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
Meeting Host and Presenting Sponsor
Overview
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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
Airports vs Street – Know the Difference!
Key Business Model Differences
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Sales per square foot
Margin/Pricing
Rent
Labor Cost
Operating Hours
Construction Costs
Distribution
Concept Strategy Considerations
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Enplanements
Capture rate
Historical spend
Business vs Leisure
Dwell Time
Airport Preferences
• Detailed specifications
• Local vs national
• Design Criteria and Branding
Concept Strategy
Travel Store/Convenience – Z Market
Concept Strategy
The Decline of Books and Reading Materials
Concept Strategy
Localized Travel Market – Sweet Auburn Atlanta
Concept Strategy
Food focused concepts - Napa Farms SFO
Concept Strategy
Electronics Explosion
Concept Strategy
Jewelry - Pandora
Concept Strategy
Personal Care – Kiehl’s
Concept Strategy
Fashion – Michael Kors
Due Diligence Efforts
Due Diligence: Do you understand and agree
with the pro forma?
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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?
Due Diligence: Are you intimately familiar with
your lease?
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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
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
Attributes of a Successful Airport Retail
Business Owner
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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
Community – a key differentiator!
What can you do now to prepare for a
possible opportunity?
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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