Sunday, November 30, 2008

As I have been in the past.

The more I crunch the numbers, the more perverse satisfaction I take in how I prepared for this downturn. I don't want to sound cocky or smug, but....I think I've planned for this well.

Of course, if it's a long enough and bad enough downturn, it might not be possible to endure without damage. But within reason, I'm prepared.

And whether I was conscious of it or not, that is exactly what I've been doing for the last five years. Preparing. I may not have known when it would come, or how it would manifest itself, but I knew something like this was coming.

You can't be in business as long as I have been without experiencing at least one or two of these situations.

So, in the back of my mind, I've been shoring up the store for years.

For instance, keeping the overhead low. Trying to increase the margins. Driving sales as high as I could when times were good, in as many categories as I could manage.

I'm not, as I have been in the past, dependent only on regulars. Nor, like many stores in downtown Bend am I dependent on walk-by traffic. I feel I've got a good mix of the two.

I'm not, as I have been in the past, caught off guard, with my pants down, going into the slowest time of the year and having completely over committed to product in advance.

I'm not, as I have been in the past, dependent on one or two product lines. I have about 8 product lines, any of which could produce the sales numbers I need on any given day.

I'm not, as I have been in the past, caught with an empty store, selling dated material, and flailing around looking for viable product.

I'm not, as I have been in the past, paying for commercial loans at the bank, as well as maxed out and overdue on my credit cards, and an empty bank balance, and juggling my monthly bills.

I have a store full of viable product, and I don't have to order more and gamble more and hope that people buy. Or cut deals with every even slightly interested customer and thrash my profit margins. I need only replace the best of the product, get my weekly shipments, and that's a much less risky and stress free situation.

I don't want anyone to think I'm happy with a downturn, or that I take pleasure in it. I'm knocking wood as I write this.

Nevertheless, I've had plenty of experience with downturns, and I'm aware that if I can make it through this time without debt, and can accrue any cash at all, I'll be able to maximize the opportunities when I see the market start to take an upturn. I have faith that I'll be able to recognize a true upturn just as I was able to see the downturn, in plenty of time to prepare.

Saturday, November 29, 2008

I'm younger than I thought.

This is going to sound absolutely weird to anyone younger, but I spent all last year thinking I was 56 years old. I hit October 13th this year, and went to the trouble of adding up my age on my fingers, and wham. I'm 56 THIS year.

It's like going to the life bank and finding an error in your favor.

Does screw up my figuring on Social Security and all that.

I guess you just really don't spend much time on thinking about your age when you pass 50 or so.

People ask me when stuff happens, and I'll say something like, "Oh, about 3 or 4 years ago," and Linda will dig me in the ribs and say, "Try 8 years...."

Time is whipping by so fast, I just added a year to make sure I was caught up.


Whelp, neither Pat or I were trampled to death by shoppers yesterday.


Actually, it was a pretty good day. Beat last year. So I'm thankful for that.

But....the month as a whole really sucked, a repeat of our horrible September.

Still, there is hope that the tourists will spend some money while they're in town. I noticed that over the summer, and it's a ray of hope for Christmas.

And I didn't have any real 'Sales' so managed to keep my margins; and I didn't 'Stimulate' sales by buying a bunch of new stuff.

Still hoping to keep my savings intact, pay all the bills, clear out the credit cards and go into next year even.

That's about the best I can hope for right now, but considering how things have been....that's pretty good. Probably some of the best money management I've ever done.

Funny thing, about half the day in I had a radio reporter visit who asked "How's it going?"

I declined to say, (too early), but I asked how others were responding.

"Oh, so far they're doing pretty good."

"No offense, but what else did you expect them to say?"

"I see what you're saying, but they were being pretty upfront about it before the holidays."

I dropped the conversation there, but thought about it later.

No....people aren't going to tell you if sales are down, even if they predicted it in advance.

See...saying in advance is a guess, and they could be wrong, and hell, it might even Stimulate people to go spend money. If the consumer thinks we're desperate enough to Slash Prices, they'll take advantage. (Personally, I think it's all bait and switch and hooey, but...whatever gets people out of the house....)

(There was an almost perfect example of a bait and switch yesterday; I noticed, because it really stood out. And 800.00 50" plasma T.V. Now that's a deal.

Except, reading the USA Today, later in the day, it turned out that there were only 10 of these per store.

So they get you in the door, and you don't get the 800.00 T.V. and there's one just like it for 1050.00 and easy financing and what the hell, wrap it up and deliver it...)

So any store manager who actually reports that sales are lower, by name, is just saying, "Here. I failed."

Anyway, predicting is safer than actually reporting lower sales.

So I'll make a prediction right now.

The company line for the retail industry will be, "Gee, Christmas wasn't so bad after all."

All they have to do is lower expectations enough, and they can claim success if they don't have total meltdown.

But I just don't see how you can have good profits if your high sales come from price cutting, unless it really isn't price cutting. So...the consumers need to ask themselves what's really going on.

I suspect what's really going on is that the retail market is selling off a portion of their stores, which will mean less inventory and less choice and less price decreases in the future.

I had a customer who was looking at a boardgame I had one copy of, which last year sold out a week before Christmas, and which I was the only store in town that still had copies that late.

This year, I'm even leaner, and if I sell out a week and a half or two weeks in advance, so be it. I won't be doing any late reordering.

She didn't buy my argument. Why should she? That sort of inventory management hasn't been in place for years, now. And besides, there's always the internet.

But it's going to be a big surprise to some consumers later in the season.

Big deal, I suppose. The world will still be awash in product. It just may not be awash in the right product.

Friday, November 28, 2008

Drinking and Shopping don't mix.

I don't drink much anymore. Hardly at all.

Family dinners are my weakness. Everyone drinking wine, and having a good time.

So, I had a few beers.

And slept terribly. It just ain't worth is anymore.

So be kind, this Black Friday.


Of course, Diamond chose today to hit me with a wondrous array of discounted books. Wonderful art books, Alex Raymond, Franklin Booth. I'm just a sucker for that.

But I already have hundreds of art books, which are displayed spine out.

Nothing more useless than inventorying an art book without showing the cover.

So, before I knew it, I'd ordered hundreds of dollars worth.

Hit the delete button, and went to work.

Not this time.


Not expecting a whole lot today. Black Friday has become more of a Mass Market Phenom.

Thursday, November 27, 2008

Planning for downturns.

Planning for downturns would seem easy, wouldn't it?

But it's extremely difficult.

If you simply react to each downturn on the way down, you are losing money every month. By the time you reach bottom, you may not have any money left, or be so deep in debt that you can't sustain business.

On the other hand, if you cut spending too fast or too soon, you potentially create the very conditions that lead to a downturn in sales.

What to do?

The example I always use is a month to month chronology.

Let's say you've had several years of month to month growth. Then suddenly, you have a big drop for one month. So, you hold your breath and wait for the next month before reacting. Next month you're down just a little bit, not much to worry about. So you wait again. The next month you're up a little bit.

You breath a big sigh of relief. Everything is back to normal you think.

The next month you have a huge drop, followed by another huge drop.

Now you're ready to react.

But wait, the current month is very good. Indeed, you end the month up.

So you freeze your response another month.

The next month is down just a little, again. Not enough to panic about.

Then another slightly down month. And the next is another almost even month.

And then the bottom falls out, and you have two horrible months in a row.

You finally let go that favorite employee, you finally cut your orders. You finally admit the climate has changed.

But what's the score?

You've just had 10 down months and 2 up months.

It's just human nature not to overreact. If you're a small businessman, you are by nature a very optimistic person. You aren't going to react to every little change.

It's only after you've been through the above scenario several times that you go ahead and make the drastic cuts early.

The above is almost exactly what happened to my store -- in terms of sales -- but I started cutting expenses before it even happened, and was well ahead of the curve all the way down.

I'll never know how much of a downturn would have occurred if I HADN'T started cutting, but I know that I simply couldn't wait around and lose money and find out.

Besides, I think events have proven that I was right.

Happy Thanksgiving Bulletin Barrage.

Biggest Bulletin Barrage of advertising ever!

Doesn't that just get you in the shopping mood? Deals, deals, deals!


Wednesday, November 26, 2008

Letting it all hang out.

As you can see, I've decided to let it all hang out.

When blogger readers have been in my store, I've said to them, "I'm nowhere as negative on my blog as I really feel."

To heck with that.

You can thank Jim (P.T. Barnum) Cramer for that.

I was watching him interviewed and he said something like, "Well, I really feel as though it's going to get much worse, but if I keep saying that, it makes me a perma bear. And I don't want to be a perma bear."


If you tell the truth, your BRAND is tarnished?

So we've established that you are a shill, Cramer, and now we're just haggling over how big a shill?

