Do or Die

[fergusmum]

Advice needed please. I have a clothes shop which has been spiralling down for a few years & i am almost at the bottom . We are in a secondary location, at the opposite end to all the banks, large shops. Just before xmas our neighbour a national off licence chain closed down adding to the chain of empty shops between us & the busy end of town & since then our sales have really suffered, also the snow hasn't helped. I am now at a stage where im ready to shut up & ship out, even though this will leave me with huge personal debt & poss bankruptcy?? There is a shop available to let, slap bang central to the banks, the free parking, the weekly market & very popular farmers market are literally on its doorstep & it is a beautiful old victorian fronted shop, prob the best shop in town (imo) but of course it comes at a cost. It is probably 4 times bigger than where we are now, so i could expand my ranges, especially accessories, but at the moment our rent is £4K inc of vat, rates £1K, the other is £22K + vat (asking, i would offer less) & £9K rates!!! Extortionate. It was a clothes shop (for 2 years) before it closed last jan, so is all still set up just to walk into. I know we would be so much busier down there,but how much so?? There is only 1 national clothing shop in the town & 1 very small independant. I guess what im asking, (sorry for rambling) is, seeing as i am at rock bottom now, is it better just to give up or take 1 last shot at success, even if i fail, im in debt now anyway, so would a bit more hurt???? Thanks for listening lol.

 

[GillespieBS]

I would consider why the previous tenant of your proposed shop has gone? Perhaps there just isn't the market unless you are appealing to a completely clientele.

 

whats the population of the town.?

Earl

 

[Lee Jones Jnr]

It is easy to say but if your about to bite it anyway then why not go for it?

 

[saxondale]

It is easy to say but if your about to bite it anyway then why not go for it?

will you supply the stock too?

 

[fergusmum]

Well done, i knew someone would pick up on the fact that the previous clothing business in there has closed. They were selling ex high street clothing, ex M & S, Wallis, Next etc, did really well to start with, but as the recession hit, these big stores started cutting back on waste so there was less stock & choice to be had for them. I now sell this stuff (nothing like a bit of plagiarism lol) but we also have other ranges to add to this so we are not solely reliant on these suppliers like they were. Plus i was thinking about adding some childrens wear which i can get cash & carry also. I would never go back into forward ordering stock 6 moths in advance like i used to with some labels we used to stock, as this is how i got into debt in the 1st place. Plus the previous owners took 2 or 3 luxury holidays per year, bought new cars etc. I think they were pulling too much out in salary, also as both husband & wife worked there, they would have needed a decent wage, me I'd be over the moon with £75 a week if i was paying my debts off too. (its more than i take at the mo!) The previous tenants were the landlords daughter & son in law, do you think it would be cheeky to ask to see a copy of their last years takings??

 

[london lady123]

Advice needed please. I have a clothes shop which has been spiralling down for a few years & i am almost at the bottom . We are in a secondary location, at the opposite end to all the banks, large shops. Just before xmas our neighbour a national off licence chain closed down adding to the chain of empty shops between us & the busy end of town & since then our sales have really suffered, also the snow hasn't helped. I am now at a stage where im ready to shut up & ship out, even though this will leave me with huge personal debt & poss bankruptcy?? There is a shop available to let, slap bang central to the banks, the free parking, the weekly market & very popular farmers market are literally on its doorstep & it is a beautiful old victorian fronted shop, prob the best shop in town (imo) but of course it comes at a cost. It is probably 4 times bigger than where we are now, so i could expand my ranges, especially accessories, but at the moment our rent is £4K inc of vat, rates £1K, the other is £22K + vat (asking, i would offer less) & £9K rates!!! Extortionate. It was a clothes shop (for 2 years) before it closed last jan, so is all still set up just to walk into. I know we would be so much busier down there,but how much so?? There is only 1 national clothing shop in the town & 1 very small independant. I guess what im asking, (sorry for rambling) is, seeing as i am at rock bottom now, is it better just to give up or take 1 last shot at success, even if i fail, im in debt now anyway, so would a bit more hurt???? Thanks for listening lol.

On first reading of your post, my first thought was 'no'.

