Store Closing

[Rob Markoff]

After ten years we have seen the performance of what many have called "our best looking store" continue to decline. Our lease is up for renewal.

In the past few months, three of our competitors in the same neighborhood have closed their doors, yet we have failed to see any perceptable increase in our business.

We agonized over whether to hang on and see if we could capture more market share, but the final straw came when our landlord raised our new rent 30%. That makes the rent at this location 20% more than our best performing store and we have decided to close this location.

I call your attention to the commercial posts section of the grumble where I have detailed many of the things we have for sale at terriffic prices.

If you are even thinking of opening a shop, or upgrading your own, this is a rare opportumity to pick up some fixtures at practically the cost of materials. For many, it would be worth flying out and renting a truck because you could not build fixtures of this quality for what we are selling them for.

 

[J Phipps TN]

I'm sorry to hear that Rob.

How many Locations do you own? and How many jobs are going to be lost?

Jennifer

 

[Bandsaw]

Rob,
It would appear you have no further plans for expansion - any comments on the state of the industry?

 

[Rob Markoff]

When we close this store, we will only have two locations.

"Expansion" is an interesting term. When we started our company 25 years ago, we specialized in commercial/contract work and had a healthy retail trade that was willing to come to a "destination location" because our main workrooms are located in an industrial park. We eventually embraced the concept of 1200 - 1400 sq foot design centers in strip centers located in a hub around our workrooms.

With retail rents being what they are in San Diego, (The rent for the store we are closing increased to $5064 per month for 1400 sq feet) we have found that the contract/commercial work we are doing is greater than the gross of some of the retail stores (that we closed). My wife, Barbara sells more art and framing from her desk per month than this store was producing at its best times. Our business is "growing" but we are focusing more on contract and corporate than retail.

I am not convinced that we can continue to be profitable at retail in some locations due to high rents, high workers comp, high utilities, and the general cost of living. Most of my people have a hard time making ends meet at $13 per hour, yet when one figures benefits and taxes on top of wages, it is hard to be competitive and pay more.

I think we will see a shift back to "trade" type activities in more commercial/industrial locations and firms with reputations such as ours will continue to have clients find our workrooms to get the service and quality we produce.

 

[Paul N]

Sorry to hear that Rob, looks like a really nice store.

 

[stshof]

$5064 for 1400 sq ft? OMG! When I hear the going prices for real estate in other parts of the country, it just blows me away!

It truly is a beautiful store. Downsizing isn't always bad - perhaps the money, time, and energy saved will enable you to enjoy other aspects of life more! (Sorry, that's the over 50 Sue trying to talk herself into slowing down and you just got in the way!)

 

[J Phipps TN]

Wow, I can't beleive your rent. Sue is right, it just blows me away.

I guess you do alot more business then most in your part of the world or else you just charge more.

Does anyone else pay that much? I have heard of Mall locations charging close to that, and that is why all the Deck the Walls have moved out.

Jennifer

 

[JbNormandog]

Jennifer,

Any mall around here is charging more like 12,000 - 15,000 for a space monthly.

If you want one of those little pushcarts in the middle of the mall they go around 5,000 monthly rent.

My rent is not far off from his.

I read what some people on here pay monthly and complain about it and it makes me WISH I paid that much.

As with everything else, it all depends on where you are.

"Wherever you go, there you are"

 

[B. Newman]

Originally posted by Rob Markoff:
When we started our company 25 years ago, we specialized in commercial/contract work and had a healthy retail trade that was willing to come to a "destination location" because our main workrooms are located in an industrial park. We eventually embraced the concept of 1200 - 1400 sq foot design centers in strip centers located in a hub around our workrooms.


I am not convinced that we can continue to be profitable at retail in some locations due to high rents, high workers comp, high utilities, and the general cost of living.


I think we will see a shift back to "trade" type activities in more commercial/industrial locations and firms with reputations such as ours will continue to have clients find our workrooms to get the service and quality we produce.

I don't (even in my wildest dreams) presume to even be in the same "ball-game" as Rob, let alone in the same "ball-park", but even for my miniscule business this is the same concept we've found.

This "trade type activites" seems to be the wave of the future in this area as well. The mere fact of a "killer location" is not the answer any more, that I can see.

Perhaps this is just another "mindset" that needs to be looked at a little closer, maybe?

(To the two "gunslingers" [you know who you are]: Perhaps the shots fired from the Tennessee "shooter" might be a little closer to the target in this instance?)

 

[Tim Hayes.]

Rob,
Sorry to hear about your store but I am sure someone with your business sense has thoroughly thought this out and made the best possible decision. All the best with continuing success in the rest of your business.
Tim

($5,670/month 1200 sq. ft.)

 

[Jay H]

Ditto everybody.

Great looking store too. I have tons of those glass shelves but didn't like the base. I love what you did with the base of them.

