Comment by kurttheviking

3 days ago

I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that spoils in the very short term). When I've got a bit more time I want to try that idea and see if it works as a way to revitalize otherwise charming old downtown areas with vacant retail space and communities wishing to bring back their main street. Giving this idea away in case anyone else has tried or wants to try sooner than me and report back.

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work.

However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.

  • High commercial rent affects not only diverse businesses (good ideas that take risks) but also the quality and accessibility of goods of necessary businesses. Near me, simple mens' haircuts have soared to $35+... Except those shops that have been around for ages and own their buildings. They still charge sub $20.

    Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/

    • A good haircut takes about 30 minutes. So if the barber is getting $20/cut that's $40/hr gross max assuming he's booked solid every day (most are not). From that they have to cover the rent (or property tax, insurance, and upkeep if they own the shop), utilities, scissors/clippers and other instruments, consumables, their own self-employment tax, health insurance, and retirement. That doesn't sound like it would leave much.

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  • It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

    • AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.

      Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense

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    • It's because commercial property is bought and bundled up into REITs and they would rather have a property go unleaded than to lower rates.

    • I see this also, but I don’t get it. An empty building still costs a bunch of taxes and upkeep and still rapidly deteriorates without tenants looking after it. Aren’t these people hemorrhaging money? What do they have to show for it? My city actually handled a majority of the rent so a business could revitalize a large-ish property that had been empty for years. Of course it failed as soon as that deal ran out.

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    • i don't know if it's the same everywhere, but in my town there's essentially no taxes on vacant commercial buildings. the tax rate is based on the use

      and so landlords who own a whole bunch of properties would much rather a unit sit empty for a year than lower the rent to fill it, becauase it costs them basically nothing and lowering the rent on one unit might have a cascading effect that lowers the rents on all their other properties.

    • When the capital owner has thousands of properties, why spend energy on optimizing a few to make cities more liveable?

      Consolidation, as always, is eating the society like cancer.

  • A Georgist LVT would fix that is short order. Start making owners pay compensation for keeping a valuable space empty and crumbling, and you'll see them step to it pretty quickly or sell it to someone who does.

    • If it's empty and crumbling, I doubt it's all that valuable to be repurposed for housing or anything else. I did note the other day in the very small downtown of a nearby minor city that the the ancient travel agent is now a party supply store. But, really, there's not a lot in that downtown.

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    • Though I am pro-LVT, I don't think this will help in the current situation.

      The owner, the bank, and the city all wish to maintain the illusion that a $10M building from 2010 is still worth at least $10M today, even vacant. No party wishes to realize the loss in value. Occasionally, the city may try to punish vacancy with a tax, which is still about additional revenue and not about realizing diminished value.

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  • If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.

    • The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change.

      Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.

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  • For the companies that own all that real estate it's better to let them sit empty for years than lower the rent.

    But eventually the hammer always falls.

I take my two little ones almost weekly to our small downtown area. The trip is usually a coffee shop, the bookstore, and a rotating third one (sometimes a candy shop sometimes the toy store, sometimes something else).

Anyway, we're an N=1 confirmation of that theory.

  • In our case the coffee shop is in the bookstore and it is located right in front of the third. The third is a really nice park (think lake and lots of playgrounds plus activities).

(In slight contrast to my other comment) I think Larimer Square in Denver is trying to do something akin. There was a land-edge-lord kerfuffle and gone are staples like The Market and Ted’s Montana Grill (RIP, I was also just in Bozeman). rn one side is bookstore - jewelry & artsy - African jewelry & artsy - Rioja (Denver famous food) - John Fluevog (Vancouver shoes) - Osteria Marco (Denver less famous Italian) - Van Leewuen (NYC ice cream). I hope it all works...

now, bookstores here are a whole other mess. two words, Tattered Cover. there are ample used bookstores, though, i found a copy of Alinsky’s Rules for Radicals for $6.50 on Colfax that should probably be handled with BSL-3 precaution which is as it should be

Your comment makes me think of this recent post, https://laurenleek.substack.com/p/the-basket-and-the-booza, from an always wonderful blog which looks at why Australia has far more independent stores left compared to English cities and comes to a surprising conclusion:

"The unifying claim is this: chains follow legibility. A city becomes legible to a site-selection algorithm when it has been organised into walkable, transit-connected high streets with predictable pedestrian volumes. That legibility is what good urbanism produces and simultaneously what makes a city capturable."

