Abdi Nabil (AFM) ID 05 Brisack Kathleen (OLM) Chabeau Valérie (HRM) De Winter Marie-Laure (AFM assistant) Saidov Saïd (SMM) Vanophalvens Marie (PL)

CEO V. Ravet Mega Leisure and Sport store Year 2010

Business plan « COMEX L&S Ltd »

“Why going elsewhere?

We have everything you’re looking for in equipment and in sportswear”

Table of contents

1. The company ................................................................................................................................... 1

2. The project’s team of Belgium ........................................................................................................ 1

3. Motivations of the company ........................................................................................................... 1

4. Our project ...................................................................................................................................... 2

1. Description .................................................................................................................................. 2

2. Corporate identity ....................................................................................................................... 2

5. Our products & services .................................................................................................................. 2

1. The products ................................................................................................................................ 2

2. The quality ................................................................................................................................... 2

3. The width of the assortment ....................................................................................................... 2

4. The depth of the assortment....................................................................................................... 2

5. The services ................................................................................................................................. 3

6. The Belgium market ........................................................................................................................ 3

1. The market .................................................................................................................................. 3

1. The competitors .......................................................................................................................... 4

7. The location ..................................................................................................................................... 5

1. Situation of the point of sales ..................................................................................................... 5

2. Features of the commercial area ................................................................................................ 7

8. The turnover .................................................................................................................................... 7

1. Turnover for the three years ....................................................................................................... 7

2. Seasonality ................................................................................................................................... 8

9. The strategy ..................................................................................................................................... 9

1. The target .................................................................................................................................... 9

2. The positioning ............................................................................................................................ 9

3. Promoted products and services ................................................................................................. 9

4. Our objectives ............................................................................................................................. 9

5. Marcom ..................................................................................................................................... 10

6. Swot ........................................................................................................................................... 12

10. HR .............................................................................................................................................. 13

1. The paritary committee 311 ...................................................................................................... 13

2. Labor law in Belgium ................................................................................................................. 13

3. Staff composition and salary cost ............................................................................................. 13

4. Organization chart ..................................................................................................................... 14

5. Other costs related to our staff ................................................................................................. 14

11. Means of production ................................................................................................................. 16

1. Area and possibilities to extend our store ................................................................................ 16

2. Arrangement and installation ................................................................................................... 16

3. Equipment, furniture and vehicles ............................................................................................ 17

4. Suppliers .................................................................................................................................... 17

12. Financial dossier ........................................................................................................................ 18

1. Investment budget .................................................................................................................... 18

2. P&L forecast .............................................................................................................................. 19

3. Balance sheet ............................................................................................................................ 21

4. Ratios ......................................................................................................................................... 22

5. Financial help ............................................................................................................................. 23

13. Exchange rate, VAT, insurances................................................................................................. 23

1. Exchange rate ............................................................................................................................ 23

2. VAT ............................................................................................................................................ 24

3. Insurances.................................................................................................................................. 24

14. Conclusion ................................................................................................................................. 24

The 2nd Comex L&S Mega store in Belgium ....................................................................................... 24

15. Sources ...................................................................................................................................... 25

1. Webography .............................................................................................................................. 25

2. Bibliography ............................................................................................................................... 25

3. Interviews .................................................................................................................................. 25

16. Appendix .................................................................................................................................... 25

1

1. The company

Comex L&S Ltd is part of the Group Comex Ltd, established in 2003. It is an international group from UK which owns several branches in numerous sectors. Comex L&S isn’t only active in UK but also in Ireland, Spain, Austria (franchise) and Germany. Our core business is the retailing of leisure and sport items, where all major international and local brands are available. The company covers all possible activities in leisure and sport (ski, fitness, swimming, horse riding, football, basket-ball, …).

The concept is to open the biggest leisure and sport store in Belgium with high quality products and attractive prices. It doesn’t mean that it is a hard discounter; the image of the brand will be respected.

The CEO of Comex Group Ltd is Vincent RAVET, the COO is Isabelle BROUWERS and the CFO is Fabienne VAN DEN BERGH.

2. The project’s team of Belgium

COMEX Ltd sent a team of six members of its staff to investigate the Belgian market in order to invest in this country.

Marie Vanophalvens, Project Leader, and her team have been in Belgium for six weeks to study the feasibility of opening a new mega leisure and sport store. The team is composed of an Administrative

and Financial Manager, Nabil Abdi and his assistant Marie-Laure De Winter, Marketing and Sales Manager, Saïd Saidov, a Logistic and Operational Manager, Kathleen Brisack and finally, a Human Resources Manager, Valérie Chabeau.

3. Motivations of the company

The aim of Comex Group is first to spread the company in Europe and then in the whole world. Belgium is the next market where the Group wants to invest in implanting a new store. The company wants to attack a regional market as a beginning and is planning to reach the national market with a second store.

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4. Our project

1. Description

We want to develop the company in Belgium in opening a L&S store in Flanders. The city of Ghent was selected. We will sell all products in leisure and sport. The company in Belgium focuses on the retailing, whereas the production plant is located in UK.