Anyway, it will no longer be a surprise to any of you that I think next year is going to be a challenge.

Oh, there I go. Challenge, right. Sugar coating it.

No, it's going to be a total bear.

Anyway, at least it seems only sensible for me to plan for it.

Here's the thing. I know that 90% of the people who read this blog aren't regular customers and 99% of my customers don't read this blog.

Which sort of frees me to be a truth teller as I see it.

Also should say, that if I manage this correctly, it could turn out to be a boon in the long run.

I think I can manage this so that I don't eat into saving, I don't resort to credit, I pay all bills on time, and I keep the store up and stocked.

When it all starts back up, one year or two or three years down the road, at least I won't be starting from a hole like I have in the past, which should give me a jump on the competition.


But it requires seeing it clearly for what it is.

As I've said many times before, it takes a simple phone call to order more stuff if I'm wrong.


And Happy Thanksgiving!

Hope to see some of you this weekend!

It's logical to plan for the illogical.

And it's rational to include the irrational in your plans.

Did you folks read the story about Madras retail? Stores falling like flies, declines in sales of 50 and 70%.

Can't happen in Bend, right?

Why not?

I think a 10% unemployment rate in Bend is more than possible. And I believe that -- for some stores, at least -- 50% declines in sales are also more than possible.

In fact, I think logical and rational.

It's the irrational and illogical I'm hoping for. That Bend will see an Obama surge, that the 'rich' will drive down from the West Hills and do all their Christmas shopping in downtown Bend. That tourists will feel they need a break from the bad news and come to Bend.

It could happen, couldn't it?

A couple of years ago, it was the other way around. Planning for the logical, thinking we'll hold our own or see a small decline. But also including the possibility of an 'irrational' collapse.

The national news is so much more dire than I could have ever known. It really does lend credence to the saying, what happens locally is happening nationally. I saw the local bubble, but didn't realize it was not only happening all over the U.S. but even in places like Ireland and Spain.

The very fact that they are throwing something like 5 to 7 trillion dollars at the problem just to plug some holes -- how big is the underlying problems that are creating those holes? Will those holes become a breach, and a burst dam?

The Rachel Maddow Show had a graph that showed that amount of money was more than; (if I can remember) all the money spend on the Marshall Plan, all the money spent on the Vietnam War, the Great Society, the Nasa programs, including the moon race, the New Deal, the Manhattan Project, oh, I don't know, JUST ABOUT EVERY BIG MONEY PROGRAM IN THE LAST 75 YEARS COMBINED!

Does that give you pause. Shivers?

It does me.

The irrational and illogical now look to be the normal.

Left unsaid?

The Deal to Trade Forestland for a Development Rights Falls Through, The Bulletin, Front Page, Nov. 26, 2008.

For the life of me, I couldn't find the "Why" in this story. It fell through because it fell through, or more specifically because of complications and problems.

Yeah, I get that.

My guess, however, is the "Development" side fell through because it was no longer commercially viable. Or at least not commercially viable enough to fight it's way through the opposition.

Meanwhile, in the national news there is this honey of a quote from Borders Books, who has been trying to sell:

"It's been quite a distraction on the organization. We are really glad to get to this point," Jones said. "We looked at all the alternatives. We feel ready to weather the economic storm that all retailers are in."

Yeah, right. Couldn't find any buyers, could you?

The rest of the article ( just details how sick the chain is.

I'll go to the comic site, ICV2 though, to sum up the situation that bookstore chains are in:

In full:

Borders Sales Drop Worst of All
Same Stores Drop 12.8%
Published: 11/26/2008 12:00am

Borders released its financial information for the quarter ended November 1st after the close on Tuesday, and its sales drop was the worst of major book chains reporting this quarter. Sales at Borders superstores dropped 12.8% vs. the same store a year ago, or 10.6% with music excluded. For those of you keeping score at home, here are the same store sales declines of the three largest book chains for the most recent quarter:

Barnes & Noble -- 7.4% decline

Waldenbooks -- 7.7% decline

Books-a-Million -- 9.9% decline

Borders -- 12.8% decline

Hey, guys. Why don't you just build more stores?

Tuesday, November 25, 2008

An old coat.

I've mentioned before how familiar this business climate feels to me. It's like finding an old but cosy coat in the back of the closet that you used to wear all the time, but which you replaced with a shiny new one. This old coat isn't so bad, you think. Comfortable is probably the wrong word, but 'familiar' works.

When I first saw the extent of the 'growth bubble' in Bend, and sat down and worked out the math, it looked extremely serious. But it was a huge economy, I told myself, so maybe it won't be as bad as I think it will be.

Nevermind that I've always had a theory that a bubble is a bubble is a bubble, whether it's sports cards or comics or Magic or Pokemon or Beanie Babies or Pogs.....or houses and businesses. Different in particulars, but eerily similar in overall ramifications.

So...the fact that it's every bit as bad as I first thought, or worse, doesn't totally surprise me. I had already prepared myself.

When I trumpet my experience, it's not to say that I know more than other people or other businesses -- it's to say, I know more than My Former Self. That is, I've learned not to repeat the same mistakes that I made then.

I have a tendency to underestimate problems, to believe the 'experts', to think that if I'm the only one feeling it but everyone else says they aren't that I'm wrong, to believe I can spend my way out of trouble by buying good stuff, that I can go into debt short term and pay it back later, that it will turn around much sooner than it does, that my suppliers and landlords will make concessions because of the slow business, to believe that my customers will stay firm no matter what, and so on and so on.

But, because I've been through this so many times before, while I may still feel denial and defiance and anger and finally resignation, I cycle through the phases very fast.

Years of dealing with this kind of thing has made the responses educated instead of guesses. Believe me, I've tried everything to reverse a burst bubble, and nothing works.

It's like trying to change the weather.

The business climate has changed, and all you can do is search the back of the closet for that old, warm coat and slog through the storm.

And it's O.K.

It is your patriotic duty to spend money.


Doesn't work this time?

How about? It is your Christian duty to spend money at Christmas!

What, you don't want to celebrate Christ's birthday? Sacrilege!

It's going to be an interesting Christmas in all kinds of ways. For one thing, I wonder if the consumers will do their usual "Let's wait until the last minute and get bargain basement prices!" thing again.

I suspect they may find the pickings pretty slim by that time. Oh, lots of junk for cheap prices as usual, but anything in demand it going to go out of stock sooner than usual, because the stores are going to pocket the cash instead of buying more stuff.

Lean and mean will be the phrase, among the savvy retailers.

Probably nothing to worry about, though. Most stores haven't gotten the memo yet.

Or haven't ever been in a position of actually buying less stuff.

I also suspect you'll see more decorating than ever. Atmosphere is cheap.

Sure. Sales. Lots and lots of sales. But it will be stuff they have in stock, and it will be stuff they won't replace. But with twinkling lights and the smell of gingerbread candles and that lovely Christmas music.

I'm not actually expecting a Christmas boost this year. Always surprises me when I read that many stores get a third of their revenue from Christmas. They must be petrified. I get a nice little 25% boost, usually, same as summer. Nice, but not a dealbreaker either way.

Meanwhile, I did get the memo.

A stern e-mail from the Sheriff of Nottingham.

"Cancel Christmas!"

But people have been ignoring the Sheriff every year for my entire career. More likely, they'll take after that couple in the Master Card commercial who buy his and her sports cars with their credit card.

Now THAT'S the Christmas Spirit!

Monday, November 24, 2008

Sunday, November 23, 2008

Head veto heart.

Despite my seeming negativity, the biggest danger for me is my native optimism. I always think I'll weather the storm better than anyone else, and that kind of arrogance can get me in trouble.

The analogy I've come up with for the risk/reward ratio is: Dancing on the Edge of the Cliff.

Retail is like dancing on the edge of a cliff. The closer to the cliff you are, the more vigorously you dance, the more reward you reap. Of course, the herky-jerky motion is likely to carry you over, if you're too close. Or the vigorous motion might just weaken the edge of the cliff.

I kind of like it. The danger and stress, the skill it takes. But I've also gone over the edge a few times, caught myself a scraggly bush and crawled back up.

Chastened, I moved further away from the cliff.

Away from the cliff, you dance much slower and reap much less reward, but the danger is much less.

I've always liked this analogy (metaphor?) because it also includes competition in the scenario. If you dance too slowly, and too far from the cliff, you risk a competitor coming between you and cutting off all access to reward.

So you have to determine whether that person is just going to go flying over the edge, or get smart and retreat, or be so damn good at it that he'll dance and dance and survive.

Of course, I think no one survives on the very edge forever.

Anyone who survives finds that small median between what's ultra dangerous and ultra complacent.

