Selecting a Store Location

Submitted by:
Ankit Goel smba08033
Abhinay bajapi smba08007
Rawandev kaur smba08181
Divyadarshan smba08079
Amrita datta smba08027
 Points to be Discussed
About Stephanie
Selecting a Store
 - The Downtown Arcade
 - Tenderloin Village
 - Appletree Mall


Discussion Question

Stephanie Wilson

 In her late 30’s, Working in municipal government.

 Majored in Fine Arts.
 Divorced with two children.
 Wants her own business.
 Loves Fashion, has a flair for it.
 Evening Courses: Retail Management & Fashion
Design.
The Downtown Arcade
 Arcade building since 1912.
 Vacant from last 15 years, going to be completed in next 6 yr.
 3 level shopping facility
 - 40 shops on ground floor
 - 28 on Second floor.
 - Restaurant on third floor.
 Considerations: 30 feet square, near main entrance.
 Rent: $ 20 per sqft., Annual total; $ 18,000.
 If sales exceed $225,000 rent: 8% of the sales.
 3 year lease contract.
Tenderloin Village

 Yuppie Enclave: well kept Brownstones

building & comfortable neighborhood.
 20 small retailer adjacent to the
convention centre.
 Mostly “Ferns and Quiche” restaurants.
 Three small women`s clothing stores.
 Site Available: main street on the
ground floor.
 Space: 900 sqft.
 Rent: $ 15,000 annually (no clause)
 Two year lease
 Appletree Mall
• Suburban mall has been open for 8 years.
• 8 miles from Downtown.
• Regional centre: 3 department store & 100
smaller shops.
• Two doors from the local department store
chain`s mall outlet.
• Area: 1200 sqft. (24 ft in front by 50 ft deep).
• Rent: $28,800 annually
• If sales exceed $411,500 Rent: 7% of sales.
• Additional Charges: 1% of sales.
• Five year lease.
• Escape clause: two year if sales don`t reach $
411,500
 Give the + and - of each
location?
Location
 The Downtown Tenderloin Appletree mall
Characteristics

Arcade Village

Area (in sqft) 30 900 1200

Rent (annually) $ 18,000 $ 15,000 $ 28,000
Lease Duration Years 2 years 5 years
Coverage Clause If sales > No Clause If sales >
$225,000 then $411,500 then
Additional No
8% No 1%
7%
Charges
People More More Few
working/living in
area
What type of store would be
most appropriate for each
location?
If you were Stephanie, which
location would you choose?
Why?
• Tenderloin Village
¯ population size
¯ Competition
 - 3 in Tenderloin Village
 - 9 in Appletree Mall
¯ transportation access
 - Urban area & adjacent to
convention centre
 - Appletreemall 8 miles from
Downtown.
¯ nature of nearby stores
¯ Cheapest rent
¯ length of agreement (2 year)
¯ No legal restrictions
•
THANK YOU