2. Corporate identity

The name of the branch is “Comex L&S”. The business purpose is a megastore of leisure and sport items. Its legal form is a Public Limited Company (Ltd). Regarding to the creation (articles of incorporation, company’s statuses,…) we will call a business lawyer firm, LIEDEKERKE1 to help us in the constitution of our business unit. The company’s criteria’s meet features to a large company.

5. Our products & services

1. The products

Our store will propose 15.000 references which cover every kind of sport. But we will also offer beverage (ex.: energetic beverage) and energy food. Comex L& S will buy the products from the purchasing central from Comex Group. Moreover, we will also have local brands as Tolga2 (horse riding equipment), Scarecrow3 (wakeboard and surf), Marie Jo Intense4 (sport underwears), Purple Products5 (fishing products)...

2. The quality

The quality concerns as well the clothes material as the resistance of equipments. The quality will obviously differ from a brand to another.

3. The width of the assortment

The assortment we propose is so complete that each person will be equipped whatever their activities (jogging, running, trail, campaign, bicycle, welfare, games, horse riding, martial arts, water sport, outdoor activities …).

4. The depth of the assortment

In each brand, we will offer a huge choice to respond to all kind of customer’s expectations.

1 Appendix n°1 2 www.tolga.be 3 http://scarecrow.be 4 www.mariejo.com/home/intense/fr/default.aspx 5 www.purpleproducts.be

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5. The services6

Our marketing department imagined several services to boost the sales and to improve our customer relationship.

Services to boost our sales and image7

Gift voucher Pro solution Gift guide by topic Comex L&S’ loyalty card Acceptation of Eco Pass and Eco checks A delivery service Ski & snowboard rental Online shopping A COMEX L&S online Magazine

6. The Belgium market

1. The market

A. General information

The total population of Belgium is approximately 10,8 million8 inhabitants. We have to pay attention to the main KPI’s in Belgium. The inflation rate has reached 2,11%9 in 2010 and the annual GDP in 2009 decreased by 3% compared to 2008 and amounts to €337.75 billion10. The unemployment rate11 represents 8,7% of the total population. Brussels experiences the highest percentage of unemployment (17%) followed by Wallonia (12%) and then Flanders (5,6%). Concerning the economic growth, Flanders was the most touched by the economic recession of 2009 (GDP of Flanders -3,3%)12. In 2010, the growth rate has increased, especially thanks to the good performances of export. The growth of the Belgian economy should reach 1,7 % in 2011 thanks to the growth of exports that should again accelerate13. Indeed in 2011, the progression of the employment and the property incomes14 will generate an increasing of 1,5% of the purchasing power. In this context, the household savings will decrease for 2011. This would generate a rise of the private consumption by 1,4% in 2011.

B. Bankruptcies

It is important to keep in mind that all companies can go bankrupt in Belgium. Indeed, the region where our first store will be established has the highest number of bankruptcies (4.983) followed by Wallonia (2.649) and then Brussels (1.788)15.

6 Appendix n°2

8 http://www.ducroire.be/WebDucDel/Website.nsf/AllWeb/Belgium?OpenDocument&Disp=1&Language=fr 9http://statbel.fgov.be/fr/statistiques/chiffres/economie/prix_consommation/indices_prix_consommation/inflation/index.jsp 10 http://www.lalibre.be/economie/actualite/article/563527/le-pib-de-la-belgique-a-recule-de-3-en-2009.html 11http://statbel.fgov.be/fr/modules/pressrelease/statistiques/marche_du_travail_et_conditions_de_vie/nouveaux_chiffres_de_eft_premier_trimestre_2010.jsp 12 http://www.plan.be/press/press_det.php?lang=fr&TM=64&IS=67&KeyPub=978 13 http://www.plan.be/press/press_det.php?lang=fr&TM=44&IS=67&KeyPub=988 14 http://www.plan.be/press/press_det.php?lang=fr&TM=44&IS=67&KeyPub=988 15 http://statbel.fgov.be/fr/statistiques/chiffres/economie/entreprises/faillites/ans/index.jsp

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C. Political situation

There are ongoing discussions between Flemish and French speaking politicians to see how the country could be reorganized.

Actually, since federal elections of June 13th 2010, after 6 months, Belgium doesn’t have a government. The problem comes from the negotiations between the 7 parties (N-VA, PS, CD&V, sp.a, cdH, Ecolo and Groen !) about the financing law which is the core element of State Reform and which would increase the (financial) responsibility of the regions. Actually, the N-VA (a Flemish party) wants a bigger independence about employment policy, family allowances, a part of justice, ... , and up to 45% of the income tax. The king has appointed Johan Vande Lanotte, the former Flemish socialist (sp.a) minister of Budget, for a conciliation mission.

D. Real Estate

The Belgian real estate market has been fairly stable over the last few years. Despite the economic crisis, rents have held up and even though the take up has slowed down, the occupancy rate remains very high (on average between 95% and 98%). The real estate and the rents are not as expensive as UK, France and Germany. In Belgium, every property is subject to a real estate property tax. The tax depends on the “revenu cadastral” assigned by the local authority and to which a specific percentage is applied16.