I have been in clothing since 1986 though, probably different markets to yourself.

I was late 'getting' the whole online thing, esp how popular it is with younger people. I attended a lecture by Mary Portas 18 months back and even she said she got caught out with it.
I thought you have to see, feel and try...for many it is the only way but companies like asos and Boohoo (owned by a major supplier who you may know if you go to London or Manchester buying) are really kicking a$$ and offer customers so much choice.
We supplied an e-tailer for over a year and the sales volumes blew me away.

If you were struggling for space and couldn't keep up with demand, then I would say go for it, expand your ranges and customer base. In a small town, surely everyone knows where you are?
Also, go for it if you a surplus in the bank...but not if things are a bit knife edgy at the moment.
I want to be positive but it worries me as it's such a huge leap in fixed costs. You would need to have 5 times the stock budget available to open too.

If it's been empty for 2 years, how about asking the LL f0r a 6 month let rent free and you will cover the rates. He may say yes....and you get to test the water at less risk.

 

[movietub]

Its not do or die at all, its 'do and possibly die, or don't do and definately die'!

Is that a tough choice?

The only reason I can think of for cutting your losses is if the potential bankrupcy as is, would probably not lose you your home - but an even bigger one would. If your screwed either way, then why on earth not go for the last chance of success?

There is also the business to consider of course. What if it is a good business that was always doomed to fail due to poor location? Do you believe if you had good footfall you could attract enough customers to make the debts manageble? It all comes down to calculation, it may be that the best way forwards is to borrow more (Gordon Brown does it )

I've been bankrupt by the way, its not the end by any means - was almost the start in my case. If you belive in the business you should press on with no fear, just determination.

 

[OldWelshGuy]

If the shop is empty, and there are lots of other empty shops, and it is kitted out, then why not negotiate with the owner for a trial period? Currently he has no revenue, at least he will get an improved property and no revenue, and if it works, then he gets income.

If you don't ask, you don't get.

 

[fergusmum]

Thanks everyone, lots to consider, but am gonna go for a look round & sound out the agent about a trial period, although im sure he'll be pushing for as much money as poss!!

 

[london lady123]

Thanks everyone, lots to consider, but am gonna go for a look round & sound out the agent about a trial period, although im sure he'll be pushing for as much money as poss!!

That feels to me the bestest option and I know plenty of LL who will take a 'fill in' tenant to look after the place and pay the rates. They will want to keep the To Let sign up and may want to do a months notice but as other poster said, don't ask, don't get.

 

[fergusmum]

I just pm'd you about boohoo??

 

[london lady123]

I just pm'd you about boohoo??

I replied...they won't admit it though..it's in a seperate company.
Are you North or South?

 

[Frimley111R]

Have a look at the 'What NOT to do...' thread on here. There's load of advice about this.

 

[Beachcomber]

Lots of talk about whether to move premisis or not but no mention of what marketing you are doing?

Is it worth stepping up your advertising / leafleting / promotions to draw people in before taking on a 4x increase in costs?

Are there new ways to can boost your current shop - even a new sign and lick of paint can work, people get so used to seeing the same old shop fronts every day they don't notice them anymore - a revamped shop would catch the eye and renew interest (and only cost a couple of hundred quid)

....why not negotiate with the owner for a trial period?

Not only will the landlord not be getting any income, but he will be paying vacant rates & poss. other costs like utility standing charges etc. so it should be easy to negotiate a short term trial lease which will at least cover costs.

 

[KidsBeeHappy]

I was in a very similar situation about a decade ago with an antiques shop. With ours it was a choice between the two premises that you are talking about.

Our rent was £27k, plus rates etc v £3.5k rent, plus rates etc. I worked the financials and worked out that it would have to generate an extra £100k of revenue per anumn before it would generate £1 of profit in our pockets, and we decided that for our market, that extra expense wouldn't generate that amount of extra turnover. (Antiques is a fickle market, and one that tends to encourage regular visitors, almost regardless of where you are, so it's a bit different in the extent of the two opposites.)

