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Selecting a Store Location

Points to be Discussed

About StephanieSelecting 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?

LocationCharacteristics

The Downtown Arcade

Tenderloin Village

Appletree mall

Area (in sqft) 30 900 1200

Rent (annually) $ 18,000 $ 15,000 $ 28,000

Lease Duration 3 Years 2 years 5 years

Coverage Clause If sales > $225,000 then 8%

No Clause If sales > $411,500 then 7%

Additional Charges No No 1%

People working/living in area

More More Few

What type of store would be most appropriate for each location?

Tenderloin Village• Lifestyle

Center• Restaurant

Downtown Arcade • Specialty

stores

Appletree mall• Departmenta

l stores• Fashion

brands

If you were Stephanie, which location would you choose? Why?

• Tenderloin Village population sizeCompetition

- 3 in Tenderloin Village- 9 in Appletree Mall

transportation access - Urban area & adjacent to convention centre- Appletree mall 8 miles from Downtown.

nature of nearby storesCheapest rent length of agreement (2 year)No legal restrictions

THANK YOU