E. Flanders and our sector

In 2008, they were 157 leisure and sport stores in Belgium for a total of 173.055 m². The distribution in term of number of point of sales and sales area by square meters is as follows17:

Regions Number of store Total square meters

Brussels 12 15.000 m² Flanders 96 105.330 m² Wallonia 49 52.725 m²

In Flanders, the district which has the biggest population is first of all Antwerp with 472.071 people. At the second place, we have Ghent with 237.250 people. At the third place, we have Bruges with 117.073 people18.

1. The competitors19

A. Direct

There is a lot of competition in our sector. Indeed, there are European leader companies which have already a good awareness in Belgium and even in Europe. The leader in Belgium is Decathlon with 12 stores followed by SportDirect.com and the third one is A.S. Adventure. They are in full expansion and theirs T.O. don’t cease to increase. The competition is more and more important. However, there are also other direct competitors which aren’t negligible.

16 Market Snapshots Q4, 2010, Cushman 1 Wakefield 17 http://statbel.fgov.be/fr/statistiques/chiffres/economie/commerce/nonalimentaire/index.jsp 18 http://statbel.fgov.be/fr/statistiques/chiffres/population/structure/residence/plus/index.jsp 19 Appendix n°3

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B. Indirect

There are many indirect competitors in Belgium like Foot Locker, Cora, Esprit... which don’t propose so many references as us. Some of them are not really specialised but they are holding significant market shares. The most important indirect competitor is Foot locker20.

7. The location

1. Situation of the point of sales

Our store is situated in Ghent Zwijnaarde and more precisely 76, Oudernaardsesteenweg, 9052 Zwijnaarde (Ghent).More concretely, it is a former hypermarket Carrefour which has closed its doors. We chose this one because Ghent is the second most populated city in Flanders after Antwerp and there was a huge sales area available.21

A. Natural flow of pedestrians

This point of sales is quite good served. Indeed, there is a bus stop “de deynestraat” with several buses (44, 48, 49, 70, 71, 72) which pass just in front of this one. These busses pass by Merelbeke, Zottegem, Oudenaarde and Ghent. Secondly, the entry of this point of sales is by the N 60 which joins the highway E 40 (Brussels – Oostende) at about 1 km.

20 Trends 21 Appendix n°4

6

B. Catchment area

Our catchment area is 50km around Ghent. It includes Aalst, Bruges, Kortrijk, St-Niklaas and Dendermonde. However, there are also some little cities around.

Cities of the catchment area Population Main competitors

Ghent 237.250 SportDirect.com, A.S. Adventure, Intersport

Aalst 77.790 A.S. Adventure

Bruges 117.073 Decathlon, SportDirect.com, A.S. Adventure

Kortrijk 74.200 Decathlon, SportDirect.com, A.S. Adventure

St-Niklaas 68.800 A.S. Adventure, SportDirect.com

Dendermonde 43.200 There is not one of our main competitors

Total population 618.313

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2. Features of the commercial area

Sales area: 4.357 m² Storage area: 3.727 m² Lunch Garden: 719 m² Total area: 8.803 m² Parking places: 480 places (129 underground places, 204 places on the roof and 147 in surface).

8. The turnover

1. Turnover for the three years

2011 2012 2013

Turnover 14.278.260 21.417.390 (+50%) 29.984.346 (+40%)

Decathlon’s turnover in 2009 amounts to €197,036,683 for its 12 stores in Belgium. It is equal to €16.419.723 for one store (€197.036.683/12). The T.O. we expect for 2011 amounts to €14.278.260 (-15% of the decathlon’s one for 2009). Then for 2012 we expect an increasing about 50% because of the communication plan we made with PTOC and the location of our store. Indeed in 2011 there will be 3 big waves of communication to build our awareness in Belgium and to attract people. Then in 2012 we will continue our advertising campaign via PTOC (2 big waves of communication) and the word of mouth will also increase. This is why we expect an increase about 50% between the first and the second year. Moreover our store is located in a place where they are other shops and they are also national and highway. Finally in 2013 our T.O. will continue to increase because of the awareness that we will have and the word of mouth there will be. In fact we will also attract people outside our catchment area and the communications waves will continue (2 for 2013). So our T.O. will increase about 40% between the second and the third year.

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2. Seasonality

A. Expectations for the first year

The first year of operation will be different. We have estimated the monthly sales in the table below. Due to the fact that we won’t have any awareness, we have to expect higher losses in the first months. To understand better the impact on our turnover we have to determine the seasonality ratio month per month. The seasonality ratio is a percentage of the annual turnover.

Seasonality ratio The turnover * ratio

September 8% 1.142.260 €

October 4% 571.13040 €

November 5% 713.913 €

December 10% 1.427.826 €

January 9% 1.285.043 €

February 3% 428.347 €

March 8% 1.142.260 €

April 10% 1.427.826 €

May 10% 1.427.826 €

June 12% 1.713.391 €

July 11% 1.570.608 €

August 10% 1.427.826 €

Total 100% 14.278.260 €

B. Expectations for the following years

The real impact of the seasonality will be felt only from the second year. We expect February to be the slowest month as it follows the usual sales period of January. In addition to January and July where promotional sales are allowed, the best period for incomes is December. Concerning the slack periods the incomes and the sales are correlated.

