Bend is a small town.

Bend is a small town.

At twice the size, metro area.

If it was twice the size, it might turn into what?

Salem? Only without the state government, or many small towns around it, or less than an hour from Portland or Eugene on a usually snow free interstate?

Or Eugene? Only without the interstate or the University of Oregon?

Or Medford? Again, without a 4 year college or an interstate.

Hell, we're not even a Corvallis, with OSU; or an Albany, with actual jobs. (Did I say interstate?)

Poverty with a view.

A thin veneer of rich people, a small amount of sophistication, does not make us a city. Nor does Trader Joes, or any number of (going out of business) fine dining.

Come here. Live here. Get used to it.

Wishing won't make it different. We've seen waves of aspirational lifestyle seekers before, and we thank you. But proclaiming over and over again that 'we're different' won't cut it.

Spend your money, or retire here and spend your money. Great. Give us a magazine to show us how to live, bring a big time chef, tell us about your commute or your long-distance job, and especially how rich you are.

We like that you're rich.


We like that you're willing to spend your entire nest egg, your entire trust fund, the entire proceeds of your big house sale. We thrive on your willingness.

But we're still a small town.

Isolated.

Without much industry. And why would industry move to such an isolated place?

We've maintained a pretty good surface veneer. Stores have been leaving beautiful husks for years. We continue to fail upward. Thank you for the nice renovations.

After all, people do want to live here. Nice and smart people. Many who understand that they have to accept less income to live here.

But many don't. Many seem to think they've moved somewhere -- different.

At least we do have lots of great scenery, and lots of minimum wage tourism jobs.

Enjoy.

Happy New Year! (Or at least try to hang in there.)

The other day, my friend Jim from Sisters (I'd use his full name, but I'm not sure he'd want me to) came into the store. He's one of those rare individuals who often has a viewpoint different from mine and is willing and able to discuss it. (Argue, without hard feelings.)

"So," I say, baiting him. "I don't think you'll need to worry about people's opinion about development in Sisters. Most of it won't happen anyway...."

"Oh, I think the hotel will go through, at least," he says.

So off I go on my view that next year is going to be horrible, that commercial real estate lending has frozen, etc. etc.

"I'm sure we're all doomed..." he says, deadpan.

This sets me off. I get a little heated. I can't stand to have people say, 'It'll get better. Don't worry. Everything is just fine.' Of course, that's not what he would say he was saying.

"I don't see the point of obsessing over it."

Which just sets me off again.

He listens to me quizzically for awhile, and then asks, "Why are you surprised? That's the way people are, the way they've always been."

"But....but...." I sputter. "They need to know! They need to be aware! They need to get educated!"

He grins, and says, "I've figured you out. You're a Calvinist. You are offended by other's weaknesses."

I raise my fist, and proclaim, "THERE WILL BE A RECKONING! WE DESERVE OUR FATE!"

I'm sort of joking, sort of not. Because I'd been thinking that way.

I'd always thought my Mom was a Calvinist, in that she had strong principles and couldn't really understand other's weaknesses. Most of my family would disagree, and she was at the same time an empathetic and understanding and liberal person. With a solid steel backbone.

"Oh, my God," I said. "I've turned into my Mom."

He laughs. "Well I'm glad we got through that."

"But of course." I said. "I really appreciate that you argue with me. It's what I like about you."

Anyway, the point of this entry is to say that I've been holding back through the holidays, but now with the New Year, I intend to kind of mix it up. I've got a whole bunch of articles I've been saving up, from mainstream periodicals like the NYT's and WSJ; and I want to comment on them.

Happy New Year, or at least a Hold Your Own New Year!

My wife's new blogs.

My wife has started two new blogs.

Latitudes and Lassitudes, is her diary blog. Address: latitudeslassitudes.blogspot.com

And her poetry blog: sagewindvoices.blogspot.com

She's a deep and wise person, and much much nicer than I am. Give her a whirl.

Horse race, coming into the stretch.

Up or down?

I'm sorry my entries have been such a profit/loss horse race, but that's where my head's been at.

Really, a few hundred dollars either direction isn't going to make that much difference. But I'm fascinated by how close I'm coming. I'll be about 1% over/under my original goal.

Projections.

I seem to have a pretty good knack for projections. I guessed almost exactly right in each of my store openings, for instance. I figured I had to do twice as good as the current store was doing to make it pencil out, but I was pretty sure that the previous owner had dropped the ball that much.

When we penciled out the Bookmark, I came up with a figure that we needed to do to break even from the beginning. I didn't know if we'd do way above that (possible) or slightly below that (probable). But we were within 1% of my original projection.

The only time I seemed lost was a four year period, mid-90's, where I simply couldn't get a handle on it. The two major industries I was involved in were so dysfunctional and so unpredictable, that I felt helpless. Everything I was selling was dropping, and I couldn't guess where it would end.

Eventually, the business climate came around and became more steady.

This current slowdown has been much more predictable in many ways. Bend has been part of a rolling bubble burst, if you will. You need only look at where Florida was two years ago, California a year and half ago, and Las Vegas and Arizona a year ago, and so on.

That's been a hell of a business advantage to anyone paying attention and willing to look the truth in the face.

Now it's our turn.

So, despite the snow, I'm going to be able to come out the year almost even. Almost. I still have to save up for taxes, so not really. But close.

If I come up a couple hundred short, which now seems likely, it's almost certainly due to the fact that I haven't gotten any shipments for a week, now. A quarter of my product for the month has been waylaid. It was supposed to be here last Wednesday, then Friday, then yesterday.

UPS is apparently in such a mess in Portland that they can't really tell me. I think my Diamond rep told me they were 14,000 packages behind, or something.

Anyway, on to more substantive entries next year.

Waiting for my shipments.

Didn't get my comics at all last week. They should have arrived on Wednesday, then Friday.

Hopefully today.

Then not again until Friday, assuming the weather doesn't snatch them again.

So both days I'll be doing the putting away, myself. Which I suppose I'll need to get used to next week without Pat, anyway.

I'm expecting a VERY slow January and February. In fact, I'm expecting to get about as low as it will get. And yet, I'm predicting at least a two year slowdown, so how can that be?

I think these first two months will be like that first extreme dip in a roller coaster ride. It may be the most extreme drop in the entire ride -- but it isn't the end of the ride by any means. I think the rolling average will continue to drop all through next year, and then bump along the bottom for a couple of years.

But the January and February totals will be like a splash of cold water over anyone who thinks things are going to turn around quickly.

Or not....You know, I could be wrong. If I'm wrong, GREAT! It takes me ten minutes to get on the phone and order more stuff.

Best Blogger Fodder in 20 years, ...

Best blogger fodder in 20 years.

I've borrowed Bruce's phrase. Yeah. Like looking at a big chocolate cake with ice cream.

But I'm too full to eat it, today.

Maybe later.

I've always had a sneaking admiration for Hollern's business astuteness. (As I pointed out a year and a half ago, he was the first developer to start to respond to the slowdown with real actions: selling property and putting his developments in mothballs. He kept the land and sold the mill all those years ago, which seemed crazy at the time.) Smith has pulled off what I didn't think possible. I never thought the Old Mill would be viable, and it's at least that.

Hollern's been around even longer than me, and I saw the 70's as a kid, and bought my store at the very bottom of the '80's downturn. And of course, my store is pretty small potatoes.

But....I will make one observation. Once again the Bulletin has left off the all important word "YET". We may not be as bad as those two previous downturns, but it ain't played out YET.

It was alarming to me to hear some businesses are down by half, because I think we have another plateau to fall off of. I figure the overall downturn will be half, in another year or so. That will be very hard for many businesses to endure.

But I think we've only halfway there.

Hijacked sales day.

Much like Black Friday, the day after Christmas has pretty much been hijacked by the box stores. Used to be a pretty good day for me, up until the last few years. What I notice is that I usually do have a big day sometime in the following week, however.

I still think it likely I'll reach my goal; one good day, and four mediocre days would get me there.

I noticed a bunch of stores downtown with big "Sales!" signs. Never really understood that; the amount of taxes saved by liquidating inventory just doesn't seem worth it to me to empty out a store. Especially below cost. I'd rather have a fully stocked store.

In fact, Diamond published an absolutely magnificent liquidation list on Friday (always seems to happen at the beginning of the off season) and I went ahead and ordered a bunch of it. This was great stuff, and I have the capital to take advantage of it.

There is a bit of fortuitous timing in the Holiday's this year. Because it was so slow until the 15th of December, I didn't reorder that week. Because of the way shipping days fall, I then saw no point in ordering this week, nor is there much point in ordering next week. So if I can just wait one more week, I've cleared away a whole lot of budget to restock.

My liquidation order is the exception, but even that won't come due until the second half of January, when I have the cash flow to cover it.

I don't really garner any savings from Pat's leaving until February, because employee taxes are due in January. So the month off of reorders dovetails nicely with the budget. Almost like I planned it.

But WE'RE still strong.

Given the previous entry, why would a store try to act stronger than it really is?

To grab that market share while they can.

Today's Oregonian has an article:

Titans may come out of slump stronger

Staying in business won't be easy -- sales declines are a given and job cuts are likely to continue. But we won't remain in the dumps forever, and the companies that will be best positioned when the economy eventually improves may include the following:

Expanding retailers: Kohl's Corp. and Forever 21 are rare among retailers -- they're opening stores. They have their pick, since failed competitors mean they can get good locations cheaply.

