MOR: Filene's basement

Asram Jamil (15077)

1. Evaluate the in-house site selection model of FB. What additional
information should we bring in to the model for better decision on
site selection?
In-house selection model of FB was a sales forecasting model which was developed after
regression for 50 variables of 15 stores. The variables having the maximum correlation were
Fair rental rate per sq. ft., market impression per household and competition square ft. per
household. Other factors which should be built in to the model are the demographic aspects
like: i) The type of customers, which denotes the presence of our target segment ii)
Traffic in the region iii) Attractiveness of the location, where people to like to spend
some time iv) Population in the region v) Median income of the surrounding population
vi) Anchoring stores, the stores in the locality which are likely to pull the crowd to the
location vii) Visibility and Access to the location is another aspect which needs to looked
into. Before building the model, FB should analyse the issues in the location, which could
not be factored in the model. As total dependency on model may present a wrong picture.
There is a need for subjective analysis too.

2. In which area should the Filenes Basements new store be

opened? Justify your decision
Regression analysis shows that if the management considers two more stores, the increase
in sale would be 4% i.e., $21.38 million, which is encouraging to support new sites. Chicago
market is one of the attractive markets for such kind of stores as it is one of the largest
markets as studied by Filenes Basement in 1990. It is an upscale white-collar market having
median household income of $31,556, which is 15% higher than national average but 8%
lower than Boston.
Location 1
Location 2
Randhurst
Sugar Grove Mall
Longwood CenterAurora/Naperville
Shopping Centre
Anchored by
J.C. Penney, Carson J.C. Penney,
Bonwit Teller, I.
J.C. Penney, Marshall
Pirie Scott,
Sanders and SearsMagnin, Lord & Taylor,
Fields, Sears and Lord
Montgomery Ward,
Marshall Fields,
& Taylor
Kohls and Spiess
Neiman Marcus, Saks
Fift Avenue and Sears
Customers
Upscale
Upscale
Upscale
Traffic
High
High
High
Attractiveness
High
Medium
Low
Demographics
Good
Good
Good
Population
465,500 (1990)
465,500 (1990) 465,500 (1990)
351,568
Median Income
$53,167
$53,167
$53,167
$45,350
Visibility & Access Visible and easy to Visible but customer
Not visible and not
access
has to pass through
accessible easily
Sears
Issues
Another Filenes
Customer has to Nordstorms will enter
So many competitors
Basement is near and
pass through the the market soon and
sharing the 20%
Sears shop beforeFilenes Basement will
overlap with new reaching to store not be visible from
store
parking lot.
Estimated
Sales
$6.7 million
NA
NA
$4.7 to 5.4 million
(1993)
Recommendation Very high
Medium
Not recommended Recommended
Attribute

MOR: Filene's basement

Asram Jamil (15077)
Statistics of Randhurst are higher than Filenes Basement median as population of
Randhurst is 465,464 as compared to 432,562 Filenes Basement Median whereas, the
population of Aurora/Naperville is 351,568 lesser than basements median. However,
median HH income per annum is also higher for Randhurst i.e., $53,167 and
Aurora/Naperville i.e., $45,350 compare to basement median of $45,268. Both Randhurst
Shopping Mall and Aurora/Naperville should be considered as strategic location for opening
new stores before the competitors take place those markets.