The slackest period is February due to Christmas, New Year and the sales period.

The best periods for incomes are: - December during the holiday period - June before the vacation

Seasonality ratio per month

January 10% July 10%

February 3% August 9%

March 7% September 10%

April 8% October 5%

May 8% November 6%

June 11% December 13%

Total 100%

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9. The strategy

1. The target

We will target all professionals and amateurs sportsmen and families who like to take time to practice a sport or for leisure. Those people will find all major international and local brands according to their budget, under the same roof as expected.

2. The positioning22

“Comex L&S, the biggest Belgian Leisure and Sport Store which provides all major international and local brands for all professionals and amateurs sportsmen and families. In our store, each person and family can be equipped according to its budget and its activities”. “Comex L&S means high quality products with attractive prices and the best customer satisfaction”.

3. Promoted products and services

The products and the services we will highlight will be those that make us different from our competitors. Actually, they will be international and local products and some services for amateurs and professionals, which will have the best value for money compared to our main competitors (Decathlon, SportDirect.com and A.S. Adventure). It means that we will promote products and services which are cheaper and with the same or even best quality compared to them.

4. Our objectives

A. To build our awareness in Belgium, we will: (Corporate communication)

Launch a series of advertisements more oriented to build an awareness (TV, radio, Clear Channel, newspaper, JC Decaux) thanks to PTOC (a company specialized in the planning and buying of all types of outdoor advertising)

Create a website + ecommerce via Booster (a company specialized on creation of website and ecommerce)

Try to do a Sponsorship (with Belgian sport celebrities and some international and national brands)

Organize an event for the opening of our store with Belgian sport celebrities as special guests and journalists to create a “buzz” about us in Belgium

B. To attract people, we will: (product and brand communication)

Launch a series of advertisements more oriented to attract people (promotions, gifts vouchers, brochures and coupons) via PTOC for the communication

Propose a Comex L&S loyalty card with bonus points Make a tombola in our website

C. To create a customer relationship, we will:

Investigate the habits of our customer thanks to our Comex L&S cards Have a good after sale service Create a blog in our website

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Appendix n°5

10

5. Marcom

A. Communication tools

a) External communication

Media and supports Direct marketing Sales promotion Press Public relations Website E-commerce

b) The publicity campaign made by PTOC

Indeed the publicity campaign will be made with the collaboration of PTOC during the first 3 years. They made for us an advertising campaign per year. For 2011 they made it according to a budget of €1.5 million and then €930.000 for 2012 and €930.000 for 2013. The rest of the 4million€ will be spend for the website, the tombola, the event (only the 1st year) and for other kind of communications.

PTOC proposed the following marketing plan purpose to do the communication like that :

The 1st Year

There will be 3 waves of communications :

The 1st one is the following :

It will be more oriented to the opening of our store and to build our awareness

Advertising campaign23

o To cover the Eastern and Western Flanders with 220 panels of 20m ² during 7days before the opening of our store and during 7 days after the opening (see an example in appendix)

o To reinforce the advertising campaign by 115 full back on bus in Gent, Aalst, Bruges, Kortrijk and St-Niklaas during 7 days before the opening and 21 days after the opening (see an example in appendix)

Radio advertisement

o On MNM, Q music and Studio Brussels ,spot of 30 seconds during 6 days before the opening and then 8 days to cover the Flemish territory

TV advertisement

o On VTM, VT4 and 2BE, spot of 30 seconds to cover all Flemish territory 7 days before the opening and 7 days after

Thanks to this campaign we will cover those cities but also their surroundings

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Appendix n°6

11

A brochure distributed one time in East and West Flanders about our new store

The 2nd and the 3rd wave will be also like the first one but the advertisement will not only be oriented to build our awareness but they will have also the aim to attract people and to highlight the promotions in COMEX L&S. Concerning the length and the period of these advertising waves, they will be +/- similar to the 1st wave.

For the 2nd and the 3rd year

There will be 2 waves of communication made by PTOC which will be oriented to promote our image and to attract people in our store for the Sales period (July and January).

B. Marcom cost

2011 2012 2013

A website24 €15.000 /// ///

An Ecommerce25 €15.000 /// ///

Event for the opening €200.000 /// ///

20m2 panels26 €300.000 €200.000 €200.000

Full back €150.000 €100.000 €100.000

Radio ads €300.000 €200.000 €200.000

TV ads €450.000 €300.000 €300.000

Brochures (1time) €20.000 /// ///

Tombola in our website

€1.000 €750 €500

Production and region taxes

€195.200 €128.000 €128.000

Other communications (press, magazines, interim agency…)

€365.000 €71.250 €71.500

Total of cost €2.000.000 €1.000.000 €1.000.000

24http://booster-sites.be/fr/site_web/ 25http://booster-sites.be/fr/ecommerce/ 26 The costs for 20m2 panels, full back, radio ads, TV ads, brochures and production and region taxes come from the quotation of PTOC’s Account Manager, Christoph Nolf