I hadn't thought of that.

Good luck.

 

[stshof]

Originally posted by Tim Hayes.:
Rob,

($5,670/month 1200 sq. ft.)

Commercial property, 300 ft from intersection with state highway, in town, 2200 sq. ft., mortgage $561.40/month.

No, I'm not lying!

 

[Bob Carter]

Rent in Caesar's Forum runs over $100 sqft plus all the other fees.

Rent is a proportional expense and I would urge people to not think in dollars but percentages. The expression is that you get what you pay for.

Jennifer-I'm sorry but your comments about DTW's is wrong on both accounts. What's the commercial with the two cavemen on the GEICO commercial?

Rob is a great operator and is going back to his roots. Nothing wrong with that

 

[stshof]

Originally posted by Bob Carter:
Rent in Caesar's Forum runs over $100 sqft plus all the other fees.

Any framers there? (I did the math)

 

[Bob Carter]

Sue-Guess what the sales/ sq ft are( I know)

And, what are your sales/sqft for your commercial property (What's your math for that?)

Last I was there, they had a couple of galleries, a sports memorabilia shop and a hollywood-memorabilia type store. I'm guessing that the galleries would frame something and the Sports Guys had different frame options

Perhaps that they just had another different view of business?

 

[stshof]

Sorry - didn't mean to pull your chain! I was just thinking about how much of my square footage is work space; not sales/retail space. And how expensive that square footage for my Wizard to sit on would be!
I tried the separate work location for a while. It didn't work for me. No matter how carefully I transported, I had damage and whatever supplies I needed always seem to be at the other location.
You're right - my view of business is different but it works for me!

And the real estate costs in other parts of the country still blow me away!

 

[Paul N]

Originally posted by J Phipps TN:
Wow, I can't beleive your rent. Sue is right, it just blows me away.

I guess you do alot more business then most in your part of the world or else you just charge more.

Does anyone else pay that much? I have heard of Mall locations charging close to that, and that is why all the Deck the Walls have moved out.

Jennifer

If I tell you how much my rent is, your ear rings would melt...

 

[DTWDSM]

Jennifer,

Mall rents vary but most are higher than strip centers and free standing locations, but as Bob stated, you get what you pay for. I have more people walking in my store in a day than many have in weeks. And yes most people in malls are doing much more business than the rest of the world..and sometimes we do charge more, but other times we charge less and still make good profit.

As for DTWs moving out of malls, currently there are approx 70 stores across the country, of those I think that no more than 6 or 7 are not in a mall location. There are former stores that are no longer open that were in malls but mall rent was only one of many reasons they closed.

 

[Val]

Whew! Maybe I won't be so grumpy when I write my next rent check, and just thank my lucky stars. I did the math, and I'm pretty darn fortunate.
(shhhhhhh! No-one tell my landlady!)

 

[Puppyraiser]

Or you can do as I do... sleep with the landlord. Hehehe

 

[Liz]

Hey Rob - My background (for 25 years) is selling commercial business insurance, but finding commercial customers in this industry has proven difficult. Any words of wisdom on attracting those commercial/contract customers?

 

[John Ranes II CPF GCF]

Originally posted by Rob Markoff:
...The rent for the store we are closing increased to $5064 per month for 1400 sq feet...

At that rate per foot, I'd be paying over $13,000/month for our 3,600 sq/foot retail location. That's more than double my advertsing budget and current rent combined! There's no way I could keep my doors open with those expenses.

Sorry Rob - Good looking shop! I hate to see rents increase as dramatically as your's did - Is that real expense or greed? Oh....that's a discussion to have over a beer.

John

 

[Rob Markoff]

Read the article by my wife, Barbara in PFM in the upcoming May issue! Seriously, it has the most information in one place on the subject that I have seen in any publication.

I can't believe that there is NO ONE in Gruble Land that is interested in buying ANYTHING?

 

[FrameMakers]

Rob, I am not sorry for you at all. I don't think your looking for sympathy so none will be given.

I applaud you for making a sound business decision based on facts and not on a gut whim.

We also just closed our 4th location that was the best looking & newest of our stores. It had by far the worst sales and the highest rent.

We are currently in the process of moving our warehouse facility and combining it with one of our existing locations.

Good luck with the consolidation and the sale of equipment.

See you in Atlanta.

 

[J Phipps TN]

Wow,

I didn't mean to insult the DTW people at all.

I just know that around here, almost all of the Deck the Walls have closed and most of what I heard was because of the high cost of Mall space and the competition from stores like HL and Kirklands. At least that is what I have heard from my reps in this part of the world.

Maybe it's not that way around the country so I appoligize for any miss speaking.

