BUSINESS PROJECT: ESPACE DÉTENTE(FRENCH « JIMJILBANG »)Slides created by Nicolas Simon

WHAT IS « ESPACE DÉTENTE »?

It’s a place where you can: enter 24/7 enjoy spa services, such as jacuzzis, hammams,

saunas and massages shape up in a gym have fun with others, watching TV, playing cards

and board-games,… eat snacks and small meals access the internet rest in dormitory-like rooms and stay as long as you want, for a very cheap

price!

DOES SUCH A PLACE EXIST?

Yes, in Korea! It’s called « jimjilbang »

Jimjilbang are very common places there, probably as common as fast-food restaurants

In Seoul for instance, a 12 hours stay is priced 5 to 10 Euros. In comparison, one night in a Korean guesthouse costs 12 to 25 Euros. Basically everything is twice or trice less expensive than in France

JIMJILBANG ILLUSTRATIVE PICTURES (1)

JIMJILBANG ILLUSTRATIVE PICTURES (2)

JIMJILBANG ILLUSTRATIVE PICTURES (3)

JIMJILBANG ILLUSTRATIVE PICTURES (4)

HAS THIS VERY CULTURALLY ROOTED CONCEPT EVER BEEN EXPORTED?

In recent years (2007 & 2008), two jimjibang have opened in New-York and Los Angeles.

These projects were initiated by Korean businessmen, in response to the needs of the ever growing Korean community in those two cities.

Almost every piece of equipment and technology was imported from Korea, to replicate a traditional Korean jimjilbang

The high quality facilities, called “Spa World” required 10 to 15 million dollars of initial investment

ARE THE USA JIMJILBANG  SUCCESSFUL ? Probably yes, considering that:

There is a large core customer base (e.g. Korean expatriates and immigrants)

Americans are lured in by high quality equipment and exotic settings

It’s relatively cheap ̶ 35$ After a few years, the businesses still exist

USA jimjilbang are almost identical to the original Korean ones, expect for the location, outside the cities at driving range

Location costs were kept minimal, thanks to the deeply rooted American habit of using cars as a first choice of transportation system

HOW INNOVATIVE AND DIFFERENT IS ESPACE DÉTENTE ?

Though Espace Détente is conceptually similar to a jimjilbang, it is not a jimjilbang

It will use the power of the internet to add value to the service, and benefit from inexpensive marketing

No Korean branding. The decoration and the marketed goods will be French. For example, sandwiches will be served, not Korean food

SUCCESS DRIVERS OF ESPACE DÉTENTE

Affordability

Social usefulness (it’s an alternative to other social places, such as bars, cinemas, parks, facebook,…)

Practicality (everything seems possible and easy to do there)

Regenerativity (stress and other light illnesses will go away)

Coolness

EXPECTED PROBLEMS TO OVERCOME Team selection (required technical and human skills are

very diverse)

French prejudices and habits (I don’t want to be naked in front of people, I will only watch a football match at a bar,…)

French laws and regulations (opening a business 24/7, changing of the spa water,…)

Funds finding (it’s a very capitalist business, which will most certainly require millions of Euros of initial investment)

Aggressive lobbying ( Espace Détente can be a problem for a number of other business such as spas, gyms, cheap hotels, taxis,…)

FIRST YEAR FINANCIAL EXPECTATIONS (1)

Initial investment of 6 million Euros, fully covered by a bank loan (5 years, 12% interest, constant amortization). first year financial costs ̶ 1 920 000€

Estimated monthly running costs are: rent ̶ 100 000€, staff ̶ 80 000€, water/electricity/maintenance ̶ 50 000€ insurance ̶ 10 000€

Annual running costs V 2 880 000€

FIRST YEAR FINANCIAL EXPECTATIONS (2)

Expected monthly revenues: Entry fees ̶ 4 073 000€ (700 daily customers

paying 20€ on average to enter the facility) Services ̶ 852 000€ (based on margin per

customer of 2€ for food, 1€ for massages, and 0,5€ for other services)

Annual revenues ̶ 4 925 000€

Expected first year profit – 83 000€

If fully financed by shareholders, the expected rate of return would be around 13%

THANK YOU FOR YOUR ATTENTION