O.K. I don't really believe that Kohl's is all that strong. But like the old joke, you don't have to be faster than the bear you just have to be faster than the other guy.

It's time for Walmart to lord it over Target. Kohl's to lord it over Macy's. Time for Best Buy and Beds, Baths and Beyond to crow about how they vanquished the other guys.

So they are going to do the opposite of what I talked about in the previous entry. The branch managers are going to get the message from on high to buff up their numbers anyway possible.

Which makes all a big game, what?

Whocouldaknodit?

To follow up on the previous entry: Why would any store be inclined to report worse results than they have to?

I think this will be the season of WHOCOULDAKNODIT?

I can think of a couple of reasons.

1.) To own up to weakness.

Let's just say I'm a corporate entity, and I stocked heavily on a product that didn't sell very well. I could mark it down, and take a loss, or I could pretend that it's still viable product and therefore keep it in the profit side of the ledger.

This is your chance to dump it.

I suspect that even relatively good branch managers hide some weaknesses here and there, or they wouldn't survive the corporate cutthroat. Now they can lump the weakness along with the other crap.

You may have weak systems or employees or fixtures....here's your chance to admit it.

After all, Whocouldaknodit?

It's not our fault a huge recession hit and there were terrible blizzards.

2.) Get rid of the marginal.

There are probably a lot of stuff in every business that is neither good or bad but just kind of neutral. As long as things are going well, you keep them on the books, but nows the time to clear them.

In other words, this will be the season to dump absolutely everything you can. Dig out all the crap, the weak, the inefficient and blame the economy.

Hell, the stock price is going to go through the floor anyway. And everyone else is in the same camp, might was well take your lumps.

Which ironically, might make the season look even worse than it is!

Pay no attention....

We will be hearing a lot of reports about sales over the coming days and weeks.

I'm going to pretty much ignore them. Frankly, anecdotal evidence is probably as valuable or accurate.

1.) I don't believe them.

Sure, corporations have to report accurate numbers to their shareholders, but I'm not sure those are the numbers we're getting through the media. We're getting spun numbers -- pick and choose numbers. Besides, who pays attention to corrected numbers, later? There are stores who are going to try to make it worse than it is, and stores that will try to make it better; depending on what they're trying to accomplish.

And if it's true that most business is done by 'small' business, there really isn't any way you can convince me that you get accurate numbers through credit card transactions or whatever.

2.) They're meaningless.

If I gave you an overall average temperature for the entire country, what could you learn from it? I'm not sure an overall sales % is any more useful. Numbers are going to vary by industry, region and town.

3.) They're the wrong numbers.

Sales don't mean much. Profits mean everything. If it's true that everyone was heavily discounting, then the overall sales are even more meaningless.

4.) They're skewed by the big box stores.

If Walmart can bring 6.4% declines back up to 2% declines, as I was reading the other day, then what can Walmart, Target and a dozen other big retailers do to the numbers? Like I said, the numbers probably only reflect chainstores, anyway.

5.) The only numbers that really count, are MY numbers.

I'll tell you how we did at the end of the month. But that is all I can tell you.

6.) The numbers are ridiculously small.

Which makes me doubt them completely. What I'm hearing locally are numbers more in the range of 30 or 40 and even 50% down, not 2 or 3 or 5% down. Something stinks.

I suspect that statistics are just being manipulated. That the world of retail is just too big and diverse to really get a true handle on.

Like I said, I'll let you know. But whatever number I finally arrive at, the only thing that really matters is how my store is doing overall. Whether it's turning a profit, whether it has positive cash flow, whether the store is kept up in both inventory and infrastructure, and whether services can continue to be paid. And on that basis, Pegasus is pretty strong.

What's interesting is, I planned for the worst. And the worst wasn't just a bad Christmas season, that was a given, it was a bad Christmas season, PLUS a blizzard, and that's what we got. That's what worst case scenario planning is about.

Sales can suck, and it doesn't matter. Sales can be huge, and it doesn't matter.
I've seen it both ways. As long as you are a viable store with customers, sales are almost the least important stat.

O.K. O.K. Well, sales do matter, and perhaps because they aren't strong I'm in the mood to minimize their importance. But I think its true that sales sometimes become a video game number, with lots of flash and glamour, which grabs the media and the publics attention, but which distracts from the more important number -- profit. And then profit becomes yet another glamour number, perhaps hiding the basic weakness of the store (weakened inventory and infrastructure, lack of adequate resources, lack of adequate staffing, etc. etc.)

And in those most important categories, I feel pretty good about Pegasus Books.

So don't pay too much attention to the "Sales" numbers, except maybe as an overall indication of the business climate.

Merry Christmas to all and to all a good morrow.

Had another good day, yesterday. Three in a row, bringing my chances of getting to my goal of break-even, (all bills paid, reserves untouched, credit balances zero), from not-likely, to likely.

Though, I haven't checked the weather reports.

The week after Christmas has sometimes been very good, and sometimes very bad, and I can never guess in advance.

I can't believe how relaxed I get on Christmas Day. There is obviously an underlying tension to business that I'm not completely aware of until it drops away.

Linda and I really stuck to our buy nothing vows this year. Got my usual calendar, my usual one shelf figure (other people call them toys), my usual book. Linda's brother is coming by in the afternoon for some Christmas Pizza. Then Linda and I are going over to my sister's for the traditional dinner.

I'm going to pop out the door every couple of hours to hack away at the berm in our driveway. A little a time.

Such a beautiful day outside.

Yikes!

O.K.

Well I'm just not used to that. Had a really big day. The idea that Pegasus might actually reach it's original goal has gone from impossible, to very possible but still improbable.

But sheeesh, can't you folks spread out your shopping just ...a .....litttle....more?

Really, I was happy to see it, and I am hoping for the same thing today.

So happens I work the store alone on Mondays and Tuesdays, so it was pretty exhausting. Both Pat and the weekly comics are arriving today, so that should be interesting.

Have a safe and happy Christmas Eve, everyone.

Weathering the storm.

I'll try to get as Christmasy positive as I can.

It's a beautiful day, today. Blue skies, white snow, crisp air. To complain about snow -- in Bend, Oregon -- is off the mark, somehow. I don't live in Bend despite the snow, I live in Bend because of the snow. Even though I don't ski anymore, I still get real warm fuzzies from this kind of weather. Just hunkering down, and watching the snow flurries.

This is just normal?

This downturn in business is kind of interesting to me. It's kind of familiar. I may be the only 29 year business in town that has gone through such extremes not once, not twice, but half a dozen times. Business dropping in half overnight is par for the course for my shop. The only real difference is that so many other shops are going through the same thing, and I doubt they know what's hit them.

And you know, just as it wasn't all gravy on the wave up, it isn't all doom and gloom on the way down.

Other stores.

I read Keeneye's blog for a counter-balance, Paizano's Pizza in Baker City, which is kicking butt and taking names.

My wife's store is holding up reasonably well.

I know of a comic shop in Spokane which just opened it's third location. I may have my doubts, but he's going full steam ahead. Sometimes that kind of daring gets rewarded. I'm just not willing to take on that kind of stress anymore.

There's another store in San Fran who was talking about how his business was actually up -- which was both reassuring and alarming to me. This month, his column is talking about his business being down 30% -- which is still both reassuring and alarming.

Taking care of business.

The thing is, if the cash-flow, break-even point core of the business is protected, everything else can be adjusted to. Less business, means less buying, less shipping costs, less labor help, etc. You just adjust the scale.

I have a good balance sheet, little or no debt, a positive cash flow. Low overhead. A stocked store.

I can weather this storm. Let the flurries fly!

"May I Helllppp you."

Pat's been joking about going to work in a funeral home. Digging graves.

I guess he figures once you've worked in a comic shop there's nowhere else to go.

I told him to start talking a deep monotone voice, looking down his nose over steepled fingers, "My I Help You." He's been practicing. Not very Christmasy.

So he comes in yesterday, and says, "I just applied at a funeral home, and they offered me a job!"

"Really?" I exclaim. "Take it! It's the only job in town."

"I'm not sure," he says in a hushed, subdued voice. "They asked me if I minded working with 'body parts.' Besides.....it doesn't pay very well."

I'll get an update tomorrow from him.

But it occurred to me that not many people probably walk into funeral homes and apply for jobs. Always an option.

Finally, a big day.

Finally had a big day. Three days before Christmas. A couple of more days of that, and we may still pull it out, even-steven for the month and year.

Of course, we're really way ahead of that, because whatever debt we end up with (maybe a thousand or two) on our credit cards is nothing compared to last year.

I look around the store and it still seems packed, to me. But that is the norm in my store -- I don't stock up for the holiday's or trim for the off season. I sort of feel sorry for any store that tried too hard or borrowed too much to stock up for Christmas.

Best of all, I don't have anything coming down the pike that I must buy. That's different. Usually, I'm either paying for a recent ordering mistake, or having to accept product I ordered a long time ago. But I've sweated out all the unanticipated problems over the last year and half. I thought it was just terrible that business fell off the September before last, but really most of the year was pretty good. Until this September.

Then it really fell off the table. But I'd had a year to prepare, to get ready.

I'm just getting ready to hunker down next year. I've got a well stocked but paid for store in the midst of a slowdown, which is going to be hard for other stores to do unless they started preparing a long time ago.

