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The death of the brick and mortar toy store

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Re: The death of the brick and mortar toy store

#41

I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that sp…

So there are a few versions of this.

The most common in the US is the strip mall. This is a largely American, soulless construct of commercial space with parking out front, typically on a major road. There are lots of reasons why this flourished in the US. It's a symptom of society being so car-dependent, which is by design. Rents here are typically lower than other options so some businesses can survive in strip malls that can't elsewhere.

The next step up (density-wise) are actual malls, or shopping centers for the non-Americans. There are different versions of this. You have the entirely indoor mall. You also have other anchor stores that pop up nearby (eg Home Depot) that are popular but can't justify the mall rent costs. Often a bunch of other businesses will sprout around these stores, which is why they're called anchor stores. Anchor stores are also things you generally need in a mall to bring in enough traffic to make the whole thing economical eg supermarkets, department stores. Malls in general have been dying in droves. Basically too many got built in the 1970s through 1990s and online shopping is killing them. There are photography and video channels dedicated to exploring dead malls.

The third rarest option is the walkable district. This is generally the downtown of cities that existed before cars. People generally love these but public transit is an issue. Americans always want to drive even when there are viable options otherwise. That means having to build parking garages and the whole thing kinda falls apart. Or at least it losses some of its charm. The hellish end of this spectrum is Houston.

Some cities have managed to rejuvenate such areas by diverting traffic and generally investing in the area. But what tends to always happen is that businesses will rejuvenate an area and then the landlords will kill it by charging exorbitant rents. I've seen 40+ year old restaurants close because of rent hikes in areas that only really existed for that restaurant.

This is part of the problem with housing being so expensive. It makes everything expensive. That local shops? Well it costs as much to build as a house and a house is easier to sell. But a cafe or a bakery or a bookstore or some other eclectic shop can survive when the rent is $20,000/year. You don't need to pay staff as much when houses cost $100k not $1M. Expensive housing just strangles everything. But when that rent goes to $200,000 over a decade well then suddenly only chain stores and big box retail can survive there so what was once a charming downtown turns into Chili's, a CVS and a Chase bank.

So this can go wrong even in dense places like NYC. There's a real issue right now with so-called "zombie leases". Basically, companies like CVS, Duane Reade and Walgreens signed high-rent long-term leases but then decided to close the store. The store remains empty because the owner has no incentive to rent it for a now-lower market rent while the billion dollar company is still on the hook for it. Enough of these and a street can look abandoned.

I really think that when cities choose to rejuvenate an area they should acquire all of it first. Eminent domain, baby.

I saw a Tiktok awhile ago where someone posited that things we once took for granted get taken away from us and sold back to us. The specific example was walkable cities. That used to be the norm. Now it's a luxury. We can't have that. If people walk everywhere and take a train or bus well then they might not buy a car. Then they'r enot buying insurance and gas and maintaining it. Unacceptable.

Society really is getting dystopian.

Re: The death of the brick and mortar toy store

#42
post #39
post #13

Earlier quoted context omitted.

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work. However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.

If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.

The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change.

Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.

Re: The death of the brick and mortar toy store

#43
Our local toy store is a member of marketing cooperative and yours might be too.

They are wonderful and a perfect example of a local toy store - a wide variety, personal service and free gift wrapping on all purchases (a life saver for anyone with kids and a birthday party to go to seemingly every other weekend).

A map of the network is here.

https://stoysnetpartner.com/our-retail-clients/

Re: The death of the brick and mortar toy store

#44

I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that sp…

This strategy has worked well for both Shakespeare and Co. in Paris and Shakespeare and Sons in Berlin. Books + Bakery + Coffee. Both of course are set in living pedestrian cities. https://www.shakespeareandsons.com

Re: The death of the brick and mortar toy store

#45
post #14
post #8

Earlier quoted context omitted.

I have a 7 year old and for the past 3-4 years we make a weekly pilgrimage to a local boutique toy store specifically for birthday party gifts. It’s usually packed with others just like us doing exactly the same thing. They do provide the free wrapping service and they slap their story sticker on every box and it’s a good marketing strategy. But they also stock toys that are pretty unique and change the stock frequen…

Part of the problem is that when Toys R Us bit the wax tadpole, Walmart jumped in and doubled or tripled the number of aisles dedicated to toys; so any "middle" suburb/city area with a Walmart already has an "easy source" of toys to grab, making it an uphill battle. Target did the same and now has more Lego than TRU ever had, for example, though their prices are often over MSRP. The key would be to market above both…

I've never heard the phrase "bit the wax tadpole" before. From googling, it sounds like a reference to an urban legend about Coca Cola being poorly transliterated into Chinese? It's not clear to me if this is something commonly used as an alternative to "bit the dust" or if I'm missing another level of metaphor here.

Re: The death of the brick and mortar toy store

#46
post #13

I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that sp…

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work. However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.

It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

Re: The death of the brick and mortar toy store

#47

There is a really cool place in Denver called Wizard’s Chest. I think they make good money off costumes, but also Warhammer 4k (and to a related lesser extent DnD). Nice people, too.

It's Warhammer 40k.

But beware, this game is designed to suck your wallet dry! ;)

Re: The death of the brick and mortar toy store

#48
post #46
post #13

Earlier quoted context omitted.

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work. However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.

It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.

Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense

Re: The death of the brick and mortar toy store

#49
post #46

Earlier quoted context omitted.

It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half. Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent no…

We had this experience with a local town centre where the high street basically died. Retailers priced out by high rents, which was fine when the economy was good and people were spending, but as soon as it took a dip there was nowhere to go and they had to shut up shop.

And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.

Re: The death of the brick and mortar toy store

#50
post #46

Earlier quoted context omitted.

It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half. Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent no…

I’m not sure if the explanation in the second part holds water. Wouldn’t the reduction in property value be the same as the ammortized free rent?
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