In this section of the website J&KE will share their knowledge on setting up temporary retail space and on related subjects that will be useful for emerging designers who wish to get their work into retail.
Articles
- What are Business Rates
- CTU's Pop-Up Shop Programme
- How to Calculate Wholesale Prices
What are Business Rates
Business Rates are something you will come across when looking at opening a shop, temporary or otherwise. They seem shrouded in mystery until you discover the key facts which are:
A) Business rates are a tax that is collected on behalf of central government.
B) They are calculated using a properties Rateable Value against a Poundage Multiplier.
C) they are charged on any non residential sites (including advertising sites, car parking space and factories)
The differentiation between central government and local government is important here as you can apply for business rates relief, but this application would be made to the local council where the property is situated and is dependant on the budget of the local council.
Rateable value is set by Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs This broadly represents the yearly rent the property could have been let for on the open market on a particular date normally the 1st april.
and Poundage Multiplier is set annually by Central Government. At J&KE we refer to this confusing formula as dividing a chicken by an orange as it doesn't throw any light on the mystery of business rates but our friend at Camden Town Unlimited advised us that looking at the size of shop frontage and it's location (prime or a bit further out) are good indicators to whether business rates will be high or low and When looking at a specific property the agent should be able to provide you with the expected business rates.
It is also important to keep up to date with the current charges and exemptions surrounding business rates as they respond to the recession. At the moment Business rates will not be payable in the first three months that a property is empty. (our information came from camaden.gov.uk updated Mar 5, 2010) this knowledge can be a good bargaining chip when talking to landlords who's empty properties may soon be costing them money.
we found some further information about business rates at : business_rates_explained
Camden Town Unlimited's Pop up shop programme
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| Joyce, Kethi and Emma at Camden Town Unlimited's plush office |
Camden Town Unlimited (CTU) Ran a pop-up shop scheme which from 1st June 2009 – 1st January 2010. J&KE went to meet Matthew McMillan of CTU to find out more and get some advice from someone with the experience of negotiating with landlords to get access to vacant properties.
Why was the pop up scheme was created?
As a representative for business in Camden town, CTU try to introduce innovative approaches to upgrade the commercial and environmental performance of Camden Town. Driving up footfall, creating a positive environment and social space to sustain businesses, and their employees are key aims. The Pop-up shop programme was born out of the recession, the increased number of vacant properties and challenges to the high street retailers. The long term goal of the pop-up shop programme was to improve the saleability of each premises and attract a long term leaseholders.
What sort of criteria did you have for people involved in your pop up programme?
Participants in the shops must be interested in finding new ways of approaching the challenges to the high street with the ideas that they present rather than just Just filling the shop. The shops must be viewed as a non-typical shops, which inevitably requires a new approach as well as an opportunity for participants to sell their brand, promote themselves through events. The events and shop must generate PR which is good for the profile of the area.
what success did you see during the programme which related to your key aims ? (PR, Footfall and saleability of properties)
In total, the shops have hosted 25 1-2 week shows and over 40 Private Views leading to 50 international media articles.
We don’t have overall footfall data, but we have specific show data: for example Botox 69 attracted over 1000 visitors in three weeks. and Partimi/Trash Vortex turned over £3,500 in their week/Heriott Watt made £3,000 during their residency. Footfall as measured in autumn 2009 was 6000 people per hr on Camden High Street.
For the three properties we used during the Pop-up shop programme we secured a let within 4 weeks on one unit (having previously been empty for 4 months) and within 6 weeks on the other unit (previously been on the market for 6 months). The third unit was taken off the market by the landlord for redevelopment.
What do you think is the future of pop-up shops?
- Brands are getting more involved in pop up shops; With some only operating through short-term pop up shops translating short runs of products to how they are retailed.
- Dual use of shop eg. Artist sponsored to be there or sponsors such as Diesel showcasing artist and their own brand within a shop.
- Experiential retail – shops as an event; transforming the usual retail experience
What advice can you give to others who are thinking of setting up a pop up shop and considering approaching landlords?
Future of pop up shops is dependant on landlords: CTU contacted 30 of which 2 agreed.It is key to understand the concerns of landlords when attempting to negotiate with landlords despite their properties remaining vacant there are drawbacks for landlords entering into an agreement for a short-term let:
- Insurance risk
- Agents get no fee from renting free shop.
however with our scheme the advantages were visible with the Vacant properties were let quicker with a pop up shop promotion than similar properties that didn’t.
The pop up scheme run by CTU solved a problem for landlords by taking responsibility for the 6 month let and then sub-let to tenants, CTU acted as buffer between short-term tenants and landlords who would find it really inconvenient to work with short-term tenants.
How to Calculate Wholesale Prices
The J&KE team found some useful information about calculating wholesale prices on this site: http://www.cultural-enterprise.com/download/FactPricing_e.html and we wanted to share it with you. If you stock your work in a shop they will normally take a 2.5 commission on top, this means they will mulitply your 'wholesale price' by 2.5 to find your 'Retail price' so to make sure you get a fair price for your work it is best to calculate a realistic wholesale price.
