On Jan. 12, Mountain Miser's doors were locked for good. Employees apparently spent the day boxing up inventory and removed it from the store before owner David Goodman turned his key in the door, securing it behind him one last time. Though rumors about Mountain Miser's impending demise had been circulating for months, with several insiders telling SNEWSÂ® the store would likely close by the end of January unless a buyer could be found, this move by Goodman caught everyone by surprise.
"I have been actively trying to sell the business for the last six months," Goodman told his vendors in a mass email sent Jan. 18. "We had a potential buyer lined up with a tentative agreement on closing before the Trade Show (sic) at the end of the month. The deal suddenly fell through last week and upon hearing the news, our secured creditor, McLean & Associate's, decided to no longer support Mountain Miser as an ongoing operation. A decision was made to move the inventory out of the building in order to ensure physical security and prevent shrinkage and other loss while it is liquidated."
SNEWSÂ® has learned the prospective buyer was reportedly 24 years old and apparently enamored with owning and operating an outdoor specialty retail store. He had no prior retail experience other than as a salesperson at Mountain Miser, we were told.
Goodman informed his vendors that the secured creditor had removed all cash from Mountain Miser's banking accounts, leaving vendors still holding un-cashed Mountain Miser checks out of luck as they will now be returned with "NSF" stamped on them.
Although a liquidation sale is being organized, Goodman told vendors in the email: "We will use our best efforts in liquidating our assets, but we do not anticipate any funds to be available in excess of the debt held by the secured lender." Meaning, any receivables vendors have still open with Goodman aren't likely to be paid.
Mountain Miser generated approximately $1 million in revenue, but had been struggling increasingly with declining sales numbers, shrinking margins and dwindling store traffic. Insiders tell us that troubles for the store began nearly two years ago, approximately the same time that Goodman and his wife, also a partner in the store at the time, divorced, requiring Goodman to buy her out.
Goodman's insistence that Mountain Miser be a hardgoods store primarily, with the mix of hardgoods to softgoods hovering around 83 percent to 17 percent, respectively, meant that the store had to rely on products that carry a lower margin to carry the store. A tall order even in the best of times. Difficult winter seasons didn't help the ski inventory situation either.
As debts mounted and the struggle to make payables increased, Mountain Miser decided to withdraw from participation in the ROI buying group in late 2004. The store made a last ditch attempt to trim expenses, insiders told SNEWSÂ®, by switching all employees to a commission-only status in 2005.
Attempts to contact Goodman for this story were unsuccessful.
SNEWSÂ® View: Bummer. Another specialty outdoor store bites the dust, but this one should surprise no one. The writing has been on the wall for over a year now, with the Miser on COD with many vendors, employees on a commission-only basis and grumbling, and a store owner, Goodman, seemingly distracted, we have been told. In a Denver Post article published Jan. 18, Goodman laid the blame of his store's troubles at the feet of online retailers and competitors such as REI, as well as stores selling the same product he did at a discount.
"Everybody would come to me to get the information they need, then they would go buy somewhere else," Goodman was quoted as saying in the article.
While we would agree the specialty retailer faces increasing competition from larger stores and chains now carrying the same niche products that used to be the exclusive domain of specialty, simply laying the blame game at the feet of non-specialty retailers and manufacturers that can't control distribution is basically a cop-out.
Goodman was too smart of a businessman to go out the way he did, but we'd surmise that his business struggled simply because he failed to adapt to a changing market and didn't find ways to attract and retain new customers. There's also something to the belief that insiders have shared with us that some of the fire in Goodman died after his divorce. Retail is hard enough when your mind is on the job 100 percent of the time. It's much harder when it is not. Â
As for switching employees over to a commission-only structure, that can work IF the store is doing well. But such a move only serves to further crush morale when employees are left standing around for up to four hours at a time with no customers walking in the door, knowing they aren't making a dime. Little incentive to do the extra things then, like merchandising which can make a difference in how a store is perceived and shopped.