Of course, there is always a chance that the entire hillside will fall away, taking everyone with it.

When those times occur, and I think we're in one now, I use a different analogy.

Think of an ocean as your risk/reward median. The closer you are to the life giving waters, the more reward you reap. The further away, the drier and deader it is.

Of course, if you are too close to the edge, the tides and the waves will eventually wash you away.

But too safe, and you're on dry sand with old cracked crab shells and not much reward.

Even then, a giant wave could come and grab you.

Some people are sitting complacently on giant logs, thinking nothing can reach them. But a big wave may be headed toward them, that will loosen the log and crush them beneath.

Other people have built really large and formidable sand castles close the edge, and you watch them, knowing that the waves are undercutting their walls.

Anyway, I've retreated up the beach, and will just wait for the storm surge to die down and hope a giant massive wave doesn't come and get me.

Saturday, November 22, 2008

Bigger keeps the difference.

Bigger does not give back to smaller.

I challenged BEM to give me some positives in the Bend economy. I'm writing this before he answered, but the only one I could come up with is that commercial rents might get lower.

At least in theory.

But I ain't counting on it. In fact, I expect an increase.

Never in 28 years have I had a rent decrease, good times or bad.

Nor have I had my interest rates on my cards lowered.

Or my bank fees lessened. My electric bill goes up no matter the economic conditions. My health insurance rises so much, that it's become a bad joke.

Lately, my shipping costs were getting so extreme, that I stopped 'direct shipping.'

Wait a minute. Oil has dropped from 200.00 back to under 50.00 a barrow. Should I expect my shipping to go back down?


Bigger doesn't seem to give back to smaller. Once the price hikes take place, they are never rescinded.

I recently decided to quit pre-ordering from a supplier I've used for 25 years. Up until recently, he had a flat 3.00 shipping charge. He raised that to 10.00.

Not much of an increase, except I could order one or two times a week at the 3.00 rate, order as little as 100.00 worth without feeling as though it was affecting my margins.

My only options that I can see are fairly passive aggressive; as the little guy I have very little power. So....I don't use my credit cards. (I know, I know. Good.)

I stop ordering as much or as often.

I try to find someone who hasn't decided to raise rates yet. My game wholesaler is likely to get more orders, because he has free shipping above a certain rate.

It may seem to make little sense. Higher rents? But if the landlord can get them, and he wants the 'going rate,' then who can argue?

From what I'm hearing, rents not only aren't going down, but are still going up. It would take several years of drastic downturn, I believe, to make a difference. I think wishing for that is like wishing for an amputation to cure a papercut.

I believe we are at the point in commercial rents that we were circa early 2007 for housing costs, when the bubble was bursting and housing was slowing, but people were still asking higher prices. Prices are going to be sticky for awhile yet, especially if the downtown locations keep being snapped up.

Not trying to sound bitter about this. It's the way of the world. Caveman kicks the dog, walks out the cave and gets kicked by the wooly mammoth.

The Wrong Stuff.

There's a great scene in the movie, The Right Stuff, where the seven original astronauts are at their first news conference. They're giving out their short, military answers and the press is really unsatisfied, until they reach John Glenn, who starts going on about God, country, and apple pie.

The other astronauts see how the audience it eating it up, and they follow Glenn's example, laying it on thick.

Compare that to the Big (Little?) 3 Automakers sitting glumly in front of Congress, asking for 25 Billion on top of the 25 Billion they already have.

Would you give up your corporate jets?

Uh, no.

Would you forgo your salary this year?

Uh, I like my money.

I'm just a little comic shop owner, but I think I would have jumped all over that hanging ball, I would have knocked it straight out of the ballpark.

"You're right, Congressman. I'm going to sell those jets straight-away. And I'm going to ask for a 1.00 salary next year, because I feel that strongly these businesses need to be saved."

Guess what.

We'd be talking about that guy today. We'd be cynical, but we'd be talking. (The guy would be hired at twice the salary somewhere else down the road, or write a book. I suspect it wouldn't have hurt him a bit.)

No wonder these businesses are failing.

These guys embody the Wrong Stuff.

(And yes, I'm aware of unions and benefits and all the rest. But poor leadership is poor leadership.)

Friday, November 21, 2008

Delete it is.

Just saved myself 600.00 bucks.

What's interesting to me, this time around, is how there is an almost perfect correlation between sales and orders. Of course, you say. But that's not always how its worked out in the past, either because my pre-orders were too high, or because I just didn't have enough inventory to carry it.

Other than those pesky spot shortages I've mentioned, this is perfectly manageable. Even the spot shortages can wait, since the customers are a bit more understanding.

The news is full of reports that 'consignment' and 'used' type stores are doing very well.

I can pretty much confirm this, because my wife's store is holding its own. I'm feeling rather good about the way we 'hedged' our bets. After listening to all the news about layoffs, Linda turned to me last night and said, "Aren't you glad we aren't working for anyone else?"

Meanwhile, there's this from one of the comic sites I visit, ICV2:

"Chain bookseller Barnes & Noble reported a larger than expected loss in the third quarter and reduced its sales and earnings forecast for the holiday season. B&N announced a loss of $18.4 million for the quarter compared with a profit of $4.4 million in the third quarter of 2007. Same-store sales dipped 7.4% in Q3 and the company expects them to decline from 6% to 9% in the fourth quarter, which would yield a 5% to 6% decline for the full year. Barnes & Noble CEO Steven Riggio blamed “a significant drop-off in customer traffic and consumer spending” for the drop in the key indicator of same-store sales."

Oh, I like that.

"...a significant drop-off in customer traffic and consumer spending" for the drop in...sales."

Well, ah, yeah, that would do it.

If it seems like I'm writing more than usual, I probably have a bit more free time.
I'm also going home at night less tired. So there are compensations.

I'm going to try to let myself read at the store next year, rather than blather on or play solitaire or wipe the counters or ...

I've always resisted this, because nothing kills the enjoyment of reading like being interrupted on a constant basis.

But...I'm not in danger of being interrupted as much, and I really need to make better use of my time. Even reading one comic a day would mean 30 comics a month. Or 2. Or 3. At least, I can browse them.

Too negative? Compared to what?

I was talking to the employee of another store who mentioned that he had suggested to his boss that she read my blog.

"Too negative."

O.K. I totally understand that.

I really do.

But you know what? I look at what I wrote two years ago, and if anything I underestimated the problems...

And, if I'm allowed to say this, I was more right about what was coming than most people at the time.

So...if my estimate that it's going to be horrid the first half of next year turns you off, so be it....

I don't see how you can begin to plan or deal with the problems if you can't acknowledge them.

Feel free to ignore me. But I wish I could find some sites where owners actually talk about what's happening. It's just not in their natures, I figure. Business owners are a canny bunch.

I mean you can find no end of local and national blogs run by business that are nothing but rosy, nothing but "look what shiny new things we just made, or got, and isn't it just wonderful?"

Try to find anyone talking turkey. I've pretty much given up. Just as I had to give up years ago asking them face to face, or over the phone. I never know what they're really feeling until after the fact, usually about 6 months later when they've either made it through and are looking back ruefully, or they're closing shop.

There are a fair number of business news blogs who can be honest, but they are depending on facts and figures that don't usually get reported until long after the actual timeline.

It doesn't really matter.

But much of this blog is about preparing myself, because....believe it or not...I consistently underestimate the problems, and overestimate my ability to deal with them.

I'm just trying to narrow that reality gap.

And as I always say, if I ever STOP talking about it, then you'll know I've got real problems. As it is, I'm doing pretty good because I've made the necessary steps.

Postscript: I've just had two really good days in sales. Mostly due to two customers, but then they do count. I don't know. I just think I can talk about a slowdown without scaring people. That it's just one of those parts of the business cycle. Maybe not. You tell me.

Thursday, November 20, 2008

B.S Graph.

Want to know why our local government is having trouble with it's finances, and why it's likely to get worse?

Front page of the Bulletin, an Economic Graph forecasting income and employment. A sharp, solid line down, reflecting the REAL numbers of the last couple of years, and the bottom of that solid line, an immediate uptick. But these lines are dotted, because they are a guess. And, conveniently, the uptick begins immediately and goes straight up to previous levels.


Come on.

What world are they living in?

This same thinking is embodied in the Bulletin local section, "No Bus Service Cuts -- Yet." Despite going to the voter's because the need was urgent, they have decided to keep funding the bus system out of general funds....why, because they think it will get better? Do they think there is any chance that the public will vote for a 'payroll' tax? Really?


Was on my way to work yesterday, and got stuck behind a couple of cars going 30 miles an hour on the 45 speed zone, all the way from Costgo to 8th. Then at 15 miles per hour to 4th, when I saw an opening and swooped in front.

