5,000 Locations Later: The Operator's Rules For Retail Expansion

A brand Simon Dallimore advises was headed for one of the most high-profile retail locations in the country. Nothing was wrong with the site. His team ran the variables anyway, made the case for the brand's second choice, and shifted the decision. Fifteen months later that store is running at about 3x plan.

Simon has been involved with about 5,000 locations, first as an operator and then as an advisor. He was one of the first employees at The Body Shop, opened Swatch's retail network in the US, ran Lucky Brand as its president, and at Liz Claiborne grew a number of brands and set up the shared services group. In 2004 he founded Dallimore & Co., which works with brands, bankers and investors on two questions: how big can this business get, and where do the next stores go.

I met Simon at ICSC and we connected over our shared love of bike riding. He is bold enough to New York City. I try to stay out of the way of cars as much as possible ;)

People who listen to this show know I gravitate to advisors who learned retail by owning a P&L, and Simon is exactly that. What follows are the rules he works by.

Every store has to satisfy its own business case

An operator who owns the P&L sweats it every day. Simon described going to sleep panicked about a store: the high points, the low points, the outliers. Pattern recognition becomes the asset.

I said on the show that this is the difference between an operator and a consultant. A consultant sees a path to revenue. An operator sees the three things that path does to the P&L. Simon's version is one sentence, and every other rule here hangs from it.

"Every single store needs to satisfy its own business case."

He said it looking at a sheet on his desk that his colleague Reid pulls together: the quantitative and the qualitative parts of a decision, side by side. Fleet averages are where bad stores hide.

Size the prize before you draw the map

The week we recorded, Dallimore & Co. had just started a due diligence study for a brand planning to exit later this year. The job is to size and scale the business: to put a number on the "size of the prize" for the banker, the investor and the brand at the same time.

Step one is unpacking the existing business in detail, because even within the brick-and-mortar channel, revenue and P&L vary from store to store, and the variables behind that are what scale depends on. And scale is brand-specific. A mature food and beverage business can run to thousands of units. A mature contemporary fashion brand, five years out, might be 50. The business Simon was about to start on could go from 50 stores to perhaps 150 over the next five years, and that is the value the investor is underwriting over the hold period.

"All channels to me tells me the roadmap. That gives me an insight into who the customer is."

E-commerce shows demand on an unfiltered basis, which is why Andrew Neelon leans on it, but it is one filter. The stores say something. The wholesale business says something. Simon marries the three, looks at the qualitative side of each store, and forms an opinion before the first conversation with the brand about sites.

Lesson: Before white space, know the ceiling. I said on the show that a 50-store brand with a predictive model is a little silly, and Simon agreed: McDonald's needs that precision at its size, the brands he works often do not. At 50 stores, the pattern in the existing fleet is the model.

Founders are built differently

Every company Simon has worked with has had a founder and an investor in the picture at some stage. Founders put every ounce of their being into the business: some mortgaged the house to make payroll. Simon calls it mindset. It shapes the deal too. Deal mechanics are a skill set, and few people get to learn them twice.

Align everyone before the first site

Many people in a retail organization have opinions and votes. Simon's answer is alignment on a plan up front, where every stakeholder says openly what they believe the business looks like. Their input may not be right, but it comes from years inside that business, so the job is to listen, digest it, and decide how it applies.

Sometimes the alignment has to be built one person at a time. On one deal, the group call with the CEO, the investor and the banker was not going well. Simon knew the banker well, asked to take it offline, and for a couple of weeks held a one-to-one call with the CEO at 8 p.m. Eastern, every evening. The value creation was obvious to Simon because he had seen the pattern before, but showing where it would come out of the existing fleet took education, and that conversation needed to be private.

"You need everybody on the same page, on the same hymn sheet, day one."

Lesson: Nobody has written the playbook for the social side of site selection. Everything published is about predictive models and trade areas. Jack Thompson, who founded Tango Analytics and did site selection for McDonald's, had the ops team and the real estate team walk every site together and fill out an 18-point qualitative survey. It fed the model, but the real purpose was to hash out the opinion together. Simon's plan up front is the same idea from the other direction.

Boots on the ground, same team, every time

Back to the store running at 3x plan. Location A was one of the most high-profile places in the country and an obvious choice. Simon's team had pattern recognition from similar businesses that said B might be better, so they isolated every variable and ran both sites through the same two filters: P&L and brand impact. On brand impact, moving to B was roughly neutral. On P&L, they believed the business would do more volume and be more profitable at B. At month 15, revenue is about 3x plan, with EBITDA payback and everything else that follows from it. The CEO is conservative and so was the pro forma, Simon was quick to add. Even so.