  • Not sure if this is an issue of Australian English vs American English but this is way too jargon-laden to mean anything at all to me.

    • Oh sorry, the pull quote does seem nonsensical by itself. It's well down in the conclusion of the article which, while written for the semi-layperson, is very heavy on the data science. Essentially it means what we currently think of (for good reason!) as good urban design makes it easier to analyze an area to optimize for profitability.

I know someone who used to manage department stores (one branch at a time, several locations). He talked about clusters in a very similar way: Stores need nearby other stores to be attractive.

This is a timely comment for me. I have been doing research on opening a small indie (new/used) bookstore in a small old downtown I walk through almost every day. It has restaurants, specialty shops, coffee shops and a small local grocery store. I've always thought it was missing a bookstore.

Any tips/warnings that might not be immediately obvious to a hopeful bookstore owner? Do you think there is a sweet spot in terms of square footage of retail space? Margins are low so do you supplement with sidelines/events/memberships?

One of my next steps is to join the ABA as a provisional member to get access to their new bookseller guides.

  • I'm just an internet commenter who knows nothing about running a retail store and has thought about a bookstore as well. With that out of the way, finding high margin items to sell to offset low margin items would make sense. I think this is why you see coffee paired with bookstores, coffee should be high margin but might also require food licensing/inspections.

    Ideas for a local bookstore: seasonal and local items for sale, think gift giving timeframes - mothers day, fathers day, end of year holidays. Items like unique greeting cards, calendars, custom gift wrapping, having a kids section with higher margin items kids like - toys, trading cards, etc. Also you could throw some checkout friendly things like book lights, book marks, candies, etc.

    If you find local craftspeople, offer some shelf/floor space for free if you can agree on a split of the margin. Hand-crafted things would pair well during holiday seasons and advertised properly might get repeat visits and word of mouth spreading.

    • Thanks for the comment and ideas. I was thinking through the different types of things that could be sidelines. You hit on many of them. There are some cultural festivals that occur in the downtown that can bring opportunities for some local craftspeople to share retail space before and after the festivals. Also, some branded items that go well with books like totes and bookmarks.

I suspect, particularly for toy stores, there's also a weird incentive: if they stand alone, you don't want to bring your kids there because it's only going to cost you money. But if they're next to other shops, you can send your kids there to entertain themselves, while you can browse what you actually want to see in peace.

I have seen bookstore (second-handed books) thriving near universities. Your idea is actually very interesting and remind me of the mall model -- the mall model worked because everyone in the family gets his/her own share of pleasure. Of course the traffic matters a lot, too. Hope you start that experiment soon and succeed!

  • Universities are effectively ultra-anchors. You have large numbers of students from mostly middle class backgrounds, many of whom have free time and disposable income. (Or at least they're not worried about their loans yet.)

    And then you have the academics. Tenured profs are relatively well paid. Adjuncts/assistants not so much, but they still like nice things.

    The UK's public school towns (Marlborough, Harrow, Winchester...) often have a prosperous independent store economy on a smaller scale, for the same reasons.

    Clusters work well in these towns.

    If you try them elsewhere, like one of the UK's many run-down towns, they're more likely to fail because the prosperity just isn't there.

  • The general theory of most malls was that you had anchor stores. My local one has a couple of stores adjacent to the mall (a local chain supermarket and and Home Depot) that are very busy, almost too much so. The mall itself is pretty much dead and has been on the market for ages. The anchor stores--JCPenney, Sears, and Macy's are all long gone. Haven't been in the actual mall in ages but I assume it's pretty sad and there seem very few cars in the lots.