Flashing lights behind me at the traffic lights on 3rd. Sheepishly, I raise my hands to acknowledge, and he thankfully turns them off until we go through the intersection and I pull into the Bookmark's parking lot.


I get out of the car shaking my head ruefully, and say, "Sorry, I got impatient. I followed that guy all the way from Costgo."

The cop says, "At least you're not drunk."

"Uh....I don't DO that," I say in surprise.

He asks for my driver's license, and it takes me a minute to fish it out. My wallet has become a repository to all kinds of junk, none of which I actually use.

Then my registration. I open the glove compartment and find about 13 of those, and we finally find the right one.

Insurance? Again, I have about 13 and he says, "Oh, just give me an old one."

So he goes back, and I sit there for what seemed 15 minutes, feeling embarrassed and exposed.

He comes up finally. "I am giving you a warning. When you drive like that, it just irks the other drivers, and they start doing the same thing, and before you know it, chaos!!!" (I don't think he said it quite so vividly, but that's what I remember.)

I'm totally relieved, and I say, "I realize that. I won't be doing that again."

I haven't gotten a ticket for 30 years. I probably deserved one this time.

It must be my honest face.

Black September?

Beginning with September, changes in consumer spending have created the most difficult retail environment we have ever seen,” Hastings CEO John Marmaduke.

“Never in all my years as a bookseller have I seen a retail climate as poor as the one we are in,” Barnes and Noble, CEO John Riggio.

“Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," Best Buy Chief Executive Brad Anderson.

Hey, these are the winners in the Category Killers world: Best Buy vs. Circuit City:
Barnes and Noble vs. Borders.

I've been kind of commenting to my customers that I thought when the dust settled, that September 2008 would be recorded as a historic drop. I'll go ahead and call it. Black September.

***(POSTSCRIPT: Added Nov. 25, 08: Results for the quarter were clearly disappointing. We faced dramatic macroeconomic headwinds, and as a result we experienced our weakest comparable store sales in many years.” Books-a-Million, CEO Sandra Cochran.

Wednesday, November 19, 2008

Complete or delete? Complete or delete?

My finger is still wavering over the two buttons.

On one hand, books are the one bright spot in my store.

On the other hand, its the classic and cult books that I buy at full wholesale which are selling, not these liquidation books.

On the one foot, I can't afford to stock my store with non-fiction except if I get a deal.

On the second foot, I'm not sure that getting non-fiction is necessary; that is, trying to be a full bookstore may not make much sense. Fiction sells. Maybe I should stick with that?

O.K. I've run out of hands and feet, so we'll go to fingers.

On the fifth finger, If I'm going to get these books at all, it makes sense to get them before Christmas.

On the sixth finger, I could wait to see if I actually make money at Christmas, and use actual profits to purchase merchandise, instead of debt (future profits?).

On the seventh finger, while the cheaper books may not sell all that well, the used books seem to sell better because they're surrounded by more books. The more books I have, the more books I sell.

On the eighth finger, not buying anything is boring and I can't stay engaged with the store unless I'm trying to improve it.

On the ninth finger, I don't have to go crazy with improvements. Incremental improvements work too.

On the tenth finger, it roughly takes ten times longer to pay for product than it does to order it. So I can get in ten kinds of trouble.

And so on and so on.

I'm not wishy-washy. (Well, maybe a little....) But these decisions are never clear cut, and you don't really know if you made a mistake until much later.

Have I mentioned lately....?

I'm beginning to realize that there is a sort of reverse proportion to my warnings and results.

That is, when things were going well a couple of years ago, I could be much more dire in my predictions.

Then as things started to go down, I found myself backing off from talking about it. I pick lighter subjects, or I tone down my negativity.

Part of it is that I don't want to browbeat the subject.

"It's going to get bad, my friends....what, you don't believe me? I tell you it going to be really really bad!

"Oh, you agree that its bad now, but you don't see that it's going to get even worse!

"O.K. It's worse.

"But now it's going to be really really horrible!"

That kind of dynamic.

I figure it's self-evident to some extent.

And yet....

I do think we're looking at another couple of years of downturns, minimum. And I don't think I've said that. I still think, in general, people are underestimating the problem.

(Usual postscript...Pegasus is weathering the storm remarkably well, and my wife's store has barely felt it.)

Just Like Lincoln.

Oh, for god's sake, give the guy a chance. I'm talking to you, my fellow leftists.

How would you like to get your PGA card and told you're the next Tiger Woods?

Or welcomed into the NBA as the next Jordan?

Thanks, but no thanks.

Talk about setting someone up for failure.

He isn't even in office yet!

Also to my fellow liberals. Sure, he ran as a 'anti-war' candidate, but I think it was pretty clear from the beginning that he was going to be pragmatic about it. Hell, if anything, he was a hawk about Afghanistan. Haven't you noticed that we seem to be winning? Why would we throw that away by a precipitous withdrawal?

He was always most likely going to follow General Petraous's advice, anyway.

I always figured that he'd be pretty centrist. That he would, as he vowed, bring in members of the other side. Were you planning to just have a left version of Bush?

Again, thanks but no thanks.

As far as having tantrums because he is appointing old Clinton folk? Who else was he going to put in?

Grow up.

But I do have a criticism.

Hilary Clinton as S of S? I have no problem with that. But are we looking at four years of Bill Clinton scandals? God love him, but old Bill got real rich real fast, once the old rules of disclosure didn't apply.

If nothing else, it will make for a lively presidency.

I think we ought to wait and see how everything plays out. Let him act with "deliberate haste."

Just like Lincoln?

I tell you what. I'd settle for a pretty good president, right now. A Truman, a Polk, yes, even a Clinton.

Give the guy a chance.

Tuesday, November 18, 2008

Complete or delete?

Sometimes I wish I had a camera trained on the street outside. It would be interesting to compare a year or two ago with what's going on today.

I've been leaving the house at the same time every day for years. Timed so that I arrive just in Time, at the store. Lately, I've been arriving five minutes early, today I arrived ten minutes early. And it wasn't just green lights, either.

Tuesdays in November. Always a chance to get some work done. Did some exciting things like updating and defragmenting my computer.

Made a huge book order, and have been staring at it all day, with my finger poised above the "Complete Order" button. Over the last hour, my finger started straying over to the "Delete" button instead.

News of the Weird.

Let's be honest - - Is it just me, or is the news getting weirder and weirder around here?

Maybe I just haven't been paying enough attention all these years to the local "If it Bleeds, it Leads" T.V. stations?

I visit both KTVZ and KOHD websites, nowadays, even if I never listen to the actual newscasts.

That's why those mugshots really leap out at me. (Still noticing the really short hair on the perps....what, do they shave them in jail and they just haven't been out for very long?)

The Morticia-looking lady from Redmond stealing everything in sight. Really, I expected the rest of the Addams Family.

Or the Good Samanitarian who got in the middle of a fight in the street. (Apparently, the assailants were wielding broken windows from the Pink Pusseycat as weapons.)

Knife fights everywhere. (Have you noticed that anything short of a samurai sword results in less than fatal results? Same fights with guns, and there'd be a few more dead bodies. Just saying...this isn't a argument against guns. Well, maybe a little...)

And the true outrage. The kind of thing that bothers everyone. People shooting cats and horses and other critters.

I can watch any number of First 48 Hours type shows, but I can't watch Animal Cops. Cruelty to animals makes me sick.

I tell you, every thing's falling apart around here.

But, fortunately, we have professional City Managers who are probably paying close attention, and will be sure to fix it.

Monday, November 17, 2008

Booms and Busts.

The way I figure it, I've experienced only two real recessions; the current one, and the huge recession in the early '80's.

I came in at the bottom of the first one, and that's not actually a bad place to start; at least I had nowhere to go but up.

I didn't even feel the other national recessions, other fads being in play at the time.

But at the same time, the store Pegasus has suffered at least 7 major recessions, and at least 3 minor recessions. Booms and Busts.

What I mean by this, is that the store has had 20% drops YoY in major products at least 7 times, and 10% drops YoY at least 3 times.

Sports cards.



Non-Sport cards.

Beanie Babies.



All dropped off a cliff at one point or another.

Comics, sports cards and Magic have done so on a second, smaller bounce at least once.

It got so I expected a new fad every 2 years or so.

The first 2 drops I was unprepared for, and handled badly, putting me in debt for years.

The middle two I handled O.K. At least I didn't lose money.

The last three I handled extremely well, and not only didn't lose money but actually came out ahead.

I haven't seen any real fads since the decline of Pokemon, Christmas 2000. But the Bend economy itself began a surge so I've been riding that wave.

Anyway, this is an old familiar feeling, a sinking feeling I admit, but very very familiar.