Working the store by myself really frees me up to run the store at full capacity. My buying budget actually can stay pretty much the same as it's been.

Interesting times.

My blogs are too plain.

Some of you may appreciate this.

I got an e-mail, entitled; Your Blogs are Too Plain, from a teacher in Texas who was "despondently running a Google search for "middle aged can't get a job."

She continues....."Adding to my despondency was seeing such a plain blog as yours. And the Pegasus Blog is even worse. Sorry to have to give you such news."

She offers to help me dress up my blog, "free of charge." Insists she isn't selling anything. Apparently, my blogs "are entirely too plain."

"Honestly, your blogs need some decorations.

"Most of all, they each need a nice banner. Or SOMETHING at the top of the blog. Even a small square graphic in the sidebar. Something.

"Oh, yes, certainly you love words; after all, you own a bookstore. But you also have an appreciation for comix and graphic novels, so you should know better than to have such desolate blogs."

Gee, lady, tell me how you really feel.

Thing is, I know she's right.

I'm just the C-Span of blogs. Boring.

I told her I didn't care, that I was an accidental blogger, that it was a way for me to get my thoughts in order.

I did the same thing for 20 years before I started on the blog, only with a pencil. On paper. I have a 2 foot tall stack of notebooks that no one will ever read, probably including me, to prove it.

It helps me to get it down in writing. I like the occasional nice turn of phrase. The only difference from my notebooks is that I probably do a bit less ranting. (Believe it or not.)

I'm glad that some people feel this blog is sometimes worth reading. It has proved a bit of a socializing tool for me, who has a hard time socializing with other people. And I'm pretty good at providing content, that is, blogging everyday. What use is a pretty blog that never has anything new entered, which is what I see everywhere else?

And there is a certain calmness to the design, a easy on the eyes aspect.

Yeah, boring.

Sometimes I like watching C-Span.

I'll probably get around to dressing it up more some day. I actually add pictures once in a while.

I do hate to be adding to the despondency of someone in Texas.

But dammit, they gave us Bush! They have no right to complain!

Twice as much.

This graph is from the Portland Housing Blog. It shows what I've always maintained. We all drank the kool-aid, but Bendites drank twice as much.

Back at the height of the boom, I'd be talking to a tourist about the housing bubble, and they'd say, "Oh, yes. It's happening where we came from."

And it always sounded lame when I'd say, "Yeah, but Bend is a bigger bubble than anywhere else."

But I think we were. At least we were head to head with Naples, Florida and a few other places.

And don't give me the old line about Bend being 'special.' This graph is relative to local conditions, which makes that whole argument moot.

The weather outside is frightful.

I posted the following on December 1, this year.

The real sales for my store usually come in the second half of the month. Which, as I've said in Christmas pasts, is kind of scary because it really comes down to about 10 days and what happens if there's a blizzard or a terrorist attack or something?

Paul-doh made fun of me worrying about my business instead of a terrorist attack, but hey....it's out of my hands.

So, anyway. The weather has hit. Hard. It hit just as Christmas was ready to take off, 10 days before Christmas. It ramped up just as the last weekend arrived. And it appears to be ramping up again for the last five days.

It was bound to happen one of these days, and really quite amazing that it hasn't really happened before.

Of course, Murphy's Law being the bastard it is, it happened on a very challenged Christmas season, probably turning a 'bad' sales level to a 'horrible' sales level.

I may plan for 'horrible' sales levels, but that doesn't mean I want them to happen.

I still have a chance of breaking even for the season, but more likely I'll come up short. (The big problem is the big inventory of books I ordered this fall with the intention of paying with Christmas profits.) What it means is that I'll carry a small balance into January on my credit cards, maybe 1/10th as much as last year, and when I saw what was happening I moderated my orders to such an extent that I may be able to pay them off in January. Or February.

As long as the cash flow is positive, I'm good.

I think I've also mentioned that the locals have quit spending money, but the tourists were still spending even through the summer and I thought there was a decent chance they would deliver this Christmas.

That's before the weather hit. Now I'm afraid that people are going to use this as a good excuse to stay home and wrap themselves in a warm football game.

Basic confirmation is in the Bulletin article below.

Holiday tourism forecast: Chilly
Economic troubles contribute to ‘startling’ drop in lodging
By Jeff McDonald / The Bulletin
Published: December 21. 2008 4:00AM PST

Last week’s snowfall could entice some procrastinating holiday planners to trek to Central Oregon for wintertime fun, but early lodging industry projections predict a double-digit drop in bookings for the critical two-week holiday period that begins this week.

That’s the word from the Central Oregon Visitors Association, which surveyed its lodging partners last week in advance of the holidays.

“Regrettably, the news isn’t real good,” said Alana Audette, COVA’s president and CEO, after hearing results of the survey and speaking with lodging property owners. “Across the board, properties are down significantly. … It is pretty startling.”

Most businesses are down in the 10 to 20 percent range compared with the same period last year, Audette said.

The situation reminds her of the holidays after Sept. 11, 2001, when many Americans hunkered down with families, simplified their lives and avoided travel.

The slowdown in overnight lodging could affect other parts of the region’s economy, including restaurants, ski rental shops and other businesses, Audette said.

“It is brutal for the tourism industry and it is indicative of what’s going to happen around the nation,” Audette said.

The downward projections started with the Thanksgiving holiday bookings, which also fell double-digits, Audette said.

Seventh Mountain Resort could be down as much as 30 percent this month compared with December 2007, said Jim Kinney, general manager.

“It is pretty significant,” Kinney said. “Two things are going on. The snow is coming late, which gave travelers a reason to wait and see and, of course, the economy is dragging things down. The economy is affecting things more at this point.”

Holiday travel over the next two weeks is expected to decline 2.1 percent among Americans this year, according to AAA. Auto travel is expected to decline 1.2 percent while air travel will decline 8.5 percent this year, AAA said.

Mt. Bachelor and Hoodoo ski areas are hoping lower gas prices will help bolster business from markets within driving distance.

Ski areas located within driving distance of their target markets are expected to fare better than ski areas whose target markets must travel by air, said Alex Kaufman, director of marketing for Mt. Bachelor.

“People are more willing to hop in a car than hop on a plane in this environment,” he said.

Bachelor, which sold 17 to 20 percent more season passes this year than it did in advance of the 2007-08 season, typically does a month’s worth of business during this two-week period, Kaufman said.

“With an increased number of season pass holders, they tend to relate to increased visitation because those people bring people with them,” Kaufman said.

For Hoodoo, which was scheduled to open Saturday, the snowfall came at just the right time. While Mt. Bachelor’s attendance dropped 7 percent last season, Hoodoo grew by 10 percent in 2007-08, General Manager Matthew McFarland said.

Hoodoo set an all-time, single-day record with 4,019 ski visitors on Dec. 31, 2007, he said. The Christmas-to-New Year’s week comprises about 25 percent of Hoodoo’s annual business, McFarland said.

“We are hoping for as good as last year, with maybe a little growth,” he said. “I think the economy is going to slow people a little bit, but with gas prices dropping, maybe more people will take the less expensive vacation — rather than go to California or Colorado — and come ski with us.”

The recent storms brought a glimmer of hope for the local restaurant industry, which has been hit hard by a downturn dating to November 2007, said Mike Millette, general manager of Merenda Restaurant and Wine Bar in downtown Bend. That’s when Merenda started seeing steep year-over-year declines, which have resulted in a 30 percent drop in sales year to date, Millette said.

This year, Merenda is booked solid on Christmas Eve, Christmas Day and New Year’s Eve, but down the rest of the holiday season, Millette said. “We will probably be down, but hopefully snow and low gas prices will bring (visitors) here,” he said. “People are spending their money on those important days, but we are down the day after Christmas.”

At Skjersaa’s Sports Shop on Century Drive in Bend, the snow has meant more smiles and excitement among existing customers but has not resulted in a spike in sales, said Greg Rubin, a sales clerk. “There have been a few Christmas shoppers and people looking for gear, but nowhere near last season,” he said. “A lot of people are sticking to the essentials rather than buying new equipment. Everyone is looking for secondhand or cheaper.”

Business is projected to dip only 2 percent at Discover Sunriver Vacation Rentals, said Larry Browning, owner of the property management company in Sunriver. “The snow helped,” said Browning, who added that property rentals were off about 10 to 15 percent over Thanksgiving. “I am tickled to death with (only a slight drop for the holidays).”

The timing of this year’s Christmas and New Year’s holidays, which are positioned close to weekends, helped boost reservations, Browning said.

“We are not getting a sense that (skiers and other visitors) are not going to come because of the variety of lodging options in Central Oregon and type of snow at the mountain,” Browning said. “I still think people are going to take that quality vacation.”

Other hotels, the Marriott Towne Place Suites and the Fairfield Inn & Suites by Marriott, will not be altogether helped by the recent snowfall, said Amy Reynolds, general manager of both hotels.

Every room at the Towne Place Suites, a leisure-oriented hotel closer to Mt. Bachelor, is sold out over Christmas weekend.

But at the Fairfield Inn, more of a business-oriented hotel north of downtown Bend, the snow hurt business, Reynolds said.

The two hotels combined had 25 cancellations in three days related to the snowfall last week, most of which were at the Fairfield Inn, she said. “Our hotels survive mostly on business travel. When the passes are covered with snow and ice, those business travelers don’t come. This snowfall, at least for our hotels, is not necessarily going to help us.”