I use to work in a Deck the Walls in Boiser City LA. and thought it was a great place, but since owning my own store,(20 years later) I can't imagine being able to cover the cost of the Mall space, at least not in this "non-limited edtion" type selling market. I wonder if the one I worked at is still in business?

If some are still doing it and making it, more power to them,

But we don't have one left any where around here.

We just lost our last one in January of this year. They moved the framing part to a homebased business.

I wish you all well and again I didn't mean any disrespect by pointing out just one chain of framing stores. We all seem to be changing and finding different ways to make our business's grow.
I beleive this changing economy is scarey to all of us. I know I don't want to invest the time I have to end up like the Type Writer Repair guys.



Jennifer

 

[Jerry Ervin]

Jennifer

Don't fret about the comments from DTW or mall people. Maybe they are right and we are wrong. Only time will tell.

All the DTWs in North Carolina are now gone. I talked to the owner of the last to close a month ago and he stated the number one reason why he closed was the rent. His rent was slightly north of 12,000 per month. His average month grossed around 18 to 20 and he peaked around 70 for the month of Dec most years.

Just like a lot of businesses, his numbers just didn't work.

There does seem to be good growth in other franchises. Look at Fast Frame. They are growing in numbers even here in the 'framing capital of the world'. The funny thing is, they seem to gravitate to lower rent strip centers.

 

[Cliff Wilson]

Rob, good luck in the new direction. If you were close, I'd probably come take a look, but it doesn't seem worth it to ship cross country?

Would love those flat files an some of the fixtures, but ...

again good luck!

 

[Jerry Ervin]

I ditto Cliff.

The flat files and the glass shelving would be mine if you were in driving distance.

 

[Maryann]

Rob,
With all the frequent flyer miles that I have because of you, we should fly out and rent a truck as you suggested. We're planning a re-do of our shop this summer. But taking the time, that's the problem.

Good luck.

 

[Bob Carter]

Let's suppose that my business just failed

Am I going to say that maybe I was not such a hot operator? Or, that I can find an evil villain like a greedy landlord?

Of the DTW or other mall operators-are there any amongst that group that seem to be successful? Are there no succes stories in their midst?

Is high rent simply an incurable obstacle?

Can no merchant survive as these "astronomical" levels?

I speak to a lot of framers that seem to contact me when they are on the ropes. If there was one common theme, it might be that their business skills were not as good as necessary in this marketplace (and I am certainly not including Rob in that suggestion)

Where you are located is a personal decision

I have seen many more shops with low rents close than the opposite. And, I have seen many sharp operators make money at either end of the rent spectrum

That shouldn't excuse blanket statements about things we simply do not know. Several of the comments remind me of the GEICO commercial with the two cavemen

Next time, do a little research

 

[J Phipps TN]

Hey Bob,

What's the deal? I didn't make a blanket statement. I simply stated that is what I was given as a reason.

I have appologized for those it may have offeneded and I think frankly, simple math says it all. Either you make enough to cover your rent and make it worth your while or you don't!

Some areas do better then others. Maybe that's why most or all of the DTWs aren't around Here anymore. Maybe the sales problem is just regional.

That's not a blanket statement, it's a theory.

I'm sure there are exceptions and maybe a great business man Like yourself could open an igloo store in florida and make it, but for most it is just a matter of simple math and if it is worth it or not. Some want to get rich and others just want to take a little home every month. Either way, you must at a minimum make your rent.

Just my humble opinion, though it doesn't seem to be worth much.

Jennifer

 

[DTWDSM]

Jennifer,

First of all, no offence taken here. By no means think that I was taking anything you said personally.

I will say that over the years on the Grumble peole throw out statements like all the DTWs are closing or they are all hurting, ect and I feel it is because of many reasons but to lump a entire brand into a statement because of a few stores is really not fair.

Yes there have been many stores that have closed over the past year and half, somewhere around 40 I think. Some were poor operators, most were not. Many refused to change, you mentioned limited editions, many who were strong stores did it with 2 or 3 artists and as they have slowed down, many lost over half of their sales with the demise of artists such as Kinkaid, Barnes, and Bateman.

Many people who have closed were at the end of their franchise agreement and decided not to renew so they could retire, or follow a different career.

Some just could not make the numbers work anymore, it wasn't that they were bad operators, the numbers just did not work. Remember mall rent, insurance, royalties, payroll, taxes do add up and with rent costs going over 5 figures a month for some, it does not make sense. Some of those people closed, some opened up as another frame shop, and some went to the real world and get a staedy paycheck.

And I will also say that some just had some sort of beef with the franchise and said screw you, I'm gone.

The problem that I have is that many are quick to judge the entire franchise on what they have heard from reps or just assume things. What never comes out is that many, if not all DTWs that have closed were still doing more business than the average frame shop in the country, most were doing more than double the average.

