Independents: How to expand from your first store
Expanding beyond your first store is one of the biggest decisions an independent retailer will ever have to make. Retail property expert Tom Stanbury, Director of Central London Retail for CBRE answers some key questions.
The first store has worked, what are the triggers to establish a second or more?
It is rare that an independent retailer would open a second store without the first store already making a profit. Independent retailers are rightly cautious because it is their money they are investing. Is a retailer seeing consistent growth in sales, do they have good accounts which show profit, do they have the supply lines to expand?
What tips can you share on how an indie can best time branching out?
Investigate where there are more flexible lease terms available, so that you are not tied in to an unsustainable lease length and cost. It is also worth approaching landlords around the terms of the lease – are these based on the performance of the store to try and share the risk? Also instructing a property agent can be useful. They can advise on market conditions and speak to other retailers who have been there before and grown successfully.
What internal changes do you need to make as you start expanding?
You’ll need to try and keep your overheads to a minimum so look out for cost-saving opportunities. When fitting a space out, it’s possible to gain relief from business rates payments and much of your expenditure in relation to fitting a store out would be tax deductible if you ensure you apply for the right capital allowances. You’ll also need to recruit staff who have distinct and different roles. Indies are usually good generalists but as things expand you will benefit from specialists.
How do you choose between a regional or national strategy?
In my opinion it is easier logistically if you go for a regional strategy but arguably with on-line the next market could be another major city rather than the nearest town.
This article first appeared on Inside Retail, a new portal to support independent retailers, launched by Ascential Events owner trade shows such as Pure London and Spring and Autumn Fair.