The snow could be a late holiday boost for most of Bend’s hotels and motels, which are typically booked at the last minute, said Doug La Placa, president and CEO of Visit Bend.

“The timing of the snow is a very positive factor for leisure travel,” La Placa said. “During the next two to three weeks, Bend would not be experiencing that much corporate travel anyhow.”

Even with a slight bump expected from this month’s snowfall, Bend’s tourism industry is expected to be down anywhere from 8 to 14 percent throughout the rest of winter, La Placa said.

“The feedback I am hearing is that properties are anticipating a very soft holiday season.”

Jeff McDonald can be reached at 541-383-0323 or at jmcdonald@bendbulletin.com.

Um.....don't know.

Maybe because people know who I am and can reach me, they seem to be under the impression that I know who all the other bubble bloggers are here in Bend.

I don't have a clue.

I've met 6 or 7 of the more prominent comment-ers, but even there I didn't write down their names and addresses.

I'm sort of assuming they've all come in to my store, checked me out, realized I was a doofus, and left.

I also can see how it is confusing to separate them all.

We've got Bendbubble2, Bend Economy Man, Bend Economy 2, and Bend Economy Bulletin Board. As far as I know, they're all different people.

Bendbubble2, I still think of as Paul-doh, aka Butter, aka Homer...

Bend Economy Man is BEM. (Or, as I call him, OB, the "Original Blogger.")

Bend Economy Bulletin Board is bendbb, (but has other people aligned with his board such as RDC.)

And Bend Economy 2 (and Bendbubble3 among others -- none of them seem to go anywhere) is the irrepressible Bilbo/Buster/Pedro, the man of a million names but one opinion at a time. He's the Joker in the deck, who manages to make everything else seem confusing. He's insulted when his issues aren't being discussed, but uses so many alias's that we never know what his issues are. (Well, obviously, other than Suterra and nofollow.)

Anyway, I was asked to get BB2 to get his time on the board correct. I believe this complaint actually refers to Bend Economy Bulletin Board.

So how about it bendbb? Can you get the time right?

Anyway....

I think that's who everyone isn't....

Or do I have it all wrong?

Who's in charge around here!

My Kingdom for a Granite Countertop Advertisement!

As well as this tidbit from the Bulletin this morning:

BEND LIVING PUBLISHER SAYS IT'S REORGANIZING

Cutter Communications, Inc, which publishes Bend Living, Bend Business Review and Bend Living Home magazines, said Friday that it is reorganizing it's operations due to the economy.

....The magazine will likely transition to Web-only in 2009 and return to print in 2010, Cutter said.

A granite countertop! A granite countertop! MY KINGDOM! for a granite countertop ad!

Why open now?

I spend way too much time trying to figure out other people's motivations, which is probably pointless and impossible.

Still, as a general rule of thumb, if it doesn't make sense to me, that's usually a sign that there is something wrong.

Such as Gottshalks building and opening a big box store in Bend at the very beginning of a deep recession.

Must mean they're doing pretty good right? Lots of faith in the local market, heh?

From a site called the Tulare Business Journal:

Gottschalks (Pink Sheets: GOTT) tumbled deeper into penny-stock territory Friday morning after a Chinese company backed out of an agreement that would have given the troubled retailer a cash infusion of up to $30 million.Gottschalks traded as low as 14 cents per share Friday morning, down 69 percent from Thursday’s close of 45 cents. That broke below its previous all-time low of 22 cents per share set Nov. 21.

The latest selloff gave the company, which has annual sales of almost $600 million, a market valuation of less than $2 million.Gottschalks, which operates 59 department stores and three specialty stores in California and five other Western states, has lost $32 million in the past seven quarters, including almost $20 million in the first three quarters of this year, as a result of the tough economy and questionable strategic moves.

Industry analysts are now pondering the immediate future of the retailer. If suppliers who were bolstered by the deal's prospects cut Gottschalks off, it could be forced to begin a liquidation with closure sometime next year, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York.

"Gottschalks needs divine intervention," Davidowitz said. "They are in a very tough place."

On hold.

So much is on hold, right now.

The Christmas season is in play. I've been saying the second half of December is the whole deal, but if you want to get down to brass tacks, it's really the 6 days before Christmas and the day after. In other words, starting TODAY.

Lots of other things happening. The whole 1031 mess is something I'd love to comment about; but I want to get the full info first. Interesting that it all blew up on the blogs a full day before it hit the media. But I do have one comment: a lot of people seem to be challenged by the concept of 'cause and effect....'

Amazing to me that so many stores have chosen to open in the last week, or so. And what a shock the middle of February is going to feel to them.

I'll be interested to know how Borders does this Christmas; a couple of years ago, the independent comic community was all but calling for the demise of comic shops in favor of the mega bookstores. "Look how well Manga is selling at Borders!"

Falls under the rubric of "Watch out what you wish for...."

I'm torn about taking my usual half Friday and the weekend off. It will be almost my last chance to have days off. But I do have the following weekend, so I'll probably work most of Friday, and most of Saturday, and open early and close late on Sunday.

Out of my hands.

Felt myself relaxing yesterday, because I'm done influencing the Christmas sales. What will be, will be. Too late to do any reorders.

Besides, counter-intuitive as it is, I've found it better to make lots of reorders during slow times, and not so much in busy times. Busy times mean lots of new visitors, either infrequent locals or out-of-towners, and everything in the store is new to them. An item that might have been passed by a dozen times by regulars might be just the thing that someone from the valley has been looking everywhere for.

I'm glad we had the storm last week; hopefully everyone is acclimated.

I do wonder what's going to happen next year with everyone's inventory. I suspect that every retailer is cutting back, and the unintended result will be that there will be less selection and higher prices.

Which will come as a shock, since I'm certain the public believes the retailers are desperate.

I know that what happens in my store is that the LESS I sell of a stocked item, the MORE likely I am to stick to full retail price. Since I'm a long-tail store with lots of diverse product, but an inch deep, this is pretty much my pricing strategy.

Bigger stores who deal in large volume, who deal in what I would term commodities, have a pricing structure based on buying in quantity, getting the lowest price, and therefore need to sell in quantity to make it all work.

I think a 'specialty' store wanders into this territory at their own peril.

Meanwhile, I'm sure that everyone thinks the internet will be the answer. But I suspect that shortages of a particular product will appear there, too, because so many of the internet sites are connected to brick and mortar stores and because cut backs are cut backs.

There is an interconnected aspect to all this that everyone is underestimating. And the cascading effects of cutbacks will ripple all through the economy.

Boothian floppy dogs and cats

I saw this morning that there is a new George Booth cartoon collection out. I knew who he was the minute I saw a sample of his art: It's further proof that I was more heavily influenced by the fact my parents subscribed to The New Yorker magazine than I ever realized.

But the real point of this post, (and probably one I should keep to myself), is that it made me realize how little scouting I'm currently doing for good titles.

I'm not even looking at the end of the year, "Best Of...", lists because there is no point. I'm ordering what I need to order and no more.

Kinda sad, really. One of the fun things about owning a store is being able to order stuff on a semi whimsical basis.

George Booth? I love his stuff. But unless I'm buying it for myself, there probably isn't much point in ordering it.

My budget will allow some of that kind of idiosyncratic ordering after Christmas is over. But the question should be not whether I can, but whether I should order such stuff. I know it adds to the uniqueness of my store, and frankly it's a better use of 'advertising' money than actual advertising, at least for those who actually wander in the door. But still....

Frankly, the independent graphic novel experiment has pretty much been a flop. (Just as my fantasy art obsession has resulted in a great selection and no sales.) I tried really hard to carry all the good material being put out, but most of it simply doesn't sell. I'm too proud to give it up completely, but I do need to rethink it.

There are a couple of hundred titles that sell, and probably a couple of dozen titles that sell consistently. Most of it is mainstream Marvel and DC, with a bit of Image, Dark Horse, and maybe some IDW. Vertigo is about the most outside the mainstream that sells. Everything else?

I don't think I have a single current regular who buys that stuff. (Except very, very infrequently.) I'm totally dependent on out-of-towners for selling most Oni, Fantagraphics, Top Shelf, etc. Doesn't seem to matter how good it is, most people just aren't willing to go there. What sells is what has always sold, Preacher, Sandman, Watchmen, Punisher, Green Lantern, Batman, Superman, Sin City, Hellboy, etc. I'm carrying all of those titles, I believe. All the easy sales.

Thing is, if I'm going to carry new novels, the exact same thing is true, only double, triple, infinity the number of possible titles. I've got a long way to go before I've reached the saturation point on classic and cult books, so that's where I need to turn my attention next.

Oh, I'll keep up the quality and diversity of my selection, which is far beyond most comics shops already, but I just won't constantly add new titles.

With the occasional whimsical choice. Like....I'm really going to seek out that George Booth title.

Just long enough....

So much for there not being a winter in Bend.

I've had more Bend business owners than ever before volunteer that it's slow. Unusual that they mention it at all, but there is enough evidence out there that maybe they don't feel like they're alone.

14 building permits in December in Bend. 14.

Went to see Transporter 3. Linda's comment: "You don't suppose that's his real body, do you?"

"No, honey. I'm pretty sure it's all special effects."

My wife first pointed out to me that when you see a national chain advertising on a local channel, it means they're on their way here. Except, it seemed, for Olive Garden, which has been advertising for several years. I guess they were just planning for the future.

