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Lady M Confections - Growth of an exclusive bakery brand

Executive Summary - "This is the kind of dessert that sparks revolutions. The transformation of a Parisian street food into a dessert fit for Marie Antoinette"-The New York Observer

Situation
A detailed examination of Lady M's business model reveals that its core business can be seen in the creation of aesthetically-pleasing baked goods. The product lines of Lady M are cakes (including mille-crêpes and half sheets), individual slices, savories and wedding cakes. Distinguishing between Lady M's products, the extravagance of the cake, is the core product of Lady M and the benefit customers associate with buying Lady M cake. The actual product is the cake itself, whose delicate, less sweet taste and aesthetics persuades the buyer to buy Lady M's products. Lady M's augmented product is seen as the high-class customer service, which gives the customer an exclusive experience in the boutiques with its sleek, understated decor.

Distribution

Since Lady M confections (Lady M) started with a mom-and-pop cake operation in 2001, the specialty bakery company now turned into a quickly-growing multinational company. Today Lady Mis located in US, Canada, China &Singapore with 14 stores as well as an online shop.

Starting with one shop in New York, Lady M is currently positioned with six shops in New York including a very exclusive and high-end boutique in the One World Observatory with set-up costs of around $1 million. Other boutiques are located in LA, Boston, Hong-Kong and Singapore either in a very exclusive street or a shopping mall. Every boutique with its minimalist setting and clean white interior design,accentuatewith the only colors coming from the flowers and the cakes themselves, which can be consumed in-house or will be packaged for take away.

Financial Overview

Lady M had experienced significant growth over the last couple of years, with a sales growth of 81% in 2013. Additionally, Lady M realized profit margins of 11.4% which are atypical for the restaurant industry since the industry standard is a single digit margin.

Moreover, there are many investors especially from China, who are willing to invest two digits million amounts into the company.

Lady M plays within the highest-price category since one slice of cake costs about 8$, whereas a whole cake costs 85$. A Lady M wedding cake can be purchased for 750$.