Kasi Kicks Business Plan — Executive Summary

A multi-brand sneaker retail group: R16.13m funding, four stores, 49,239 pairs a year and R75.23m Year 5 revenue at a 13.7% margin.

Executive Summary

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2.1 How footwear allocation works
2.2 What each tier contributes
2.3 Counterfeit and grey market

2.1 How footwear allocation works

A retailer does not simply order sneakers. It holds an authorised retailer agreement with each brand, and against that agreement the brand allocates product by tier. General release stock is broadly available. Premium and limited product is rationed by account, by store and often by individual door, on the basis of history, sell-through performance, store environment and volume commitment.

The consequence is that a new independent begins at the bottom of the queue for exactly the product that generates queues. This is not a grievance; it is the structure of the industry, and a business plan that assumes otherwise is not describing footwear retail.

What the brand controls	What this means for the retailer
Which accounts are opened at all	Store location, environment and fit-out are assessed before an account is granted
Which tiers an account may buy	Limited and tier-zero product is allocated, not ordered
Quantity by style and by door	A retailer may receive six pairs of a launch style, not sixty
Size runs supplied	Assortments are often pre-packed, which is the origin of the size-curve problem
Minimum order commitments	Seasonal buys are committed months ahead, at the retailer’s risk
Pricing and promotional windows	Recommended pricing and restrictions on when discounting may occur

2.2 What each tier contributes

Tier	Share of units	Realised price	Gross profit	Role in the range
Tier-zero and limited releases	4%	R2 925	R1 391	Sells out in hours; allocation is rationed by the brand
Premium general release	26%	R1 715	R812	The commercial heart of the range
Core general release	44%	R1 138	R535	Volume; also where the size curve does most damage
Carryover and clearance lines	16%	R668	R257	Bought on deal; margin looks thin but turns fast
Accessories, apparel and care	10%	R485	R278	Attachment sales; the best margin in the store
Blended	100%	R1 219	R571	46.8% gross margin

Two lines are worth reading against each other. Accessories and apparel are only 10 per cent of units at an average selling price of R520, but carry the highest gross margin in the store at 57 per cent. Carryover and clearance is 16 per cent of units at the lowest margin, and exists because it turns fast and fills price points the brands do not otherwise serve. Neither line is glamorous and both are necessary.

The blended realised price of R1 219 is materially below the blended list price of R1 360, and the gap is the markdown the range carries at a 73 per cent full-price sell-through. Section 3 is about closing that gap, and it is the only part of this business the retailer fully controls.

2.3 Counterfeit and grey market

Counterfeit penetration is a recognised feature of the South African footwear market, and the grey market — genuine product imported outside authorised channels — is a persistent competitor on price. Both matter commercially rather than merely legally.

▪ A single counterfeit line ends the brand relationship. Authorised retailer agreements are terminated for it, and the account is not reopened. Provenance records on every delivery are a condition of trading, not an administrative preference.

▪ Grey market undercuts on price without carrying the costs. No store, no staff, no returns liability. The response is authenticity, service and the ability to fit a customer properly, not price matching.

▪ Customers increasingly verify. The resale and collector culture in South Africa has made buyers unusually alert to authenticity, which is an advantage to an authorised retailer that makes its status visible.

Previous section1. Allocation: What You Are Allowed to Sell

Next section3. The Size Curve: Where Footwear Margin Is Lost