View Full Version : Opening a luxury childrens shop in this economic climate?

07-02-2009, 09:03 PM
I am looking into opening a 'designer' boutique for children, selling the more high end labels and catering for ages 0 - 8. My partner thinks I'd be mad to open a luxury business in this economic climate and I can't say I don't have a lot of reservations. I know retail is a very competitive arena to be in but I wouldn't be trying to go against the likes of the supermakets or primark selling day to day clothes as mine would be more designer.

I don't have retail or fashion experience and to be honest at the moment it's all seeming like pie in the sky and whilst I know its not easy I don't think its unsurmountable - I have passion and desire to suceed. Location wise we are in an northern market town but it does have its very affluent areas and I really can see it working?

Any advice anybody?

08-02-2009, 11:45 AM
No replies.....I guess that says it all then!

OK...back to the drawing board :-/

08-02-2009, 12:29 PM
Hi there,

If you decided to actually open a shop, you would be looking at a very high startup cost, for rent, fixtures & fittings, rates, utilities, stock, staff etc.

My suggestion we would be to consider opening an online shop.

This would be a much more cost effective way of running your business, and your startup costs would be much lower, as you could run the shop from home.

08-02-2009, 12:53 PM
Originally posted by julialove
No replies.....I guess that says it all then!
You posted on a Saturday night and only allowed 12 hours for a reply, you really need to give it a few days sometimes!

This may be a viable business :
If you can keep your initial costs low
If you can get a pre-start-up grant
Get cheap financing, if you need it
Consider a commission operation from a local retailer

Although you may want your own shop, a cheaper option is to look at the like of in-shops and rent one of their units
Providing they don't have a similar such shop already in the unit, this could be a potential gold mine
Sadly, visitors to these shops are typically low income, but with a good website (from whch you could also sell online, ideal for when you are quiet) and advertising people will seek you out
Word of mouth is golden, especially in this type of specialist market

08-02-2009, 12:55 PM
I can relate to your proposed business venture as part of my product range includes cloting.

Aside from the normal setup costs, as mentioned above, there are a few other considerations that spring to mind with me:

You haven't said whether you've done any market research yet, but this will be essential if you are to plan ahead properly. You need to assess demand and consider your competition - e.g. Next.

Do you already know the brands you wish to stock? Have you contacted the suppliers or distributors for these brands to find out the criteria for opening a trading account with them? My experience of leading brands is that they have quite strict rules for opening accounts and will normally have a minimum annual spend. There are good reasons for this stance, but I won't go into them right now - however, some have definitely reduced (or removed) their annual spend figure.

I assume you keep a close eye on the news and have seen all the doom and gloom within the retail sector. This is bound to give you a fair indication of the demand that's out there. I have to admit that it may be more difficult for the big operators to adjust to a recession than the independent store, so this could be one possible positive. However, people are spending less at the moment - cloting outlets like Primark are doing well because they are cheap and is a fair indicator of where people are spending their cash. Could you compete with this?

The short answer is, personally, I don't think it would be a good idea to open a business like this right now.

Some food for thought for you though - in the golf industry, where I operate, we are seeing a lot of 'clearance' stock offers by the big brands, as they look to move stock on that they were left with or over-produced and can't sell to retailers due to lack of demand by the public. I expect that the majority of manufacturers have adjusted their forecasts by now and will have reduced their production numbers. There will however be some more companies getting into trouble and may well look to push out a load of stock at much cheaper rates, just to give them more breathing space in terms of cashflow. You ideally need to be fairly well connected within the industry to get access to deals like this, but if you can get in on it, it could be a possible opportunity. A few of my suppliers work on this basis, they buy clearance stock only and try to move it on a quickly as possible to the retailers. The stock they are offering is becoming more and more 'in season', a possible sign of tough times in retail.

08-02-2009, 03:04 PM
Thanks all for taking time to reply to me. Sorry if I seemed impatient lol !

Mike - I can see what you mean about being online espcecially in that its mcuh cheaper to start but I don't know how I'd stand out from the 1001 kids boutiques/clothes shops that are already there. It would be near impossible to get good SEO rankings and even if I did I'd be one of hundreds where as to open a bricks and mortar shop I'd be the only one in the locality and would have the passing trade.

I already have an online shop (nothing to do with childrens wear) and even though its in a fairly niche area, I really struggle to make money from it and its really only a partime venture that brings in pocket money.

m8internet - thanks for your advice. Not sure I could get a grant though as I doubt I'd qualify. By in-unit do you mean a little row of undercover shops? And is a commission operation renting floor space in an establised shop? I think an online shop would be a good asset with a real shop but as above I am dubious about it surviving on its own.

Shamrocker - I'm in the very early stages and its not much more than an idea I'm researching at the moment. One thing that does give me hope is that there is a demand is that there used to be a similar shop to what I am proposing but it closed down last year after about 5 years trading due to the people moving to another city. As I understand it used to do very well.

I don't see Primark and Next as being in the league as what I would selling, the clothes would be a lot more exclusive than that although of course I cannot discount them entirely as competition.

No I haven't contacted suppliers yet, I'm just sounding out ideas at the moment. Thanks for your honesty about starting out!

08-02-2009, 03:40 PM
Hi there,

Although I agree, initially an E-Commerce website shop would not be ideal, it is a relatively low startup option to consider.

