Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The death of the brick and mortar toy store

brainbaking.com

Post reply on HN
Print view View original

91–100 of 256 posts

Re: The death of the brick and mortar toy store

#91

Post by kergonath »

vonnik wrote: post #44
kurttheviking wrote: post #6

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

I can’t comment on the shop in Berlin, but the one in Paris is a special case. It’s in a relatively central location in a 11M people metropolis, right on top of a major rail and metro hub and across the river from one of the most touristic monument in the world. And even though it’s not really in a shopping area, there are dozens of cafés within 2 minutes on foot. They don’t really have problems getting people to go there. Plus, considering how long hey’ve been in business, I assume they own the building, which shields them from the rent issue. They could still face problems (like Gibert next door that closed somewhat recently), but their situation is very different from the vast majority of shops in normal European cities (including the UK).

Re: The death of the brick and mortar toy store

#92

Post by AdrianB1 »

What I did not see in the article or comments is the fact that people dictate how things evolve. People vote with their wallets (or via local councils) in ways that directly or indirectly influence the outcome. The title can also be, and still correct, "We killed the brick and mortar toy store". This makes people think more than "it's raining", which is impersonal and somewhat inactionable.

Re: The death of the brick and mortar toy store

#93

Post by voidUpdate »

Citizen_Lame wrote: post #81
voidUpdate wrote: post #58

What country are they in? The list of shops seems to suggest belgium/the netherlands. Because in the UK, I often go to toy shops with my partner. There's probably two shops in the same shopping centre you could call "toy shops", as well as a GAME which sells video games. All three of them sell lego, as well as quite a few other shops. There's also a Cex and a mini Cex if you want to buy video games and get ripped off…

GAME is bankrupt and was a shit for a long time, WH Smith is also closing lot of stores, B&M is selling tat and is half empty. But none of these are toy stores. Retail in the UK is very much dead, unless you need barber and vape shops.

As I said, I wouldn't call any of those three "toy shops". But all three of my local ones seem to be going strong, and sell toys or toy-adjacent things

Re: The death of the brick and mortar toy store

#94

Post by pythonbase »

kurttheviking wrote: post #6

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…

[dead]

Re: The death of the brick and mortar toy store

#95

Post by tardedmeme »

coldtea wrote: post #75
armenarmen wrote: post #48

Earlier quoted context omitted.

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…

> 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. Well, if the town is dying, the "value of that building" is effectively cut in half, or worse, anyway. Asking a lot for rent is not gonna magically make the building worth more - it w…

It's not just accounting, it means enough things that they're incentivized to manipulate it upwards. It impacts the loans they can get and the interest they pay, enough that it may be worth it to forego some actual income to keep the fake numbers up.

Re: The death of the brick and mortar toy store

#96

Post by sjducb »

pif wrote: post #77
armenarmen wrote: post #48

Earlier quoted context omitted.

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…

> devastating for someone with a loan Sorry, I can't understand why. Could you please expand a bit? I don't get how decreasing the value of the building makes the loan more difficult to repay.

Loan to Value (LTV) is a percentage that tells you how safe a loan is. You divide the amount of the loan by the value of the building. So if I buy a building for 10 million with a 6 million loan and 4 million of my own money then I have an LTV of 60%.

This means if I go bankrupt then the bank can sell the building and get its money back.

If the value of the building halves because the rent halved then I have a 6 million loan on a 5 million building. My LTV is 120%. The bank cannot get its money back by selling the building.

No bank is going to give me a loan on a property with an LTV of 120% so I’m stuck with my current bank. My current bank then increases my interest rate because I am now a very high risk customer who can’t leave. This is very expensive for me.

One way out of this situation is to get my LTV back to 60% which means I need to reduce the loan to 3 million by finding 3 million to pay off part of the loan.

Another way out is to sell the building for 5 million then pay the bank one million, exiting the deal with a loss of 1 million.

None of these are good for me. I’ll do anything to keep the value of the building high by charging high rents even if no one can actually pay the rents and the building sits empty.

Long term I might be able to exit by getting permission to convert it to flats.

Re: The death of the brick and mortar toy store

#97

Post by BrenBarn »

armenarmen wrote: post #48
ofrzeta wrote: 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 hear people say this a lot but it doesn't make any sense. Why would the value be based on some imaginary rent rather than the actual amount of money taken in? It seems stupid for anyone to say that asking, say, $2500 rent with three free months (giving $27k for the year) is better than just asking $2000 with no free months (giving $24k for the year). If this is really what is going in then the system deserves to crash.

Re: The death of the brick and mortar toy store

#98

Post by BrenBarn »

ThrustVectoring wrote: post #72
salynchnew wrote: post #68

Earlier quoted context omitted.

That seems like a rather inefficient use of resources. How long will a fund typically keep that on the books before they have to offload the asset or declare bankruptcy? At a certain point, that smells like a scam with a real estate business attached to it.

Commercial real estate lending typically has a clause that allows pausing of payments during a vacancy and letting the interest accrue into the balance of the loan - effectively, the banks are giving the property owners a free option to try and get the vacancy cleared without affecting long-term incomes and asset prices.

That still sounds like a scam.

Re: The death of the brick and mortar toy store

#99

Post by BrenBarn »

Arainach wrote: post #54
LPisGood wrote: post #50

Earlier quoted context omitted.

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?

No, because the mortgage companies' valuation is based on rent and does not consider any incentives.

Right. . . but isn't that just obviously stupid? If I say the rent is $3k a month but you get all 12 months free, why would anyone be fooled by that? Why would you base it on some hypothetical rent rather than the amount of actual money that the property takes in?

Re: The death of the brick and mortar toy store

#100

Post by JuniperMesos »

diogenescynic wrote: post #52

I miss toy stores, butcher shops, record stores, movie renal stores... everything moving online has really made culture so isolating and a lot harder to meet people. I remember when I was younger I could just go to a retail area and get some coffee, look at magazines/books, then go to a record store, then a video game store, a pet store, etc. Now everything is either a big box store in a giant parking lot or online.…

> Capitalism is strangling culture and making people more lonely and anti-social. They want us at home, buying subscription services, and getting taxis for our burritos so we don't have to actually go out and do anything or see anyone...

People are choosing in large numbers to buy subscription services, order food online, stay at home, and avoid socializing with other people; and the market is supplying demand. This isn't something that some external power is forcing on an unwilling populace. Indeed, if you think that people are systematically making consumer choices that are easy and convenient in the short term but bad for the fabric of society in the long term (a common-enough complaint about human society), then the "they" who wants to force people to change their habits en masse is you.

Post reply on HN