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Archive for Sunday, June 28, 1998

STRENGTH IN DIVERSITY

June 28, 1998

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An eclectic mix of restaurants, locally owned shops and national retailers keep the pulse of downtown Lawrence strong.

Robbie Talley stands at the counter, watching customers trickle in and out of his new shop as music pounds out in the bright orange and blue background.

When Avalon closed in April, Talley seized the opportunity to go into business for himself. He just opened a new store called Neighborhood in the same space where Avalon went out of business, selling essentially the same type of merchandise -- new and vintage clothing targeting young buyers.

Talley is betting that his downtown store will succeed for a simple reason: He knows better than an Ohio-based chain what will sell in Lawrence.

``There definitely was potential, but they didn't live up to it,'' he said of Avalon.

That's downtown Lawrence in a nutshell -- great potential, but often a tough nut to crack. Over the years, that's led to heavy turnover and almost constant change in the mix of businesses along Lawrence's main thoroughfare.

In fact, one recent study found that only 26 percent of all Massachusetts Street businesses kept a foothold in downtown from 1985 to 1995.

Mix of old, new

As for Avalon, Talley believes it would have thrived if the chain had kept its inventory current and listened to local employees.

So Talley bought Avalon's fixtures in bankruptcy court and set out to try to make a living in downtown Lawrence. Whether Neighborhood will become a downtown fixture or go by the wayside remains to be seen, but one thing is certain: Talley has pinned his hopes on an ever-changing retail and entertainment center.

It's difficult to track businesses in Lawrence. The city does not require business permits, and sales tax applications are confidential under state law. But as Talley was opening Neighborhood, the Glass Gallery, a gift store, was in the process of closing in the 1000 block of Massachusetts and customers who called Lawrence Brewers Supply on East Eighth Street got a message saying the phone had been disconnected.

Potato Mountain Cafe, a new Massachusetts Street restaurant, was doing brisk business selling flavored mashed potatoes, and HomeStyle, a shop selling furniture from remodeled hotels, was gearing up to open Saturday. Game Guy was selling, trading and buying used video games and gear from its new store off Massachusetts on Seventh Street. Massachusetts had a couple of vacancies -- a sign in the window of a gourmet and coffee shop said it had moved to western Lawrence -- and some old standbys were thriving.

Bill Martin, director of economic development for the Lawrence Chamber of Commerce, jokes that if he could put his finger on what works in downtown Lawrence, he'd go into business himself.

``There's a magic about downtown,'' Martin says. ``Downtown has broad appeal. It's active from early in the morning to, well, early in the morning. From an office standpoint, it has a good communications infrastructure, and obviously it's an entertainment center with restaurants and bars. Restaurants can have a crowd all day. It's a very diverse business environment.''

Randee Brady, director of the Kansas University Small Business Development Center, also struggles to pinpoint what makes a business thrive or fail downtown.

``The long-term success of businesses in the downtown area depends on having synergy and affinity: If there's a good mix of merchants that attract complementary types of customers to downtown, the total impact -- for example, sales volume -- is greater than the sum of individual stores,'' Brady said. ``This impact can be increased with joint promotions and advertising, too. Customers feel that they get more bang for their buck and will do more business overall.''

The development center looked at turnover and downtown business success rates during a 10-year period in a study titled ``The Mass Street Study.'' Anna Kniazian used telephone directories to research turnover on Massachusetts Street from 1985 to 1995. The center has not updated the study.

Some highlights:

  • Many locations in the 800 block had multiple businesses during the 10-year period, such as 814 Mass., where two clothing stores, one convenience store and two restaurants did business from 1985 to 1995. The average turnover, however, was not high when compared to other blocks because of the larger number of firms in the block. The average turnover was 0.6, a rate indicating that more than half of all addresses had at least two businesses during the 10-year period.
  • The 600 and 1100 blocks had the lowest number of businesses, and the lowest percentage of retail space. Turnover in the 600 block was 0.63, a rate indicating that 10 locations out of 16 had at least two businesses during the 10-year period.
  • The 900 and 1000 blocks had the largest percentages of locations that had zero turnover. The percentages of locations consistently occupied by one business were 39 percent and 37 percent, respectively.
  • The 700 block had the largest percentage of retail space -- 94.3 percent.

