The sales graph at Pegasus Books over the last seven years has been an almost perfect V shape.
The high was in 2007.
It dropped 15% in 2008.
It dropped 11% in 2009.
It dropped 6% in 2010.
That was the low point.
It then rose 5% in 2011.
It rose 12% in 2012.
It rose 4% in 2013.
And it looks like it will rise about 6% in 2014.
I will be very, very close to the high I reached in 2007. It's not quite a perfect V. It went down for three years, and it has taken 4 years to get back up to the previous level.
But amazingly close.
Also proof, as far as I'm concerned, that it wasn't the store, but the overall economy that caused the V.
The overall drop was about 28%. I thought it might drop as much as 40%. My worst case survival scenario was it would drop 50%. (Worst case -- living in a cave, eating mice.)
If I hadn't added books and boardgames, that might have happened. Because I was adding inventory, and thus sales, the drop wasn't quite as bad as it could have been. But by adding inventory, it probably cut our profit margins substantially. Still, the product lines are established, and I'm starting to see the benefits of that now.
I predicted, based on my research of previous bubble collapses, that it would take seven years. I nailed it.
Within that time span, there were more severe drops. If you take mid-way between 2007 and midway 2008, it was probably a much bigger decline to kick the whole thing off. So the year totals obscure the true magnitude of the decline.
We did fine. I adjusted my ordering accordingly, I had eliminated debt, built up a small cash cushion, like I said, added new revenue producing product, and worked the store by myself for a year to keep down expenses.
I will give myself total credit for seeing the bubble for what it was, and responding appropriately, for planning, and for forecasting what would happen. I was very careful not to add to overhead in the years preceding the crash. No loans, no capital improvements, no adding to costs that I couldn't cut if I had to.
Despite all the doubters at the time.
I should add for the sake of those who don't live in Bend and didn't see such precipitous declines, that Bend probably had it as bad as anyone in the country. We were a bubble within a bubble. I wouldn't be surprised if we were in the top 10 declines, just as we were in the top 10 rises at the time of the bubble.
4 days ago