Andrew Laties’s on the viability of small businesses in Manhattan

Andrew Laties’s on the viability of small businesses in Manhattan

November 4, 2011

from thirteen.org:

Op-Ed: Occupy Manhattan Storefronts

By Andrew Laties

This is an exciting moment for New York’s indie businesses. According to a just-released report issued by the Center for an Urban Future, “the sluggish economy and drop in consumer spending may finally be catching up with chain stores here.”

The proliferation of chain stores in the city has slowed for the first time since the organization began its annual survey of New York’s chain stores. Nearly one-third of the national retailers surveyed had reduced the number of their locations over the past year, and almost three-fourths of those chains did not add stores in the past year.

But the economic factors hurting chains have stressed small businesses too.

When I first played street music in Manhattan in the summer of 1978, I used to sneak a half-hour break among the poetry books at Gotham Book Mart on West 47th Street, or haunt the indoor balcony at Dauber and Pine on 4th Street; Old Mr. Pine was a friendly face. I eventually became a bookseller myself, opening my first store in Chicago a few years later.

But these days, bookstores are no longer on every corner. Of the 47 stores that used to be on the old Book Row, only one, The Strand, remains.

Cause of death? Commercial rents have gotten so high it seems not just indies, but even chain bookstores can’t afford Manhattan. For instance, Barnes & Noble cited increased rent when recently closing its locations near Lincoln Center and Astor Place. (Thank goodness the Bass family bought their Strand Bookstore’s building years ago.) Borders closed several of its city locations before it kicked the bucket entirely.

So is bookselling in the city nearly over? The travails ofSt. Mark’s Bookshop can be interpreted that way: what was a concessionary rent in 1993 (the bookstore was offered a 20 percent discount to be a tenant) has turned onerous in 2011, due to annual increases. The bookstore’s 44,000 petition signatures have yet to sway landlord Cooper Union to cut rent. [Ed. note: St. Mark's Bookshop has since worked out a deal with Cooper Union, allowing the shop to stay in business.]

So how can indies deploy their strengths and seize the day?

Crowd-sourced funding is a proven winner for indie shops. During the very weeks of St. Mark’s highly publicized campaign to survive, a different company, online-only La Casa Azul Bookstore — a Latino literature bookstore – raised more than $33,000 through crowd-sourcing website IndieGoGo to help launch a new Manhattan storefront next year. The crowd-sourced capital will be amplified by matching gifts and loans.

The momentum of La Casa Azul Bookstore suggests that indie storefronts have a way forward unavailable to chains.

Indie shops can — and should — capitalize on their unique positions within their communities. Back in 2007, I asked the owner of my favorite Village music store how he was still able to pay the rent on his quirky outfit’s storefront. My first trip to that address in 1983 had been to what seemed — in retrospect — like an entirely different (much lower-rent) district. My friend answered, “Whenever someone asks me that question I suggest that, if you want to see me here in the future, how about you pay this month’s rent for me now?”

His challenge was working: many neighbors over the years had been quietly ensuring that this landmark store remained in its storefront. Some of the most helpful were condo developers. They understood that personality-laden stores lend Manhattan neighborhoods character and vibe, actually adding value to new condos. As New York City Councilwoman Gale Brewer, who represents the Upper West Side, told Huffington Post reporter Janean Chun, “Small stores add character to streetscapes — banks and chains dull it.”

The money just raised to put La Casa Azul Bookstore into East Harlem reflects a similar understanding. A Latino literature bookstore with bilingual children’s books will complement the neighborhood’s newly redeveloping residential buildings, sending a message of stability and cultural values, while playing a role in improving the community’s public profile.

Small businesses can also take heart in the six-month success of the volunteer collective Word Up Bookstore in Washington Heights. Word Up’s $9,000-per-month rent is being donated by Vantage Properties, pending the space’s eventual rental to a paying tenant. Word Up’s creator, Veronica Liu (who was the TriBeCa-based Seven Stories Press’s editor for my book, “Rebel Bookseller“), is meanwhile striving to transform the apparently transient bookstore into a permanent location.

Get a storefront. The strategies of these businesses is simply a twist on much more familiar cause-related fundraising practice. The 35-year-old nonprofit Printed Matter has mastered the discipline. While half the income from the Chelsea gallery/book center came from book and art sales and one-sixth from exhibitors and sponsors for their free-admission New York Art Book Fair, the balance was raised from traditional nonprofit sources: donors and grantors. Bulging in Printed Matter’s budget is a hefty rent on a Chelsea storefront, which creates brand awareness for Printed Matter that pays for itself through increased fundraising capability for the (therefore) highly visible nonprofit. (Financial info courtesy of my favorite nonprofit-spying website,Guidestar.)

Only in Manhattan does a storefront translate so directly to organizational credibility and financial opportunity for the store’s operator. And here is where an understanding of the ubiquity of chain stores in Manhattan comes into the picture. Chain stores have been bidding up and leasing expensive commercial storefronts because — just like Printed Matter — corporations relish brand-building street-level visibility in the eyes of millions of Manhattan tourists, as well as mind share among the many moneyed residents who have the ability to invest in companies they take a shine to.

Thanks to Center for an Urban Future, we now know that chain store growth in the city is weakening. Small businesses planning to take advantage of this trend should Occupy Manhattan Storefronts. They should design storefronts that create a connection between their stores and their neighbors. Because when neighbors love what you’re doing, they’ll empty their pockets to help out. They don’t really want those chain stores everywhere.

Here’s a sampling of the 96 chain stores that have reduced their city footprint over the past year:

  • Blockbuster: 10 stores, down from 30 in 2010
  • American Apparel: 7 stores, down from 20 in 2010
  • New York Sports Club: 42 stores, down from 53 in 2010
  • Ann Taylor: 10 stores, down from 19 in 2010
  • Gap: 33 locations, from 37 in 2010 (The company may reduce its presence further over the next year, as it just announced it will be closing 189 stores nationwide.)
  • Verizon Wireless: 43 locations, down from 50 in 2010
  • Sprint: 25 locations, down from 33 in 2010
  • Sleepy’s: 89 locations, down from 102 in 2010
  • KFC: 60 locations, down from 71 in 2010
  • Quizno’s: 10 locations, down from 15 in 2010 (and 27 in 2008)

Andrew Laties has launched five bookselling companies in the past 30 years. He is the author of “Rebel Bookseller: Why Indie Businesses Represent Everything You Want to Fight For—from Free Speech to Buying Local to Building Communities.”

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