But, the best thing I can suggest is sit with a pen and paper and really crunch the numbers, including shop fittings, security, water rates (URGH! MY PET HATE!!), and all the other incidentals. And then work out whether you want to comit to having to generate that much extra revenue.

Also, read the small print of the lease. The last thing you need is that if it all does go pear shaped you're locked into rents for the next 22 years!

 

[london lady123]

What's your current T/O on the 4k rent? ....if you don't mind me asking.:redface:

 

[DAbusinessconsultant]

I would look at the marketing you are doing as well. Who is your target audience? Does it supply males and females of all ages - or is it more specialsed to young males who are into the urban scene, or older ladies from a more upmarket background.

If you are targetting too many different consumers then you are not targetting any. I know that I would not go and look for clothes in a shop that my nan looks in (with the exception of Next) and I can't imagine her shopping for her pullovers in say Bank or Republic.

With ways to raise your profile in the community why not offer a modelling competition or something for new posters to be put up for the summer collection and use local aspiring models.

Try and do some below the line marketing like getting in to schools and talking about business in the recession etc.

A website may be an option depending on your products - if it is things like ex supplier stock then it may not be 'special' enough to compete. A facebook group may be an option though and you can punt sales and special offers through that - it's cheap and even if it fails it cost you nothing.

Seasonal promotions are a good way - with Spring coming up you can implent lots of ideas, a spring clean of the old and look forward to a fresh new business.


On a financial level - try and negotiate a lower lease. They will know what sort of climate it is at the moment and even if you can negotiate a 6 month lower lease then it will be a start. It is better than it lying there and them having to go though an agent to lease it again (costing them a fee as well). Offer to redocorate a bit - a splash of paint and a new sign won't cost a lot but will help you stand out. Decorate it to attract your target audience as well. Don't use neon colours etc for older people and similarly don't use deep rouges for young trendy men.

Look at specialising in certain areas. Try and get products that can't be sourced nearby or exclusive deals with local designers. Eg - now selling once of designs from the up and coming designer....... or the only stockist of XXXX in XXXXXX at the lowest prices.

Where are you located by the way? 4k a month seems a fair amount for a high street plot!

 

Ask if you can put something in the shop window you are thinking of moving to advertising location etc of your present business. This while you negotiate for a deal. The response will give you some clue as to whether you are going to get trade from the new location.

 

[KidsBeeHappy]

Can you share premises? Perhaps with a shoe shop? Or a accessories shop?
Go halvers on the bills and the staff, and double up on the customers??

 

[Chris Ashdown]

How about the obvious, change over to e-commerce, just select some small specific area and give it a try, your already in the rag trade and with low sales probably standing around all day waiting for customers to drop in, at the same time you could be building your web shop selling anything to start with
Suggestions

Underware
Gloves
Leather goods
Childrens clothe
Party gear for 16-25's
Kitchen wear
Workwear
Jumpers
Cardigans
Fleece
Polo Shirts
Sweatshirts
Swimming costumes
Rain coats
and so on, low start up cost and when it takes off close down bricks and mortar shop

 

[DAbusinessconsultant]

I would say the only thing with doing this is that having a high street shop means you can compete with competitors on service and ability to try clothes on, mix and match outfits etc. Moving this online takes away most of your competitive advantage and would mean you would compete with all the other internet stores - if you are not selling unique enough clothing or have a nice niche then it will be awfully hard to sustain as a full time business. How often do you buy clothes from 'high street' stores that have no street presence? Can you name any even? You also have the likes of Ebay to compete with which makes it even harder.

Have one alongside the shop by all means but I think closing the shop and relying solely on ecommerce is a big danger.

 

How about the obvious, change over to e-commerce, just select some small specific area and give it a try, your already in the rag trade and with low sales probably standing around all day waiting for customers to drop in, at the same time you could be building your web shop selling anything to start with
Suggestions

Underware
Gloves
Leather goods
Childrens clothe
Party gear for 16-25's
Kitchen wear
Workwear
Jumpers
Cardigans
Fleece
Polo Shirts
Sweatshirts
Swimming costumes
Rain coats
and so on, low start up cost and when it takes off close down bricks and mortar shop

Agreed the added advantage is that everyone in the world ( well mabe not the queen ) will know where your bricks and mortar shop is.