This weather always reminds me that most Bendites have been here for five minutes.
Either they drive as if they've never seen snow before and are frightened to death, or they drive as if they've never seen snow before and don't know that a big SUV won't keep you from sliding. I leave as much space between cars as I can manage.

Who would've thought Mickey Rourke would become a deep and moving actor?

From Business Wire, a confirmation of my prediction that stores will be losing sales to lack of inventory:

As if retailers did not have enough problems attracting consumers in a weak economic environment, a new research study from IHL Group says that retailers lose sales of at least one item to as many as 20% of consumers coming into their stores – leading many consumers to quit shopping with the retailer altogether.

Consumer Electronics stores are losing the most, with consumers saying that they leave the store without buying at least one item 21.2% of the time. Or put another way, these retailers are losing $1.35 for every customer that comes into their stores due to their level of out-of-stocks. Likewise, Warehouse Clubs lose $1.78 and Grocery stores lose $.68 in sales for every customer when consumers cannot buy that product or an adequate substitute. . . .

I can't believe how many specific requests for product I'm getting. Stuff I wouldn't carry in the best of times, most of them. Others I might consider selling if times were better.
Most require a full inventory to sell the one item to the one customer, and that's the real problem.

As I've said before, I think it will end up driving even more people to the internet. You just can't gauge the real demand for an item by how many requests you get, sadly. You may get ten requests, order a hundred items, and sell five. Or you may get no requests, order twenty items and sell ten. In other words, there may be a few very fervent buyers, but that's it.

Calculated Risk is the only financial blog out there that consistently reports on Commercial Real Estate: and it's reports are pretty dire. Here's where I will probably defy expectations in my prediction: Yes, I think sales will be dire for the first six months next year; yes, I believe the slowdown will last a couple years or more. But, no, I don't think we'll have huge vacancies and shuttered doorfronts. Because so many of the businesses in Bend are new, I predict most of them will bridge that gap between the housing bust and the recovery of the national economy. They may be losing money the whole time, but in my opinion most businesses can last at least 2 or 3 years. Just long enough.

Hey, Rudolf! What's with the F$#%CKED up nose?

I've always had a weirdly inappropriate reaction to Rudolf the Red-Nosed Reindeer.

See if I'm getting this right.

There's this nice young reindeer, Rudolf, and through no fault of his own, he's got a big red nose.

Hey, he was born with it! He can't help it.

But not only do the other reindeer not invite him to their parties and all, but they bully him, and make fun of him, and tease him mercilessly.

Until one day, the Big Guy crooks his finger at him and says, "You. Yeah, you, the funny nosed deer, come here. I need you. You ride point."

"And then all the reindeer loved him,
As they shouted out in glee,
Rudolf the Red-Nosed Reindeer,
You'll go down in history!"

I'm sorry. Here's where I can't quite go along with the jaunty tune.

I'm not as nice as Rudolf. I'd be saying something like:

Oh, suuure! NOW you like me?

Well, screw you!

I'm going to go all Heather on you.

The Big Guy and I are close, you know? Really, close.

Hey, Fatso! Remember when you short sheeted my bed? And you, with the twisted horns, I remember when you tied tin cans to my tail?

You guys, you go live in the barn.

See if I invite you to my parties!


(Um....sorry, told you it wasn't quite right. I must have been going through a tough patch when I first heard the song....)

Well, this hasn't helped....

I've been saying for years that we retailers were gambling with the last two weeks before Christmas. The Oregonian says this morning that it's been a decade since shopping was impacted by weather in the Northwest, and that seems about right.

It appears that shoppers are holding off even longer than usual this year -- or aren't going to show up at all. But I have a feeling that, in the end, most people won't resist getting some stuff. I still have faith that Christmas won't be canceled, just scaled down and shortened.

Sunday was way, way down, and yesterday wasn't much better.

I set a very low criteria for this Christmas. Took my worse month over the last year (25% down) and added another 10%. Which is currently where I'm sitting. 35% is an enormously huge drop, but I only do 1/3 my Christmas business in the first half of December, so that drop can be wiped out in the second half by a surge of a couple good days. In fact, if wasn't for the last horriblus two days I was running 10% better.

Even if the rest of the month plays out at this level, I'll still break even. At even worse, (hard to imagine, but then....) I'll get all the bills paid, still have a fully stocked store, have my reserve cash intact.....and maybe, owe a thousand or two thousand left in credit card bills.

Disappointing, but still well below the balances I was carrying in the boom years, or even last year. (On the other hand, I'd been expecting big profits over this year when I was planning two years ago.....)

I'll be saving quite a bit in January and February by working the store myself, and probably will even have enough to polish off the credit cards then.

There is still time for a magical burst in spending. Often, it takes a couple of days for shoppers to get over the shock of a weather change, and then they're back out there.

And it fortunate that it happened 10 days before Christmas instead of 5 days before Christmas (who says I don't look on the bright side?) Another storm is on the way, but the second storm is never as impactfull as the first. People have broken out their coats, winterized their cars and houses and kids, and are ready to face the world.

I'm amazing calm about the whole thing -- I suppose for the first time, I feel like a mature retailer, who planned correctly, has adequate resources, and knows what to do.

Lord, save me from clever packaging....

Dear Clever Packaging Designers,

You are a pain in the ass.

Oh, I know you went to design school, and you really, really want your product to stand out, but frankly, if I can't display it properly without moving around 5 other items your size, you are going to get skipped the next time.

Really, if half of the clever die-cut covers to your books get damaged, then I'd rather you didn't do it.

Really, if you want to give me an oblong sized box where all my other boxes are square, and you think you're being clever? All that's happening is it's getting dumped as quickly as possible, even if I have to sell it for cost.

Paperback publishers? You know those new books that are half an inch taller, and cost 9.99? It means that some of my bookshelves can no longer stock them. Sure...I'll have to take your books, but every dollar I spend on new bookshelves is a dollar I don't spend on books.

Comic publishers? Why do you make me explain to good customers why I can't get them variant covers that were offered at too high of premiums, and sometimes not offered to me at all. The story inside is what counts, if you want to create readers. Not the covers...which only create collectors.

Hey, manga publishers? You know those Omnibus books that collect several books in one? I already bought those books, you know. You're asking me to double down. Did I complain when you regurgitated every manga series from Japan? Well, maybe. But I bought them. And now you want me to buy them again? Maybe Barnes and Nobles will get them, cause they can just return all those worthless early editions.

You know, just quit trying to replace quality content with tricky packaging.

We all live in a Ponzi scheme.

What does it tell you when a Ponzi scheme can seem like a regular hedge fund?

What does it tell you when 50 Billion dollars can go down a rat hole and no one notices?

How is it different, in other words, than a thousand other mutual and hedge funds in terms of transparency? If we ask such high returns that a Ponzi scheme is needed to get there, and if other funds are getting those same kinds of returns, shouldn't we ask if something is still out of wack? Such as short-term thinking, looting by bonus, and financial gimmicks?

If you define a Ponzi scheme loosely as taking current revenues to pay off past creditors, we're all in a Ponzi scheme.

If you give yourself huge bonuses, hand out large dividends, and neglect to reinvest in your infrastructure and employees, you are indulging in a Ponzi Scheme.

I've maintained for years that most big box chains were all about building the next big box and the next, while ignoring whether the boxes you built five, ten, or twenty years ago were maintaining their sales, or indeed ever really did pay for themselves.

Stimulus Plans?

See here. I could order a ton of new product for my store, and my sales would be boosted. Just put it on the credit card. I need to get revenues up today, and I can always pay it back tomorrow.

Uh, uh. No ways. Been there, done that. It's easy, easy, easy to borrow the money and see that spike in sales, and it's damn near impossible to pay it back. The only way it could even conceivably be possible is on the backs of yet another bubble.

I couldn't understand how I could have a viable business -- and, after all, almost every other business that was around in Downtown Bend 29 years ago is gone with the wind -- paying my modest bills, driving a modest car and living in a modest house, doing a bit of shopping here and there when I need to, going on short vacations.

And everyone's living in a huge house, driving huge cars, and going on long vacations. My suspicion is that a whole bunch of those guys were borrowing off the short term of their businesses, or building up debt.

So the chickens have come home to roost. And what's the answer? Bail them out.

No, not the guys who lived within their means, but those poor, poor CEO's who couldn't possibly have seen what was coming. (Yeah, right.)

Who's benefiting from this collapse? Walmart. Of all places, Walmart. Because they have the cheap stuff.

Here's what I was hoping would happen. We'd all wake up and realize we've been on a spending binge, that we really didn't need to spend so much money, that we didn't really need all that crap. Cut back, live simply, take care of each other.

Instead, the message seems to be: O.K. I can't afford all the expensive doodads and knicknacks I used to get -- but I can still get lots of inexpensive crap from Walmart!

Sigh.

On my own, again.

I sort of let the cat out of the bag a few weeks ago when I mentioned I'd be working all the hours at the store myself next year.

I checked with Pat whether it was all right to talk about it, and he agreed. He's staying with me through Christmas, I hope, but I wouldn't begrudge him a good job.

For one thing, I wanted anyone out there who was looking for a good employee to know in advance that one was available.

I'd originally planned to cut employee hours at the end of last year; and since Pat wanted full employment, that meant letting him go, and replacing him with someone who wanted to work just one or two days a week.