Perhaps a bit more scary since unlike the product booms and busts, this is a national recession that I have no control over.

It's still pretty amazing to me that the same factors seem to come into play every time.

Especially the psychological factors.

The thing I've been watching for, and kind of dreading, was the psychology shift from gung ho, to unaware, to oh, my god the sky is falling.

I think we may have entered that last phase.

"Real" numbers.

Last week there was a flurry of articles about how there were "Record Low" retail sales in October, followed by statistics like the following:

"Total sales for the August through October 2008 period were down 1.3 percent from the same period a year ago."

What the hell. That doesn't sound so bad. If you take into account the falling car sales (which every article mentioned) and that gas prices had decreased (which every article mentioned twice), what was all the fuss about?

1.3 or 2.8 or 3.1, no matter how you sliced it, doesn't sound THAT terrible, does it?

So in all that flurry of articles, there was this one paragraph in Calculated Risk, on Nov. 14, 2008 that caught my attention:

Although the Census Bureau reported that nominal retail sales decreased 5.0% year-over-year (retail and food services decreased 4.1%), real retail sales declined by 8.8% (on a YoY basis). This is the largest YoY decline since the Census Bureau started keeping data.

Retail sales are a key portion of consumer spending and real retail sales have fallen off a cliff.

8.8%. That's more like it. That's significant. That's what businesses are really feeling. And I suspect in Bend it's more like double that number in REAL terms. Good word, that.



Paul-doh pretty much rakes to City of Bend over the coals on BB2 today; so I'll only add, that a 80% decrease in ESTIMATED REVENUES means that the ESTIMATIONS were brutally asinine and incompetent.

Especially since it was very clear to many of us (I think I blogged about this a year and a half ago) that there would be barely be enough money for repairing pot holes and plowing snow, but they went blithely on with their grandiose plans.

I'm still really amazed that only incumbents and realtors ran for office this year.

Sunday, November 16, 2008

Shadows on the wall.

Trying to gauge the economy is like looking at shadow's on the wall (See Plato's Cave Metaphor below.)

Most information I get is dated, or slanted, or whitewashed, or referring to something else. All I can do is try to glean clues from the dancing shadows.

For the first time, I have another set of data to work with, I'm not completely on my own trying to figure out what's going on. Linda's store is seeing a slight slowdown, but nothing like what Pegasus has gone through.

Meanwhile, there are several comic dealers in big cities who say they are doing very well.

Normally, I might dismiss these claims. (Or just feel jealous of them.) But this time, I see both results as hopeful. I always say, my store doesn't exist in isolation, and therefore if others are doing well, the potential exists for my store to pick up.

But I do think Bend is -- as usual -- in a kind of unique situation, and downtown is unique within Bend.

I noticed this summer, for instance, that a huge percentage of my customers were employed in the 'growth' industry. So I expected a fall off this fall and winter. I didn't expect to lose some long term customers, without so much as a word from them. They just stopped coming in.

Sort of disappointed in them. I expected better, I guess. At least a fair warning that they weren't going be able to pick up all the comics I'd piled up for them.

Overall, there seems to me to be a inexorable logic to the slowdown. Gravity has reasserted itself. Again, this morning, there are reports of only 22 building permits issued, keeping the rolling average at around 25 per month over the last year and a half or so.

Just out of curiosity, I counted the furniture store ads in the yellow pages, (not counting Antique stores) and found about 24 listings. At least 4 of those are gone.

The inexorable logic is that 24 stores furnishing 24 houses (building permits could be a garage extension, or a new deck, but let's pretend) means one house to furnish per month, assuming that people buy in Bend, assuming that they don't buy second hand, assuming that they don't already have their own furniture.

You can use the same inexorable logic on plumbers, electricians, painters, ect. ect.

I've been saying that the last 3 years were an illusion, and my sales figures seem to be confirming that. It's not fun, but it's O.K. since my overhead is no higher than it was 3 years ago but it does require an adjustment.

At least, that's the way I read the shadows.


Plato used the analogy of the cave to illustrate his idea of forms. The analogy goes like this:

Imagine several prisoners who have been chained up in a cave for all of their lives. They have never been outside the cave. They face a wall in the cave and they can never look at the entrance of the cave. Sometimes animals, birds, people, or other objects pass by the entrance of the cave casting a shadow on the wall inside the cave. The prisoners see the shadows on the wall and mistakenly view the shadows as reality.

However, one man breaks free from his chains and runs out of the cave. For the first time, he sees the real world and now knows that it is far beyond the shadows he had been seeing. He sees real birds and animals, not just shadows of birds and animals.

This man is excited about what he sees and he goes back to his fellow prisoners in the cave to tell them about the real world. But to his astonishment, they don’t believe him. In fact, they are angry with him. They say the shadows are reality and that the escaped prisoner is crazy for saying otherwise.


Saturday, November 15, 2008

Too close to see, too far to care.

As I said a couple of days ago, the truly negative news is coming from big names now, mainstream names, big businesses that everyone know about. Only six months ago, these guys were still blowing smoke and it was only the fringe outsiders who were crying alarm.

And yet, if all you did was read the paper and watch the nightly news, you really wouldn't know.

It was interesting to me -- the big information junkie -- that only about 20k people in total visit the three biggest economic blogs in the country; Big Picture, Calculated Risk, and Mish's.

I go there every day, because these guys have been proven right again and again.

But 20k people in a country of over 300 million seems like a vanishingly small number.
After all, every one is affected by the economy.

Two patterns I see. The people who are too close to the situation to see clearly, and those that aren't affected on an every day basis and don't care to see.

Again, I've seen this over and over again on a Micro level.

A bubble gets out of control, and I begin to see the beginning of the end, I try to communicate that to others in the industry -- who all give me a shrug, or a "We're doing fine."

So I just prepare my own plans and get ready.

And a few years later, they're all gone and I'm still here.

I'm wondering if I'm seeing the same thing on a Macro level, nationwide. A lot of wishful thinking, for sure, but also just a real lack of awareness.

I understand, though. It's not like these things are always completely clearcut.

When to cut back, and how much to cut back, are very difficult decisions.

But the results of this last week have more or less convinced me, and I made the final moves to prepare. It's not so much that sales were bad -- they weren't good -- but the kind of feedback I was getting from customers and suppliers, and the overall pall in the air.

I had been holding off, taking a wait and see attitude, but since most of what I do now will affect early next year, I need to pull the trigger.

If I can get through the next year or two without incurring debt, I should be very healthy on the upside and ready to take advantage.

Friday, November 14, 2008

Bend on Calculated Risk.

Interestingly, news of Bend's office vacancy made it to Calculated Risk, the second most visited business web site, at about 6550 visits per day.

Other than a couple of jokes of "Bend-over" and "Where's Bend?" the 550 comments that followed weren't all that interested in good old Bend.

Still, CR thought the vacancy rate newsworthy.

The Ninja Problem.

First emusing (correction, apologies to Jon and Dave, it was HackBend) and then Utterlyboring have picked up on the Ninja Throwing Star ordinance:

Possession of a Throwing Star.

(1) Definition: "Throwing Star" means any instrument, without handles, consisting of a metal plate having three or more radiation points with one or more sharp edges, and designed in the shape of a polygon, trefoil, cross, star, diamond, or other geometric shape for use as a weapon for throwing.

(2) A person commits the offense of possession of a throwing star if the person knowingly manufactures, causes to be manufactured, brings into the city, keeps for sale, offers for sale, exposes for sale, gives, lends or possesses a throwing star as defined in section l herein.

(3) Possession of a throwing star is a Class A misdemeanor.

[Section 5.070 added by Ord. NS-l398, passed 6-20-84]


So they're asking, "Did Bend have a Ninja problem in the early '80's?"

Oh, my, yes.

A huge problem, I'm here to tell you.

I know, because my son Toby was one of them. He'd dress all in black, loop his knumb-chucks in his belt, and go out into the dark with his friends.

"Um....what are you doing out there, Toby?"

"Oh....Oh, nothing....."

"Un, huh....."

I sort of expected a phone call each night that he had raided a fireworks stand. (His other obsession, blowing things up.) But I'm great believer in imaginative play and just hoped his common sense would outweigh his overwhelming urge to become an invisible assassin.

I don't remember exactly which movies were coming out at the time, but the young ninja's were really, really into it. I distinctly remember a conversation in the car after one such movie where Toby insisted that they had proof, absolute proof that Buddist monks could live on air, and could shift through solid stone. (Why, they had found skeletons embedded in walls!)

It seemed as though every kid 12 years old was enrolled in one martial arts program or another. (Which taught honor and duty -- and wasn't it cool to be able to kill someone with a single stroke?) I drew the line at samurai swords, no matter how dull, but throwing stars were manufactured by anyone with sheet metal and a way to cut them.