1.5 billion compared with however many in your town.

Earl

 

[fergusmum]

If you are targetting too many different consumers then you are not targetting any. I know that I would not go and look for clothes in a shop that my nan looks in (with the exception of Next) and I can't imagine her shopping for her pullovers in say Bank or Republic.

Where are you located by the way? 4k a month seems a fair amount for a high street plot!

Its 4K a year, which is nothing i know, but somedays we're lucky to take £20!! In fact 2 days in jan (SNOW!!) we took £1.75 & it cost me £90 in wages! I think we have just had the worst 2 months of the last 10 years though & im just totally fed up. I quite agree with the not targetting anyone comment & think therein lies most of our problems. We used to sell young trendy pub & club wear but decided to diversify a bit into an older age group as we were getting loads of older tourists wandering in in the summer & saying it was too young for them. But i think this has now alienated our younger customers?? Its like i said before though because there are hardly any other clothes shops in town I am trying to be all things & i dont have the space to do that, where as this new shop is split into front & back & could work better. Thanks for all the other advice too,it has been noted, I have taken off the rose tinted specs today when i was outside the shop this afternoon & it was quiet even in the "busy" section, although it was tues & threatening to snow. I've got a veiwing on fri, but there is no i am offering anywhere near the asking rent, I've decided i don't want it that badly. (well i do lol, but head over heart now)

 

[KidsBeeHappy]

It sounds like a reply of one of those Mary Queen of Shops episodes!!

 

[fergusmum]

Can you share premises? Perhaps with a shoe shop? Or a accessories shop?
Go halvers on the bills and the staff, and double up on the customers??

Yeah had thought of this one thanks, might have someone in mind, but its always a case of trusting someone & them not doing a moonlight flit if its not working out?? Am trying to talk a friend into doing childrens wear, but how bad would i feel if it went belly up!

 

[fergusmum]

It sounds like a reply of one of those Mary Queen of Shops episodes!!

I applied to be on that show,but wasn't doing badly enough apparently, shame if i'd know i would have tried to fail harder!!

 

[wordperfect]

Hi, I can't comment too objectively as I am way away from your "REALITY" but I am going to side with the E-commerce suggestions.

My sister in law has a child's and babies shop in her home town small by standards here, probably huge by yours, but everything is relative, she had more competition!

It located within 20 paces from the hospital, which treats everyone as well as delivering babies. She had the shop for over a decade and was well known made a good living but 2 + years back sales fell, she was talking about getting out.

We convinced her to go On Line and set her up with a site on BAIDU, a free e-commerce site.
It was a success, she is not doing millions but orders come from all over China so has increased her customer base
enormously. She has also added a few "Complimentary Lines" such as children's books, baby bottles and also added these to her main street store, which has also seen an increase in business.

So on the basis of that, the fact that On line clothing stores are "The Thing" now, [depending on your target market of course,] and that you have REALLY limited options, I also subscribe to the "What the hell " camp, try anything, everything, who knows.

 

[fergusmum]

well, if theres any of you out there still interested in little ol me,i've been, i've viewed, i've been turned down, lol. well not interested in a trial of any kind, didn't even mention the FREE word! He says it would cost him approx £3500 in agents fees(which i did nearly offer to pay, but actually decided not to engage my mouth b4 my brain for once & think about it). He did say a couple of nationals had looked round but didnt like it because it is split level with a bit of a hidded corner, so it does make a case for an indi to have it, but at that price i do think he'll be extremely lucky. anyway as i came out i bumped into a girl who used to work in there,so thought, aha opporttunity,so jumped straight in with, oh i ve just been to look round your old shop, just wondering how much money you used to take lol. anyway we ended up going for a coffee & she just happened to be meeting the 2 other people who used to work in there with her, so i have discovered that best day when it was at its busiest a couple of years ago was £3,000 (sat) odd times £1000 midweek, worst days £150-200, im afraid i cant remember if an average figure was mentioned, i should have been taking notes. Not sure if im any further forward in a decision but its nice to have a bit of inside info lol.

