FINANCIAL FEASIBILITY OF BUSINESS ON FAST FASHION STARTUP: A CASE STUDY OF UDO INNOVATE’S OFFLINE STORE ESTABLISHMENT PROJECT

• Main Author: Abrahim Immanuel Purba, Rafael
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83564
• Institution: Institut Teknologi Bandung

Fast Fashion is known as a type of fashion that shows a new culture with simple types of clothing, which has received positive enthusiasm in Indonesia. According to Statista, the fast fashion industry in Indonesia is expected to reach $9.51 billion by 2029, with a CAGR of 4.26%. Fierce competition in this industry forces businesses, including UDo Innovate, to use the right strategies. UDo Innovate, a fast fashion company that collaborates with the skateboarding community in Bandung, also experienced the same problem in conducting marketing strategies. UDo Innovate experienced low sales when only using online marketing strategies, so they wanted to implement an omnichannel strategy by activating offline platforms. However, in activating the omnichannel strategy, UDo Innovate has not conducted a financial feasibility study. The purpose of this research is to conduct a financial feasibility study for the activation of the offline platform through the construction of a retail store. This financial feasibility analysis will be calculated using payback period, net value (NPV), and internal return (IRR), and risk mitigation will use scenario analysis. The results show UDo Innovate is financially feasible to set up an offline store in 2026, with a payback period of 1.66 years, NPV of Rp583,921,410, and IRR of 49.53%. The funding option used is a loan from Bank Mandiri with an interest rate of 6% per annum and a tax rate of 11%, resulting in a WACC of 5.63% which is less than the full use of owner's capital at 6.25%.