Classic Choice Sneaker Store - Evaluation Paper

Introduction

Sneakers, also known as sportswear, entered the market a few decades ago and they have been a hit ever since, among several fashion trend year on year. When they were first introduced in the 19th century under the name "plimsolls" as opposed to the name sneakers, they were only used by players in the tennis or croquet sports, and their popularity only gained traction when the British army started placing ordering them in bulk in the 20th century (Gaille, 2019). The hip-hop culture has also been an instrument to the success of these type of footwear. The sneaker line of business is the shoe and footwear industry, which is a highly profitable industry in the U.S and the world over. Every person you know puts on one type of shoe or the other days depending on the leather shoe, fabric shoe or rubber shoe, so the sales potential for the footwear industry is as much as the world population and more. Statistics show that in the U.S., the Shoe and Footwear manufacturing industry generates well over $ 2 billion on an annual basis in more than 876 registered stores that are found all over the country.

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Classic Choice Sneaker store will be located in Houston, Texas in the West University or Bellaire areas. This location will enable the store to attract the foot traffic from students attending the university, which form is part of the millennials that are contributing to the enormous profits it the footwear industry. The restaurants, cafes, and bars in the area will also provide potential consumers. At the same time, the store will be giving complementary products to the boutiques located in the area. Houston also has a high and ever-growing population of its inhabitants. According to the United States Census Bureau (n.d), the people in Huston consisted of 2,312,717 people as of 1st July 2018, and this was a 10 percent increase from the year 2010 where the population was 2,099,4651. This rate of population increase is higher that of the U.S. which stands 5.5 within the same time frame. As a result of the senior population and population increase in the city, the market base is high

The footwear market is a billion dollar industry. The standard size of the footwear market is expected to scale to $95.14 billion by the year 2025 (Grand view Research Inc. as cited in Steinberg, 2018). The relaxed feel associated with these type of shoes makes them especially popular amongst the millennial generation which made up about two thirds of the of its annual sales increment of $70 million by mid-2018 from $68.78 billion in similar period in the year 2017 ("Footwear on The Rise", 2018) percent of the global market. According to "Footwear on The Rise", (2018) The sales in men footwear in the U.S. increased to $ 27.3 billion, making a 50 percent increase while the women's shoe increased their sales by 35 percent to hit $33.3 billion, and the kids market followed up with an increment of 15 percent to hit sales of about $10.1 billion. The author further argues that retailers focused on niche markets, shore stores that are branded and startup businesses are dominating most of the growth in this industry. Salpini (2018) argued that while the general footwear industry in the year 2017 only grew by 13 percent, sports footwear grew by a staggering 46 percent. This means that the market in the shoe, especially in the sportswear niche is on the rise and this inspires my resolve to join the industry.

The initial costs of operation will include the cost of leasing, furniture, furbishing, inventory and personnel hiring. The average operating costs will encompass employee remuneration cost, lease costs, electricity and water costs, and advertising costs among others. A budget of $ 1.236,000 will be set aside for inventory in the spring-summer season while a budget of $618, 000 will be set aside for initial costs and other operating costs.

Classic Choice Sneaker Store will stock sneakers of all sizes, for all ages and both male and female genders. These products will be targeting families, fellow business persons, professionals in the corporate world, sports personnel, military personnel, celebrities in the area and even tourists. The store will also stock sneakers from all types of brands. This is because market demand from virtually all the brands, especially the big players in the industry is very competitive. Selling just one brand of sneakers contracting and limiting the potential of generating more sales for the business as the sales in the market steadily increase. 6.5 - 7.5 sneaker sizes of all genders will be displayed on the first shelf of the store from the entrance, but the rest of the store will be divided into the men's section, Female section, and the children's section.

The store will use a short-term lease in the first few months running from the spring-summer period on an estimated monthly rent of $640 while testing the market penetration in the city, and if the market reception proves to be good, then considerations will be made to acquire a long term lease or better yet buying the store.