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6. Swot27

Strengths Weaknesses

Opening of our store 6 Sundays a year

Important employees number

Our prices policy

Our own brands

All major international and local brands

Easy accessibility and location of our store

Size of the building

Free huge parking

Delivery service

Purchases central

Catchment area

E-commerce

The opening hours

More completed services than our competitors

15.000 references

Communication via PTOC

Huge purchases costs

Important starting capital needed

The prices for the purchasing and the construction of the building

Important loss for the 1st year

Important companies’ tax

The costs for the HR department

Paritary committee 311 : important employee protection

Trade unions

No awareness at the beginning

Only one store

Location of the purchases central : in England

Time needed for the construction

Huge size of the building (have to fill every m² with products)

Opportunities Threats

Subsidies

Possibility to negotiate the companies’ tax

Royalties, management fees, notional interest : money not taxed in Belgium

Second store after the third year

Decreasing of the taxable basis thanks to the DNA, interest rate

Possibility to subcontract the delivery service if less costly

Sportive culture well implemented in Belgium

Exchange rate

Inflation and health rate

The sickness rate in the sector

The staff turnover

Many important competitors

The financial crisis

Belgian’s non food sector’s turnover is decreasing

Time needed to have the construction permission

The weather : negative impact on the construction

Why this ex Carrefour store has closed his door

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Appendix n°7

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10. HR28

1. The paritary committee 311 Our future company/store “COMEX L&S” in Flanders will belong to the paritary committee (PC) 311. The PC 311 is part of the large companies of retail sale. This paritary committee groups the non-food companies which employ at least 50 persons and exploit less than 3 different commercial branches.

2. Labor law in Belgium29 According to our paritary committee (PC311), the working time is 35 hours a week. The workers can work 5 days a week.

Concerning the work on Sunday, we will be opened 6 Sundays a year. In Belgium, the labor law forbids in principle that the employees work on Sunday, even if they agree. However, in the decree of the 27/11/2007, we are passed from 3 to 6 for the number of Sundays of opening during which the workers can, per calendar year, be occupied in the sector of the distribution. Furthermore, these Sundays can be chosen freely by the employer. On Sunday, the workers earn 200% of their normal wage.

3. Staff composition and salary cost

Front office

Workers in Full time 99

Workers in Part time 71

Students in Part time 71

Total Costs (gross salary) : Costs for a normal gross wage Wages for Monday to Saturday Wages for Sundays (200%) 13th month Holiday pay

€4.891.091

Back office

Workers in Full time 18

Total cost(gross salary) : Costs for a normal gross salary Wages for Monday to Saturday 13th month Holiday pay

€1.116.491

Total number of workers 259

Total salary costs €6.007.582

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Appendix n°8

29 http://www.emploi.belgique.be/defaultTab.aspx?id=388

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4. Organization chart

5. Other costs related to our staff

A. Costs of staff recruitment

All costs for the staff recruitment is included in the marketing costs

B. Salary package

All the workers

Luncheon vouchers (included in the salary) Discount card on products and services of

the store (20% discount on our own brands and 10% discount on the other brands)

Front Office

The shelf managers and the salesmen and saleswomen will receive bonuses. These bonuses are a percentage on the sales, on the turnover of the shelves. They receive these bonuses only if the turnover of the shelf is higher than a certain turnover fixed by the store manager

Back Office

The MD and the 6 managers will receive besides their wages a car with the gasoline card, a mobile phone, a pension plan (included in the salary) and an hospitalization insurance

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C. The staff turnover

The staff turnover is high in our sector. Indeed, we employ young workers because the work is heavy and physical. The problem is that these young workers are people who change often of work and are even “unstable”. The total staff turnover = voluntary departures + involuntary departures According to Securex, The staff T.O. percentage in our CP is about 6,65% for the voluntary departure and 14,09% for the involuntary departure. Currently, it is not possible to calculate the cost of the staff T.O. we will have in our company, because there are a lot of aspects we have to include (direct and indirect costs) and we cannot forecast. For example the left function, the costs related to the lost of a good worker who could have contributed to the growth of the company. Moreover, we cannot be sure that the employee who will succeed him, would be so good and even better than him. Face to a fire, the colleagues could work less. The total staff T.O. costs include the following points:

Administrative costs

The costs related to the temporary replacement

The costs related to the recruitment

The possible loss of a customer who could follow the employee who has left the company. According to the function of the worker, his performance, the time to find someone else, … the costs can reach 150% and even more of the annual wage of the worker.

D. Absenteeism costs

In 2009, the total percentage of absenteeism due to diseases = 5,58% In 2009, the total percentage of absenteeism due to accidents at work = 0,41% In term of costs, it costs for the company: 489 051,6 €

Calculation Explanations

Gross wage x 8,6% = Y (direct costs)

Y x 2,5 = Z (indirect costs)

Z x 6 days x total head count for this gross wage = total

8,6% = direct cost for one day of absenteeism due to disease

2,5 = indirect costs are estimated at 2,5 times higher than the direct costs

6 = on average the number of days of absenteeism due to disease

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11. Means of production

1. Area and possibilities to extend our store

We will construct a second floor to the biggest store in Belgium. Our total area will be more or less 15.000 m².

