So we signed on the dotted line and started designing and building our new office and showroom. We perform this type of work for our clients on a daily basis, so the process was not difficult from a technical standpoint. The hard part was figuring out how to allocate the new space. We needed room for sales, administration, design, web development services, warehousing and lectures. We had some competing interests and if I had allocated the space everyone wanted we would have had to double the size of the facility!

Instead we just started blocking out the available space; laying in desks, chairs, fixtures and displays and working with each department to try to figure out what they really needed in terms of space and equipment. Further we had to take in to account the needs of our customers- traffic flow through the showroom, access to bathrooms, ease of parking, etc. Every aspect of both the customer and the employee experience had to be taken in to account.

The overlay on all of this was of course budget. The landlord provided a reasonable build out allowance and we had fixtures and displays to add on top of that. Of course every single budgeted item came in a little higher than expected, but we value engineered as necessary and kept our targeted budget in sight - right up until the handicap accessibility rules cropped up! We had a little disagreement with the landlord regarding who was responsible for making the property ADA (American Disability Act) compliant. In most cities the ADA rules crop up when the tenant or the property owner gets a permit to improve the property or someone sues for noncompliance. It’s at that point the city tells the tenant or the owner to make the property ADA compliant. In our case, San Diego provides an exemption that limits the investment in compliance to 20% of the overall improvement budget (In our case $60,000.). At the new showroom, most of the compliance work was on the outside of the build and included grading, parking and sidewalk - all to the tune of $30,000. As the costs increased so did my blood pressure. Since we were getting pressured by our existing Landlord to get moved we eventually claimed the 20% exemption and moved forward with some interior work and 100 feet of new sidewalks. I will attempt to work things out with the landlord once the project is complete.

We did have a few other issues, which included leaking air conditioners that pumped hot instead of cold air, leaking windows, colors that looked better on the color chip then on the walls, flooring materials that were sent short, contractors who showed up late, early or not at all, and of course, the usual issues that all builders deal with and that I simply refer to as “The Zen of Store Building.”

Now on January 21, 2008, one week after we had scheduled our move, we will in fact move! I suspect the computers will glitch as will the phones and we will suffer through some growing pains as well. The showroom is next so, if the stars align, by around March 1st the showroom and retail learning center will open. That means substantially more customers visiting the facility, but that also means additional trained personnel and upgraded dress codes (there go the flip flops, t-shirts and backwards ball caps!).

The real benefit is that our new facility will let us interface more effectively with our customers while allowing them to touch and feel a myriad of fixtures, materials, samples and more. As we move forward we’ll keep you informed of our progress and the dates for the grand opening.

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Finding a location for a new store or office (or in this case both) can feel like you’re chasing a moving target. You have to be concerned about your customers, your employees, the rent, the type of buildings available, etc. In our case we have a national base of customers but we wanted to make it easy for locals to get to our showroom and warehouse and for customers coming in from out of the area to find us. Our initial inclination was to locate near a competitor. There is a synergy that often builds when a customer can hit 2 or 3 similar businesses in one area. It’s an easy shopping experience and in fact each business often finds that their sales increase. In our case we have two primary local competitors, one in downtown San Diego and the other in the center of San Diego county in a retail-industrial area about 7 miles from downtown.

Rather then basing our decision on our competitor’s locations we decided to find a customer centric location . Where was the best spot in the county for the majority of our local customers to easily reach and where was the best spot for our out of town visitors to easily find us? To that end we started analyzing the potential venues.

Population growth in San Diego has been north, east and south but the central core has also been gentrifying at an amazing rate. Getting in to downtown or the central industrial areas has become a chore due to traffic and once there the level of activity can feel chaotic. Further, our employees who have been working 3 blocks from the ocean, were less inclined to urbanize their work place then others might be. To that end we started looking in Sorrento Valley, a retail, industrial area a few miles north of San Diego. Sorrento Valley is close to the coast and within minutes of the the 5 freeway, a major LA-San Diego artery. Not too many locations appeared to be available but after extensive driving, phone calls and finally help through a great real estate broker we found a potential space.

The building had been vacant for 9 months, was mostly offices with some warehouse and was in what felt like an almost rural environment. Located on a quiet street with loads of parking, everyone who looked at the site remarked about how comfortable it felt. Even my wife liked the space and she can be a hard sell. So we started negotiations. Of course as soon as we wanted the space other prospective tenants materialized but we just kept our demands simple and reasonable.

1) All the building systems had to be in good working order. (HVAC, Power, Ceiling, etc.).
2) The building had to be in compliance with ADA handicapped access rules.
3) We needed new wall partitions, lights, ceilings, paint, and flooring. (about $70,000 dollars worth.)

And we paid them what they asked for in rent at $1.00 per foot. And they said, “fine”.

When we got the lease I had a few changes. My broker had more and we negotiated those. Some issues the landlord would not relent on and in a conversation with my broker I said:
“What’s the next lowest rent we’ve seen”.
He said: ” $1.35 per square foot”.
I said: ” At 9000 square feet that’s $3,150 more per month times 60 months. Total: $189,000. Plus, their giving us about $50,000 more in tenant improvement allowances then the other landlord’s and some free rent. If we blow the lease over a few nonessential lease provisions we will be out $250,000. Let’s sign now”.
And I did.

So now, on November 16, 2007 we’re in the building phase. We have a permit and we’re rushing towards an early January move-in date.

Next:
Designing the store and offices and implementing the construction process.

So we decided to create a bricks-and-mortar presence in San Diego.

Why now? Why at all? We’re doing well without a showroom. Why risk changing the mix?

Frankly, I simply felt like we needed to address how relevant we really are to our clients. Every single day, our customers ask, “Where can we see your fixtures?” and our salespeople have only been able to answer, “online.”

Since our business is retail design, we, more than most, realize how important touching and feeling a product is. Sure, consumers are getting more and more accustomed to buying online. But given the choice, I’d rather check pricing on the web and go to a “real” store to, as my grandmother used to say, “Feel da merchandise.” Further, we wanted to create a venue where our customers can immerse themselves in the retail experience. To that end, we decided to build a showroom that does just that. TRIO’s new showroom will showcase our retail display fixtures, house our design studio and libraries, and will provide an opportunity for our clients to interact with our packaging and POS specialists, all in one visit.

Additionally, we want to encourage an interactive retail community. One of my favorite stores in San Diego is Great News. This place started out as a small gift shop and over the past 20 years has evolved in to the greatest kitchen shop in town (and maybe the state). In addition to selling kitchen equipment, they hold cooking classes day and night in a 2,000-square-foot-classroom complete with large-screen TV monitors overhead. The place is packed with people having fun and feeding their passion.

We want to build a similar retail community. So we are setting up an auditorium in our new showroom that will be used for regular seminars and workshops on store design and planning. I’ll teach some of them and we’ll bring in various speakers to enlighten our clients on every aspect of the retail business. We’ll also have videos of many of the seminars available for you to watch in our showroom, plus a full library of books on retail design and planning to browse and purchase.

The store is in Sorrento Valley, a commercial area just north of San Diego. It’s close to the coast and just off interstate freeways 5 and 805. We’re in a semi-rural setting and we think our customers will appreciate how easy it is to get here, park, shop and learn at their leisure.

Over the next two months I’ll take you through our design and construction issues and review some of our challenges in the decision-making process. I hope you’ll be able to learn from our experience so that you’re better-equipped to handle your own move into retail.

Jeff Grant
TRIO
President

Next:
Finding the location. Where to locate, what kind of a building, the competition, rents, acting fast…