What they saw at B that the model did not:

• The consumer. The age and profile of the customer at B matched the brand. Segmentation gets you there, but only if you truly understand where those customers go.
• Boots on the ground, "absolutely non-negotiable." Visit at different times of day. Look at which synergistic brands are there and how they are performing. Sit in the restaurants and ask whether the people in them buy the way this brand's customer buys.
• Same team, same time, same experience. The same people evaluate every candidate, at the same points, so the scorecard is comparable from one site to the next.
• A/B on both. Score quant and qual side by side before deciding. It is rarely purely one or the other.

"You've got to marry these things together to come up with a good decision."

Then the part I found most useful. Once B was open and the numbers were in, Steve took what the team judged to be the gut attributes of that location and force-ranked them higher for the brand's next candidates. Easier said than done, Simon admitted, but it gave them confidence on the sites that followed.

Lesson: Segmentation gets a brand to the neighborhood. The humans standing on the corner pick the site. The step most teams skip is the last one: feed what the winner taught you back into the ranking.

Underwrite the channel conflict

I asked about the brand that arrives with wholesale, stores and e-commerce, where a store near a strong wholesale door creates tension. Simon's frame is finite capital and the implication for scale. Where a wholesale relationship is performing, sometimes the answer is to leave that market alone. In others, a store is accretive to the brand, and he named Atlanta and Dallas as places where that has worked. The rule is to know which case applies before deciding, and to put that variable into the underwriting of the business case. If channel conflict were fatal there would not be a Starbucks in every Kroger.

No such thing as good stores, only good store managers

I asked about a location that should have performed and did not, and Simon went straight to the team. The line belongs to Barry Perlman, who co-founded Lucky Brand, and Simon believes it totally. The store manager has the hardest job in retail: on their feet all day, managing customers, team, HQ and communications, and the gap between a good one and a not-so-good one shows up as big variance in the numbers.

The corollary runs the other way. Operating a business is the hardest thing, so it is incumbent on the people making site decisions to do a good job and not burden the people who have to run the store. A bad site drains the whole business, and it is not a pleasant experience for the people on the receiving end. A great manager should be compounding a good box, not rescuing a bad one.

In 2026, informed beats fast

The market I put to Simon: store closures up 12% year over year, build costs up, and vacancy at 4 to 5%, the lowest in years, because almost nothing is being built. The price of getting a store wrong is higher than it has been, and there is less space to choose from. I asked whether the answer is to decide faster.

"It's not necessarily about making faster decisions, it's making informed decisions."

Informed means having a plan and being confident in it before executing. Then he took the vacancy number apart.

• 4 to 5% is a generic number. For one brand, his team broke out three markets and looked only at the quality of space a brand on that growth trajectory would take. Austin came out at 99.5% leased.
• It is a landlord's market. Some tenants perform so well that they can afford to win in a tight market, which pushes demand further. A brand may not want to pay a certain rent, and a landlord may be able to get it anyway. Judgment, patience, a plan, and be ready.
• The better the brand, the easier it gets. One early-stage brand he is working with will find its world changes the day it opens. Not everyone is aware of a brand until they can see it, touch it and feel it.
• Lead time has grown exponentially. One tier-one decision took four years to execute. Real estate inventory is one of the bigger risk factors today, and it slows everything down.

I pushed on the exit problem: a brand with a number to hit before a sale cannot always wait. Simon's answer was that those decisions cannot be forced. Build in the lead time and react to the dynamics as they occur, because at exit an outlier store that is not performing has to be explained, and the people asking will question the management team that made the decision. Part of the advisor's job is to make sure there is nothing to explain.

"You cannot make a bad decision under any circumstance."

Lesson: Brand is the lever on the landlord. Dutch Bros is my favorite example right now: small parcels, Gen Z and working-class neighborhoods that Starbucks never targeted, and a brand people love, so a landlord knows what happens when the doors open. Simon's "the better the brand, the easier it gets" is the same point from the other side of the table.

Stay contemporary

I described the best site selectors as having a neural network in their head: there is math behind the judgment, but they cannot articulate the math. Simon agreed, with numbers. He thinks in a mathematical way all the time, has been involved with about 5,000 locations, "enough to be dangerous," and put it down to 10,000 hours. One CEO he works with keeps an experience calculator, and the two of them compared notes.

The caveat is the part that matters. The landscape changes, and pattern recognition only works if you stay contemporary enough to interpret the new elements driving sales. His examples were in coffee: Blank Street, and Watch House, a British brand with fewer than 20 stores and about three in the US whose experience he called second to none. That is the passion of an owner, and those brands chip away at the behavior of the large ones.

Summation

Every store has to satisfy its own business case. Size the prize before drawing the map, get everyone on the same page before the first site, send the same team to stand on the corner, underwrite the channel conflict, and remember that the store manager makes or breaks whatever the site allows. In a landlord's market the timeline is longer and the price of a mistake is higher, and the advantage goes to the brand that is informed enough to wait.

Simon is on LinkedIn and at simon@dallimoreco.com.

Onwards.