what I am missing in apparel retail

[Davids]

I am in negotiations to open an apparel store in downtown Philadelphia, sort of a boutique. This is my first store ever. The issue is that the rent is about 16K month. I tried to find smaller store but the location is also important. My question is that would I be able to cover this kind of rent. In my first business plane I thought I am going to sell for about 300$ a day so that would be around 9000$ a month. So initially I rejected the idea of the lease because I will not be able to cover my costs. Then someone told me that any retail store in downtown should sell for more than that. The question is that I do not have any numbers of the average sales per day for any small apparel store in downtown a metropolitan city to make my calculations. In other words my question is what is the average sales per day in an apparel store/boutique that is located in center city Philadelphia giving that I am not a big name like J Crew,Brooks Brothers or Jones NY, etc. notice that I am not even talking about malls where the rent can reach 85/sf do you think a store in a mall can make much money to just cover the rent? Any input in this matter would be appreciated

[TotalPC]

Personally i wouldn't touch something with 16k/month rent, especially when you have no idea what you will be making.

I would recommend that you spend time working in a similar store and area, so you can at least gauge what type of turnover is happening.

If you are going to go for something that is 16k/month, please ensure that you don't get locked into any long term lease or a lease that you can't easily break if things go bad.

[Spider]

... my question is what is the average sales per day in an apparel store/boutique that is located in center city Philadelphia ...Before embarking on such a venture, you must be able to answer this question yourself. If you do not know the answer from your own experience, perhaps you are not ready to do this kind of business. So, the question becomes - How can you find out this crucial piece of information for yourself?

1. As the previous respondent suggested - get a job in such a store and make lots of notes.
2. Take a folding chair and a flask of coffee and go sit across the street from a similar store and count the number of people going in and the number of people coming out with and without a store shopping bag. Do this every day for at least a month.
3. Join a chamber of commerce and befriend a boutique store owner and see what information you can get from them.
4. Pal up with the manager of such a store and go into partnership with him/her.

Frankly, I wouldn't even consider such a business until I knew a whole lot more than just the numbers you asked - I'd want to know, from my own experience, everything I needed to know about the business.

[Patrysha]

As others have noted you don't have enough data. You haven't mentioned square footage or how it's broken down into storefront, office area, shipping/recieving area and storage space. You haven't mentioned the product grade or the range of products or your projected inventory levels or your turn rate...so it's hard to say whether $300 is in the right range...what research went into the original business plan? Is that your expected sales? Where have you accounted for overhead?

[greenoak]

your sales willl be limited by how much inventory you have....you can do everything right and if you dont have enough inventory you wont be able to sell enough.,..for that kind of rent i would think you would have a big full store of the right stuff....
.300 a day sounds really small..like really cheap clothinhg......you really cant generalize about this....if you have 100$$ shirts or 10$ shirts makes a big difference...300$ sounds like just 3 or 4 customers a day to me...
a store making 9k a month hardly has a chance of making any money for the owner.....thats about 100k a year.... expenses 50 to 70k....it doesnt sound very possible.....

[Patrysha]

I haven't been in retail myself for a long, long time...but 15 years ago...one sale could be as little as $9.99 or as high as $2800 it was nothing to sell $5000 retail value on really good day and as little as $300 on bad one but that was just my ring thru...depending on the day and the season there would be five to fifteen other girls. No clue what the square footage might have been or what stores down there that it would be comparable to in size to. Up here it was around the same size as the GAP, Club Monoco, Eddie Bauer and Banana Republic stores...which were all much bigger by at least three if not four times the size of any of the locally owned and operated clothing stores I encountered in any mall I worked in. I only know what a handful of clients are paying for rent...but what you need to know is what your closest competitors are paying for rent...(along with everything else you need to know about them, but more importantly you really need to dig into getting to know your target market...and both of those things need to be ongoing...before you open and after)

[Paper Shredder Clay]

Unless you have deep pockets, or know that it will bring in well over the rent, I wouldn't touch it, especially if you are new to the business.

[yanni]

Do not do this. Too much overhead. Keep looking, this will save you much headache later on.

[Harold Mansfield]

That's a lot of rent. I live in an area with some of the most expensive real estate in the country for retail, casinos, bars and restaurants and even for a local bar dropping $50k a week from the machines, rarely do I see anyone paying much more than $10k-$15k a month, unless the location is just unbeatable.
I think the big issue is what are you selling? How high is the profit margin and what are trends and research showing you about how these items will move?
Also, what kind of budget does that leave you for advertising and marketing?

You also haven't left much for payroll, insurance, maintenance, and other operating costs. $300 a day may cover the rent, but what about everything else?

[whiteelephant]

Before embarking on such a venture, you must be able to answer this question yourself. If you do not know the answer from your own experience, perhaps you are not ready to do this kind of business. So, the question becomes - How can you find out this crucial piece of information for yourself?

1. As the previous respondent suggested - get a job in such a store and make lots of notes.
2. Take a folding chair and a flask of coffee and go sit across the street from a similar store and count the number of people going in and the number of people coming out with and without a store shopping bag. Do this every day for at least a month.
3. Join a chamber of commerce and befriend a boutique store owner and see what information you can get from them.
4. Pal up with the manager of such a store and go into partnership with him/her.



Those are great ideas, Spider.