There are many successful DTW stores out there, mine included. FastFrames are opening all over, they are closing all over and have many for sale across the country as well. All franchises have the good and bad, it's too bad that other independants like to point out the bad and not acknowledge the good.

I will peacefully get off my soapbox now. And please nobody take this personally, it is not meant to be.

 

[DTWDSM]

Jerry,
It is not that anyone said somebody is right or wrong, it all depends on what somebody wants.

If somebody is happy with 10 framing jobs a week, that's fine, if somebody wants to have 25 a day, then that's fine as well. As long as you can pay all of your bills give yourself a salary and other perks, and still have money left over, then you are doing it right.

 

[Bob Carter]

The thing often missing is some honest answers as to any store's closings

I think we learn more from failure than sucess.

But, simplistic answers don't teach much

Jennifer-I really wasn't directing my comments specifically to you, but that we tend to make statements like some of these that are just flat not true. You are not alone, believe me. Doesn't make your statements any less wrong, but they are not singular

Sharing information is good; sharing bad information isn't. Just because a rep repeats it doesn't make it worth re-repeating

Tim is right

 

[Warren Tucker]

Here's what I've picked from this thread: beautiful store, good location (judging from the rent), excellent merchandising within the store, and a very business savy owner; all these positive qualities and still not doing well enough to justify the effort. I consider none of these qualities as being very important and certainly not crucial.

 

[stshof]

I'm confused -

Do you mean the qualities you listed or the stuff in the rest of the posts to this thread?

Please elaborate! Thanks!

 

[Warren Tucker]

The qualities I listed and refered to as "these qualities" twice to elimnate the possibility of confusion: excellent location, good merchandising, savy business owner, beautiful store. These qualities are at best secondary to a store's success.

 

[Cliff Wilson]

ok Warren, I'll bite, what is important?

 

[J Phipps TN]

I'll guess,

It would have to be the Local Economy?

Or could it be customer relationships?

Jennifer

 

[TADPORTER]

How about great prices, great selection, great customer service.

 

[Jay H]

Warren I'm a chess buff and I think you are looking at business as a chess match but its not. If you trap the king, you win. There is no variable to that.

I think I know where you're going and I agree in many ways. BUT if chess had 3 kings but you only had to get 2 in check to win, the game would be much different and not so exact. Business is that dynamic and the comparisons you're drawing seem a bit do narrow in scope.

 

[CAframer]

"Better lucky than xxxxxxx"

"xxxxxx" = good, smart, etc, etc. (your choice)

Perhaps this is Warren's message?

 

[Warren Tucker]

The most important quality has to be great prices; no matter how other factors go, low prices will always come out on top. And in our industry, it's pretty easy to lower costs and, thus, prices. I'm extremely reluctant to sell anything for more than someone else is selling it for; beyond that, I do everything possible to lower my prices. Over the years we've gained a reputation for value framing and that reputation pays off in good times and bad.

Jay, I don't know about the chess analogy but how about a bridge one: low prices trumps everything else. We sell expensive stuff that we can't get volume pricing on, mainly closed corner, leafed frames and we sell a good many but I'd hate to have to depend on them for a living much less, a good living. Over the past 28 yars, high end customers have waxed and waned, but the value customers have always been there.

I think a free standing building is important as well as space for inventory storage. I can't express how important it is to be able to carry a customer's frame out to his car. Also,I think low rent space is important. I'd almost be willing to bet that my low rent locations do better than anyone else's high rent, mall locations, especially in like markets. If location isn't too important to you, you can seriously consider owning your building and once you own your building, you're pretty much set up. You're got rental income and you've got the best tenent: yourself.

Customer service is important and I think good service means more than what we'd all agree on and includes a wide range of services we offer customers: fast framing, wide capabilities, consistent staffing, constant effort to provide value products.

These are fundamental qualities; everythg else is just fluff. Customers don't come to us for a "shopping experience"; they come to us for value, quality, and good service, mainly value; they expect quality and good service.

Walking into one of our stores is like walking into the back room of a frame shop. The store is clean and pleasant and that's it. The sales area and framing areas are one.

 

[Bob Carter]

Our good friend Warren demonstates unarguably that there are many methods of being successful and he certainly has mastered one of them

When I talk to the most "successful" framers, two points are overwhelmingly apparent: they each do things differently (one size certainly does not fit all) and the true strength of their model is themselves.

For each of Warren's "musts" there are certainly exceptions and for each of the same "musts" bet the farm that others have attempted and failed at the same. For every "MBA type" that has failed there is a high school grad succeeding

Bottom line: I think the unheralded factor is the operator. I suspect that if Warren were in a Mall, a strip center, a free standing building on Route Nowhere or on the Moon, he would probably do better than the guy across the street (or crater)

I think that the things that make people like Warren "successful" are probably much more important than the methods he (or any of us) use

It's all the other (little) things that are so "tangible"