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How much $$$ to open boutique?

Discussion in 'Streetwear and Denim' started by JayMcDenim, Oct 2, 2006.

  1. Tck13

    Tck13 Senior member

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    Who said anything about 1500 sq feet? For $2k a month in any somewhat trendy area of a big city he will be lucky to get up to a thousand (im using DC area as example), which isn't so bad for a start up. He can use the smaller space to learn the ropes and make a name for himself and then if he survives upgrade in a few years.

    But to repeat, he never mentions 1500 sq feet in his original post.


    I guess that's an average store size I had in my head. I still disagree with only needing $30k to fill even an 800 sq ft store. If someone thinks it's possible, I'd like to see how. If it were possible, I'd be in business by now.
     
  2. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    I guess that's an average store size I had in my head. I still disagree with only needing $30k to fill even an 800 sq ft store. If someone thinks it's possible, I'd like to see how. If it were possible, I'd be in business by now.

    Virtually impossible if you are going for the niche diffusion market (what we are really talking about here, really.) Possible if your store is selling a lot of merchandise at lower pricepoints (see Urban Outfitters for typical brands - Triple 5 Soul, Modern Amusement, Original Penguin) with jeans at the $80-$150 pricepoint (like the new Paper Denim & Cloth,) tees at $40, and outerwear at $200. If you want to carry Rag & Bone, Engineered Garments, Wings & Horns, etc... no way. The store will look really empty.
     
  3. imageWIS

    imageWIS Senior member

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    Virtually impossible if you are going for the niche diffusion market (what we are really talking about here, really.) Possible if your store is selling a lot of merchandise at lower pricepoints (see Urban Outfitters for typical brands - Triple 5 Soul, Modern Amusement, Original Penguin) with jeans at the $80-$150 pricepoint (like the new Paper Denim & Cloth,) tees at $40, and outerwear at $200. If you want to carry Rag & Bone, Engineered Garments, Wings & Horns, etc... no way. The store will look really empty.
    Can you mix and match? Can’t you have ¾ of a stores merchandise be that of a lower price point and ¼ of the merchandise of a higher price point? Jon.
     
  4. EL72

    EL72 Senior member

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    I have been to Sudbury only once a few years back and I really have to question the viability of such a venture in a small, out-of-the-way town like Sudbury. I used to teach the small biz class at U of Toronto and saw countless biz plans for these kinds of ventures and the vast majority of students tend to grossly overestimate the market for these things and the profitability of these stores. You have to sell a lot of stuff to make a business like this worth the high risk you are taking. I would urge you to write a detailed biz plan including sensitivity analysis for different sales forecast scenarios. Without wanting to discourage you and not knowing any exact numbers or the specific market, my guess is that you need to work with very optimistic assumptions for this to be profitable. Best of luck!
     
  5. VKK3450

    VKK3450 Senior member

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    slightly off topic, but a small piece of advice. When talking retail for a young market, particularly in high demad premium goods, be prepared to account for a sustantial amount of "leakage" (either employee or external theft). I have a friend with a couple of boutiques in Amsterdam, and it IS a reality, no matter how much security you have, or how much you plan for it.

    Look at your price per piece, and see how much the loss of one pair of premium Denim is going to set you back.

    K
     
  6. imageWIS

    imageWIS Senior member

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    slightly off topic, but a small piece of advice. When talking retail for a young market, particularly in high demad premium goods, be prepared to account for a sustantial amount of "leakage" (either employee or external theft). I have a friend with a couple of boutiques in Amsterdam, and it IS a reality, no matter how much security you have, or how much you plan for it.

    Look at your price per piece, and see how much the loss of one pair of premium Denim is going to set you back.

    K


    In other words: get cameras.

    Jon.
     
