Tuesday, December 28, 2010

Allyson's Kitchen closing.

Allyson's Kitchen is closing.

I'm still trying to wrap my brain around the idea that they could "cut" 35,000.00 a month in "expenses". I mean, that's a huge number. I suppose they must be including "cost of goods" in that number, because I simply can 't believe their overhead was that high.

Also, very telling, is that they Expanded in 2008, taking on all kinds of debt.

O.K. I could understand expanding in 2006, maybe even 2007, but by 2008 the handwriting was on the wall to anyone who was paying any attention.

I think this is just one of those cases where a couple decided to have the "perfect" store, and it just wasn't viable.

It's probably time I write a blog I've been thinking about -- the "Perfect" is the enemy of the "Functional" when it comes to stores. Perfection is something you work toward, you don't try to start out as.....because no matter how much planning you've done, you aren't going to get it perfect at first, or ever.

And....no matter how much money you spend.



Meanwhile:

Oddly enough, this closing of a store right after the Christmas season is more unusual than not.

Contrary to what might be expected, stores tend to close during times you'd think they'd try to stay open.

Stores tend to cluster-close just before the beginning of a busy season for a very simple reason. Because that's when they signed the original lease contract. (If they had any brains.)

I think this barrier is breaking down a bit, though, because so many contracts are being loosened; there are probably a number of leases that are going month to month. So it's possible we'll see more closings.

Rent "deals" are mostly under the table, as far as I can tell -- the official rent stays higher than what the store actually pays. This allows the owner of the building to show higher rent to future tenants, while cutting a break for the current tenants, I suppose. And allows the building owner to change his mind at any time. This is all anecdotal, from talking to other store owners, and I can't be sure it's widespread, but it makes sense. (I negotiated for a 10% decrease, which is looking kind of wimpy right now....)

The six months of January through June, are slower in Bend because so much of our business comes from tourism, and July, August and December are by far the most important months.

I've been telling people that I don't actually believe rents have gone down enough -- despite the common perception. And even if they have moderated to some extent, most rent contracts include yearly ('inflation hedge') step increases which can quickly wipe any advantages. I suppose in comparison to what rents COULD BE, it's an improvement, but in comparison to what they USED TO BE, not really that much of an improvement.

As long as vacancy rates stay so low downtown, I don't suppose the owners have much incentive to lower rents -- though a 35% turnover in just two years ought to give them pause. (See the Downtown Comings and Goings list....)

3 comments:

blackdog said...

Always intended to eat there, never got around to it. There are WAY too many restaurants in the Bend market, but still they keep coming.

Owning a restaurant seems to be everybody's dream, but it's not for amateurs. If you don't know what you're doing it's one of the best ways (outside of Las Vegas) to lose your shirt in a hurry. I have several relatives in the restaurant business back East so I know something about the challenges.

Quimby said...

http://www.allysonskitchen.com/t-about.aspx

This says it all if you can read-between-lines.

I always shop Kitchen Compliments anyway ;)

Duncan McGeary said...

Yeah, what you're reading between the lines I had actually already heard a couple years ago from another merchant in Ashland.

These kinds of stores always drive me nuts because they raise the expectations of customers as to what a store can and can't do.

Imagine Kitchen Compliments trying to live in the "real" world, and facing the pie-in-the-sky Allyson's Kitchen.

Give me a smart competitor any day. At least we're competing on a level playing field.

The worst competitor are the guys with more money than brains.