You can get better at about everything else in retail 💪

As readers of this newsletter probably know, the Old Navy's and Neiman Marcus’ of the world have a lot of science behind their art of retailing – from buying plans to inventory markdown schedules to marketing strategies. The Hub brings these tools to smaller and newer boutiques through its educational programs and network of service providers like Pedal. 

The annual Boutique Hub Summit took place over two days in early June in Dallas, and I had a fantastic time. I learned a lot, including:

• DFW is a nice airport as a final destination despite it being the sixth ring of hell as a connection airport.

• The tortilla soup at the Renaissance Dallas hotel restaurant is really good.

• 
My brain breaks down at the conversion of EST to CST. Send me to Europe, no problem. Send me to Central Time, and I’m straight cornfusion. (Yes, CORN, it's a level past regular confusion)
• At a convention of boutique owners, my “very cool” outfit choices made me look like a Cub Scout, except for my pink sequined overalls which slayed.


Okay, I also learned a lot about running a successful independent boutique in 2024. As in life, even when you think you know a lot about something, there’s always more to learn.

For two days, I listened to practical, actionable guidance from super-knowledgeable industry experts, and I kept thinking to myself, why isn’t anyone talking about the lease?

I mean, it came up tangentially – in a cash management seminar, for instance, occupancy expenses were identified as one of the core four expense categories…but that was about it. 

In Pedal-land, retail real estate is at the center of everything (obviously), and we are always able to connect the threads back to it…so why wasn’t anyone else? 

💡 Then it hit me – when it comes to learning methods and strategies to improve your boutique’s business, the core presumption is that either (a) your lease is not a problem or (b) if it is, there’s nothing you can really do about it…at least on a day-to-day level.

You can, however, get better at every other part of running your business…you CAN always change and improve:

• Mindset

• Brand

• Sales strategy

• Selling skills

• Marketing strategy
• 
Content quality

• Inventory and buying strategies


❌ You CAN'T always change or improve your rent and lease. That's the whole point of a lease, and that’s why it’s so important to get it (as close to) right as possible the first time.

Yes, you can renegotiate things when your lease expires. Yes, you may have some flexibility during a renewal. But you never have as much room to maneuver as you do before you sign the thing.

Here what this looks like in real life: 

First, remember that "occupancy cost" is just your total rent divided by your gross sales: Occupancy % = Total rent / Total sales

Let's say your finances are struggling, and you can see that your occupancy cost is too high (for a boutique it should be about 10% or less)…the only real way that YOU can improve this metric is to increase your sales. 

Can you ask your landlord to reduce your rent? Of course. Do you have any control over whether they agree? No.

And not to be a total Debbie Downer, but when it comes to what you can control – namely, increasing your sales – your lease can restrict you there, too. 

☕ Want to add a coffee bar to your store? Great idea, does your lease’s Use clause allow it?


🪧 Want to add a sandwich board out front to drive traffic? Great idea, does your lease’s Signage Criteria allow it?


🚙 Want to offer your customers reserved parking spots? Great idea, does your Common Areas language allow it?


See my point here? The lease affects so much beyond just the rent…it affects many elements that govern how you can grow, change, and improve your business. 

Starting a new business is a cost- and time-intensive venture, and there are lots of things you can (and will have to) figure out later… but the lease is not among them.

🚚 Wherever you are on the road to brick-and-mortar – don’t cut corners on your lease. 

• Develop your real estate strategy through your business plan. Clearly define your budgets, target market and location criteria, physical site criteria, and timeline.

• Watch our YouTube channel to make sure you understand the leasing process and the deal terms.
• 
Hire professionals to help you negotiate the lease terms that set your business up for success. 


Do lease issues arise even when you’ve done it right from the start? Yes, sometimes they do. And if that happens to you, we can help. But like most things in life, building something correctly from the start is always easier than doing damage control later.