Why some E.L. businesses close quickly – and some last decades
On Feb. 21, Velvet A Candy Store joined Sweet Lorraine's Fabulous Mac n' Cheez! and Cosi among other businesses that have closed down or relocated out of downtown East Lansing in the past year, each mourned by students on social media following their passing.
Curious Book Shop, a neighbor of Cosi's corpse, has been around so long it watched the previous building be torn down to make way for the condominiums and retail storefront that now stand there. Since opening in 1969, over time many of its neighbors have came and went, and downtown East Lansing has undergone much change around it.
"A lot of businesses have come and gone, we feel fortunate that we’ve been able to stay in business," owner Ray Walsh said. "It’s a little bit more challenging now than than it was when we started certainly. At one time we had a bank next to us on the other side, there was a beauty salon and various other places that are no longer there, ladies’ clothing stores. East Lansing has gone through a lot of metamorphosis over the past 45 years or so, and with the downtown development coming, there’s certainly going to be a lot more changes.”
Flat, Black & Circular has resided in Campus Town Mall since it opened, where it used to be neighbors with Curious Book Shop before the latter moved to its current location in 1973. The record shop will celebrate its 40th anniversary this September, owner Dave Bernath said, but the building's other tenants haven't been around more than roughly 10 years at the most.
“When you start a business, you don’t know whether it’s going to fail or succeed,” Bernath said. “(Campus Town Mall has) had, I don’t know, like 50, 70 different businesses come and go in this building."
Bernath said this year's business turnover is typical in East Lansing.
“Places come and go all the time, they’ve been coming and going," Bernath said. "People come back to our store and say, ‘There’s nothing in East Lansing I recognize anymore, it’s only you, Beggar’s Banquet, El Azteco, Curious Book (Shop), everything else is gone ... I guess it’s typical that chains and/or businesses come and go, tastes change, some things are made to succeed and the other ones aren’t.”
East Lansing Director of Planning, Building and Development Tim Dempsey has held the position since 2009 and worked with the city since 2004. He said the city sees turnover every year. While this year's turnover is a bit more than usual, Dempsey said, other factors were mostly at play. Dempsey said Cosi was struggling as a chain and closing other locations, similar to when East Lansing's Barnes & Noble closed. The closings of Pancheros Mexican Grill and Ned's Bookstore were related to the upcoming Center City District project, Dempsey said.
“In terms of Velvet ... I can’t speak specifically other than I was in there a few times, I think they had a great product," Dempsey said. "It’s also a very specific, very narrow market niche, so sometimes that can be a challenge, too. Overall, I think maybe a little higher frequency of closures this year, it’s definitely related to some extenuating circumstances.”
At the same time many businesses are closing, City Manager George Lahanas said many other stores are opening. Lahanas said while there are always places that close down, East Lansing has a desirable business market that receives continual interest. Even if something goes out of business, there's usually someone willing to come in and try their shot at it, Lahanas said, which ends up being a cycle of sorts.
“I think it’s just like anywhere else, you have to have the right business model and be able to draw customers in, and just because there’s lots of students doesn’t mean it’s an easy place to make a living, you still have to have the right business," Lahanas said.
Dempsey couldn't say whether turnover in East Lansing is greater or lesser than national or overall trends, but said the turnover rate is fairly high overall in the region.
“As long as there is a business district, there’s going to be turnover, and there’ll always be some conversation around that,” Dempsey said. "There's always room for improvement."
In recent years most businesses coming to East Lansing have been food service, Dempsey said. Some have succeeded, others have not.
“It’s hyper-competitive from my standpoint,” Dempsey said. “It’s just a super competitive industry, and you've really got to have a very good product and very good service to keep it going.”
This is especially true in the food business, as places that do well provide quality service and quality food with consistency as a critical feature, Dempsey said.
“I think the ones that succeed are ones that appeal to both students and non-students, so they typically have a broader appeal, and when I say succeed, I mean businesses that not only just stay open but ones that seem to do well, that have a fairly strong customer base," Dempsey said.
Dempsey said places that set themselves apart and are unique tend to thrive, an example being the Black Cat Bistro, which fills a fine dining niche. Consistency of product is another issue that tends to set successful businesses apart, Dempsey said.
“Sometimes we’ve seen this happen where restaurants open too soon, they’re not prepared and people go in and try it and it’s not good so they never come back, or maybe they start out really well but over time the product slips or the service slips and then people kind of fade," Dempsey said.
Lahanas said East Lansing's market is competitive even though there are a lot of customers, which creates a good situation for consumers but a challenge for new businesses — especially restaurants — to gain hold of an audience.