    Oh, yeah, the Toys 'R Us in the complex is long gone too.

    • It's pretty much the same in my place, too. The old malls are dying. There are new malls coming up, but I'm not sure how they are going to hold in the future.

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This makes a lot of sense from my own behavior. If a downtown has multiple places to stop, I am far more likely to go.

Better yet if it has attractions for both my wife and me, then we are both more likely to go.

Even better - if it has attractions open at different times of day - morning - errands like hardware shop, foods basics | afternoon - cafe, prepared food, more retail shop | evening - sit down dining, bars, checkout a book store.

It's always weird how some downtowns only cover a slice of this and as a result are dead after 6pm.. or don't come alive until 5pm.

Tsutaya, a Japanese dvd rental store has a specialty shop in Hiroshima. It’s best described as a library hosting a small electronics store, a clothing store, a stationery shop and a coffee shop.

That seems to be what Barnes and Noble has become. Every store now has books, toys, and a coffee shop inside and it seems they’ve been thriving in the last few years.

My biggest complaint though is that the bargain bin no longer contains books they are cycling out but instead seems to be books and other items specifically meant to be sold in the bargain bin.

> a bookstore, a toy store, and a tea or candy shop

This was Borders and B&N, in their prime. A one stop shop. They had a childrens area with books and toys. They had a coffee bar. And of course books.

I'd be curious to know if you consider a Lego store a "toy store". There's one that opened in my city fairly recently and is in an area of smaller boutique shops (kind of like what you described).

I can't comment about the minimum number of stores, but I do think its the correct idea. I live in a town of ~12000. We have 6.5 bookstores (including the good local thrift store as .5). Stores/restaurants do turn over fairly regularly, so its still tough, but it certainly seems viable. We get a good number of tourists, which helps but I do think you need a mix of restaurants, and a mix of different types of stores. Even as you go to nearby towns with big box stores, they all have downtowns that are doing ok with locally run businesses. Notably the downtowns all are small business focused with few if any box stores

That's the overall premise of shopping malls.

Get 2-3-4 highly attractive shops that people go to (in Europe, Zara is an example) surrounded by shops that would otherwise die without the proximity/clustering.

This is exactly the business model of Poor Richards in Colorado Springs. They have a pizzarea, book store, and toy store. It's been around for decades and is a local institution.

This strategy has worked well for both Shakespeare and Co. in Paris and Shakespeare and Sons in Berlin. Books + Bakery + Coffee. Both of course are set in living pedestrian cities. https://www.shakespeareandsons.com

  • I can’t comment on the shop in Berlin, but the one in Paris is a special case. It’s in a relatively central location in a 11M people metropolis, right on top of a major rail and metro hub and across the river from one of the most touristic monument in the world. And even though it’s not really in a shopping area, there are dozens of cafés within 2 minutes on foot. They don’t really have problems getting people to go there. Plus, considering how long hey’ve been in business, I assume they own the building, which shields them from the rent issue. They could still face problems (like Gibert next door that closed somewhat recently), but their situation is very different from the vast majority of shops in normal European cities (including the UK).

    • Yeah, I walked by the block-long line of people a couple months ago and pretty much crossed it off my mental list. Didn't need another physical book and there is no shortage of cafes in Paris. Also didn't even make a special trip there. I like to stay in the Latin Quarter and happened to be walking by.

      I agree it's not exactly the random indie bookstore though as it's probably listed in every Paris guidebook.

  • It has not worked for Borders in Palo Alto.

    But that was a chain, maybe other locations forced closured everywhere, and that Borders could have survived. I doubt it, however.

I always wanted to open an indie book store + coffee shop and had a similar analysis. I read recently they are having a come back.

Barnes and noble is opening in my city after a decade ago books a million closed and our local indie closed during Covid.

What about the situation where a bunch of flower sellers end up on the same area of town?