But then, the summer before last, I got the bee in my bonnet and decided I wanted to open a second store. Rather than lose Pat at such a crucial time, I offered him another raise, and more or less promised him I would have a job for him through the following summer.

I didn't follow through with the second store, but felt obligated to Pat, and the store was able to service his wages.

What it meant was a lot of time off for me, since Pat is the only employee I've ever had who resisted the enticement of "going home early."

Anyway, it became clear this summer that I couldn't continue to keep Pat and not start eating into my 'break-even' margins more than was comfortable. Letting him go saves me 4000.00 a month in sales, which is more than I actually need to compensate for, but it wouldn't hurt to pocket the difference.

So I told him a couple of weeks before Thanksgiving that I wouldn't have any work after the first of the year.

I was risking 'short-termitis', but felt that Pat identified enough with the store that he would continue to care; and I didn't want to tell him a week before Christmas that he wouldn't have a job.

I'd be keeping him still if I could.

He's been one of my favorite employees; and seemed to get my sense of humor. Honest and reliable. I highly recommend him to anyone out there who is looking for a good hire.

Pegasus is comfortably a one man operation, and I kind of look forward to being in total charge again. Like I said, I only took so much time off because it didn't make sense often to have two of us there, and Pat didn't want his hours cut. Ergo, I took off, knowing that I'd better enjoy it while I can.

After a few months, I'll probably start training someone to watch the store on Sundays, and maybe Mondays, or something.

Because I'm not sure I want to work everyday for 7 years like I did pre-2000.

So you'll know where to find me.

Oh, well.....

Since it's been confirmed in the news (KTVZ.com), it appears that a game store is opening in the Paper Place space on Oregon Ave.

I heard about this a couple of days ago, when Paul (a big game player in town) started to tell me that KC, owner of Diamond Sports in Redmond, was moving. I was halfway through the conversation before I realized he was talking about moving to Bend.

Normally, this would have made me blanch a little, maybe get a small chill, but I had no reaction basically. Not sure why. Maybe it's just happened so often, it's worn off. I know there are implications, but I just can't seem to get worked up about them.

I guess he's going to call the shop "Magic": gee, I wonder what's he's going to be selling?

I think I'll call and ask: "Hi. Do you have one of those top hats that you put disappearing bunnies into?"

For those of you who don't know, Magic is a card game that has a cult following. We called it "Magic the crack" for awhile because it can be very addictive.

Game stores that sell magic often have play space, and usually sponsor tournaments, with game prizes. There is actually a national circuit, of sorts.

When Gambit Games closed shop, Bend was left without a retail outlet that had play space: I wasn't interested, and didn't have the space.

So I'm going to see this as a possible plus; if nothing else, KC can stir the stick, get people interested, keep the game going for another few years.

Heard also that he was thinking about doing Warhammer. Which, as I mentioned, I have avoided because I think it is a Black Hole for inventory. Don't know about role-playing games and board games, but I'm assuming he'll try that, too.

Oh, and paint ball. Kind of odd thing to be selling downtown.

I have to be allowed one snarky comment, though.

Brilliant Timing.

I really shouldn't be enjoying this....

Enjoying may not be the right word. Interested. Engaged. Fascinated.

All the activity in Bend, both good and bad.

And nationally; KB Toys is down for the count, ToyRUs is on the ropes (with KB's liquidations not helping much), and Walmart is triumphant.

Powell's Books is telling it's staff to take time off...with an implied, "Or Else."
They have 500 people working for them!!?!? Wow.

4 new fitness centers in Bend. Maybe I just don't understand exercisers, but I suspect in down times people are less motivated to get all sweaty than up times. But maybe it's the opposite....?

I've been making the joke (?) that all over town in back rooms of stores and restaurants owners are having nervous breakdowns. You know, the kind where you go out and see all the things your staff is doing wrong and fire the lot of them. That kind of thing.

So I fall back on my old (and hard won by experience) sayings:

Whatever is happening to you, is most likely happening to others.

It isn't personal.

Don't blame the customer.

You can't spend your way into profitability.

Promotion is more seductive but probably even less useful than normal.

Don't do anything drastic.

Try to see the bright side.

This too shall pass.

Store restock.

I have restocked the store in every category to the levels I think I need for Christmas.

I held off for as long as possible. Every week that went by without reorders was agony, and I kept expecting to run out of everything. In fact, only a few items actually sold out. I suppose the other side of slow sales is that you still have the inventory.

Of course, a few spot shortages developed, but I think in this modern world of "Just in Time" ordering, that is unavoidable. I cringed recently when I visited a new store that had 5 copies of every item: I thought to myself, they could have five different items for the same price. Selling even one of each per month would be an incredible turnover rate. Even for my best-selling titles, I usually keep it to two books in stock, and a one week lag in reorders.

Anyway, I was trying to pick my spot for reordering so that it would have to most impact.

I still have a bit left in my budget for next week, for last minute special orders, but after that -- anything I buy would be too late for Christmas and would go into January.

I want January to be as free of obligations as possible.

I'm having to completely ignore all the liquidation sales. I can get twice as much stuff if I buy them, but I only really have enough money in my budget to make sure that I have the evergreen, best-selling, classic material. I'm back to my, "If I don't order this, will anyone notice?" mode of buying.

Too bad. If my store was hurting for inventory, I'd probably order nonetheless, but, well, my store is packed.

I'm really surprised that with sales being as bad as they've been lately that I'm having so little trouble. No trouble in fact. This is the first real slowdown that I've managed to both predict and force myself to get ahead of the curve.

Even if I fell behind, which is unlikely at this time because I'm so focused on avoiding it, the consequences would be carrying a relatively small debt.

Still, I just don't like seeing it.

So...you know, how are you REALLY doing...?

I get this fishing question a lot.

I recognize it, because I have the same impulse.

Problem is, you'll never get a straight answer. Or at least one you can fully believe.

Probably the best policy is to always say.....ALWAYS...."We're doing great!"

Truth is, though, it's almost always a wait and see attitude. I can tell you how I DID, but I can't tell you how I'm doing until after I'm done -- with the day, the week, the month, the Holidays, whatever.

So....how are you REALLY doing? With a slight tone of sympathy.

But I simply don't know, won't know until Christmas is over.

In the Modern Christmas, it all comes down to the week before Christmas and the few days after.

Last year, for instance, started out wretchedly, and the Christmas ended up being pretty good.

I do hate the vulnerability of all the business happening in such a short period of time, though.

Do you have.....?

Yesterday seemed to be my day for random, odd requests. "Do you have..." starts the phone call, or the guy in the door, and then the most specific item I can imagine.

Lots of calls for chess sets, cribbage, backgammon and go.

Too bad I hardly ever get calls for this stuff the rest of the year. (Would it work to have a large, diverse inventory of these games? I wouldn't know without investing a ton in very expensive, space consuming variety....)

Found myself doing what I hate to do, but really....the 17th volume in the Wagon's West series? Serenity PVC figures? I tell them to go 'online.'

Last year was my first year in carrying board games, and I sold out of the big three (Carcassone, Settlers of Catan, and Ticket to Ride) about 2 days before Christmas. I decided to go with the same numbers this year.

Have tried to warn customers that I could run out, but they just move along. Had a woman buy both copies of Ticket to Ride in stock, and not half an hour later had someone else want it. I have more coming tomorrow, but she didn't want to nail it down by pre-paying.

Still, I'd rather sell out than have leftover copies going into inventory time in January.

Again, I don't think people realize that most stores are probably pretty lean right now.

Oh, well. Just doing my part to drive business to the internet.

My first Recession, PT 2.

In my previous entry, I made the comment: "Most of it (the diversified half of my product lines) is much less dependent on regulars and much less of a cash-flow drain."

What's that mean?

Regular customers are both a curse and blessing. Or, maybe I should rephrase that: regular customers for whom I have to buy specific product to satisfy can be both a curse and a blessing.

It's great to have them coming in on the regular basis; to buy other stuff, hopefully, while they're here, to show other customers some activity, and to have a baseline of sales to work from.

On the other hand, I'm ordering this material months in advance, without any commitment on the part of my customers other than "Sure, I'll show up." Most of the time, I have only a vague idea of the content, and I can't count on the shipping date whatsoever, and, well, I love my customers but they do change their minds, they do quit unexpectedly, they do cut back suddenly, they do reject material that I was so sure they wanted that I ordered on spec.

I remember excitedly telling a bank loan officer about my subscription lists, and he asked for the details, and then looked at me with raised eyebrows: "We would consider that a negative, but we'll just put that aside for now."

It's a bit like having accounts receivable -- only without the legal obligation.
(I know, I know. I could have binding contract, or get their credit cards or something, but comics have always been just a little too weak for me to demand that, and I'm not sure I wouldn't still have problems.)

So for most of the first two/thirds of my career, I was dependent on selling product that became quickly outdated, buying it in advance, depending on my customers to come through.

The thing about games and toys and books is; I can carry a very good selection, but since it's impossible anyway, I can't carry everything. So...If I have a few thousand good classic books, I'll be able to make a sale to a book reader. I may not have a specific books, (since it's impossible for any bookstore to carry every book or even every good book) but I'll have something for the serious reader.

If I have instead of 2000 classics, only 1800 classics, I may lose a specific book sale but not a book customer.

Whereas, if I don't carry pretty much the full line of comics, I could lose not only a sale but a customer.

Customers are what it is all about.

So I can order books when I want to, instead of worrying about losing customers. Especially my store, which is in Downtown with lots of foot traffic and which probably sells 90% of my books and toys to people who just happened to come in the store.

That makes the cash flow situation much more comfortable. No unexpected large shipments, which are so late that no one wants them anymore, no more need to buy the 'hottest' title in bulk even though my customers aren't currently coming in.

Years ago, I remember my sport card supplier telling me: "Well, at least you can stop buying....as a distributer I have to get everything." Interesting that he thought so, because at the time it wasn't true. I had to pretty much buy most of the comics and cards that were coming out or lose my customer base.

Thankfully, for at least half my product, that is no longer true.

My first Recession.

This is my first full-on Recession (with a capital R). Because of other factors, I barely noticed the other (little r) recessions.

What about all my supposed expertise in downturns? Well, those were product bubbles, which is a different species of animal. The overall effect may have been similar, but the reasons and dynamics were isolated to my store (and stores like mine) alone.

As I've said, in some ways this feels very comfortable to me. But in other ways, I'm having to react differently and do different things in different order than I have in the past. I have experience, but this also so new and so big that I can't be sure I'm making the right decisions.

I want to see this as a new case -- not fight the last war.

Of course, I'll know I made the wrong choices if they come back to bite me. Whereas, making the right decisions may result in not much more than the status quo, or a smaller downturn.

Maybe that's all I can hope for.

I'm thinking there aren't very many Recession proof businesses; just businesses that are affected less than others.

So I'm learning things about Recession on a day to day basis. (Good reason for a daily blog, huh?)

The information was all there, but I just wasn't able to be able to focus on it.

I saw a big downturn coming, but I really wasn't sure how it was going to affect my business. Would comics prove to be Recession proof? Would Downtown Bend continue to get affluent customers? Would tourists continue to come?

I think I'm starting to get some answers.

First of all, the answer was sort of there in my memory banks. Mike Richardson started Pegasus Books in a little hole in a wall on Greenwood in 1980, within a year he had expanded into a space next to it that was 4 times bigger. And a year later he had shrunk back to the original space. And less than a year later he had moved Downtown. (Amazing to realize that all happened within a 3 year span -- it seemed forever back then.)

The Reagan Recession was the Bend Depression. Sales of comics and especially games fell off the face of the earth.

The other piece of information was observing my customers this summer. I started to realize that the bulk of my regular comic buyers were in their late 20's or early 30's and were heavily involved in what I call the 'growth' industry. This is the demographic that seems to me to be most vulnerable the economic shock: often married, with bills and debt. And sure enough, I've seen a very big drop off in this group.

So much for comics being Recession proof. I'm still not hearing that from other comic retailers, but the biggest drop off happened in September, so it may be too soon. And I know from the previous Armageddon in comics (95'-2000') that most shops won't admit to anything until it's too late.

Meanwhile, though, summer overall was pretty good, and it was obvious that affluent tourists were still spending money. I'm hoping that this will continue on into Christmas, though the news is much worse this winter and no snow would be a bit of a disaster.

I always say that knowing a downturn is coming is a lot like being told that a guy you see coming down the street is going to sock you. Forewarning doesn't make it hurt any less.

But the real kicker is to realize that I may actually get hurt worse than businesses that were less prepared and less knowledgeable simply because of the kinds of things I sell. This could be a bitter pill, I suppose, if I let it. But you know, what does it matter? More power to them. In a sense, if they keep making money they might just generate a little to go my way.

In fact, I'm not sure it does me any good to compare to other businesses. Pay attention to my own situation.

I can pat myself on the back for carrying the other 50% of my product. Most of it is much less dependent on regulars and much less of a cash-flow drain. Books continue to do well, and the card games, so I can be glad I'm diversified.

But I'm still learning new things about how Recessions work on a daily basis.

Thing about Christmas, I won't really know how the store is doing until the out-of-towners arrive in the second half of the month, and the big surge at the end; and by then, it's too late to make orders.

So I'm erring on the side of caution.


P.S. Noticed the Bulletin has dropped the Business section on Mondays -- because, you know, there's nothing going on in the world of business these days.

Much more news about kittens and puppies, I guess.

The answer to all our problems....

I wake up Sunday mornings, pour myself a cup of coffee, and get the paper off the porch.

After shedding it's fat suit (the ad sections) the paper is much slimmer, but still slightly bigger than the daily.

And then I peruse.

Today, I discover that the Bulletin has the answer to our economic problems.

BUILD MORE WALMART'S!!

But of course! That would solve everything. More minimum wage retail jobs, a huge cavernous building, and lots and lots of cheap stuff.

Why didn't I think of that?

Oh, and traffic on the North of town to die for....literally.

There you go, folks. The answer to not enough retail sales is to build the biggest retail store you possibly can.

Really, why do we even put up with all these little stores? Walmart is so much cheaper. Downtown shops are really a waste of space. Plunk one big Walmart down there, and the problem is solved.

Think of the efficiencies. We wouldn't need a national health care plan, because we could all get Walmart's --no doubt -- generous health and retirement plans. Wages would be standardized: the Walmart wage.

Maybe Walmart could build us some cheap houses, while they're at it.

And surely, they could run a system of buses around town to make sure their employees --er, associates -- make it to work on time.

The government would only have to worry about collecting taxes from one store, and best of all, our product could all be Chinese made, thus ensuring that everyone gets access to the exact same cheap product.

This is Utopia, folks. The wide aisles, the Christmas muzak, my, god! Greeters at the door!

I think the Bulletin has hit on something, here. It's a Walmart world, and we all just live in it.

Housing bust PLUS recession.

Sure one can be the cause of the other, but if you view them as separate events, it's becomes a much more dire situation.

Paul-doh has already mentioned that there are still people coming onto the Bend Economy Bulletin Board touting this as a 'great' time to buy.

Because prices have dropped.

Florida and California have been on this downward slide in housing prices for a couple of years now.

WELL BEFORE THE RECESSION.

You could make the case that the credit crisis arose because of the housing problems, which then precipitated the recession.

But if that's true, the places where housing has already been in bad shape now have a recession on top of what's already happened. That is -- all those bad, horrible, rotten things that have happened to Stockton have now had a big steaming load of recession dropped on top.

People have been trying to make the case that housing sales are on the rebound in California. Sure...if you count foreclosures. Which is sort of like telling me a store is doing really well because they have huge sales on the going out of business SALES.

But now the recession is here, acknowledged even by Bush, and you have to wonder if even those sales are going to go by the wayside.

Bend, on the other hand, won't even have the luxury that California and Florida had of a year or two of the national economy still being O.K. while our house prices drop. Our house prices are dropping right into the crater the recession has created.

The OB. (Original bubbleblogger.)

Since I don't have much today, I thought I'd reprint the comment by BEM yesterday, which, as usual, I thought was very astute. And my not so astute comment at the end. But, yeah, what HE said.

Bend Economy Man said...

There was a phrase bandied about a lot on the national Housing Bubble Blog that inspired me to create my blog: "revert to the mean."

I understood this to mean that once the excess credit leverage was eventually gone from the economy, you'd see the pre-boom economic situation establish itself (in housing, for example, there would be a correlation between median income and median house prices).

Bend is/was a highly leveraged place. You saw the terms "upscale" and "affluent" used all the time to describe newcomers to Bend but media outlets like The Bulletin and KTVZ could never seem to give an adequate explanation about why the median income in Bend did not reflect the new "affluence."

The Occam's Razor explanation of how a large number of "affluent" people could move to Bend and yet have a relatively small effect on median income numbers would be that the money was borrowed. Borrowed money doesn't show up as income. But The Bulletin ran stories attempting to reconcile the inconsistencies, where local economic boosters said that Bendites were, in effect, big capitalists rather than big earners: they had a lot more stock, real estate investments and other ASSETS, i.e., WEALTH, but not necessarily assets that spun off a lot of income, I guess.

Well let's assume for the moment that The Bulletin was right - that we had a lot of newcomers who were asset-rich but cash-poor. Aside from people who've lost their jobs and have NO assets, those are exactly the people who have taken the biggest hit. There's been huge losses of value in just about every asset class you can think of. You hear "I'm heavily invested in stocks and real estate" nowadays and think "ouch!" rather than "wow!"

So to me, "reverting to the mean" in Bend means that people are needing to live on the money they can earn working at a job. There's not a lot of money to be made wheeling and dealing right now.

The people who are sitting the prettiest right now, other than the TRULY rich who can lose large portions of their wealth and still be wealthy, are those with steady, high-income jobs. And Bend is notoriously short on steady, high-income jobs (a problem which should be priority #1 here to fix).

In short, all rambling aside, whether Bend's "affluent" class was (1) living on borrowed money or (2) asset-wealthy but not high-earning, it ain't good for those who cater to the upscale Bend customer in today's economy because either way those folks are hurting.

Bend has a small high-earning professional class (like doctors and lawyers) that is doing just fine. Other than that it's hard to imagine that there are a lot of people around here who would describe themselves as "affluent" today.

December 5, 2008 1:57:00 PM PST

Blogger Duncan McGeary said...

You always make sense to me, BEM.

That's what I read into too.

I had a nice tourist lady in the other day, and she said, "I shouldn't say this, but...parts of Bend are really ugly."

So much for Bend being exceptional.

Sure, it is. And so are lots of other places.

