How Much Money Can I Make Owning a Clothes Boutique?

by Timothea Xi; Updated September 26, 2017

Boutiques often serve high-end or niche customers, so the amount of money you can make as an owner depends in part on the prevailing economic climate and consumer confidence. Your earnings also are impacted by competition with big clothing retailers and e-commerce outlets.

U.S. Retail Clothing Industry

According to Sageworks, a data analysis company, net profit margins for U.S. privately-held clothing stores was 7 percent as of 2013. These figures were based on aggregated financial statements of clothing stores gathered from banks, credit unions and accounting companies.

Boutique Owner Salary

Industry salary resource Salary Explorer reports that the average monthly salary for a retail store manager in the fashion/apparel industry is approximately $3,420 as of 2015. Career portal Glassdoor quotes $40,000 as the national average annual salary of a boutique manager.

Consignment clothing stores buy used clothes and/or share profits with consignors who sell their used clothing through the store. The annual salary of a consignment store owner, according to career website Simply Hired, is $42,000 as of 2015.

Store Profit Per Square Foot

The key to profitability for clothing stores, notes retail consultants Karl Stark and Bill Stewart from the Avondale company, is the ratio of sales per square foot to rent per square foot. Industry data resource Bizminer expresses the ratio in terms of rent to revenue. For retail clothing stores, that ratio as of 2013 was 7.67 percent for men's clothing stores and 8.33 percent for women's clothing stores.

Comparing boutiques in New York and Los Angeles, Stark and Stewart found the West Coast store had a sales/rent ratio one-third that of the New York venue. Despite being three times larger than the New York store, the Los Angeles store made roughly the same in sales. As a result, the more efficient New York boutique was profitable, whereas the Los Angeles boutique was not.

Whether you already own a boutique or plan to expand to new stores, you can take several steps to ensure your store's size is not a deterrent to its profit potential. Stark and Stewart recommend estimating total demand and total sales based on the local market. Determine the rental rates of your local market, then from that obtain the maximum boutique square footage for that locality.

About the Author

Timothea Xi has been writing business and finance articles since 2013. She has worked as an alternative investment adviser in Miami, specializing in managed futures. Xi has also worked as a stockbroker in New York City.