After nearly a year of planning, the A.S. Council will vote this week on a charter for its new enterprise: an apparel store scheduled to debut in Price Center by Fall Quarter 2010.
Campuswide Senator Tobias Haglund said the total budget for the store has not been finalized, but estimated that initial operating costs could reach $100,000.
“The starting cost will be the largest that A.S. will have to invest in the store,” Haglund said. “The by-year cost will be significantly lower.”
According to Vice President of Finance and Resources Peter Benesch, rent for the store’s 650-square-foot Price Center location — above Price Center Theater and directly adjacent to Outback Adventures — will be $1 to $2 per square foot, for a total cost of $650 to $1300 per month.
Haglund said the store is not expected to turn a profit within its first 12 months of operation.
“It’s obviously not going to be profitable in a year, because you’re not going to have $100,000 in a year,” he said. “I mean, you might, but business logic would say probably not.”
Benesch agreed.
“The sole purpose of the A.S. store is not to make profit — it is also to provide the students with a service,” Benesch said. “But not at the expense of being able to at least maintain itself financially, as well as reserve capital, should it require any improvements in the future and so on.”
Councilmembers originally predicted that the store would open last December. However, the opening was repeatedly pushed back as councilmembers had trouble finding information to draft a business proposal.
Benesch said VP Finance and Resources-elect Andrew Ang will have to invest a large amount of time to open the store by fall.
“Hopefully, if we can get this approved … by the end of the quarter, we can have it open by Fall Quarter,” Benesch said. “The next Vice President of Finance would have to hit the ground running for the store to open in the fall.”
Ang said that he is interested in gauging student opinion in a follow-up review of the business next year. He said he will try to find out how receptive students are to the store, alongside its financial figures.
“From what I know, the criteria I’ll be looking for is how popular I guess you can say it is with the general student body, how often it is being used and how the student organizations take advantage with the resources there and how much profit it makes,” Ang said.
The store’s charter includes a clause calling for a review of the enterprise after the first year of operations, which the council will use to review the project and determine whether to renew the charter.
Haglund said the one-year charter reapproval plan may prove problematic, as next year’s council will be comprised of representatives unfamiliar with the project.
“The concern with the one-year trial thing is just making sure we like it enough to keep it around,” Haglund said. “We thought, originally, that would ease people minds about how much money it might cost to open the store and making sure it’s going to be profitable.”
Haglund said the one-year charter could prove harmful to the store.
“We thought that the one-year expiration date on it — and having basically to reapprove the charter in a year — it would give the council a chance to look it over again,” Haglund said. “But the reason it might not be as good is because you will have one council approve the one-year charter ,and it’s going to be another council that [does it] next year. We’re not exactly sure how good that is.”
Additional reporting by Connie Qian.
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