Since Classic Choice Sneaker Store is a small scale business, it will only need to hire a cashier, two security guards running on the day and night shifts, one entry-level employee and one manager. The employees will work for 8 hours a day and shall be paid an hourly rate of $9 an hour for the security personnel, cashier and entry-level staff while the manager will receive an $18 hourly rate from the time the store opens in the spring-summer season. According to "Shore Store Jobs" (n.d), these are the standard industry rates for the respective staff members in the U.S. The cashier, and the entry-level employee will each be given one off day which will be non-concurrent. This will cost the firm about $11,644 in the six months running from February- July. The civilian total labor force of the Houston population from the year 2013 to 2017, of people of and above the age of 16 represented 67.7 percent of the population (USCB, n.d). Acquiring human resources will therefore not be a challenge.

Demographics

The market is demographics for sneakers cuts across all ages, gender, and environments. As a result, the target market for the business will include everyone as it is difficult to exclude any one of the demographic dynamism. According to the United States Census Bureau (n.d), the population in Huston consisted of 2,312,717 people as of 1st July 2018. This represented a 10 percent increase from the year 2010, against a 5.5 percentage increase of the total population in the United States over the same period, where the Huston population stood at 2,099,4651. This means that there is a robust general increase of the people of the city, which translates to a broader market base for sneakers. The author further opines that by the 1st of July 2017, the age and gender distribution was represented as follows: Children under the age of 18 consists of 25.1 percent of the population while those living between the ages of 18 - 65 make up 64.8 percent of the population. The persons are residing above the periods of 65 consist of 10.1 percent of the population. Females in Houston consist of 49.1 percent of the population.

Huston city had 838,950 households with the average number of persons per household standing at 2.66 between the years 2013 and 2017 (USCB, n.d). In the same period, the number of families living in Huston that had computers made up 85.2 percent of the total household population while 74.2 percent of them were connected to a broadband internet subscription.

According to the data found in the USCB, (n.d), the total sales in the city were $322 billion for wholesalers, $41 billion for retailers and $19 million retail sales per capita.

Houston is accessible via air and road means of transportation. The mean travel time to work is 27 minutes, against a mean of 26.4 at the federal level. (USCB, n.d). The per capita income in 2017 was $30,547 while the median household income was $49,399 (USCB, n.d).

The median gross rent in the city was $940 (USCB, n.d).

Some of the footwear stores in a Houston are, Urban Soles Outpost, A shoe place, Fleet Feet, Premium Goods, Village Shoe Shop, DSW Designer Shoe Warehouse, Sneaker Summit Storefront, Proper Houston, Finish Strong Sports and Al' Handmade Boots.

References

Gaille, B. (2019). "31 Sneaker industry statistics and trends". Brandon Gaille small business&
marketing advice. Retrieved from: https://brandongaille.com/31-sneaker-
industry-statistics-and-trends/

Job-Applications.com. (n.d). "Shoe Store Jobs". Job- Applications.com. Retrieved from:
https://www.jon-applications.com/footwear-jobs/

Ketteniss, V. Fashion, insight, menswear, news, strategy. WGSN. Retrieved from:
https://www.wgsn.com/blogs/boohooman-mens-consumer-quavo/

Salpini, C. (2018). "What's driving retail's sneaker obsession?" Deep Dive. Industry Dive
Retrieved from: https://www.retaildive.com/news/what's-driving-retails-
sneaker-obsession/518625/

Steinberg, L. (2018). "The profitable Hidden Sneaker Market." Forbes. .Forbes media Llc.
Retrieved from: https://www.forbes.com

UBM. (2018). "Footwear on the rise: The trends gaining traction." UBM Fashion Inc. [online].
Retrieved from: https://www.ubmfashion.com/education/footwear-rise-trendsgaining-
traction-2018

United States Census Bureau. (n.d). Houston city, Texas; United States. [online]. Retrieved from:
https://www.census.govv/quickfacts/fact/table/houstoncitytexas,US/PST045217/