Hotelling's Law (also known as the Principle of Minimum Differentiation or Hotelling’s Spatial Competition).

Yup, that's why molls were so successful. They were deteriorating because of Internet, as a new "moll", covid speed up the process. But, frankly speaking, molls also killed many mom & pops shops scattered in the cities. So this is just evolution, I am not sure if it goes in the right direction, but consumers have the last word and they have spoken, even though, in the long run it hurts them.

  • "Mall": a physical aggregation of independent stores in a single location, usually renting space from a single landowner.

    "Moll": a mobster's girlfriend.

    Your paragraph becomes quite amusing if one assumes you didn't make a typo.

  • moll | mäl | noun informal, dated 1 (also gun moll) the female companion of a gangster or other criminal: I'd rush the money over to his moll. 2 a prostitute.

    I think you probably mean "mall".

That is such a good idea but I always have loved small stores so I might be too optimistic.

Let us know if you do it.

kids don't want to browse amazon. =)

  • Aside from the fact you would have to be nuts to buy kids toys (or anything that must meet a safety standard) from Amazon.

    ... yet some people still do.

Aren't you worried that your rent will be jacked up 100% or more in case you successfully revitalize the area?

So there are a few versions of this.

The most common in the US is the strip mall. This is a largely American, soulless construct of commercial space with parking out front, typically on a major road. There are lots of reasons why this flourished in the US. It's a symptom of society being so car-dependent, which is by design. Rents here are typically lower than other options so some businesses can survive in strip malls that can't elsewhere.

The next step up (density-wise) are actual malls, or shopping centers for the non-Americans. There are different versions of this. You have the entirely indoor mall. You also have other anchor stores that pop up nearby (eg Home Depot) that are popular but can't justify the mall rent costs. Often a bunch of other businesses will sprout around these stores, which is why they're called anchor stores. Anchor stores are also things you generally need in a mall to bring in enough traffic to make the whole thing economical eg supermarkets, department stores. Malls in general have been dying in droves. Basically too many got built in the 1970s through 1990s and online shopping is killing them. There are photography and video channels dedicated to exploring dead malls.

The third rarest option is the walkable district. This is generally the downtown of cities that existed before cars. People generally love these but public transit is an issue. Americans always want to drive even when there are viable options otherwise. That means having to build parking garages and the whole thing kinda falls apart. Or at least it losses some of its charm. The hellish end of this spectrum is Houston.

Some cities have managed to rejuvenate such areas by diverting traffic and generally investing in the area. But what tends to always happen is that businesses will rejuvenate an area and then the landlords will kill it by charging exorbitant rents. I've seen 40+ year old restaurants close because of rent hikes in areas that only really existed for that restaurant.

This is part of the problem with housing being so expensive. It makes everything expensive. That local shops? Well it costs as much to build as a house and a house is easier to sell. But a cafe or a bakery or a bookstore or some other eclectic shop can survive when the rent is $20,000/year. You don't need to pay staff as much when houses cost $100k not $1M. Expensive housing just strangles everything. But when that rent goes to $200,000 over a decade well then suddenly only chain stores and big box retail can survive there so what was once a charming downtown turns into Chili's, a CVS and a Chase bank.

So this can go wrong even in dense places like NYC. There's a real issue right now with so-called "zombie leases". Basically, companies like CVS, Duane Reade and Walgreens signed high-rent long-term leases but then decided to close the store. The store remains empty because the owner has no incentive to rent it for a now-lower market rent while the billion dollar company is still on the hook for it. Enough of these and a street can look abandoned.

I really think that when cities choose to rejuvenate an area they should acquire all of it first. Eminent domain, baby.

I saw a Tiktok awhile ago where someone posited that things we once took for granted get taken away from us and sold back to us. The specific example was walkable cities. That used to be the norm. Now it's a luxury. We can't have that. If people walk everywhere and take a train or bus well then they might not buy a car. Then they'r enot buying insurance and gas and maintaining it. Unacceptable.

Society really is getting dystopian.