 305 026,82 332 703,27 363 053,56 396 352,30 Changes in Net Working
Capital
305 026,82 27 676,45 30 350,29 33 298,74
Investment Cash flow -305 026,82 -27 676,45 -30 350,29 -33 298,74
Free Cash Flow 1 452 233,24 1 895 560,04 2 074 708,78 2 271 041,05
Discount factor (7%) 0,93 0,87 0,82 0,76
Discounted cash flow 1 357 227,32 1 655 655,55 1 693 580,38 1 732 566,34
NPV $6 439 029,59
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