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Katmandu: the end of the beginning of an era

Iconic store closes village location Today, but developing space at Function Junction
END OF AN ERA Katmandu will close up shop on Jan. 31, but plans to reopen in Function.

As of Jan. 31, 2013, Katmandu will be closing its village store. But what started out as a "going out of business" story has become a story of rebirth. In the month or so since the word got out that Katmandu was closing up shop, owner Rusty Long has had a change of heart — partly prompted by the encouragement of loyal local customers and staff, and partly because he's been his own man so long he's not keen on the idea of going to work for someone else.

"I need a job, and I'd rather give myself one than look for one," he joked over a pint at the Dublin Gate — ostensibly because it's Robbie Burns Day, but more to fortify himself before an afternoon of attacking walls at what will become Katmandu's new location in Function Junction.

He's also looking to take his eclectic mix of products online and to branch out into new areas he's keeping under wraps for now.

"It's not about money for me," he said. "I have no desire to be wealthy. For me, success is about the lifestyle, working with good people and having fun doing it. When the store can't sustain itself it can't sustain that lifestyle.

"In the last six years I lost my house, sales kept going down. I tried to keep my attitude up but sales were so slow I decided I was going to close at the end of September.

"Instead, I sat down with staff and we said, 'we can do this.' We went to the Vegas accessory show to look at new products, we rallied the staff, we repainted the store and changed the layout and got nothing but compliments about it... we diversified, we advertised. And sales dropped 30 per cent."

While it's been difficult personally, Long said the decision to move to Function was an easy one to make.

"The support from customers and staff has been quite overwhelming actually. And believe me, I don't want to close, that's not what I want to do — I'm further in debt because of this (decision to keep the store going) than anything else. If we made enough to keep people working, to keep the store running and allow me to live I'd be happy, but it's taking me backwards."

If anything, change has been the only constant in Katmandu's 20-year history. Long worked for 20 years in the restaurant business before he got into retail, launching a consignment store in Function Junction in 1993 with diverse products like sweaters, power tools and stereo equipment in the window. Long moved to the village in 1996, soon after the North Village and Marketplace were completed. The new Katmandu was primarily a snowboard and mountain bike store that was wildly successful with four or five staff members working at any given time.

However, Long said he has been slowly forced out of his most profitable lines by competition and other realities in the Whistler retail scene, as well as things like Internet comparison shopping. Rather than compete with bigger chains he's tried to stay ahead of the curve by branching out into specialty goods like musical instruments, longboard skateboards and head-shop-style products — bongs, rolling papers, vaporizers, that kind of thing.

In the end, Long said it was a combination of issues that got the better of his store.

Too much competition?

One of the main reasons Katmandu has been forced to close is competition. When some larger chains moved into his area his revenues went down $350,000 in the first winter. The next year he cut his order and his revenues dropped again by roughly the same amount.

He used to have a few exclusive high-end brands, but when those brands decided they wanted to be in the bigger stores it took his advantage away.

The result was that those companies now had more exposure, but lost the enthusiasm that Long and his staff had for their products.

In the summer months Katmandu used to specialize in bikes, but Long said that margins are low and the opening of the bike park favoured stores closer to the mountain. As well, Katmandu backed a few bike brands that were themselves mismanaged.

After watching accounts that used to be $100,000 or more drop to $10,000, Long started to diversify his product selection — a strategy that has met with some short-term success. But anywhere he diversified successfully, competition inevitably followed. Now Katmandu is one of three head shops in the village.

As well, Long said Internet comparison shopping has taken a bite out of retail, especially where the tourist market is concerned.

"There was a guy who came in here a few weeks ago looking at badge glue, to stick a badge on his jacket and he agonized over the decision for half an hour before saying, 'I think I'm going to buy online, I feel safer that way.' For badge glue," said Long, shaking his head.

Cal Jelley, who has worked for Long the past five years, said it's a common problem these days. "People would rather go to the web even when there's an actual human being in front of them who's used the product, who's telling you it's going to work," he said.

The long recession

For a lot of people the latest global recession started in late 2007 with the collapse of several U.S. investment banks, but Whistler's busiest winter ever was back in 2000-2001 before the economy took a hit after the September 11 terror attacks. Cross-border travel has become more difficult since then, while the Canadian dollar rose to parity with the U.S. greenback.

The impact on retail was significant.

"I talk to a lot of the store owners here, and from what I can tell about 20 per cent of stores are doing really well, about 20 per cent are suffering and the other 60 per cent are just covering costs. Unfortunately I'm in that bottom 20 per cent," he said.

When the Canadian dollar was between 60 and 70 cents U.S., he said retail was much easier. American visitors still like to shop, he said, and are still big spenders compared to other markets, but there are fewer of them and they're spending less than they used to.

For several years, Whistler's bread and butter has been the Lower Mainland, but Long said visitors from Vancouver tend to stick to the chain stores or don't shop at all.

"I get a lot of people who will come in and check us out and say this is the most interesting store in all of Whistler — but they don't buy anything," he said. "I'd say that 90 per cent of my business is local... which also makes a case for moving to Function Junction."

Young, transient and seasonal workers are also a key market for Long, but in the last few years the winter workforce has also shrunk. According to the Whistler Housing Authority survey, some 14,500 employees were required to keep Whistler running back in 2002-2003, while in the winter of 2010-2011 the total number of hires was around 11,800.

"Those 3,000 young people, they were my customers," Long explained.

The high cost of doing business

While rising rents have been cited in the closing of other Whistler businesses, Long said his rent has been fair over the years — although the increase in property taxes, Tourism Whistler fees and maintenance fees have increased significantly since he moved to the village in 1996 and now account for over a third of his total bill per square foot. To put it into perspective, Long said that moving to Function will reduce his overhead costs by over 90 per cent.

For Jelley, it's been tough to see the store he loves losing ground.

"Our thing is that we've always been happy to see people in the store. They get a smile, they get a 'hi,' we go out of our way to help them," said Jelley.

"Someone will come in with a broken binding that really wants to go up the mountain that day, and nobody else will help them. But we'll take it into the back, stick it in the drill press, cut some bolts down to size. It will take us 45 minutes and we'll only charge $10 or $15.

"The store is the embodiment of all of us in a way, it's what we make it."

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