The retail slump may be in January, but a Davisville retailer is rejoicing that the doors of her shop are staying open in the New Year.
Kathleen Mackintosh of Culinarium, a gourmet food store featuring Ontario-grown products, has raised enough money through a customer investment program to keep her Mount Pleasant Road business running.
The store, open since spring 2008, has been doing well but needed more capital to stay afloat, she said.
In an email sent to some 1,000 clients in early December, Mackintosh asked people to invest $500 or $1,000 in her business through The Culinarium Shared Plate Dinner Program.
The return on investment would be paid out over a period of three years in the form of locally grown groceries from the shop’s suppliers – so that a $500 investment would yield $600 worth of groceries over three years, to be redeemed from June to December starting June 2011, while a $1,000 share would bring $1,300 worth of groceries over the same time period.
By late December, $55,000 in pledges had been made against a goal of $100,000, but Mackintosh says she made the decision to move forward with the program even though the official goal hadn’t been met.
“People are rallying to the cause,” Mackintosh said two days after making the decision to stay open.
She’s still aiming to raise $100,000 but said she’s confident she can raise the remainder of the money through various business grants.
Mackintosh also plans to keep the Shared Plate program open for people to join for the next few months, and perhaps even until June when investors will start receiving their return on investment in the form of groceries.
Aside from the overwhelming response to the investment program, positive sales – a good 40 percent increase in numbers in the fall months, she says – factored into the decision to remain open.
“December was our best month ever,” she said.
“The momentum is there.”
Participating in an online collective buying program called Groupon, which gives deals to people at local businesses only if a certain amount of people sign up for the deal, also helped raise awareness about the business, she said.
She said 1,600 people signed up for the Groupon deal in December, which offered $30 in groceries for $15, and a good 90 percent of the new people in the store these days are those customers, she said. Some even signed up for the investment program.
Mackintosh admits the share program, as with any investment, carries some risk. She’ll guarantee peoples’ investment for the first year even if it turns out the business cannot sustain itself, she said, which would mean customers could redeem their groceries for one year but would lose years two and three.
The local community and those as far-flung as Richmond Hill have been gracious in their support, she said. Even if they can’t swing a $500 donation, some have offered to volunteer or help out with professional services.
Others have offered suggestions on what Mackintosh could do to run the business more efficiently, she said, like investing in a point of sale (POS) system that would track inventory and provide specific information on, say, top selling products.
“I had no idea what to expect,” Mackintosh said of the response.
“I’m overwhelmingly surprised at the amount of community our customers feel (toward the store)”.
The slow winter months will be the perfect time to evaluate and start planning after she starts collecting the pledges in January, she said. The money raised will go towards basic operations costs but she said she also hopes it will be used for new programs and equipment.
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