Table of Content

    How to start your own clothing line

    Do you like fashion? Maybe you like advising your friends and family on what to wear and how to wear it and they have encouraged you to turn your passion into a business venture. Instead of retailing clothes from established clothing brands, you may decide to start your clothing line. All favorite designer clothing brands began somewhere, and this could be your turn to make money out of your passion.

    Creating a successful clothing line business plan involves dedication and great work. It will require a systematic clothing line business plan that will guide your business and set your foundation for success. Starting a business is not only having an excellent idea, but it is also more than that. A clothing line business demands creativity to build your loyal customer base. Our business plan clothing writers have gained a wealth of experience over the many years of helping successful entrepreneurs establish their clothing business from scratch.

    Executive Summary

    1.1 Clothing Business

    Lavish will be an independent clothing line owned by Julia Adam. The outlet will be based in Brooklyn, the most populous borough in New York City. In the initial stages, Lavish will just be selling apparel for women and juniors alongside accessories and gifts. The designs will include modern western, and southwestern wear.
    In this business plan sample for clothing line, we’ll be providing all details that can help anyone start their own clothing branding.

    1.2 Management

    A clothing line business plan can’t run without fine management and without hardworking and talented employees. So, before thinking about how to start a clothing company, you must devise your management plan.
    Julia decided to hire a manager for managing the overall operations – so that she can have time to invest in design ideas. However, she will be keeping an eye on all the activities by herself.

    A wide space in a strategically ideal location that is Brooklyn, will be taken on rent. To provide an assortment of various brands and designers’ clothes, representatives will be holding talks with big giants of this market. Moreover, efficient staff after rigorous testing will be hired to ensure the smooth running of the startup.

    1.3 Customers

    Before making a clothing line business plan, you must be clear about who will be your target customers. As your entire setup, inventory and apparels will be dependent on them. Lavish decided to aim at targeting just the women and junior population in the vicinity. Thus, the store will be providing clothing line of just their interest.

    1.4 Business Target

    To be clear about what the company aims to do, Lavish defined the following targets in its clothing store business plan.
    Our target is to become the most renown clothing line in the whole of NYC within a year of our launch. We aim at providing modern, trendy, high quality and unmatched apparel and accessories to the women and juniors of our town.

    Clothing Line Business Plan - 3 Years Profit Forecast

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    Company Summary

    2.1 Company Owner

    Julia, the company owner is a passionate and brilliant woman. Following her graduation from Hewlett High School, she went to Parsons School of Design to excel her skills as a fashion designer. After working for two years in ASMclothing, she has gained both experience and knowledge to implement her own ideas.

    2.2 Why the clothing business is being started

    Julia always wanted to be a fashion designer and work with the big names in this domain. However, after acknowledging that she can better implement her unique ideas by producing clothes on her own, she decided to launch her own clothing line. After gathering info about how to start a clothing line and looking at the opportunities that a startup clothing brand can offer her, she made up her mind to enter this venture.

    2.3 How the clothing business will be started

    Starting your own clothing line is a time taking task and needs efficient and accurate planning. If you also want to manufacture the material yourself then you will be needing a business plan template for clothing line to take major decisions.

    Here we’re providing a clothing company business plan sample free of cost to help you in making a clothing line business plan for your startup.

    Julia decided to do a contract with pre-existing cloth manufacturing company to utilize their services and machinery to produce the fabric like she wants. She’ll be hiring textile engineers who can help her devise ways to produce high-quality and eco-friendly material.

    Moreover, to execute the ideas on her mind, she’ll be hiring fashion designers, dress-makers, tailors and direct to garment printing experts alongside the usual staff.

    The financial experts have forecasted following costs for expenses, assets, investment, and loans for the startup.

    Clothing Line Business Plan - Startup Cost

    Start-up Expenses
    Legal $198 450
    Consultants $0
    Insurance $45 600
    Rent $38 970
    Research and Development $45 600
    Expensed Equipment $65 440
    Signs $2 340
    TOTAL START-UP EXPENSES $396 400
    Start-up Assets $345 000
    Cash Required $543 000
    Start-up Inventory $45 000
    Other Current Assets $245 000
    Long-term Assets $312 500
    TOTAL ASSETS $1 490 500
    Total Requirements $1 886 900
    START-UP FUNDING
    Start-up Expenses to Fund $254 000
    Start-up Assets to Fund $1 125 000
    TOTAL FUNDING REQUIRED $1 379 000
    Assets
    Non-cash Assets from Start-up $456 000
    Cash Requirements from Start-up $234 000
    Additional Cash Raised $45 000
    Cash Balance on Starting Date $41 500
    TOTAL ASSETS $776 500
    Liabilities and Capital
    Liabilities $37 590
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $33 000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $70 590
    Capital
    Planned Investment $1 379 000
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1 379 000
    Loss at Start-up (Start-up Expenses) ($673 090)
    TOTAL CAPITAL $705 910
    TOTAL CAPITAL AND LIABILITIES $776 500
    Total Funding $1 379 000

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    Services for Customers

    If you are passionate about building fashion brand, you must first decide the right domain for you. Accurate fashion clothing line business plan can only be made after you have decided your services, as your inventory, manufacturing clothes, orders, and designs will all be dependent on your services.

    After researching on how to design a clothing line and combining her interests, Julia decided to opt for the following services.

    Daily wear & College wear: To provide our customers with a daily-life comfort and style, Lavish will be offering premium quality dresses, elegant shirts and pants to be worn routinely.

    Day-outs and Party Outfits: We’ll be providing perfect outfits for casual occasions, proms, cocktail nights, wedding parties, hangouts, and similar events. We’ll offer gorgeous Bandeau Dresses, Pencil Dresses, Trench Dresses, Denim Dresses, Layered Dresses, Spaghetti Dresses, and Tweed Dresses.

    Juniors Clothing: We’ll be providing clothing line for juniors too that will include daily-routine casual outfits, events’ clothing as well as party dresses.

    Handbags & Accessories: We’ll be offering an assortment of unique handbags, jewelry items, bracelets, hats, watches, and scarves.

    Note

    These are the services which Julia will provide for 5-years of the launch of her startup. After being established in the market she’ll expand her product line and amend her business plan for clothing line accordingly.

    Marketing Analysis of Clothing line Business

    If you have made up your mind to start a clothing line for the sake of making your own clothes to sell, you must carry out thorough research on market first. As it will be hard to strive among already-established businesses, therefore, you must go for a location where there are comparatively fewer competitors.

    The most favorable location for your fashion brand launch can only be found after analyzing various markets and natives. Thus it’s essential for you to include a detailed marketing analysis in your clothing line business plan.

    Here we are providing fashion marketing plan example so that anyone who is thinking about creating a clothing brand can benefit.

    Bank/SBA Business Plan

    4.1 Market Trends

    Initiating a clothing line has enormous scope provided that one plans it efficiently. As clothing trends and fashion wears vary from day-to-day, people especially women are in continuous search of something that is unique and different from others so need to create a business continuity plan checklist. Women are always willing to spend on luxury clothing and accessories that make them appear beautiful besides providing comfort and confidence, therefore you will not be at loss if you have some good designing ideas on your mind.

    In the United States, the revenue of $37 billion has been generated by women clothing stores in 2019. More than 64 thousand such businesses are running in the whole state while employing about 340k people. But a concerning fact is that the business is not seeing growth from the past few years due to high competition, so you must keep in mind to focus on a specific group and excel in your domain.

    4.2 Marketing Segmentation

    in order to develop an accurate retail clothing line business plan template it’s essential to do marketing segmentation in it. Marketing Segmentation includes detail of the major groups of your target customers and the ways you’ll adopt to fulfill their needs.

    Since Julia has launched her clothing line for just women and children thus her target customers will mostly be the females living in Brooklyn. To meet the demands of every type of lady Julia has divided them into two groups so that she can focus on the requirements of each group effectively. Marketing segmentation as done by Julia for her startup is given here in this fashion marketing plan example.

    Clothing Line Business Plan - Marketing Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    4.2.1 Working Class

    The biggest consumer of our products will be the women who work in offices or in some other places. They will buy our comfortable and formal outfits for daily routine as well as our party dresses for whenever they have to go to some event. We’ll also be having a small office wear jewelry items so that they can enhance their work look.

    As working women can spend a sufficient amount on clothing to appear up-to-date while being comfortable, thus we expect them to make significant purchases with us.

    4.2.2 College & School Going Girls

    The second group of our target customers will be the young girls who are in the way of completing their degrees. We’ll keep stylish and mod apparel for them to wear at party nights, proms, and hangouts.

    4.2.3 Parents of Juniors

    The last group of our target customers will be the parents of children under 13 years of age. We’ll be offering daily routine supreme quality clothes as well as stunning party outfits for the junior population of our area.