Sales area: 4.357m² * 2 = 8714 m² Storage area: 3727 m² = 13.879 m² Lunch garden 719m² * 2 = 1438 According to the town of Ghent the waiting time for the building permit will be 4 months.

For the constructions, we have approached the building company Willy Naessens. They have built over 4500 buildings so far. They propose two kinds of services:

Structure, foundation, roof and pavement for €250 per m² All the construction with heating and electricity €500 to €600 per m²

So the construction price of our sales will amount to €600 * 8803 = €5.298.000 for the second floor.

The purchase price amounts to €5.500.000, but we negotiate with Redveco to have a discount on this price. They agree to do a discount of 7% on the cost price. So the store will cost us at the end €5.115.000.

In conclusion for the construction and the purchase price of the store the amount is €10.413.000.

2. Arrangement and installation

We would like to buy a Carrefour which closed his doors. Indeed they will be a lot of arrangement work because of the shelves, the check-out, fitting rooms … that we have to put in place. But the advantage of this store is that they have things that we keep for example the reception desk.

For all the installation of the second floor and the arrangement we put an amount of more or less €1.500.000

The entrance

First of all when you will enter the store you will see the special offers for the week or the month. We will also have a number of 10 checks out on the left and on the right we will have reception desk.

In the middle

We will have a shelf for all kind of sport. But maybe 2 for some sports which take place. Over each shelf you will find an indication to know which sport is concerned. There will be mirrors at the end of the shelf if it is necessary.

At the back

On one side we will find the products which take a lot of place such as the bicycle, weight machines, tents … and on the other side we will have the fitting room.

The exit We will have the after sales service

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Schedules:

Opened from Monday to Saturday (6 days per week) Opened from 9.00 am to 8.30 pm (111/2 hours per day) Opened 6 Sundays a year

3. Equipment, furniture and vehicles30

We will depreciate the building over 30 years, the plant, machinery and equipment over 10 years and the furniture and vehicles over 5 years31.

Vehicles

The cost for the cars that we will give to our back office staff is included in the salary package. These cars will be bought through a financial leasing. We offer a BMW for the managing director and Golf 6 for the others32.The monthly rent with the insurance and the maintenance amounts to 850€ for the 320d BMW and to 415€ for the Golf 6. We will buy 2 VW Crafter Fourgon for our delivery service through a financial renting and not through a financial leasing because they will make a lot of km a year and it is more advantageous.

4. Suppliers

Most products will be purchased through the headquarters, located in UK. We have estimated our needs in goods for our sales and our stock: for the first year we will buy 8.923.913 €; for the second year 13.385.869 €; for the third year 18.740.216 €. These needs are calculated in percentage of our turnover ≈ 60% (with a 40% benefits margin). This is based on the assumption that the cost of goods sold will reach around 60 % (leaving 40% gross profit margin).

We found local brands with whom we can work. These local brands are Tolga33 (horse riding equipments), Scarecrow34 (wakeboard and surf), Marie Jo Intense35 (sport underwears), Purple Products36 (fishing products)... It could be a good idea to supply us by local brands to reduce the costs of transport.

30

Appendix n°9 31

Appendix n°10 32

Appendix n°11 33

www.tolga.be 34

http://scarecrow.be 35

www.mariejo.com/home/intense/fr/default.aspx 36

www.purpleproducts.be

18

12. Financial dossier

1. Investment budget

Investment budget

Constitution fees 5.322

Business lawyer firm 5.000 Status publication fees 322,31

Tangible assets 14.500.000 Land and

construction (building) 12.000.000 Plant, machinery and equipment 2.000.000 Furniture and vehicles 500.000

Stock 1.500.000

Liquid assets 3.000.000

Total 19.005.322

19

2. P&L forecast

2011 2012 2013

Sales and Services 70/74 14.278.260 21.417.390 29.984.346

Turnover 70 14.278.260 50% = 21.417.390

40%= 29.984.346

Cost of sales and services 60/64 17.263.134 21.820.412 27.177.226

Supply and goods 60 7.423.913 12.635.869 17.840.216

Purchase 600/8

Equipment

Clothes

Machines 8.923.91

3 13.385.8

69 18.740.2

16

Accessories

Energies food

Stocks: decrease (increase) 609 -1.500.000 -750.000 -900.000

Various services and goods 61 2.248.832 1.450.002 1.456.303

Phone, internet costs 10.000 10.000 10.000

Cleaning costs 120.000 120.000 120.000

Security 293.832 300.002 306.303

Communication costs 1.800.00

0 1.000.00

0 1.000.00

0

Entertainment expenses 15.000 15.000 15.000

Office supplies 5.000 5.000 5.000

Business lawyer firm 5.000

Remunerations, social contributions and pensions

62 6.496.633 6.633.062 6.772.357

Remunerations for NP + 10% 6.075.817 6.500.689 6.623.853

Amortizations and value reductions on start-up costs, on intangible asset and tangible asset immobilization

