Fast forward to 2017 and an attractive opportunity arose to open a fifth store in Kingston Upon Thames. The property was the right size, in a busy location and Kingston as a town ticked the right boxes. Mark, the founder, felt confident it would work and put in an offer and ended up agreeing to a 10 year lease at £55,000 pa rent and a six month rent free incentive.
The shop opened but within a couple of months was already struggling. It was well below its targets on sales and was only making a small profit even within the 6 month period where no rent was due. Once the rent kicked in, it would switch to making a significant loss. A worrying position to be in, especially when locked into the lease for 10 years.
After six months of trying different ways to increase sales and reduce costs, Postmark realised that the shop in Kingston was never going to work. They had 2 options. The first was to try and find another business to take on their lease and to do that they had to start advertising that their lease was available. But after several months of marketing the lease it was clear that no other businesses were interested.
The second and only other option available to Postmark, was to persuade the landlord to terminate its lease early. But the landlord was under no obligation to do this and so Postmark had to buy its way out. The brand also had to write off the capital it had invested in the shop fit. It ended up leaving Kingston nine months after the lease had begun, financially worse off but having learnt some valuable lessons. How did they prevent this situation from happening again?
Hatch first started working with Postmark a few years later. The business wanted to use our Location Insight tool to assess the potential customer density of locations before it had to commit to a lease. The Location Insight tool provides analysis including population size, footfall, average age, age group data, sex, average household income, % of students, % of retirees, competition and more.
To test the usefulness, Postmark wanted to compare the stats for Kingston with the locations of their existing four successful stores and see whether they would have still opened there having had the insight the tool provides. The differences were significant. Kingston had far more competition and a lower customer density and were they to have known this
information before they would have made the same mistake in opening there.
Later, we used Location Insight again, but this time to find out where its next shop should be. Wimbledon Village had comparable demographics to its existing successful stores and Postmark used Hatch Site Finder to find 61 High Street, Wimbledon. Confident the numbers worked using Affordability Checker, Postmark made an offer and secured the property on competitive lease terms.
Using our Leasing Guide, the letting moved smoothly through the legal process. Meanwhile Postmark made use of the Hatch Community Hub to help with its due-diligence in finding a building surveyor and store design team.