    The detailed market analysis of our potential customers is given in the following table:

     

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Working Class 25% 12 450 13 695 14 940 16 185 17 430 12,00%
    College & School Going Girls 48% 25 250 27 775 30 300 32 825 35 350 12,00%
    Parents 27% 14 250 15 675 17 100 18 525 19 950 12,00%
    Total 100% 51 950 57 145 62 340 67 535 72 730 10%
    Any questions? Get in Touch

    4.3 Business Target

    Our major targets are:

    • To generate a profit margin of $15 per month by the end of the first year
    • To earn a net promoter score of 25 by the end of the first year and of 40 by the end of the second year
    • To increase our monthly sales by 25% every month
    • To expand our product line by the end of five years

    4.4 Product Pricing

    The prices of most of our products are comparable with that of our competitors. however, some apparels which were hard to design are priced a little higher. Our trench apparels and Bandeau dresses will also be a bit expensive as we’ll be using newer fabric with enhanced features while making them.

    Clothing line Marketing Strategy

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    After you have gathered information regarding how to start a private label clothing line, you must start exploring garments business tips that can help you in increasing your sales.

    In your clothing line business plan you must explore the ways that can provoke people to choose you among your competitors. To help you in getting an idea of what startups in these modern times are doing to promote themselves, we’re providing the sales strategy of the startup, Lavish.

    The sales strategy developed by our experts is as follows:

    5.1 Competitive Analysis

    The biggest aspect that can help us in becoming a successful clothing company is our strategic location. Julia has selected an ideal location where she’ll be having competition with just two or three businesses of the same kind.

    Secondly, our fabric will be of the highest quality and will be breathable, durable, anti-wrinkle, lint-resistant and comfortable. Thirdly we will be coming up with extremely unique, stylish and eye-catching designs. In fact, the only thing that inspired Julia to go for developing a clothing line was her hundreds of ideas that she could only implement independently. Lastly, we’ll offer a wide variety of dresses so that every lady has something to buy from us.

    5.2 Sales Strategy

    Our experts have come up with the following brilliant ideas to advertise and sell ourselves.

    • We will have a really amazing and eye-catching display in our stores as well as on your website
    • We’ll be offering a 10% discount on every purchase of $50 for the three months of our launch
    • We’ll be allowing customers to make online purchase
    • We’ll be giving a small gift on every purchase of $30 for the first month of our launch

    5.3 Sales Monthly

    Clothing Line Business Plan - Sales Monthly

    5.4 Sales Yearly

    Clothing Line Business Plan - Sales Yearly5.5 Sales Forecast

    The detailed information about sales forecast, total unit sales, total sales is given in the following table:

    Clothing Line Business Plan - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Daily wear & College wear 21 450 22 737 24 101
    Day-outs and Party Outfits 34 630 36 708 38 910
    Juniors Clothing 27 540 29 192 30 944
    Handbags & Accessories 12 340 13 080 13 865
    TOTAL UNIT SALES 95 960 101 718 107 821
    Unit Prices Year 1 Year 2 Year 3
    Daily wear & College wear $40,00 $46,40 $53,82
    Day-outs and Party Outfits $45,00 $52,20 $60,55
    Juniors Clothing $50,00 $58,00 $67,28
    Handbags & Accessories $75,00 $87,00 $100,92
    Sales
    Daily wear & College wear $858 000,00 $1 054 996,80 $1 297 224,07
    Day-outs and Party Outfits $1 558 350,00 $1 916 147,16 $2 356 094,55
    Juniors Clothing $1 377 000,00 $1 693 159,20 $2 081 908,55
    Handbags & Accessories $925 500,00 $1 137 994,80 $1 399 278,41
    TOTAL SALES $4 718 850,00 $5 802 297,96 $7 134 505,57
    Direct Unit Costs Year 1 Year 2 Year 3
    Daily wear & College wear $23,20 $26,91 $30,62
    Day-outs and Party Outfits $29,00 $33,64 $38,28
    Juniors Clothing $18,56 $21,53 $24,50
    Handbags & Accessories $58,00 $67,28 $76,56
    Direct Cost of Sales
    Daily wear & College wear $497 640,00 $611 898,14 $738 075,76
    Day-outs and Party Outfits $1 004 270,00 $1 234 850,39 $1 489 485,06
    Juniors Clothing $511 142,40 $628 500,70 $758 101,87
    Handbags & Accessories $715 720,00 $880 049,31 $1 061 521,55
    Subtotal Direct Cost of Sales $2 728 772,40 $3 355 298,54 $4 047 184,24

    Any questions? Get in Touch!