I just automatically suspect that when someone says we're different -- richer, smarter, cleaner and blonder -- that it's mostly B.S.

December 5, 2008 3:03:00 PM PST

All piled up, and nowhere to go.

Bulletin Headlines, today:

PILED UP AND READY: But ready for what? I have no reason to believe that snow won't show up, except the superstition and experience that when things start going wrong, everything goes wrong...

GUN SALES SOAR: It's heartwarming how we're all pulling together in this time of trouble.

SMILE -- TURNS OUT HAPPINESS IS CONTAGIOUS: By all means. But fake smiles are kinda creepy.

ADMIRING THE MORNING PERSON: Really? I just want to shoot them. With my new gun.

A HARD SELL FOR BIG 3 EXECS: Despite what I said last time, showing up in hybrid cars and offering to take 1.00 salaries no longer counts. Too late, bozo's.

SEVENTH MOUNTAIN FACES NEW LAWSUIT: I thought that last lawsuit ended a little messily. It's a crappy situation and probably irreconcilable in this economic climate. Besides....do time-shares EVER work?

GOTTSHALKS HAD LOSS: All because they came to Bend, I'm sure.

4 IN BEND ARRESTED AFTER SERIES OF THEFTS: A perfect circle jerk. The sleazy robbing the crooked and just all around mindless twittery. Mugshots in KTVZ and KOHD.

BEND MUST DO WHAT IT CAN TO SAVE CITY BUS SERVICE: Editorial. Which says, basically, that because she knows some people who need it, it should be supported. Which is a bit like saying, I know some people who can't mow their lawn, so we should create a massive bureaucracy, with lawn care employees and warehouse of lawn mowing machines, to take care of it.

There are always individual problems that need to be addressed, but not everything requires a government program. Not saying that it isn't needed, just that a few examples of people who need it aren't proof.

It's almost certain that the bungled managing of the buses doomed the measure. And, I think that is about as liberal a turnout as Bend is ever likely to get. So, I just can't see how they can count on the public ponying up for this any time in the near future.

BUSINESS DINERS TAKE A RAIN CHECK: Lately, I've been saying to people. Go back a couple of years; rich people were moving in droves to Bend, supposedly saving our asses from ever being in the wilderness again.

But the scenario I keep imagining is this:

Real estate agent takes rich client out to dinner.

Anyone want to guess who paid for the dinner?



So thank you, Bulletin, for your endless blog fodder. Without you, I'd be lost.

Dear dogs, please don't piss on the Christmas lights

Just had a gentleman come into the store, with a grim look on his face.

"You've got a dangerous situation in front of your store!" he said. "I just saw a dog peeing on the Christmas lights wrapped around your tree and he got an electric shock!"

Every once in a while, I get a guy in off the street who immediately launches into some story, and I thought this was a joke.

"Good!" I exclaimed.

He looks at me like I'm scum.

"What if a young kid gets shocked?"

Hmmmm. I see he's not joking, but now I can't resist.

"Even better!" I say, looking at him askance.

After he left, customer Aaron suggested I should put up a sign.

"Dear Dogs, (and kids),

Do not piss on this tree or you will be electrocuted. (All legal ramifications now null and void.)"

People get ready, there's a train a'comin'

Marketwatch.com: 12/3/08:

"According to the Global Insight report, only three metro areas are extremely overvalued: Atlantic City, N.J., Bend, Ore., and St. George, Utah. In 2005, 52 metro areas were deemed to be extremely overvalued."

USA Today: 12/4/08:

"Retailers limped through a miserable November that even a surge of shopping after Thanksgiving couldn't save, making it the weakest month since at least 1969 and deepening fears that the critical holiday period could be the most dismal in decades.

As merchants announced November sales figures Thursday, the malaise cut across all sectors."

Just saying, you know, in case you hadn't noticed.

I realize that isn't the original meaning of the title to the old spiritual. But you get the point.

I've always thought it was the height of stupidity to get hit by a train. Here you have a strip only 3 ft' or so wide, and a freight train that travels down it a few times of day, and you have to be so stupid as to be caught in that little zone in that moment.

Very Darwinian.

I guess people get caught because they underestimate the speed of the train. And the overestimate the ability of the train to stop and their ability to avoid it. They get impatient or they just aren't paying attention.

The difference is that we all have a freight train coming at us, and we all have to get out of the way.

Morale Pt. 2

Following up on the morale entry.

There are stores all through Bend and all through this country that are suddenly wondering if it's worth it. Not just worth it for the money, but worth it for all the aggravation.

I've mentioned before that I think there only two good reasons to own a business; to make money and to have fun.

People usually misunderstand what I mean by fun. I don't mean, sitting around reading comics or playing games.

I mean it's important to enjoy the process of owning a business, of being in charge, or making decisions.

I'm willing to bring on product that I'm not all that interested in, if it makes money; and I'm willing to bring in product that I'm interested in that doesn't make much money.

But eventually, all product takes on a neutral widget nature. If you are selling a product, I don't care what it is, if you are engaged that product will take on a certain fascination. At the same time, even the most fascinating product will eventually become somewhat humdrum.

So I figure, if you're in business long enough, the interest in what you sell will meet in the middle.

When sports cards went bad on me oh, so many years ago, I remember asking myself; "Am I having fun? Am I making money?" And the answer to both was no.

I couldn't do much about the money making part, but I could rearrange the store, rearrange my schedule, what I carried, what I supported, what I talked about and researched, what I was willing to put up with. I could make the store more satisfying to myself.

It was gut check time; and I remembered that I originally envisioned a store where I could go to work everyday, that was mine, where I made the rules, and talked to the customers, and unpacked and displayed the merchandise and so on and so on.

The nuts and bolts process. That I really enjoyed.

I will always make the satisfying choice over the money making choice.

We all have a built in scale of money vs satisfaction. Jobs we hate but we stick with because they make us money and have benefits. Others will stay in jobs that don't pay much, but which are fun.

I think in business, if you aren't having fun, you'll eventually burn out.

I suspect as many or more businesses close because of being dispirited and unhappy as from money issues. Of course, the two are usually linked. But I can always tell when a Mom and Pop business has jumped the shark, because it's when the owners start not showing up for work just when they should be rolling up their sleeves and taking on more work.

Because they can't stand to watch their businesses go down, and they hope some manager or employee can turn it around.

That's when options (I can get a job here, I can do this instead) take effect; that's when losing a little money each month changes from being no big deal to being an aggravation. That's when that lease increase just seems too outrageous to endure; when you get angry at the wrong supplier at the wrong time.

When you jump the shark.

So I always bring it back to: will I enjoy doing this? Do I like standing at the counter and chatting with my customers? Do I like juggling bills and looking for ways to survive?

And the answer is still:

I really do enjoy owning my own business.

Keeping up the morale.

It requires a certain light touch to sell effectively. It's necessary to 'want' to make a sale, without an odor of 'needing' to make a sale. It requires the ability to let people walk away without being grumpy; and not greeting them at the door with a gloomy expression.

It's all in the head. I've started off days with a big sale and felt just great all day, only to end with lower than average sales. I've started off days with no sales for several hours, a sinking feeling in the pit of my stomach, and a creeping scowl on my face, only to end to day with a bang.

Early afternoon, had a woman hand me a 100.00 for a purchase, and I didn't have the change in cash.

"I haven't made the cash for change....yet," I said, with a smile.

"Oh, I like that. Yet. You have a good attitude."

"Not always," I laughed. "But I have learned it's harder to make a sale if you aren't cheerful."

Obviously, yesterday was another of those slow Tuesdays. I noticed that I had an even worse day last year, and ended up with a good Christmas, so I'm not taking it to heart. I think there is a hangover from Black Friday on the following week (which begs the question of how useful that weekend is -- especially if you achieved high sales by giving high discounts.)

One of the surprises to me is that morale is a problem at all. In the past, if I was feeling down about things it was understandable because I usually had bills to pay and debt building up.

This time, that isn't happening. But I still find those slow hours hard to endure cheerfully.

But I'm 10,000% better at it than I used to be.

No Follow?

Bilbo/buster is going on and on over on BB2 about my site having a 'nofollow' code on my comments section.

There are several reasons for this.

First, I'm like the guy from Jurassic Park who just touches a computer and it goes on the fritz.

I'm not touching the basic 'template.' I know that if I do, the computer will explode.

A flying saucer will land in my back yard, and some dangerous looking aliens will knock on my office door.

"Stupid human! Why have you disabled our monitoring device?"

(When they eventually put me in a straight jacket and lock me up, it will because of this. I've known since I was 12 that aliens were watching Earth through my eyes. The movie Starfighter totally stole my story....")

The second reason, as I teased Buster, is that I actually do get comments...which then enables the spam thingie, or something. I'm sure BB2 is totally on Bloggers watch list for spam.

And the third reason is, that I consider this a 'local' blog. I'm not sure why people from outside the area would be all that interested. Despite the impression that people have told me they have about this blog, I've really only talked about politics a few times. (Though my political leanings are probably pretty obvious to everyone.)

I don't try to explain things, like if I talk about Greenwood, I don't say: This is a main east/west artery in Bend, which contains older and light industrial commercial land, blah, blah, blah...

If I was trying to write for a wider audience I'd be writing a different kind of blog.

Sure, everyone likes to be read. But ultimately, this is for my own self-expression and edification.

And just to see if I can do it.

And hopefully have a few people who read it.