 

[BusinessIdeas]

well, if theres any of you out there still interested in little ol me,i've been, i've viewed, i've been turned down, lol. well not interested in a trial of any kind, didn't even mention the FREE word! He says it would cost him approx £3500 in agents fees(which i did nearly offer to pay, but actually decided not to engage my mouth b4 my brain for once & think about it). He did say a couple of nationals had looked round but didnt like it because it is split level with a bit of a hidded corner, so it does make a case for an indi to have it, but at that price i do think he'll be extremely lucky. anyway as i came out i bumped into a girl who used to work in there,so thought, aha opporttunity,so jumped straight in with, oh i ve just been to look round your old shop, just wondering how much money you used to take lol. anyway we ended up going for a coffee & she just happened to be meeting the 2 other people who used to work in there with her, so i have discovered that best day when it was at its busiest a couple of years ago was £3,000 (sat) odd times £1000 midweek, worst days £150-200, im afraid i cant remember if an average figure was mentioned, i should have been taking notes. Not sure if im any further forward in a decision but its nice to have a bit of inside info lol.

Have you considered the question of VAT? if you increase your T/O you are going to have to be VAT registered and this is quite a big step, and can actually decrease your competitivity.

 

[fergusmum]

Have you considered the question of VAT? if you increase your T/O you are going to have to be VAT registered and this is quite a big step, and can actually decrease your competitivity.

Yes, thanks, i know it's all extra cost. we were vat registered a couple of years ago,when things were going better, but i was just on the flat rate scheme, whereby i paid 5% of my takings which was easy enough, but would (hopefully) take too much to qualify for that this time. God, im backing out more & more each day lol.

 

[BusinessIdeas]

Ok here's an 'off the wall' idea for you. Take the goods to the customer instead, buy a big van with signwriting on the side advertising what you do and go park it in some of the estates where you think your customers hang out (near a school might be good). You could even let them have a limited form of credit! you dont even need a consumer credit licence if you offer to take the money over four payments or less within a year.

 

[fergusmum]

Thanks crewgirl, i was talking to someone today who suggested a similar thing, taking the stock out in clothing parties,visiting peoples houses, something to think about. x

 

[popunder]

Thinking back to the Mary Portas series, I don't remember her ever advising the ailing retailers to sell up and quadruple their outgoings by buying bigger and better-located premises! It was all about knowing who the products were aimed at, focussing hard on those people, smartening up the shop and displays, and then re-launching and promoting the business.

In my job I talk to lots of local businesses every week, and I find that the retailers often think they don't need to market themselves, just because they have a shop front. Wrong. You said you're in a secondary location, so people need to proactively decide to visit your shop. You need to give them reasons to seek you out, and then communicate those reasons.

I'd keep well clear of the big shop. There are plenty of shops in secondary locations doing well, so that's not the problem. Ask friends or drag passers-by in to cast a critical eye over your shop and stock, ask them what they like and don't like; you might learn some interesting lessons. Re-watch the Queen of Shops series and then, if you're going to spend money on anything, just think "What would Mary do"!

 

[Chris Ashdown]

Popunder speaks a lot of sence, what are you doing wrong, go back to basics, customer base, stock, window display, staff attitude, Shop floor, add on sales etc and prices

 

Sorry if I've missed part of the thread, but if you are in debt and facing bankruptcy, how are you going to fund this expansion?

Otherwise - I woud go for it!

 

[fergusmum]

Thanks for the last 3 posts, i was just thinking out loud really, with what i would like to happen, but to be honest i don't think it will. I can't face the thought of shelling out more money (which i don't have), for something which may or may not be better? These last 2 months really have been diabolical, with all the snow, the town is absolutely deserted some days, (we are quite rural) but hopefully the tourists usually return march-april ish which will help & i've realised my stock offer really is not targeted to anyone at the moment, so am going to improve that asap. Trip to manchester on monday i think! Thanks everyone, its nice to know there are so many people willing to help x

 

While you are in Manchester Look at or Buy the book
"Retailing for Dummies"
I think it will pay for itself