The Quandary of Closing a Brick and Mortar Store
I have a question for the Mom and Pop store owners out there who’ve closed their doors. What did you do with the unsold stock? I’m quite serious. There’s a tremendous quandary of what to do in these circumstances. You need the revenue to pay off bills, you need to get the merchandise out of the location, need to not pay state property tax on leftover inventory, or pay to store it. What do you do?
With a great deal of optimism, I took a large slice of my 18 inch doll clothing and furniture inventory and took it to a long standing children’s consignment place in Houston. What was worth hundreds of dollars in retail resulted in two checks worth less than $150. Almost immediately after delivery, my merchandise had gone on sale, more sales later, and then there were customer discounts taken off too.
Donations to a nonprofit can also be a sinkhole for brick and mortars because of tax laws. Again, what maybe worth hundreds of dollars may only result in a pittance deducted from income taxes. If you don’t need the deductions and want to get rid of stock, it’s a clean way of clearing things out. Just don’t expect to get a deduction nearly what the merchandise is worth.
In my store’s case, I was also stuck with thousands of dollars worth of merchandise from a well known toy company. Most of it went back, at my expense, but that cleared out a lot. Thank goodness they had a liberal return policy, part of their success story in sales. Clearancing it out before closing had been a bust since the same toys are undersold all over the Internet.
The remaining stock was top quality, beautiful, and too nice for the area where my store was located. It’s gone from a solidly middle to upper middle class area, into one with increasing poverty, high levels of school lunch program participants, and working poor in twelve years. Even with clearance sales at 50-75%, I still was left with too much stock.
Well meaning customers told me to rent a booth or two at the local Trader’s Village and sell it off. This would work if one has help moving and setting up, plus another pair of eyes for shoplifters. It’s not the kind of thing a lone woman can do who has physical limitations.
Closing a store is like having a death in the family. End of dreams, end of saved money, end of a life plan. My sweet UPS driver knocked on the closed door one day, concerned about me. “Mrs. Thompson,” he said. “I’ve been worried you were in here crying and being sad, and just wanted you to know I was thinking about you.” This was the guy who delivered 110 boxes of toys to me one day, and cheerfully unloaded them. Who often came back on his own time and shopped for toys when he didn’t have to, and gave me pep talks when he knew I was really, really down. Wesley, you’ll never know how much it meant to have a fellow human being just sympathize.
My quandary in the meantime continues. For people my age, perhaps thinking about using their 401K to start up a business, I tell you the world has changed. The Mayberry of brick and mortars has died a slow death, so do your homework, make a business plan, make an exit plan in case of the worse scenario. Don’t be like me, with a closed store and a huge amount of unsold inventory hanging like an Albatross around your financial neck. Don’t find yourself in my quandary.
Closing a brick and mortar is a humbling experience, a life changing experience, and yet I feel as if a prison sentence has been served. From a 60 hour a week job, to being able to spend time with my family has been a gift. The next challenge is to find another job at age 55, and once again reinvent myself.