But I do sort of remember that damage was done, by someone; they never caught them.

Ninja's are too slippery.

Thursday, November 13, 2008

Fairy dust....

What was interesting about the Bulletin stories today is how completely the tone has changed from a couple of years ago. What isn't being said anymore, and what is finally being said outloud. But the Bulletin still can't resist sprinkling a little of the magic fairy dust...

First story, "REDMOND AIRPORT SCALES BACK EXPANSION: 2 Fewer Gates Will Save $600k...."

Sure, it's only a savings of 600k from 40Million, but still.... A couple of years ago, the story would have been: "REDMOND AIRPORT WILL ADD FAIRY GOLD DUST TO GATES: Just Because We Can...."



First off, let me say I hope to god they succeed, because there are swarms of teenagers running around downtown, and they're looking for trouble...

But doesn't anyone else see the exact flow of the opening and closings of these clubs? How they parallel the boom and bust cycle of the last decade?

Let's see, they start with one club in 1995, following the economic trajectory up with openings in Redmond, Prineville, Terrebonne, Madras, Warm Springs and La Pine and another in Bend.

"But not too long ago, the clubs were forced to close their doors. It started with La Pine in September 2006, and later, Madras, Prineville, and the Warms Springs clubs stopped operating..."

If that was a business, you'd have to say the business model failed.

But, as I've been trying to say, beware of models that work only when things are going well.



A huge load of hooey. Talks about how "...Tetherow is strong, sales have been robust..." and then proceeds to give no evidence of that. Whatsoever.

The real thrust of the article is in the same sentence, because they really don't want you to think too much about 'sales': "...and, most importantly, the incredible Scottish style golf course has exceeded everyone's expectations, from golfers to environmentalists."

The next 8 paragraphs are all about David Kidd, the Scottish golf architect, and his incredible Scottish golf course.

Have I mentioned it's Scottish?

Not only Scottish, but sprinkled with with Leprechaun gold fairy dust, I guess. How did Bend get so lucky to get all this fairy dust?

Maybe because we built the Shire?

Also interesting is that the "Editorial" by the 'owners representative' (not an ad or a promotion, mind you, but an editorial) points out that they got the Bulletin to make a correction for having the audacity to say that Tetherow is "stalling."

"Stalling" is the right word. Where's the Hotel? Oh, yeah, stalled. Big time.

Sad that the Bulletin would 'correct' the truth because a builder demands it.



I've been saying for awhile now, the CRE boom in Bend, if anything, was bigger than the housing boom. I zeroed in on the 'retail' part: "Vacancy in the city's retail sector grew from 6.8 percent in the second quarter to 9.7 percent in third quarter."

"Additionally, higher vacancy rates will result in lower rents and incentives..." and "If your lease expires in 2009, you are a winner."

Well, we can hope. But so far I think they're still just saying that, while sticking pretty firmly to the higher rents. They may be more willing to arrange a balloon payment schedule, as one of the owners detailed, but really, they still want the old prices.

What I found ironic, and which should be pointed out because it pretty much contradicts the emphasis on 'building' that our media and government leaders have been expounding as important to our economy, was this:

"The good news is very little building is planned for 2009, so vacancy rates are expected to flatten in Redmond and Bend..."

"There's very little reason to build anymore because there is excess capacity with every product type..."

Well, which is it? More building is good? Or more building is bad? Or is it only building that has the fairy dust of the boom involved that's good?



"Until recently, ...(BEST BUY)...has largely been immune from the dwindling economy that has felled other retailers, including its closest competitor Circuit City, which filed for bankruptcy this week."

This is another thing I've been trying to point out for the last year or so about retail.

If the #2 Category Killer is failing, the Circuit City's, the Linen's and Thing's, the Borders Book's, etc. why do the #1's think they're immune?

It's like saying that my neighbors all died of the plague, but we're just fine.

Maybe they've sprinkled their business with...fairy dust. We're #1, we're #1! The plague wouldn't dare touch us! We're protected by fairy dust!



Wow. Apparently, these planes are actually built from fairy dust, they will be the first to come back, everything will be fine....quit asking.


All in all, a very different tone, mixed with fairy dust, from a couple of years ago.

Wednesday, November 12, 2008

New stores everywhere....

I'm absolutely fascinated by the number of new small stores opening in Bend. And at a bit of a loss to explain it.

Human endeavor is wondrously messy and unpredictable.

People do what people do. Open stores. Because they want to.

I suppose that it's good for my store to have so many new openings around it. I've always maintained that almost all stores can last 2 or 3 years; so this may just about bridge the downturn in the local economy. Any sign of brisk activity is good for the existing stores.

I'm convinced that most of us have seen a 20% drop in sales; I'm currently running about 12% down for the year, but that figure is probably going to get worse. At the same time, this has been my most profitable year; all debt paid off, current on bills, savings untouched, taxes paid in full and on time.

As I keep saying, as long as you are over your 'break-even' point, it almost doesn't matter how much you gross, it matters how much you spend. You make just as much money at 20k with 50% margins as you do at 30k with 33% margins. As long as you can manage that, your bottomline should be safe.

It's not as fun to be more careful and circumspect. I've always enjoyed the growth phases because it allows me to experiment, play around, try new things.

But the phases of being more disciplined have also been satisfying; you know, that feeling of satisfaction of being inside a warm house while the storm rages outside.

What has surprised me and gratified me, is so far even on the slowest of weeks, I've had enough to pay bills on time.

The difference this time, I think most of all, is that I don't have any debt. The debt burden in past slowdowns was horrendous. That, and the fact that I pushed sales so much above the 'break-even' point in the last growth phase (roughly 2002-2007) that I can sustain a substantial drop in sales without any danger.

I guess all it takes is 25 years of ups and downs, and hanging on by my fingernails for years, and just steadily chipping away at it.

Every Wednesday a Christmas.

I get over 2/3rds of my product each week on Wednesdays.

It's fun to open the boxes, to reveal the shiny array of new toys and books, games and cards. All the cool stuff, nestled in the wrappings and popcorn. Lifting out a stack of comics to find that really neat looking toy. Seeing the cover of the new Star Wars comic just pops. Leafing through the new art book of fantasy drawings.

Every week seems to have it's own surprises -- some item that is way cooler in the real world than I expected. (Why didn't I order more of this!)

Or something that looked really cool in the catalog but is way lamer in the real world. (Why on earth did I order that?)

I never know for sure what's going to arrive each week. Shipping dates are all well and good, except when the publishers don't bother to follow them. (Which seems like about half the time.)

I'll often have a customer inform me that something is out, when I know for a fact it hasn't arrived. I call it the Unicorn Effect. I tell them I can sell a Unicorn over the internet, but if I tried to sell them a Unicorn in my store they'd demand to see it.

Way back in March, DC offered a really cool Joker bust, for 300.00. (I even profiled it on my Pegasus Blog). I got all enthused and ordered 3 copies (which is way, way more than I usually order; indeed, I rarely order expensive statues at all.) The movie came and went. Heath Ledger's interpretation of the Joker supplanted the older classic version, and finally this week they tell me I can lower my orders if I want.

So I canceled them.

I'm going to play as few of these 'preorder and be damned' games with the distributors as possible, dammit.

You want to wait until the peak selling time has passed, and then deliver during the slowest time of year? Keep it.

In fact, I've made the momentous decision to quit preordering most of my game and card product at all. I just don't have anyone left who is paying attention to the newest card releases...Sad, but true.

I'll just wait to see what comes out each week, observe the lay of the land and my bank balances, and decide if or when I want something. I couldn't do that in the old days for a couple of reasons. First, there was only so much stuff being released and I needed all of it. Second, I always risked being unable to get the product due to sell-outs.

Neither is really a problem these days. Now the only advantage to preorders is that it's just a bit more convenient to put an order in advance and forget about it. But the inability to control the arrival of the product now outweighs the convenience of preorders in my opinion.

It will require a bit more work on my part, keeping track of what's been released.

I can't really go this route with comics. Marvel and DC (about 80% of the monthly comics) have instituted a 'Final Order Cut-off' (FOC) which is only a couple of weeks before shipping instead of the old standard 2 months. Some stores are ordering all their comics this way; but it seems kind of risky to me. I'm afraid of being FOC'ed if you will.

Still, I'm going to need to spend a bit more time every Tuesday looking over my orders on the FOC, and seeing if there are any comics that didn't perform up to expectations and shaving them a bit.

There's a bit more incentive (and a bit more time on my hands) to fine-tune the orders, cut down on the waste.

I'm not too worried about running out of stuff to sell.

Wednesday arrives every week, and I get a whole new batch of product.

