Local Investors Step in to Save Book Store
The push to support local businesses – Buy Local campaigns – are gaining steam, and Invest-Local is no exception.
In Portsmouth, so called “Locavestors” have come together to save a community book store.
RiverRun bookstore sits near the center of downtown Portsmouth.
It’s a bright shop, with big windows looking out onto historic Congress Street.
Customers Nancy Pollard and Elria Ewing are in browsing for replicas of old maps of downtown.
They love their local bookseller.
Pollard: No matter how often you come it’s still very important to know it’s here, and we all do. Ewing: Yes, it’s like mother’s milk. It’s reliable it’s pleasant; I love the way they categorize their stuff, and send you little notes.
But this beautiful, airy shop comes with a hefty price tag.
The landlord bought the space at the height of the housing bubble, and to make his mortgage has to charge about a hundred grand a year.
Looking at trends in the business, like e-readers and a down economy, RiverRun’s owner Tom Holbrook realized that the space was killing him.
Holbrook: Really if I was gonna do this it was going to be a complete reset of the store so that we could be on firm footing, and I sorta came to the position that that wasn’t possible
He sent out an e-mail and posted to his website that they would have to close.
The response he got surprised him.
Holbrook: I got over two-hundred e-mails, and dozens of calls, including some customers who ardently came in and said, whatever it takes to do we’ll do. So we decided to get a group of people to talk about it.
So about ten days later, Holbrook called a meeting to discuss the future of the store.
He says that more people showed up than could squish themselves into the space.
Out of that meeting came a plan to raise 150,000 dollars of local capital, with fifteen investors buying in at 10,000 apiece in exchange for 5% of the store’s profits.
SEB: So for your investors give me your pitch …
Holbrook: it’s a horrible, horrible investment. No seriously, I mean obviously there’s plenty of ways to make more and better and safer money
Despite that tantalizing offer, it took less than a month to find fifteen new partners.
CJ Cogswell is the owner of All Makes Sew and Vac, just down the street from RiverRun.
He’s one of the fifteen.
Cogswell says that his investment isn’t about maximizing profit.
Cogswell: Big box stores are killing us, even me, I know my business is a dying breed, so the better that we as small business people can take care of each other, I think that’s the best way to start.
Of course RiverRun isn’t the only shop to benefit from increased interest in local capital.
Lots of small scale experiments are underway all across the country, and seem to be gaining traction.
Julia Eades is the president of the Community Loan Fund.
She says that while interest in locavesting is on the rise, it doesn’t always come easy.
Eades: Local investing though I think in some ways it’s always been there, people have their uncle has invested in their business, but then how do you organize your neighbors to do sort of like the barn raising of the capital world. So there are ways to do that and people have done that in unsystematic and passionate sort of individual ways.
But even lots of capital can’t save a business that doesn’t have a viable business plan, so RiverRun has been looking to make some changes.
The real lynchpin was when Holbrook found a new space 200 yards away for about half of the rent.
But he says it’s community support that may make them successful again.
Holbrook: When we moved in here we had approximately 100 volunteers pass boxes of books from one store to the other, and I just keep getting questions, when you move are doing a book brigade again, are you gonna do another book brigade, and it’s like yes, only it will be colder this time!
Portsmouth is a different kind of town.
Buy-Local has been a mantra here for some time, and even though the city faces the same economic pressures as elsewhere, it has hung on to its local funkiness.
So RiverRun books will stick around.
It will stay in place for the holiday shopping season, and is scheduled to move in January.