  7. mendel

    mendel Senior member

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    Nth-ing the "could Sudbury support that?" worries. My father owns a clothing store in Belleville, which doesn't have the Northern Ontario effect but does have the small-city thing going on, and what you describe would have a hard time getting by in Belleville. You really need to do up a full business case for the store, doubly so if you're going to operate on a business loan, but some things to keep in mind:

    Who are your customers? Does the age and income range you're selling to stick around Sudbury, or do they get out the first chance they get? Sudbury has had a population decline, especially at the younger end, for the last decade, with most of the exodus heading towards southern Ontario. (There were only 5,000 men aged 25-35 in Sudbury in 2001.)

    Where are your potential customers shopping now? If they're hitting up Wal-Mart you'll have a hard time getting them to come to you instead, but if they're making twice-yearly trips to Toronto to shop then you might be on to something.

    What's your competition at exactly your price point? If there isn't any selling the styles you're thinking of selling, maybe you've struck it rich, but it's more probable that no-one else has considered it profitable. If the competition at the price point is, say, all aimed at over-40s, then that's probably important to consider.

    What about at a lower price point for your demographic? If people are shopping in Chateau or Old Navy now, you'll have to figure out if they're doing so because they can't find anything nicer-and-more-expensive, or if they're just happy with Chateau and Old Navy quality and price. The average individual income for residents 15 and over in Sudbury is only $28,000 so you want to make sure they're even able to step up a level in price point.

    Lastly, be very, very sure that you're opening the store because you think a lot of other people will give you money for the things you sell, and not just because you wish someone else would open the store you want to open. It's easy to wish someone sold the lines you want to carry locally and then figure that if they're not going to, then YOU will! -- but it's a lot harder to get people in the door and leaving with your merchandise.
     
  8. VKK3450

    VKK3450 Senior member

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    Cameras are not really enough. In a small boutique, you cannot man them all the time. And a crafty emplyee knows how to get around it. You need to be able to know and trust your staff, and you need to merchandise thins in a way which discourages theft. There are other security measures, but these are the two that he employs. (But he still provisions for certain leakage)

    K
     
  9. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    Are you sure you want to try this in Sudbury? How about a slightly larger market with a large student demographic with a yen for more "premium" goods, but who don't have time to drive to Toronto every weekend. My hometown on Kingston, with a lot of students and young professionals, and 2.5 hours from TO (too long for a day trip for most people), and with a large summer tourist industry to boot, might be a great place to start such a business. And there is a well developed downtown area. I know that at least half a dozen places like the one you are envisioning that have stayed in business between 3-20 years now. Price points are not what I'm used to anymore. But I remember when I was in highschool, I thought that Urban Trade was the bomb. At that time, it was the only store like it in town. Now, there are a bunch, catering to a variety of clientele.
     
  10. imageWIS

    imageWIS Senior member

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    Cameras are not really enough. In a small boutique, you cannot man them all the time. And a crafty emplyee knows how to get around it. You need to be able to know and trust your staff, and you need to merchandise thins in a way which discourages theft. There are other security measures, but these are the two that he employs. (But he still provisions for certain leakage)

    K


    I have a very solution to this dilemma: hook up the cameras to a computer and record digitally, and while you might not catch an employee in the act of theft, you will have them recorded and will be able to deal with them accordingly. No reason to keep a thieving employee, when you can find an honest one.

    Jon.
     
  11. Get Smart

    Get Smart Senior member

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    wouldnt the OP be working the boutique himself most of the time, perhaps have 1 or 2 part time helpers? so there'd prolly be no theft for quite a while unless he steals from himself.
     
  12. ahk1979

    ahk1979 Senior member

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    Nth-ing the "could Sudbury support that?" worries. My father owns a clothing store in Belleville,

    what store is that?

    i'm from brighton and did most of my shopping as a young kid a the good old quinte mall, until i found better places to spend my money.

    nice to see so many ontarians on these boards!
     
  13. mendel

    mendel Senior member

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    what store is that?

    i'm from brighton and did most of my shopping as a young kid a the good old quinte mall, until i found better places to spend my money.

    nice to see so many ontarians on these boards!


    If it was a while ago, both Carson's Mens Wear and Crossings. Nowadays they're both in one store (Crossings).
     

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