    Personnel plan

    No matter how many unique clothing business ideas you do have, they’ll all go waste if you fail at implementing them. To implement them at the right time, you’ll be needing efficient staff. Considering the importance of dedicated employees in a business, Julia decided to hire them after rigorous testing.

    The list of her staff with average salaries is given here in this clothing line business plan sample.

    6.1 Company Staff

    • 1 General Manager to manage the company’s display store
    • 1 Manager to monitor operations in the manufacturing center
    • 2 Textile Engineers to work in production unit to produce highest quality material
    • 4 Fashion Designers to design clothes
    • 1 Direct to Garment Digital Printing Expert
    • 2 Accountants to maintain financial records
    • 3 Sales Executives to interact with retailers and to execute sales strategy plan
    • 8 Tailors to stitch and fit the dresses
    • 1 Receptionist
    • 1 Driver for delivery tasks
    • 2 Cleaners to maintain the facility
    • 2 General Assistants for routine works

     6.2 Average Salary of Employees

    The following table shows the forecasted data about employees and their salaries for next three years.

     Personnel Plan
    Year 1 Year 2 Year 3
    General Manager $40 000 $44 000 $48 400
    Manager $30 500 $33 550 $36 905
    Textile Engineers $71 500 $78 650 $86 515
    Fashion Designers $75 000 $82 500 $90 750
    Digital Printing Expert $35 000 $38 500 $42 350
    Accountants $30 000 $33 000 $36 300
    Sales Executives $65 000 $71 500 $78 650
    Tailors $125 000 $137 500 $151 250
    Receptionist $38 500 $42 350 $46 585
    Driver $33 000 $36 300 $39 930
    Cleaners $22 500 $24 750 $27 225
    General Assistant $25 000 $27 500 $30 250
    Total Salaries $374 000 $650 100 $715 110

    Financial Plan

    You might have questions on your mind such as is the clothing line business plan profitable? Well, that’s a natural concern and can only be relieved after you have analyzed all the finances in a financial plan. After manipulating investments, loans, expected salaries, and all possible expenses you’ll be able to learn how much does it cost to start a clothing line. Moreover, through an accurate financial plan, you can figure out how much profit can you generate while managing all the finances. It can also provide possible solutions if you somehow fail to generate the revenue you expected.

    Considering the long-term importance of a financial plan, Julia had it written by a financial expert. A sample of that financial plan is provided here.

    7.1 Important Assumptions

     General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8,50% 8,78% 9,24%
    Long-term Interest Rate 8,90% 9,20% 9,50%
    Tax Rate 25,45% 26,54% 27,54%
    Other 0 0 0

    7.2 Brake-even Analysis

    Clothing Line Business Plan - Brake-even Analysis

     Brake-Even Analysis
    Monthly Units Break-even 5400
    Monthly Revenue Break-even $134 560
    Assumptions:
    Average Per-Unit Revenue $255,50
    Average Per-Unit Variable Cost $0,75
    Estimated Monthly Fixed Cost $176 500

    7.3 Projected Profit and Loss

     Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $4 718 850 $5 802 298 $7 134 506
    Direct Cost of Sales $2 728 772 $3 355 299 $4 047 184
    Other $0 $0 $0
    TOTAL COST OF SALES $2 728 772 $3 355 299 $4 047 184
    Gross Margin $1 990 078 $2 446 999 $3 087 321
    Gross Margin % 42,17% 42,17% 43,27%
    Expenses
    Payroll $374 000 $650 100 $715 110
    Sales and Marketing and Other Expenses $111 300 $122 430 $133 560
    Depreciation $2 692 $2 962 $3 231
    Leased Equipment $0 $0 $0
    Utilities $4 028 $4 431 $4 834
    Insurance $2 332 $2 565 $2 798
    Rent $5 300 $5 830 $6 360
    Payroll Taxes $42 400 $46 640 $50 880
    Other $0 $0 $0
    Total Operating Expenses $542 052 $834 958 $916 773
    Profit Before Interest and Taxes $1 448 025 $1 612 042 $2 170 548
    EBITDA $1 448 025 $1 612 042 $2 170 548
    Interest Expense $0 $0 $0
    Taxes Incurred $289 605 $322 408 $434 110
    Net Profit $1 158 420 $1 289 633 $1 736 439
    Net Profit/Sales 24,55% 22,23% 24,34%

