Kasi Kicks Business Plan — The Store and the Channel

The 185 m² store format, the central warehouse and merchandise planning function, and the online channel at 18% of pairs.

The Store and the Channel

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4.1 Store economics
4.2 Trading density
4.3 The online channel

4.1 Store economics

Per store	Value	Note
Trading area	185 m²	Prime mall footwear space
Pairs sold a year at maturity	9 800 pairs	About 27 a trading day
Blended realised price	R1 219	After markdown, across all tiers
Gross profit a pair	R571	At a gross margin of 46.8%
Variable cost a pair	R101	Card fees, shrinkage, packaging, inbound freight
Contribution a pair	R470	38.6% of the realised price
Store fixed costs	R2 381 560	Payroll, rent and store overhead
Break-even	5 067 pairs	14 pairs a day
Margin of safety at maturity	48.3%

Figure 9. One store, break-even against mature volume.

Store fixed cost	Annual	Note
Store payroll	1 130 860	6 people including manager and assistant, plus 2.1% statutory
Rent	854 700	185 m² at R385/m² a month
Utilities, security and cleaning	158 000
Store marketing and visual merchandising	98 000
Point of sale, connectivity and systems	72 000
Repairs, maintenance and sundry	68 000
Total store fixed cost	2 381 560	R12 873 per m² a year

Variable cost a pair, store	Amount	Note
Card and payment fees	R38	On card settlement
Shrinkage and stock loss	R27	Footwear is a high-theft category
Packaging and consumables	R21
Inbound freight to store	R15	From the central warehouse
Total store variable cost	R101	8.3% of the realised price
Online fulfilment a pair	R118	Picking, packaging, delivery and returns handling

Note that shrinkage at R27 a pair is the second-largest variable line. Footwear is a high-theft category and the number is deliberately visible rather than buried in store overhead; security is carried separately in the fixed cost base at R158 000 a year alongside utilities and cleaning.

4.2 Trading density

Figure 11. Revenue per square metre across the projection.

	Year 1	Year 2	Year 3	Year 4	Year 5
Stores trading	1	2	3	4	4
Trading area, m²	185	370	555	740	740
Store revenue	8 842 462	22 250 501	38 521 686	56 605 478	61 685 254
Online revenue	0	1 420 245	4 761 107	9 989 202	13 540 665
Total revenue	8 842 462	23 670 746	43 282 793	66 594 680	75 225 919
Revenue per m²	47 797	60 136	69 408	76 494	83 358

Trading density is measured on store revenue, not total revenue

This distinction matters as the online channel grows. Including online sales in the numerator while dividing by store floor area would flatter the figure by 22 per cent at maturity and would mislead exactly the two parties who use the number: the landlord assessing whether the rent is supportable, and the lender assessing whether the store can service the facility. The figures above are store revenue only. Break-even sits at R33 387 per square metre and the plan reaches R83 358 by Year 5, which is demanding and rests on 9 800 pairs a store a year — roughly 27 a day. A secondary location doing two-thirds of that volume would still clear store break-even but would not carry its share of the central function, which is why site selection is a condition precedent rather than an operational task.

4.3 The online channel

Feature	What it is	Why it matters
Fulfilment cost	R118 a pair for picking, packaging, delivery and returns handling	Carried in variable costs; it is why the variable cost per pair rises across the projection
Returns	Footwear returns at a materially higher rate than most categories because fit is uncertain	Detailed size guidance and a controlled returns policy are commercial necessities
Range extension	Online shows sizes the stores cannot hold	Pools the fringe-size tail across the whole chain, directly addressing the size-curve problem
Click and collect	Drives store footfall and reduces delivery cost	Where most South African footwear e-commerce volume actually lands

Online grows from nothing in Year 1 to 18 per cent of units by Year 5. It is deliberately introduced only in Year 2, once the stores are trading and the stock file is accurate. Selling online from an inaccurate stock file is the fastest way to disappoint a customer and to strand inventory.

The channel is also the most direct answer to the size-curve problem. A single store cannot economically hold UK 5 and UK 13 in depth, but the chain can hold them once, centrally, and serve them nationally. That pools the fringe-size tail across four stores and a warehouse instead of stranding it in each — which is worth more than the fulfilment cost of R118 a pair it carries.

Previous section3. The Size Curve: Where Footwear Margin Is Lost

Next section5. SWOT and Competitive Position