Stephanie's Boutique

Q1. Give the pluses & minuses of each location?

The Downtown Arcade

Advantages

1) City’s central business district.

2) Arcade renovation has been proposed under a master redevelopment plan, which new departmental store & offices.

3) Includes a 3-level shopping facility with 68 shops & a series of restaurants, a convention center & validated parking.

4) High visibility, situated near main ground floor entrance.

5) Moderate rent at $20/sq. ft or $18,000 annually

Disadvantages

1) Has been ailing for some time, vacant for past 15 years.

2) If sales exceed $225,000 rent will calculated at 8%.

3) Minimum lease period is 3 years

Tenderloin Village

Advantages

1) Gentrified urban area of the city. Trendy enclave.

2) Stephanie’s lives here & it’s a neat & comfortable neighborhood.

3) Excellent visibility, available site is on the Village’s main street.

4) Least rent amongst the 3 locations, at $15,000 annually with no coverage clause.

5) Landlord knows Stephanie & lease period is shortest (2 years).

Disadvantages

1) High Competition, the neighborhood already has three small women’s specialty clothing stores

Appletree Mall

Advantages

1) Successful regional center, located just off a major interstate highway,about 8 miles from Downtown.

2) It has 3 department stores & the site available to Stephanie is two doorsfrom the local department chain’s outlets.

3) Largest space as compared to other two sites, at 1200 sq. feet.

4) Mall sales growths are 12% ahead of last year.

5) Escape clause if sales don’t reach $411,500 after 2 years.

Disadvantages

1) Very high annual rent at $28,800 ($24 per sq. feet).

2) Additional charge of 1% of sales for mall maintenance & promotion.

3) Longest minimum lease period (5 years).

4) Very