And it's still a blast to open those boxes.

Tuesday, November 11, 2008

Breaking even is the new going up.

Local Librarian to recommend a growing genre..." Bulletin, Nov. 11, 2008.

You'd think I'd be delighted to see this as the lead article on the front page of the Bulletin. Sadly, it was a pretty patronizing attitude; it more or less implied that graphic novels are for slow learners, or as an entry point to 'real' reading.

Sort of misses the value and complexity of the art form.

Sounds to me like she'll be looking for worthy and educational graphic novels; which may or may not be the 'best.'

Oh, well. Another step forward and another step back.


Poker losing popularity? The article doesn't use the word 'fad' but I will. Besides, how many people have to lose how much money before they realize that it's not an easy game? Before the poker fad, I don't think I put a lot of thought into the idea of gambling.

Now? I think it's a really shady activity, that tends to prey on the people who can least afford it (I'm pointing at YOU, state sanctioned lotteries!). There's a reason most cultures have frowned on gambling in it's many forms. (Just as there is a reason most cultures have frowned on borrowing, but that a whole nother kettle of fish.)


"Guide Gives Insight to Rural Living" Bulletin, Nov. 10. This kind of made me laugh. They should have entitled it, "You Know You're a Redneck When...."


Bill Friedman died. I got exhausted just reading his resume. I don't know how these civic minded guys do it, or why. Thank god some people are willing to commit so much time and energy to the process.


I've noticed that about half of the 13 or 14 spaces that were open for Lease on Greenwood have been rented over the last few months. In the midst of a major slowdown. With one holiday month ahead and then the long, slow off season.

But it just points up the fact that people open business for their own reasons, and timing is just a matter of luck. I wish them the best.


I heard a new phrase from a blog reader from the valley, whose wife works in the motel industry: "Breaking even is the New Up."

That about says it...

Monday, November 10, 2008

Odd things found in used books.

Linda found a dried, pressed leaf of a certain plant in one of her used books. "Is that what I think it is?" she asked.

"I don't know, you'll have to grind it up and smoke it...."

We're constantly finding things in books, tons of bookmarks (from all 50 states and beyond) which I've tried to get her to save, and other random pieces of literature. (I found the most pornographic letter once, which was so filthy I blushed to read the first paragraph, and immediately tossed it. It was unsigned, by the way.) In the boxes, we find toys, dvd's, mouse eaten dollar bills, small electronics, all kinds of knick knacks.

When we try to give them back, people hustle out of the store. "Nah," they wave their hands. "Just throw them away." People are just clearing stuff out, and it all gets tossed in a box.

Linda has mentioned that she'd like to write a book someday with pictures of "People Who Sleep in Bookstores." Every once in a while, she'll hear snoring and look over at the couch to see someone sprawled out. (Ahem, guilty.)

So this is a second book she could write: "Odd Things Found in Used Books."

Sunday, November 9, 2008

Trumped the bump.

Not much new to report on the Pegasus front. I've settled into a new range of purchases and sales; I expect that Christmas won't be canceled, but I'm also not expecting too much. I'm expecting the first part of next year to be horrid, but again I can handle that if I order properly.

We didn't see an Obama/post election bump; but the weather changed at almost the same moment, and I think the weather trumped the bump.

Linda's store has proven to be very resilient in the face of the slowdown. She's not getting quite the same rate of growth, but she's doing all right.

The biggest problem developing for my store is what I call 'spot shortages.'

When sales are high, it seems as though the cash flow covers everything; that is, if I have 8 categories of product, and I have to order 80% of the good stuff each month to keep them up, I sell just enough overall to keep that going. I might sell 60% of one category, and 90% of another, and 75% of another, but it more or less evens out over the long run.

When sales are lower, one category can sell very well, can sell completely out, while the other categories aren't doing so well. That means the cash is frozen in non-selling inventory.

What to do?

Well, I can just sit and wait for enough of the slower moving product to sell to be able to cover the spot shortage. This is what I've had to do in the past when things were dicey and I couldn't take any risk, and/or I had no capital to dip into.

But obviously, this means that the category that is short is actually the category that was selling. Pretty dumb to let that lay fallow.

The other solution is to actually dip into saving to buy the hotter product, and commit myself to replacing the borrowed money when some of the slower product finally sells.

This is a perfectly good solution, as long as I'm disciplined enough to replace the borrow money, which I haven't been too good about in the past.

Then again, I've managed to do a lot of disciplined things this year that I haven't been too good about in the past. So, yeah. I'll keep the inventory up.

But spot shortages are a pain in the ass.

Saturday, November 8, 2008

Bend trends.

This morning's paper pointed to a couple of long-term trends in this town.

The first story, about Jeld-Wen Foundations rethinking it's support of the Tradition golf tourney.

"We've run into a buzz saw with the economy," said Henry Hewitt, chairman of the Jeld-Wen Foundation board. "I think this is just a piece of that, and the economics of the tournament and our relationship with PJS. I think in addition to how the tournament is managed, we are probably going to try to find a lower-cost solution, because the economics weren't as good as we wanted them to be."

Trend #1: Overreach.

This is the trend of Bend having taken the BOOM of the last 5 to 10 years and thinking it was going to continue. I think the last five years were more or less an illusion, and any event or business who predicated their plans on those years had better wake up fast.

We in Bend have just elected a pro-growth and pro-builder slate of city councilors; and I think the city is almost guaranteed to go broke if they pursue support programs for builders, resorts and Juniper Ridge.

Our only chance of avoiding this is not only not continuing on this way, but to reverse course and start cutting everywhere we can. It was completely foolish to use General Funds to continue to support the BAT when there was little chance the public would support it, for instance. It doesn't matter if you are for or against the BAT, foolishness is foolishness.

Trend #2: Ignoring warnings. (Mostly in the blogosphere.)

There has been blogger on the BEBB who has been saying for over a year now, that Cessna was going to close, and let go all it's employees. He became the Boy Who Cried Wolf, because he kept being proved wrong.

Until this morning.

He had an obvious ax to grind, and may have just been a stopped clock: but there were other people who pointed out the obvious: such as Paul-doh on Bend Bubble2; that when a big national company buys a local company, the local company is fair game.

There is another big warning out there about Suterra, who is the second tenant of Juniper Ridge. Now most of the warnings seem kind of loony to me, but there seems to be enough there that at least one of the news organizations in this town ought to investigate, if only to debunk.

But you wouldn't even know that that there was a big kurfluffle down in California about synthetic pheromone spraying.

I'd like to discount all this types of warnings as paranoid delusions, except they seem to come about a bit more often than pure chance would have it.

Going all Wolf Blitzer on you.

Looking at that 52/46% vote split and shaking my head.

I can't figure out how it could have been so close.

I think The Onion, below, has it right: "To elect a black man, in this country, and at this time-these last eight years must have really broken you."

A mandate? I don't think so. The only thing the Republicans had to offer was McCain himself, his history and character. And yet it was still close.

A new Coalition? I guess, going into the future. But it took Young People, Hispanics, African Americans, and Women, and even then the Democrats needed a few traitorous old white guys like me.

And dare I say it? It looks to me like they needed a few Joe the Plumbers in Penn. and Ohio.

From The Onion:

" remained unclear whether the failing economy, dilapidated housing market, crumbling national infrastructure, health care crisis, energy crisis, and five-year-long disastrous war in Iraq had made the nation crappy enough to rise above 300 years of racial prejudice and make lasting change.

"Today the American people have made their voices heard, and they have said, 'Things are finally as terrible as we're willing to tolerate," said Obama, addressing a crowd of unemployed, uninsured, and debt-ridden supporters. "To elect a black man, in this country, and at this time—these last eight years must have really broken you."

Added Obama, "It's a great day for our nation."

Friday, November 7, 2008

Pass on by.

"Boys and Girls Clubs Halting Service," Bulletin, Nov.7, 2008: Oh, oh. Might explain the swarms of kids I had come into the store yesterday. I'm really uncomfortable with swarms. Pass on by.

Small side story in the business section: "Retail Sales Weak:" "....the weakest October in at least 39 years." You think? IN 39 YEARS! Pass on by.

Graphs showing the housing and labor forecasts: Nice U shape. Of course, only the downside of the U has actually happened, and the upside of the U seems completely guesswork. Just cause they make a graph of a U doesn't mean it will happen. It seems more likely to me that it will look like an L. Even the timeline seems really optimistic. And the idea that we'll escape the worse because of less subprime mortgages. Then again, did they forget we were the most overpriced market in America for a couple of years? Pass on by.

"Big Three Press Legislators for Aid": Where the hell is all the money they made from making big expensive gass-guzzling SUV's for the last 10 years? Can I get a handout too? No? Pass on by.