Also, because you would be dealing with luxury shops, as opposed to your every day primark example, SEO would be a lot easier than if you were just a childrens clothing shop.

08-02-2009, 04:05 PM
I'd just worry people would go onto the likes of e bay for their designer cut price bargins?? Also there does seem to be quite alot of 'boutiquey' shops online aimed at the more high end kids clothes market.

08-02-2009, 04:17 PM
Perhaps you could focus on a particular area, or maybe a particular age?

This would certanly help :)

08-02-2009, 05:02 PM
By commission, you supply the stock to a local shop
If they sell any, the retailer keeps the a % of the sale
You then replenish as and when they require
At the end of the agreement you then get all that stock back

Another method is "sale or return"
You then sell the initial stock to the them
Any stock they sell, they keep the profit
Any stock they don't sell, they return to you
You then replenish them as and when required
This is more profitable, but does require more maintenance

08-02-2009, 07:17 PM
Thanks Mike - good idea. I will give it some more thought.

Thanks m8internet - I'd not heard of that before!

08-02-2009, 08:25 PM
Hi Julia,

I personally think you'd be bonkers to pursue this venture at the moment, people just dont have the money to spend on designer kids clothes. I have a 5 year old child and although I can afford it, I wouldnt shell out on obscene designer price tags.

You say you're in the North near affluent areas, I'm also from the North and well connected with Wilmslow and Prestbury area, and this Christmas they had to cancel the 25th Cheshire Snowflake Ball because they couldnt sell enough tickets. This is an infamous event for Cheshires well-helled to hob knob, every year tickets sell out months before and VIP tickets even faster, and this year they struggled to sell 12 tables (out of 110).

If you drive through Prestbury/Wilsmow you'll see all the Jags up for sale, the Bentleys, the houses being repossessed. This is because the seemingly affluent have often built their perceived weath from excessive borrowing, and these areas are often stock broker belts many of whom have lost their jobs or had millions wiped off their share values. The last people Id be trying to sell to are the "affluent" because its all a smoke screen - a large number of them are struggling to make ends meet, and you cant make a living from the small minority who are genuinely rich. And of those who are genuinely rich are often a lot older and dont have kids anyway.

08-02-2009, 10:00 PM
Thanks MissFitUK

More good advice! I know what you are saying....I always feel like I've missed the boat and I should have thought of my ideas about 5 years earlier! :-}

09-02-2009, 09:48 AM
If you really want to open a business of some sort, maybe think outside the box. What do people need at the moment? What is missing from the market? What service do you think you can do a damn site better?

My second company that Im researching and just putting into motion at the moment for 2010 is called 'Meals on Heels' and delivers hot, home cooked meals to people in sheltered housing or those who receive government Direct Payments. What better business than one which is paid for by the Government!

I also have another business in line ready for when times get better, called 'The Other Woman' a cleaning company that goes in after tenants vacate and prepare the place for new tenants. My mum has a lot of residential lets and its the bain of her life cleaning the place up before a new tenant moves in.

It doesnt matter what the economic climate is like, there are some things that wont change. Old and disabled people will still need looking after, people will still need somewhere to live, students will still have the most disposable income..... You just have to think outside the box and be one step ahead of everyone else.

Some brilliant books are James Caan and Duncan Bannatynes books, I found them really inspirational and you can get them cheap on Amazon x

09-02-2009, 06:42 PM
Thanks again for your great advice.

You see I wouldn't have a clue about people in sheltered housing or that after tennants move out they leave a mess. Neither would cross my mind in a million years that they are services that need answers for! I suppose its dependant on what you are exposed to.

The reason I wanted a shop is because I currently run a 'service' type business and want to move away from that as it's ok money, it pays the bills but that's about it. Its not financially viable to take on staff and expand as I'd hoped when I first started it. I've tried but the figures just don't add up.

I've been looking at business's for sale and the shops profit figures about about 3 or 4 times the amount my service business brings in!! I suppose thats another reason why having a shop is appealing to me, I'm thinking it would give me a better chance at a nicer standard of living.

Thanks for the book recs - I love inspiration business books! [trots off to Amazon]

25-02-2009, 08:09 PM
I have to disagree with most people in here...

Right now is the perfect time to open a luxury store, as you will notice, we will be rolling out quite a few.

There are 2 reasons for this being the perfect time:

1) There is a credit crunch yes, however what people fail to realise is why the poor get poorer, the rich are getting richer still, it was shown recently that apple have a huge increase on their computer sales (the most expensive). The luxury market is still growing and will peak which you need to get a part of.

2) What you need to remember is that even those that can't currently afford your products are still potential. Because its simple 'i want that' thought that will mean when they have the money in a few months/years they will come to you then.

This, with heavy discounts on stores and construction costs is the best time to open a store just be careful that it is done in the right location.

Les Deux Retail

merrifield Interim Management Limited
04-03-2009, 12:12 PM
I would be happy to assist in developing a business plan and Financial vibility with you regarding this potential business venture.


merrifield Interim Management Limited
04-03-2009, 12:16 PM
Would you agree that it is better to market to "higher end" than to the mid sector within the credit crunch.

Or......at the lower end like Lidl and Aldi have done to perfect business sense?

Not much happening in the mid market.....