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“ Preparing the Emerging Business Owner for Participation in the Concession Space ”

Meeting Host and Presenting Sponsor. “ Preparing the Emerging Business Owner for Participation in the Concession Space ” Presented by: John Cugasi, SVP Planning and Development, The Paradies Shops. December 3, 2012. Overview. Meeting Host and Presenting Sponsor.

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“ Preparing the Emerging Business Owner for Participation in the Concession Space ”

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  1. Meeting Host andPresenting Sponsor “Preparing the Emerging Business Owner for Participation in the Concession Space” Presented by: John Cugasi, SVP Planning and Development, The Paradies Shops December 3, 2012

  2. Overview Meeting Host andPresenting Sponsor • Airport vs Street business model differences • Concept Strategy • Due Diligence efforts • Adding Value as an owner (Roles and Responsibilities) • Preparation – Steps you can take now

  3. Airports vs Street – Know the Difference!

  4. Key Business Model Differences • Sales per square foot • Margin/Pricing • Rent • Labor Cost • Operating Hours • Construction Costs • Distribution

  5. Concept Strategy Considerations • Enplanements • Capture rate • Historical spend • Business vs Leisure • Dwell Time • Airport Preferences • Detailed specifications • Local vs national • Design Criteria and Branding

  6. Concept Strategy Travel Store/Convenience – Z Market

  7. Concept Strategy The Decline of Books and Reading Materials

  8. Concept Strategy Localized Travel Market – Sweet Auburn Atlanta

  9. Concept Strategy Food focused concepts - Napa Farms SFO

  10. Concept Strategy Electronics Explosion

  11. Concept Strategy Jewelry - Pandora

  12. Concept Strategy Personal Care – Kiehl’s

  13. Concept Strategy Fashion – Michael Kors

  14. Due Diligence Efforts

  15. Due Diligence: Do you understand and agree with the pro forma? • Sales per enplanement rationale • Margin - does it reflect pricing strategy? • Expense items – in line with historical experience? • Capital investment levels – realistic and reflecting airport environment and size of store? • ROI and payback – are these acceptable and consistent with your business plan?

  16. Due Diligence: Are you intimately familiar with your lease? • LOD and lease line considerations • Operating hours • Use Clauses • Take back or use of additional space • CAM, Marketing or other charges • Distribution charges and policy • Protection in event of serious traffic loss

  17. Ownership Responsibilities - Pro Rata investment in all aspects of the business • Capital Contributions • Roles and Responsibilities – day to day management of the business • Major business decisions • Ongoing communication

  18. Attributes of a Successful Airport Retail Business Owner • Knowledgeable and conversant with business details • Strong and consistent presence in the business • Customer focused • Responsive to the business and airport’s needs • Innovative – Continuously looking for improvement • Outstanding communication skills • A passionate sense of community

  19. Community – a key differentiator!

  20. What can you do now to prepare for a possible opportunity? • Get Certified - Codes matter! • Meet with the airport • Attend all relevant public meetings and outreach events • Obtain a list of attendees, research them and reach out to those of interest • Spend time watching and observing airport businesses • Get copies of airports concessions reporting (if available) • Get a copy of a recent airport lease and review carefully • Develop and continue to own your business plan

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