CONCLUSION: SHOP THURSDAYS: POST COVID-19 STRATEGY

Piltz was thrilled with Thursdays' past success but was eager to work alongside her mom and uncle to continue to reach consumers across Canada and internationally. With the lease renewal date of July 1, 2020, for the Exchange Tower store, Piltz needed to come to a decision quickly. Based on the current economic environment and the unknowns surrounding the COVID-19 pandemic, Piltz hoped that whether she chose to focus on the online store with influencer marketing or maintain the Exchange Tower location, her decision would result in a profit of at least $300,000.

EXHIBIT 1: SHOP THURSDAYS' SELLING PRICES AND WHOLESALE COSTS BY PRODUCT TYPE

(IN CA$)

Item Type	Selling Price	Wholesale Cost
Cashmere Lounge Set	$670.00	$255.00
Non-Cashmere Lounge Set	$195.00	$90.00
Pants	$150.00	$70.00
Dress	$140.00	$65.00
Shirt	$90.00	$45.00

Source: Company files

EXHIBIT 2: SHOP THURSDAYS' ANNUAL PROJECTED COSTS, 2021 FISCAL PERIOD

Exchange Tower Store

Store Rent	$ 78.000
Salaries and Wages	122.320
Utilities	1.440
Depreciation	1,615
Internet/Phone	1.140
Insurance	2.210
Other Tenant Fees	1.255
Point-of-Sale System	1.236
Health and Safety	1,400

Online Store

Online Manager	$ 40.000
Website Hosting Fees	13,100
Insurance	2,500
Warehouse Rent	28.000

Answer the following question:

1. Calculate the unit contribution margin and contribution margin ratio for the two types of orders made at Thursdays' Exchange Tower location and for the two types of orders made online.

2. Calculate the total annual fixed costs of operating the Exchange Tower store and online store. If the Exchange Tower store were to close, how much funding could then be allocated toward influencer marketing for the 2020/21 fiscal year?