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 womenoAbercrombie & 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. oThey 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

Threat of New Entrants: High

- industry is always emerging

- trendy fashion scene

Threat of substitutes: Low

- few alternatives- wide range of

products

Buyer Power: High/Medium

- customers have low switching costs

- limited power of raising prices

- able to adapt to changing demands

Supplier Power: Low/Medium

- not materially dependent to any

one supplier- carries wide and

diversified products

Five Forces

EFE Matrix

The Buckle EFE MatrixOpportunities Weight Rating Weighted ScorePredict and respond to changing customer demands and preferred choices more efficiently

0.10 4 0.40

Source merchandise more efficiently 0.08 3 0.24Continue to develop consumer perception of quality for the future 0.09 3 0.27

Increase in Market Share 0.06 3 0.18Increase in household income (increase in minimum wage) 0.05 2 0.10Keep up with consumer/social deployments, need to develop more technology systems

0.07 4 0.28

ThreatsThe industry is highly competitive, specifically for: fashion, selection, quality, price, location, service and atmosphere (mostly in malls)

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 0.06 2 0.12Reliability on customers spending trends/customer confidence 0.16 3 0.48Changing tax rates for business 0.06 2 0.12Growing costs of healthcare 0.04 2 0.08Totals 1.00 3.10

Strategic Group Map

0 500 1000 1500 2000 2500 3000 3500

-2

0

2

4

6

8

10

Gap (2.87)

American Eagle 0.41A&F [Y VALUE]

Pacsun [Y VALUE]

Express [Y VALUE]

Wet Seal[Y VALUE]

Buckle 3.38

Dillards 7.79

Nordstroms [Y VALUE]

Strategic Group Map

Number of Store Locations

Earn

ings

Per

Sha

re

IFE Matrix

The Buckle IFE MatrixStrengths Weighted Rating Weighted ScoreExpansion of stores 0.09 3 0.27Well known in the 43 states it's located 0.05 4 0.20Distribution ships in 2-3 days 0.05 4 0.20Diverse Product Lines, Specialized inventory to reflect local tastes 0.06 3 0.18

Staff Loyalty (all members) 0.04 4 0.16Private-label and exclusive merchandise 0.10 4 0.40Little debt (no long-term) 0.08 4 0.32Targets ages 15-30 0.04 3 0.12Denim accounts for 45% of sales 0.05 3 0.15WeaknessesFluctuations in comparable stores net sales results 0.07 2 0.14Very localized markets with stores that compete against each other 0.06 2 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

0.05 2 0.10

Reliant on foreign producers 0.04 2 0.08Dependence on Single Distribution Center 0.08 4 0.32The change in fashion fluctuates each year 0.03 1 0.03Lack of social media presence (recycled instead of targeting promotions 0.05 2 0.10

Totals 1.00 2.95

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

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

SWOT Analysis Strengthso 430 stores and expandingoWell known, present in 43 stateso Diverse Products lines, unique inventoryoMerchandise ships in 2-3 dayso Little to no debt

Weaknesseso Lack of social media presence, no targeting

promotions o Small number of full-time employees, more

dependent on leadership teamso Depend on foreign producerso Very common market, constantly having to

compete against rivals

SWOT Analysis Opportunities o Anticipate and react to the changing customer

demands more efficientlyoMore top selling and competitive brandso Develop the customers awareness of the quality

productso Design a system to keep up with consumer and

social advances

Threatso Retail industry is highly competitiveo Time sensitivity of inventory o Rising labor and product costso Relying on consumer spending trends

SWOT Analysis SO strategies (S1, O4) Expand into the international markets to appeal to consumers and make social advancements in foreign markets

(S3, O2) Create a marketing strategy for the diverse and unique product lines to sell more competitive brands than rivals

(S4,O) Build more distribution centers to accommodate for the consumers demands of products that need shipped in 2-3 days

ST strategies (S3, T2) Improve inventory turnover by increasing the demand for the unique and diverse products

(S2, T1) Gain higher awareness to stay competitive amongst rivals, in the current 43 states

(S1, T3) Build more stores to increase revenue to compensate for the increase in labor and product cost

SWOT Analysis WO strategies (W1, O4) Lower prices and utilize technology by gaining a stronger social media presence

(W2, O1) Create more full-time jobs in their stores, help keep up with the changing consumer demands

(W4, O3) Develop a advertising plan to raise company awareness to stay competitive amongst rivals.

WT strategies (W3, T2) Lower the dependency on foreign producers to decrease product costs

(W1, T4) Increase social media presence to market to the consumers and keep up to date on the latest trends

Competitive Profile Matrix

CPMBuckle Abercrombie and Fitch Express

Critical Success Factors Weights Rating Score Rating Score Rating Score Advertising 0.13 3 0.39 4 0.52 2 0.26Company Image 0.14 4 0.56 4 0.56 3 0.42Global Expansion 0.10 1 0.10 4 0.40 2 0.20Consumer Loyalty 0.12 4 0.48 2 0.24 3 0.36Production Capacity 0.10 1 0.10 4 0.40 3 0.30Market Share 0.11 4 0.44 2 0.22 1 0.11Price Competitiveness 0.13 4 0.52 2 0.26 3 0.39Technology 0.09 3 0.27 4 0.36 2 0.18Management 0.08 4 0.32 3 0.24 2 0.16Totals 1.00 3.18 3.20 2.38

Ethics For the most part they are pretty ethical

Lawsuits:

1. Buckle Store Class Action Lawsuit Settlement, Dec. 17, 2013o 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

BKEFinancials

2014 2013 2012 2011Operating 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

Days of Inventory 66.17 60.78 59.21 60.79

Inventory Turnover 5.52 6 6.16 6

Net Income (in millions) 163 164 151 135

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 groupContinue to develop their competitive advantages◦ Personalized and knowledgeable customer services◦ Well- trained employees◦ Unique productsNarrow and deepen their product offering