    7.3.1 Profit Monthly

    Clothing Line Business Plan - Profit Monthly

    7.3.2 Profit Yearly

    Clothing Line Business Plan - Profit Yearly

    7.3.3 Gross Margin Monthly

    Clothing Line Business Plan - Gross Margin Monthly

    7.3.4 Gross Margin Yearly

    Clothing Line Business Plan - Gross Margin Yearly

    7.4 Projected Cash Flow

    Clothing Line Business Plan - Projected Cash Flow

     Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $58 570 $62 750 $66 930
    Cash from Receivables $10 370 $12 040 $13 710
    SUBTOTAL CASH FROM OPERATIONS $65 067 $70 775 $76 483
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $57 067 $58 775 $60 483
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $38 000 $39 500 $41 000
    Bill Payments $19 280 $20 220 $21 160
    SUBTOTAL SPENT ON OPERATIONS $47 615 $51 648 $55 681
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $52 275 $60 668 $69 061
    Net Cash Flow $14 900 $15 470 $16 040
    Cash Balance $29 730 $33 820 $37 910

    7.5 Projected Balance Sheet

     Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $244 200 $267 300 $290 400
    Accounts Receivable $22 000 $24 200 $26 400
    Inventory $4 120 $4 690 $5 260
    Other Current Assets $1 000 $1 000 $1 000
    TOTAL CURRENT ASSETS $309 886 $346 095 $382 304
    Long-term Assets
    Long-term Assets $10 000 $10 000 $10 000
    Accumulated Depreciation $15 960 $17 060 $18 160
    TOTAL LONG-TERM ASSETS $1 870 $2 500 $3 130
    TOTAL ASSETS $301 256 $335 395 $369 534
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $18 400 $21 850 $25 300
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $13 412 $14 722 $16 032
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $13 412 $14 722 $16 032
    Paid-in Capital $30 000 $30 000 $30 000
    Retained Earnings $109 000 $131 000 $153 000
    Earnings $178 000 $200 000 $222 000
    TOTAL CAPITAL $287 850 $320 680 $353 510
    TOTAL LIABILITIES AND CAPITAL $301 256 $335 395 $369 534
    Net Worth $277 000 $309 000 $341 000

    7.6 Business Ratios

     Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7,21% 7,99% 8,77% 3,00%
    Percent of Total Assets
    Accounts Receivable 9,55% 10,55% 11,55% 9,70%
    Inventory 5,44% 6,56% 7,68% 9,80%
    Other Current Assets 2,58% 2,71% 2,84% 2,54%
    Total Current Assets 145,60% 150,60% 155,60% 165,33%
    Long-term Assets 11,30% 12,39% 13,48% 12,20%
    TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%
    Current Liabilities 4,48% 4,73% 4,98% 4,53%
    Long-term Liabilities 0,00% 0,00% 0,00% 0,00%
    Total Liabilities 6,98% 8,54% 10,10% 7,54%
    NET WORTH 104,48% 106,20% 107,92% 110,00%
    Percent of Sales
    Sales 100,00% 100,00% 100,00% 100,00%
    Gross Margin 98,46% 99,49% 100,52% 98,65%
    Selling, General & Administrative Expenses 90,96% 92,62% 94,28% 99,55%
    Advertising Expenses 1,90% 2,00% 2,10% 1,50%
    Profit Before Interest and Taxes 42,53% 46,63% 50,73% 34,50%
    Main Ratios
    Current 38,54 40,54 42,54 34,5
    Quick 34,11 35,9 37,69 36,5
    Total Debt to Total Assets 0,48% 0,20% -0,08% 0,50%
    Pre-tax Return on Net Worth 76,11% 79,90% 83,69% 76,54%
    Pre-tax Return on Assets 89,32% 102,32% 115,32% 115,00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 35,14% 38,05% 40,96% N.A.
    Return on Equity 59,32% 60,32% 61,32% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7,48 8,56 9,64 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 37,6 38,7 39,8 N.A.
    Accounts Payable Turnover 15,23 16,14 17,05 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2,6 2,7 2,8 N.A.
    Debt Ratios
    Debt to Net Worth -0,04 -0,05 -0,06 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $205 000 $214 000 $223 000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0,85 0,94 1,03 N.A.
    Current Debt/Total Assets 2% 1% 0% N.A.
    Acid Test 30 31,68 33,36 N.A.
    Sales/Net Worth 2,1 2,2 2,3 N.A.
    Dividend Payout 0 0 0 N.A.

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