630 700.000 700.000 700.000

Other operating expenses 640/8 393.756 401.479 408.350

Water, electricity 50.000 51.150 52.173

285.800 292.373 298.221

Insurances* 57.956 57.956 57.956

Operating profit (loss) 9901 -2.984.874 -403.022 2.807.120

Financial expenses 65

Debt expenses 650

Banking charges 797.563 671.063 544.563

Other financial expenses 652/9

Current profit (loss) before taxes 9902 -3.782.437 -1.074.085 2.262.557

20

DNA 425.726 249.646 285.526

DNA : deduction 277.069 195.009 221.919

Fuel (75%) 137.800 (103.350)

161.720 (121.290)

197.600 (148.200)

Leasing (75%) 56.830 (42.623) 56.830 (42.623) 56.830 (42.623)

Renting (100%) 16.256 (16.256) 16.256 (16.256) 16.256 (16.256)

Event, sponsorship (50%) 200.000 (100.000)

Entertainment expenses (100% if

once a year) 11.340 (11.340) 11.340 (11.340) 11.340 (11.340)

Beverages (100%) 3.500 (3.500) 3.500 (3.500) 3.500 (3.500)

Exercise profit (loss) before taxes 9903 -4.208.163 -1.323.731 2.548.083

Royalties 3%

76.443

Taxable basis 2.249.722

Taxes 33,99% 670/3

764.680

Exercise profit (loss) to affect 9905 -4.208.163 -1.323.731 1.485.041

NP + 10% -3.787.347 -1.191.358 1.633.546

21

3. Balance sheet

Assets Balance sheet at the beginning

2011 2012 2013

Tangible assets 22/27 14.500.000 13.800.000 13.100.000 12.400.000

Land and construction (building)

22 12.000.000 11.600.000 11.200.000 10.800.000

Plant, machinery

and equipment 23 2.000.000 1.800.000 1.600.000 1.400.000

Furniture and Vehicles

24 500.000 400.000 300.000 200.000

Stocks 30/36 1.500.000 1.500.000 2.250.000 3.150.000

Claims of less than one year

40/41

Commercial claims (b to b)

40

480.000 720.000 1.008.000

Liquid assets 54/58 3.000.000 -1.997.163 -4.349.448 -3.878.286

Accruals 490/1

Total of the assets 20/58 19.000.000 13.782.837 11.720.552 12.679.714

Liabilities

Balance sheet at the beginning

2011 2012 2013

Equity 17/100

Capital 10 5.000.000 5.000.000 5.000.000 5.000.000

Reserve 13

Deferred profit (loss) 14

-4.208.163 -5.531.894 -4.046.853

Debts 17/49

Debts of more than one year

17

Financial debts

170/4 12.500.000 10.850.000 9.200.000 7.550.000

Banks 8.500.000 7.650.000 6.800.000 5.950.000

Comex Ltd 4.000.000 3.200.000 2.400.000 1.600.000

Debts of less than one year

42/48

Financial debts 43

Commercial debts

44 1.500.000 1.500.000 2.250.000 3.150.000

Fiscal debts, remuneration and social debts

45

Taxes 450/3

215.000 367.500 582.487

Remuneration and social debts

454/9

426.000 434.946 444.080

Accruals 492/3

Total of the liabilities

49/100 19.000.000 13.782.837 11.720.552 12.679.714

22

4. Ratios

ratios 2011 2012 2013

Working capital -2.158.163 -4.431.894 -3.896.853

Working capital needs 480.000 720.000 1.008.000

ROE -26,55% -9,32% 11,83%

ROI -24,75% -5,57% 22,04%

Solvency 84,47% 73,96% 67,06%

Liquidity -101,14% -161,31% -91,12%

EBIT -4.208.163 -1.323.731 2.548.083

EBITA -3.508.163 -623.731 3.248.083

Cash flow -4.208.163 -1.323.731 2.548.083

% / TO 2011 2012 2013

T.O. 14.278.260 21.417.390 29.984.346

G.M. -20,91% -1,88% 9,36%

Remunerations 45,50% 30,97% 22,59%

Working capital -15,12% -20,69% -13,00%

Working capital needs 3,36% 3,36% 3,36%

EBIT -29,47% -6,18% 8,50%

EBITA -24,57% -2,91% 10,83%

N.P. -29,47% -6,18% 4,95%

Cash

2011 2012 2013

In

T.O. 14.278.260 21.417.390 29.984.346

Out

Supply and goods 8.923.913 13.385.869 18.740.216

Various services and goods

2.248.832 1.450.002 1.456.303

Remunerations 6.496.633 6.633.062 6.772.357

Other operating expenses

393.756 401.479 408.350

DNA 425.726 249.646 285.526

Total OUT 18.488.860 22.120.058 27.662.752

Total

-4.210.600 -702.668 2.321.594

23

5. Financial help

A. Capital grants from the Flemish government 37

There is a possibility to receive a capital grants from the Flemish government because it encourages the investment in their region. However, there are some conditions and a “competition system” to get it. The maximum amount we can receive in our case is up to 14% of the project.

B. Flanders Investment & Trade(FIT)38

It is a Flemish agency which gives free advices on all aspects of the investment in their region (choice of the site, the integration in the local community life, legal aspects related to the creation of a local company …). It will allows us to avoid some extra spends for some information we need.