“Just because someone opens a very good pizza place or a very good sub place or a very good burger place, it doesn’t guarantee their success, they’ve still got to show the value and show what differentiates them,” Lahanas said.
Walsh said the uniqueness of his business and appealing to not only students but other demographics has contributed to the staying power of his business.
“There’s no one reason why we’ve stayed in business, part of it has just been in some cases just luck and some cases its chance or skill," Walsh said. "We do the best we can and we’ve been selling books and other paper items over the last 45 years, hopefully we’ll continue to do so in the future.”
Dempsey said he thinks the retail market in East Lansing is different than it was a decade ago, and certainly different than it was 20-30 years ago. The economics are different and retail might not be as appealing a field as it once was, Dempsey said, the best example of this being Curious Book Shop.
“He started his bookstore I think right after graduation at MSU,” Dempsey said. “It’s probably a little tougher as a student these days to come out of college and have enough capital to open up a bookstore or any kind of store when you’ve probably got a fair amount of student debt and other obligations.”
Walsh said East Lansing has gone through a number of changes in the last 45 years.
"'Course, every town has those kinds of changes, but in the college community there’s been a lot of growth and many new shops have opened up and closed down, particularly restaurants and tattoo parlors and various other establishments, clothing stores," Walsh said. "The commercial situation has changed significantly since then. Students aren’t coming across the streets nearly as much as they used to.”
Walsh said many businesses are facing more challenges because of changes in technology, and he's attempted to adapt with the times. Walsh said his shop now sells books online and makes use of Facebook, eBay, Etsy, Amazon and its own website.
"The internet offers more sources for people to buy things so they’re not as likely sometimes to leave their comfortable environments of their home when they can get things shipped to them directly,” Walsh said.
Bernath also had to adapt to keep his business afloat throughout the years,
“Being aware of what’s going on, you know, you’ve got to change for the times, if we had just been selling records and never got into CDs, we’d have been long gone,” Bernath said. “Bookstores went through a crisis, music stores folded left and right and we have been able to survive, I think, by being both new and used and just knowing what to buy and what not to buy. We make a lot more money on used items than we do on new items ... you have to be aware of that at all times, lots of people are buying stuff online now, so you can’t really compete with that.”
Despite this, Bernath said he is confident about the future and thinks records are here to stay.
“CDs, I’m not so sure, they’re fading out … but records are back, I kind of always thought they would come back, I’ve been banking on it,” Bernath said. “This late in the game, after 40 years, sometimes you wonder whether it’s going to be still going or not."
East Lansing businesses also must contend with the demographic issues that come with operating in a college town.
When students leave East Lansing en masse, such as during spring break or summer and winter vacations, East Lansing businesses lose their largest demographic.
“They have to figure it out and be aware of that consideration, because if they plan on making the same money that they make in the fall they might be in for a surprise, when Christmas for three weeks gets really slow for instance,” Lahanas said.
Downtown East Lansing shifts its focus throughout the year to combat this, Lahanas said, focusing on students in the fall, winter and spring while marketing to families and permanent residents in the summer. Lahanas said the erratic nature of the consumer base is a challenge to businesses and makes it harder to survive.
“They have to plan their years out well, and if they’re expecting to make the same revenue all year round and then they don’t plan for it, they could be in for a surprise … because 70 percent of the people who would normally be in the downtown aren’t here anymore, they go away for a few weeks,” Lahanas said. “I think you have to know your business cycle and plan for it accordingly so you’re not surprised.”
Walsh said his business slowed in recent weeks as students went on spring break, but the summers are usually easier because of tourists coming through town.
While forcing some businesses relocate, East Lansing's upcoming development projects might serve as a potential boon to downtown business.
“I think that what we’re doing right now with all of our applications for development, I think that’s going to only help businesses and the diversity of businesses in our downtown,” Lahanas said.
Lahanas said he thinks the way to help downtown businesses is to create a greater concentration of people living and working in the area and increase foot traffic, which the developments would accomplish through housing and hotel space. Dempsey said he believes adding more residential space to downtown will create a more immediate audience for businesses.
"Just think about if we add 800 people … living in this two-block area, think about them coming down for breakfast, going for coffee, running to a convenience store like CVS to get something, going out to eat lunch, going out to eat dinner, all of a sudden you have a new base of customers living right where you are," Lahanas said.
Bernath said the Park District blight is an eyesore, and if it becomes a hotel the added guests will help stimulate business.
“If there’s more people living downtown where there’s apartments or hotel, it will all add to the business climate, I believe,” Bernath said. “Change is good. Some people don’t like it, but you've got to roll with the punches.”