"Mattel to Cut 1,000 Jobs." Wait. I thought toys were the one thing that would sell this Christmas? Pass on by.

"Tourism Report Gives Bleak Outlook for '09." "During the last five months, Central Oregon's leisure business has dropped 8 to 10 percent..." Pass on by.

Call out snark.

I was going to do a call-out snark to 'Tim' about something he said early on: "Be careful not to attack Sarah Palin!"

So how did that work out, Tim? know what? he was right in this sense. Obama took the high road, and never personally attacked her. He didn't have to, the press did it. (Liberal press or not, they smelled blood and went after her...just as they would have any other weakened political animal.)

But neither race or gender really became big issues in this campaign except obliquely.

Except they were always there; the elephant and the donkey in the room, if you will.

The subjects have become minefields for discussion. It's just too easy to say the wrong thing; hence all the political correctness.

So we act as though race isn't there and doesn't matter and hope it will go away.

And then an incident like the O.J. Simpson verdict comes down and we are surprised by each other's reactions.

Anyway, for a brief time at least, for the couple days after the election, everyone felt safe enough to talk about race for awhile.

But as my comment about the 'black widow' dress reminded me: it's still a minefield. There are still lots of connotations and subtexts and loaded meanings.

An interesting dynamic has developed.

Smart people realize it's better and easier and safer not to talk about it.

Which leaves what? Only ignorant people to talk about it? To create even more fuss and folly? Which makes smarter people want to stay even further away from the subject?

Does the gulf widen or narrow if we don't talk about it? Is it like an illness you ignore and it eventually heals itself, or a cancer that continues to grow?

Thursday, November 6, 2008

Curse you, N.C.!

Curse you North Carolina! I was all ready to crow over nailing the Electoral College at 349. Nailed it! Oops. Guess not.

Kept saying to McCain people yesterday: Look the world hasn't ended!

Though it seems to me right wing radio could give him a couple days before they start eating him alive....

Was staring at a picture of Obama and Biden, and thinking: what if you took this picture only 10 years into the past. You'd say, Look who is President!

And they'd say, Wow. Biden finally made it. And how cool that he has a black V.P.!

Wednesday, November 5, 2008

Dancin' on the grave.

I was going to write some soaring praise of the election; how as Americans we can be proud, of both Obama and McCain. (Personally, I think McCain is a class act, and I believe he mostly avoided the 'race' card.)

But after hours of watching teared up pundits, it seems as though the praise is pretty much covered.

Instead, I'm going in the opposite direction. My brother works in Wash. DC, and years ago he pointed out that a President can do very little against an entrenched bureaucracy. That change comes slow and unwieldy.

So while I'm jazzed, I'm also reminding myself to be patient.

I'm relieved that we have a truly smart, competent, articulate, thoughtful man in the White House. But sobered on the day after to remember that he's relatively inexperienced.

Couple of funny things. The Fox Channel (I had to watch them for awhile just to see what their reaction was....) showing the celebrators outside the White House. Now, I saw that as 'dancin' on the grave' but Fox seemed to think it innocent. Then a hand lettered sign was displayed. "Why Wait? Evict Bush Now!" and the commentator seemed actually surprised and flustered by the sentiment.

Methinks Fox hasn't figured out their world has changed.

Secondly, why did Michelle Obama wear a black widow dress? Really, go look at it.


Tuesday, November 4, 2008

Here's my fear.

50 thousand enthusiastic Obama supporters go to his rally.

Yes, we can!

Yes, we can!

25 thousand Obama supporters go home and forget to vote.

25 thousand lukewarm McCain supporters got to his rally.


But all 25 thousand McCain supporters go to vote.

So we got 25 thousand Obama supporters waiting in line.
We got 25 thousand McCain supporters waiting in line.

The little old lady with a walker who is convinced Obama is a Muslim patiently waits to vote.

The young first time voter who thinks Obama is cool also waits.

It starts to rain.

A cellphone rings. Where are you, man? The party has already started. Off the young Obama supporter goes. After all, it's going to be a landslide for Obama, or so he's been told.

Biddy bing, biddy bang, biddy boom!

McCain/Palin are in.

How did that happen?

Monday, November 3, 2008

Documenting the obvious.

I eagerly read the article on "Why Do People Come to Bend," in today's Bulletin.

So much work, so little revealed.

Did any of you find anything surprising in the results?

People come to Bend for leisure/recreation? Really?

I suppose it had to be done, but I think I could have constructed a similar graph out of pure guesswork.

Anyway, the only real number that I raised my eyebrows over was that the #1 place people visited was Downtown Bend, at 58%; followed by the Old Mill District, at 44%. Even more than all of the outdoor and sightseeing sights.

The other number that seemed interesting to me was the separation between Recreation and Visiting friends and family; in talking to customers, I think this is most often a combination.

What can I glean from this?

I want to stay in Downtown, but I already knew that.

Sunday, November 2, 2008

Two pages in.

It's funny how I used to have to really search for the underlying economics, both locally and nationally. It was there, but you couldn't just skim the surface. You had to go ten or twenty pages in to find the real news, past the superficial headlines, the sexy gossip, the boosterism.

But it was always there.

So I'd try to find where it addressed some of the problems I was facing, and bring it to my blog.

Nowadays, all I have to do is look at the front page of the business section of the Bulletin. It hasn't made it to the front page of the news section much yet, but it used to not be there at all, or it was so whitewashed as to be unrecognizable.

Now the bad news is so overwhelming that I'm purposely not going more than about two pages in. Just to keep a monitor. A maintenance news level so I don't get surprised. Going ten pages in would just bum me out too much. I can't go there. Or more to the point, I can't live there and still function.

If the absolutely worst of what some of these blogs (Calculated Risk, Mish's, Big Picture) are saying comes true, there isn't much I can do to prepare for it.

All I can do is batten down the hatches.

Awwww, isn't that cute!

Seeing the long lines of voters. Seems old-fashioned. Quaint.

I'm so glad to have that out of the way.

Saturday, November 1, 2008

Paying crooks.

From Mish's Blog:

"House Financial Services Committee Chairman Barney Frank said banks using cash from the $700 billion U.S. rescue plan for bonuses, acquisitions and other purposes unrelated to lending are in ``violation'' of the law.

"I am deeply disappointed that a number of financial institutions are distorting the legislation," Frank, a Massachusetts Democrat, said in a statement today. "Any use of these funds for any purpose other than lending -- for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc. -- is a violation of the terms of the act."

So your financial adviser completely loots your account.

Sorry, he says. But you better put more money in your account, or you'll be broke.

So you give him more money.

And he loots your account.

And he tells you to put more money in your account, or you'll be broke.

So you give him more money...............

And he loots your account, again.

Do I have to point out that he'll keep doing that until you say no?

Next up? Credit cards....

Next crisis in the batter's box; credit cards.

I can almost hear Wall Street thinking:

Let's see. The government like totally bailed us out on the 'credit crisis.' Our bonuses are safe! Let's sock all that money away, (what, loan money?) and if any really cheap banks come up, we'll buy them!

Thanks, Uncle Sam!

(What a sucker, heh.)

Where else can we snag some money?

Oh, yeah. The credit cards situation really sucks. Of course, it's sucked for years, but we've kept it on the Q.T. But now?

Hey, Uncle Sam! Look how bad the credit cards are!

Here's what we'll do. We'll lower the credit on the good guys, who will immediately start screaming. We'll keep squeezing the bad credit risks for penalties and late fees, until they crack, but by then we should have more of the luscious federal moola!

Get those P.R. guys crafting some ominous sounding warnings....

Oh, I can't wait!

Merry, Funking Christmas, everyone!

Closer to the mark.

Closer but still no cigar.

Pegasus was 4.4% below middle estimate; which is much, much better than last month, which was 20% below. It was also less than 10% below last year, so I'll take it.

There were a couple of really, really slow days in the mix, and I've always seen that as a trend maker, in either direction. (A couple of really huge days might indicate a trend to the upside, for instance.) I'm sure the stock market technical analysts have all kinds of terms for it.

Anyone who reads this blog knows that I've always used the term "a late Tuesday in October" as an example of the slowest point in the year. (That, and "a late Tuesday in Feb.") In other words, this is the low point in the year, usually, and that it came back to the average I'm shooting for, is a good sign. Again, it's looking as though September, like January, was an anomaly.

In fact, if I earmark a couple of my biggest merchandise purchases as Christmas spending, and carrying on my cards for a couple of months (which is fair, I think, if not rigorous) then I even turned a small profit.

I have to take my book sale table off the sidewalk today; so I'll be interested to see how that affects book sales, which were more than double last year.

Still, I'm using going to use that awful September as my new baseline.