Memorandum

Date:               July 2025

Subject:          Strategic proposals

The issue

As I am sure you are all aware, due to challenging economic conditions, Close Knit has been struggling to retain its current customer base and bring in new business. Although we have some understanding of why this is the case, we are currently using external consultants to evaluate our business model and strategy to help us recover. Nevertheless, we believe that the current downturn is perpetuated by:

(a) A general trend away from workwear towards more casual attire; 

and, when customers do want workwear:

(b) A desire for more comfortable and functional workwear. 

We will be working with our external consultants to see the extent to which these points are sound or whether there are different factors at play. However, in the interim, the Senior Leadership Team have consulted with a wide range of members from across the business and has two proposals to change Close Knit’s product offering and mitigate the identified problems mentioned above.

Our proposals 

We believe that a radical change is required to help Close Knit to recover. With that in mind, we are proposing:

(a) branching into the supply of personal protection equipment (PPE); and/or

(b) developing a new line of ‘performance’ workwear.

After the Covid-19 pandemic, it seems like consumers and businesses are more health-conscious. The citizens of many countries used masks prior to the crisis, such as in China, and we think that the trend might be here to stay in the UK. If we cannot get our traditional business to improve, we were thinking that branching into the supply of PPE may be a way of staying afloat and supplementing the income generated by our traditional clothing product lines.

We have conducted some preliminary investigations and found that the raw materials used to produce PPE, such as latex, are very cheap when bought in quantities suitable for manufacturing. Therefore, the variable cost associated with raw materials is relatively minimal. 

As it stands, we are considering selling this PPE directly to customers. We think our most successful product in this new line will be masks. Masks do not just serve a functional purpose; they are now also a fashion statement. We believe that our customer base wants smart, professional-looking, and functional PPE for when they go to the office, client meetings, and so on. 

We are also considering developing some ‘performance’ workwear. These garments will incorporate advanced polyester technology to create flexible, breathable outfits. We think that individuals who work from home are looking for professional yet comfortable workwear. We accept that there is some debate as to whether remote working or traditional office work is the way of the future; we propose that the future is a hybrid working format.

Although many customers will be working from home, there remains a need for professional-looking workwear. Individuals need to appear presentable in video meetings but also want to be comfortable in their own homes. Therefore, we believe that there is a desire for ‘performance’ workwear that allows the customer to be presentable and free of the stiffness that comes with a traditional suit. Furthermore, customers who work in the office or on a hybrid basis can, naturally, wear their performance suits to the office. A ‘performance’ product line can appeal to all kinds of professionals, irrespective of their working environment. 

Our models indicate that performance workwear will cost approximately twice the amount more to produce than the existing range. Nevertheless, we propose that this line of clothing can be marked up substantially due to the quality, functionality and desirability of the products. 

Next steps

We will be submitting our proposals along with additional business information to our consultants for review. Alongside evaluating our ideas, we are hoping that they will also advise us, amongst other things, on how to minimise our current costs. 

We are aware that times are tough and that restructuring our business will be hard for everyone. However, we are confident that there is a clear way out of this.  

Naturally, this memorandum contains sensitive information and, therefore, we request that you do not print or distribute this document to anyone. Furthermore, please keep the information contained within this memorandum confidential. We understand that you may be affected by the current situation; if you are, please feel free to contact HR to have a private, confidential conversation and we will do our best to support you.