13. Exchange rate, VAT, insurances

1. Exchange rate39

We need to cover us for two situations:

A. Goods importation

We have chosen a “CALL” option. It is the right to purchase a currency on a specified date in the future (expiration date) at a predetermined price (strike price). The date and strike price are determined when the option is concluded. In order to acquire this right, the buyer of the option must pay an up-front premium.

expiration date = the date on which the option expires

delivery date = option expiration date + two business days or actual value date

strike price = exercise price With this way we can choose to purchase GBP at the strike price or the current spot rate. We are totally covered from the exchange risk but we have to pay an up-front premium to the bank.

Terms and conditions Duration: Minimum of three days, maximum of two years Minimum nominal amount: 10.000 € Up-front premium payable depends on factors such as the strike price, spot rate, volatility

and duration

B. Compensation/remuneration to the headquarter s

This compensation is paid at the end of the year in percentage of the turnover. We need to avoid cost and we have to choose a secured option. We are more free than for the payment of goods. Indeed we have one year to take an exchange rate. That is the reason why we can opt for a currency forward contract. It is a purchase agreement for a pair of currencies, with a predetermined exchange rate but with delivery and payment at a later date stipulated in the agreement. The forward rate is influenced by the spot rate and the interest-rate spread for the two currencies exchanged. The premium (= report) represents the interest-rate spread added to the spot rate, the discount (=deport) represents the interest-rate spread deducted from the spot rate.

37 www.investinflanders.com/fr/doing_buiseness/incentives/investment_incentives/ 38 www.investflanders.com/en/home/ 39 http://www.ing.be/business/showdoc.jsp?docid=025664_FR&menopt=sme%7Cbha%7Cris%7Cere&lang=fr

24

Forward rate = Spot rate + premium ( or report= negative interest-rate spread between the main

currency (generally EUR) and the currency traded) Spot rate - discount (or deport =positive interest-rate spread between the main

currency (generally EUR) and the currency traded)

Terms and conditions Duration: Minimum of three days, maximum of one year Minimum amount: 2.500 € Charges: 1 °/°° (payable up front) Minimum: 12,50 €, Maximum: 75 €

2. VAT40

The company, as a Belgian company, will be registered to the VAT after the obtainment of the

company number. The invoices from the headquarters don’t have to mention the VAT. According to

our business, the VAT rates are of 12% for our real estate works and 21% for all goods and services.

The Vat is deductible for trader liable the VAT. We, liable for tax, have to note the operation and the

tax in our declaration to the VAT. The declaration of the month has to be completed and submitted

to the 20th of next month.

3. Insurances

We have opted for the following insurance policies:

Industrial injuries : 1% of total gross wage €33,835

RC objective €1,000 Fire insurance: 0,75‰ of the container and the content €14,193 RC after delivery + RC operating: 0,01% of the TO €1,428 Transfer and value insurance € 7,500 TOTAL € 57,956

14. Conclusion

The 2nd Comex L&S Mega store in Belgium

We project to open a 2nd store in Belgium by 2014. As we have only one store in Flanders (Zwijnaarde), we will open another one in Wallonia to cover all the country. However, the opening of the 2nd Comex L&S will depend on the situation we will have and the projects of our Group.

If we reach our sales target, a second store will open his door in Namur. Indeed, it is the capital of Wallonia and Anne Barzin, the city counselor for trade in Namur claims that, there is a lack of leisure and sport stores in this city.41

40 Appendix n°12 41 http://www.canalc.be/index.php?option=com_content&task=view&id=6723&Itemid=356

25

15. Sources

1. Webography

- http://www.ducroire.be, visited during the months of November and December

- http://statbel.fgov.be, visited during the months of November and December

- http://www.lalibre.be, visited during the months of November and December

- http://www.plan.be, visited during the months of November and December

- http://www.rtbf.be, visited during the months of November and December

- http://booster-sites.be, visited during the month of November

- http://www.emploi.belgique.be, visited during the months of November and December

- http://www.tolga.be, visited the 22th December

- http://scarecrow.be, visited the 22th December

- http://www.mariejo.com, visited the 22th December

- http://www.purpleproducts.be, visited the 22th December

- http://www.investflanders.com, visited the months of November and December

- http://www.ing.be, visited the months of November and December

- http://www.canalc.be, visited the month of November

2. Bibliography

- GODART (N.), LATIN (J.), VANVELTHEM (M.), VERMAST (M.), Notions de législation sociale et

fiscale, ed. 2009-2010

- Trends 2011

- Financial analysis course at EPHEC third year

3. Interviews

- Employee of the Ghent authorithy, interviewed in December

- NOLF Christophe by PTOC, interviewed in November

- NELIS Charle- Emmanuel and MINNE Jean by Decathlon, interviewed in December

- FRESON Valérie, Valérie Cleaning, interviewed in December

- Employee of G4S, interviewed in December

- KONOZIS Silva by Dexia, interviewed in November

- Employee of Liedekerke,business lawyer firm, interviewed in December

- Employee of Redevco, interviewed in November

- LOOTENS Jean by BNP Paribas Fortis, interviewed in November

16. Appendix