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Home My WebLink AboutIR 7976 , F,iNFOIRMAL REPORT TO CITY COUNCIL MEMBERS No. 7976 February 6, 1996 To the Mayor and Members of the City Council %W Subject: 1873 CITY STORE FIRST QUARTER PERFORMANCE On June 20,1995, Council appropriated funds for startup costs necessary to open the City Store. At that time, staff indicated that the first three months of performance would be sufficient to determine whether the City Store project was financially viable as a business. This informal report discusses the City Store's first quarter performance and recommends continued operation of the City Store based on that performance. The City Store opened on September 25, 1995. Through the end of December 1995, the store was open for business from 10 AM to 6 PM Monday through Friday and 10 AM to 3 PM on Saturdays. Initially, the store had one full- time manager and one part-time clerk. At the height of the Christmas buying season, staffing was increased to a full-time manager, one full-time clerk and one part-time clerk. All personnel were drawn from the Temporary Services pool. In addition, the City Store paid for an off-duty Deputy City Marshal on an overtime basis to provide security for the building during the Saturday hours when no other building security was available. Gross Sales Through December 31, 1995 The City Store sells three types of products: custom signs, made on-site at the Store; surplus items consigned from City departments; and exclusive logo merchandise that features City logos such as the City Seal and several designed especially for the City Store. Custom signs were primarily of two types: a standard street name sign and a "no parking except for (name]" sign. The most successful surplus items included traffic signal heads-, fire hydrants, used traffic signs of various types, fire bunker gear, street paver bricks, and wood light poles. Among the logo merchandise, mugs and various apparel items were the most successful. Gross sales for each product type and total gross sales through December 31, 1995 are as follows. Product Gross Sales Percent of Total Custom Signs $6,207.00 20.0 Surplus 14,476.00 46.0 Total $31,241.00 100.0 OFFICIAL RICO# CITY ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS - INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7976 4 F�bp�p, To the Mayor and Members of the City ouncil February 6, 1996 Omm'"'mmmm�. , Y Y �~a ad Page 2 of 3 mBI� y/mmmOm.mmmmamm# oasm Subject: yen CITY STORE FIRST QUARTER PERFORMANCE Staff determined that the City Store would require gross sales of$28,000 through the end of December 1995 to be considered viable. This figure is half of the $56,000 break-even point for the store on an annual basis. The store should have no trouble achieving another $26,000 in gross revenues through the remaining 9 months of the fiscal year to break even. Based on the first quarter performance, the original goal of$72,000 in gross sales for the year is achievable. Staff determined that the City Store would require gross sales of$28,000 through the end of December 1995 to be considered viable. This figure is half of the $56,000 break-even point for the store on an annual basis. The store should have no trouble achieving another $26,000 in gross revenues through the remaining 9 months of the fiscal year to break even. Based on the first quarter performance, the original goal of$72,000 in gross sales for the year is achievable. Operating Position as of December 31, 1995 As of December 31, 1995, the City Store had incurred operating expenses of $15,409 and gross revenues of$31,241. Operating expenses included about $10,000 for salaries of employees (including security) and about $5,400 in operating supplies, most of which were purchased for the custom sign operation (aluminum and plastic sign stock, reflective vinyl backing, plotter parts, etc.). Operating expenses do not include purchases made with the $31,200 in startup funds that the Council initially appropriated, nor does the gross revenue figure include the startup funds. First quarter performance has left the City Store in an excellent operating position. The store will use its excess operating revenues to replenish the depleted logo merchandise stock with new and better products and make improvements to the custom sign shop's capabilities with a computer software upgrade. These actions will provide a large part of the sales needed to achieve the $72,000 goal by September 30, 1996. One operating change that has been made due to the experience of the first quarter is to eliminate the Saturday hours. Revenues from Saturday operations were not sufficient to justify the additional security costs that were necessary. Saturday hours are have not been ruled out in the future, however. ISSUED BY THE CITY MANAGER FOOT WOPTW TI=xec INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7976 To the Mayor and Members of the City Council February 6, 1996 w X Page 3 of 3 `' 1 >ex a Subject: 1875 CITY STORE FIRST QUARTER PERFORMANCE Future Plans To date, the City Store has used only media publicity and the City Page and City Times publications to market the City Store's products. Staff is currently developing a marketing plan that will include more aggressive advertising at special events and convention meetings, seasonally targeted marketing at times other than Christmas, and limited catalog sales for the next Christmas season. New surplus items are being prepared for sale as well. Further information will be provided upon request. al��G2 , BOB TERRELL City Manager " G CITYf W I` ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS