Edgartown retail routed by rents
By Steve Myrick
Published: December 31, 2009
Their numbers differ, the stores on their lists change, but business observers say Edgartown has experienced more retail shutdowns this winter than any year in recent memory. The number of stores closing their doors for good goes far beyond the normal turnover, according to Melissa Vincent, of the Edgartown Board of Trade. "My understanding is 10 to 15," said Ms. Vincent. "To me that's a huge number. You normally get one or two."
Shoppers crowd Edgartown streets during the busy summer season. Next summer, they will find many familiar retail businesses have closed their doors for good because of high rents and a difficult economic climate. File photo by Steve Myrick Changing lifestyles, changing retail environments, and even the toll taken by fraudulent money managers were a factor in difficult business decisions. But the common theme running through the story of several shuttered businesses is the continuing weakness of the economy, combined with rents that continue to increase, even beyond the level they were when business was booming.
"It just wasn't worth the fight," said Joan McKeon, who owned and managed Dream Weaver for the past 23 years. "Nobody is coming down on the rents." Her store at 1 South Water Street offered high-end women's clothing, including one-of-a-kind fashions.
Ms. McKeon said a number of her customers lost money to Bernard Madoff, who was convicted in June of operating a widespread Ponzi scheme that bilked his clients out of at least $50 billion. "It wasn't just the economy, it was Madoff," she said. "He hit my clients hard. Madoff did a number on them."
This past summer, business was off 50 percent from her best years, and 30 percent from a typical year, Ms. McKeon said.
Anticipating another annual rent increase, Ms. McKeon closed the doors of Dream Weaver at the beginning of December, and expanded her other store in Sarasota, Florida. "We're hoping our really good customers will fly down and see us," she said. "I'll miss my customers; I had really, really fantastic customers."
Also closing its doors is Lola Tortola, which offered designer label women's clothing from a large retail space at 21 Kelley Street. In early December, owner Deborah Fanton reluctantly shut down the store for good, after five years in Edgartown. She employed two or three people in the winter, and six or eight during the busy summer season.
"I absolutely loved being in Edgartown, I loved that store," Ms. Fanton said. "The nature of that space, and the economy, were a brutal combination." She said it was expensive to fill the large store with inventory, especially when business was off 15 to 20 percent in 2008, and 25 to 30 percent in 2009. "It was just spiraling downward, there was just no way with that trend we were going to get back on the right track. We tried to adjust. We tried to mix our inventory so we'd have slightly less expensive inventory," she said.
Ms. Fanton said her landlords did everything they could to help her through the economic downturn, but she hears examples of her retail colleagues who are not as fortunate. "The business rule of thumb is you should be paying less than 10 percent of your revenue in rent," Ms. Fanton said. "At $80,000 rent, you've got to be doing almost $1 million."
Instead of doing business in Edgartown, Ms. Fanton is focusing her attention on her original Lola Tortola store in Needham. "I would love to come back, but it would be very different," Ms. Fanton said. "The rent structure would have to really dramatically change. The Edgartown rent structure is just out of whack with what the economy can handle. That's going to have to dramatically change. It has changed off Island. The days of pulling out a million dollars in a short season are over. The rents haven't adjusted. They will, because for the first time there will be empty space in Edgartown."
"All of these leases are coming up for renewal, and the market is just not there to renew at the rates people want," said Ms. Vincent, of the Board of Trade. One thing, however, that most successful businesses have in common is a deep inventory of optimism. The Edgartown business community would like to see the empty retail spaces fill up next spring. "If turnover happens, and the stores are full, I'd like to say it's the ebb and flow of business," Ms. Vincent said. "I would love to see a better mix, new stores coming in."