A listing of businesses in the study tracks a specific address and reviews the history of businesses at that location. Mainstays such as Weavers, The Natural Way, Liberty Hall, Buffalo Bob's Smokehouse, Ernst & Son Hardware, the Downtown Barber Shop, McQueen Jewelers and others remained unchanged.

But the history of 846 Mass., for example, is varied -- a mix of gift shops including Pendragon, Graffiti Cards & Gifts, Party Affair and Mary Margaret's from 1985 to 1995. It now houses Third Planet Imports, which recently began selling imported goods at the address. And the study shows 914 Mass. housed Secrest Leather & Scent in 1985, Saint Crispin Luggage from 1986 to 1988, El Dorado in 1989, Zep Zep European Fashions in 1990, Jayhawk Spirit Outlet in 1991 and the Athlete's Foot from 1992 to at least 1995, the ending year of the study. Sneakers now is in business at the location.

Downtown's diversity a plus

History has shown that prevailing wisdom may be inaccurate.

Jennifer McKnight faced her share of naysayers when she opened Arizona Trading Co., an eclectic shop that sells, trades and buys used clothing, in December 1991.

``Most people didn't understand the idea,'' she said. ``But once it opened and they could see it in action, they understood.''

McKnight doesn't worry about critics anymore: The 29-year-old has opened two more Arizona Trading Co. shops, in Westport, Mo., and Columbia, Mo., and also owns Sh-Boom, which sells new women's clothing on Mass Street.

Brady, of KU's Small Business Development Center, said such understanding of what customers want -- and don't want -- is key.

``This can be tricky since sometimes we aren't always sure what they want, but they always know what they don't want,'' the small business consultant said. ``This is especially true with trendy merchandise. You have to be ahead of the demand curve, offering new goods or services that don't have a track record yet.''

McKnight said she had no expectations when she opened her first Arizona Trading Co. at 734 Mass. One given was that she wanted a downtown location.

``Mass Street was the place to be,'' she said. ``It still is.''

The young entrepreneur declined to discuss sales. ``I hesitate to speak numbers. We make a pretty good living.''

Failures and successes

The owner of the Glass Gallery declined an interview to talk about why her business was closing downtown. Martin, of the chamber of commerce, said he thought the store would have thrived downtown. He noted that businesses close for several reasons.

Propeller Creative Services started downtown above Round Corner Drug Co. and recently moved to the Kansas City area because that's where most of its client base was located. Too many people thought of Lawrence businesses as ``mom and pop'' operations, Propeller's owner said, and discounted the business because of that.

Other reasons for a business relocating or closing range from bad management or bad location to the owners simply growing tired of the long hours, Martin said.

``Retailing is tough work,'' he said. ``If you own the shop, you're going to be there long, long hours.''

And small shops sometimes fail simply because they're small, Brady said. Their inventory doesn't turn over enough, and customers ``don't connect,'' she said.

Martin also noted that retail businesses are market-driven, unlike manufacturing, for example.

``When a town reaches a population of 100,000, it can get a Red Lobster,'' Martin quipped.

The Free State Brewery is no Red Lobster. It's a homegrown restaurant and brewery that opened in 1989 and enjoys steady crowds since at 636 Mass.

Head brewer Steve Bradt says the state's first legal brewery since 1880 attracts a diverse crowd from families and businesspeople at lunch to after-hours enthusiasts to the late night college crowd.

Free State has been successful, Bradt said, because ``it's a pleasant place to be and we make consistently good quality food and beer for people to enjoy.''

While the restaurant doesn't necessarily keep tabs on its competitors, ``we're certainly aware of what's going on in the downtown community,'' Bradt said.

The brewery, which employs between 100 and 120 people, has seen restaurants come and go downtown, Bradt said.

Because downtown is an eclectic environment, diversity helps a business, he said.

Bradt pauses when asked if Free State would succeed elsewhere in Lawrence.

He says he doesn't know.

``We're so accustomed to and comfortable being downtown -- the historical tie-ins as well as the fact that downtown is a very diverse place. I don't know if we would or not.''

-- Deb Gruver's phone message number is 832-7165. Her e-mail address is dgruver@ljworld.com.

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