New retail concept LANds

A concept store – which combines an internet café with an IT retailer – turned a profit after two weeks of operation with plans to franchise the model which is claimed to be an Australian first.

Dubbed iStarZone - the first store, in George St, Sydney, was developed by former IT distribution executive Renato Catalan.

Under the model, the retail shop sells computer hardware and other products such as speakers, graphics cards and mobile phones. The café – kitted up with new PCs, plasma screens, webcams, loudspeakers and printers – is an internet and games provider which sports LAN gaming areas, clan rooms, VIP rooms and couple rooms.

Speaking to iTnews on Thursday night, Catalan, iStarZone's marketing manager, said the combination of an internet café and IT retailer is an innovative concept. “I can't believe no one's done this before, but they haven't,” he said.

Catalan estimated the store, located underneath Sydney's George Street Cinemas, cost around $350,000 to set up -  the highest cost being 73 new PCs. “There is a lot of reseller competition in the city,” Catalan said, but the shop has been successful, and even turned a profit in its first two weeks, he said.

The projected turnover for the year, if the shop and internet space was successful, was around $1.3 million, Catalan said.

When asked about further rolling out the iStarZone concept, Catalan said; “It's planned to be a franchise and Hoyts [George Street store] is the formula.”

There are three iStarZones in Sydney at present and Catalan is working on the Liverpool street store, currently a net café, which will follow the same model. 

“I'm quite excited about [the] Liverpool street [store],” Catalan said. Just as an internet café, he said the store recouped its costs within four months, so he felt confident that the location - which is on street-level and near the new Meriton tower - would prove successful. “We're also looking at locations in Strathfield and Bondi Junction,” Catalan said.

He said he had also talked to a net café in Melbourne that was “keen do a joint project with the concept”.

Although iStarZone doesn't sell any food or drinks, Catalan said that customers were welcome to eat at the tables and chairs provided, and could even order from the food court upstairs in the Cinema complex. “We're looking at doing cross-promotions with some of the food vendors upstairs - we don't want to compete with them,” Catalan said.

iStarZone held one of its first industry events last night - TeqilLAN sunrise, the launch of THQ's game Warhammer 40,000: Fire Warrior - which was put on by ABIT and THQ in conjunction with AJB's Atomic magazine.

The game's release was followed by a LAN gaming competition involving invited resellers and Atomic readers who won tickets.

Several vendors and distributors have rallied behind the concept including AMD, ASUS, Creative Labs, Samsung Electronics, Vivendi Universal and Western Digital.