Independent Upper Valley Retailers Struggle to Survive as Shopping Moves Online

By John Lippman

Valley News Business Writer

Published: 01-03-2017 11:06 AM

Hanover— It was a tough year for mom-and-pop stores in the Upper Valley.

At least nine longtime independent retail stores closed their doors in 2016, accelerating a trend that has been especially noticeable since the end of the 2008-09 recession. The roll call of fallen businesses include retailers that had welcomed customers for decades, if not generations, leaving in their place vacant spaces that in many cases have yet to be occupied by new tenants.

The area closings reflect a harsh reality for traditional brick-and-mortar stores across the country, where online shopping and changing consumer habits have upended a broad swath of the U.S. retailing industry.

Technology, which has undermined sales at retail behemoths such as Sears and J.C. Penney, is now reshaping consumer behavior in the retail communities of rural states such as New Hampshire and Vermont, long regarded as redoubts of settled habits whose residents are wary of change.

But no longer.

“Internet shopping after the 2008 recession highlighted the notion that convenience and price is more important than allegiance to independent stores,” said Kenny Fabrikant, the owner of Rosey Jekes who closed his Hanover clothing store in 2012 after 36 years in business. “Downtown is becoming just banks, restaurants and real estate offices.”

Despite the contraction in storefront businesses, however, not every Upper Valley retailer is holding a going-out-of-business fire sale. A cadre of shops hang on, their owners saying that customers appreciate the stores’ discerning approach to inventory and knowledgeable sales staffs.

And the owners of one closed West Lebanon store decided that if they could no longer compete with the online retailers, they would become one themselves. Now they wonder why they didn’t do it sooner.

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The most recent store to announce it is going out of business is Hubert’s Family Outfitters in Woodsville, one of two outlets the seven-store New Hampshire-based retailer has slated to close due to falling sales. Hubert’s announcement followed by a month the closing of two longtime Lebanon retailers, outdoor apparel store Hirsch’s and home decor and gift shop Kindlenook. And those retail losses were preceded by the closing of Scotland by the Yard, an importer of Celtic clothing and gifts in Quechee; Nouveaute Boutique in Lebanon, a women’s consignment retailer; and Blue Mountain Guitar in West Lebanon.

More than 25 small, independently owned stores selling everything from clothes to gifts to home furnishings, jewelry, shoes and books have closed since 2012 in the Upper Valley, according to a tally by the Valley News — 17 of them in the past two years alone. A majority of those stores were located in Hanover and Lebanon.

Of course, multiple factors can account for a storeowner’s decision to close up shop. Retirement figured in a number of the closings reported this year. Owners said that after 20, 30 or 40 years in business, it simply was time to call it a day. There wasn’t a family member to pass the business on to, or the next generation wasn’t interested.

The outside pressures, however, aren’t likely to let up.

“Independents have really felt the brunt of it the past two years,” said Perry Kramer, vice president at consulting firm Boston Retail Partners, which advises retail businesses. “And there’s going to be continuing closures,” noting that this past season 15 percent of holiday shopping occurred online.

Especially vulnerable, he said, will be national chains, with their vast retail networks now facing excess capacity. “There are something like 1,500 malls in the country, and 700 of them are struggling,” he said.

A Rare Exception

Meanwhile, a handful of entrepreneurs have ignored the prevailing trends and decided to try to make a go of it. Ramblers Way opened before the holidays in Hanover, selling casual and dress wool and cotton clothing made and sourced from materials in the U.S. The Hanover outlet is one of several planned for New England by owner Tom Chappell, the founder of personal-care product maker Tom’s of Maine.

Chappell is betting that the store’s line of domestically made-and-sourced clothing will appeal to professionals, young adults and trade-conscious students in Hanover and neighboring communities. The area, thanks to faculty, staff and students at Dartmouth College and the medical, business and engineering schools, has provided a customer base for upmarket apparel shops such as Indigo, Talbot’s, J. Crew, The JList and the former Rare Essentials/Essentials for Men and Rosey Jekes clothing stores.

“The store fits well with the town,” said Joseph Crate, general manager of Ramblers Way who managed Essentials for Men for 25 years before the store closed in 2015. “There are people here who want sustainable, made-in-America products, and it’s something I’m really happy to sell.”

Still, new retail stores are not filling many of the prime spaces vacated by former businesses.

In West Lebanon along the Route 12A commercial strip, storefronts formerly occupied by Radio Shack and gift shop The Mouse Menagerie remain empty a year or more after they closed. The space formerly occupied by the U.S. Armed Forces Recruiting Center at PowerHouse Plaza in West Lebanon also has been vacant since moving to 89 Main St. last spring.

Jim Rubens, owner of the Hanover Park retail complex on Lebanon Street, said “retailers are having a harder time” and fewer of them are seeking rental space. Although his building’s outdoor sign still advertises “11 shops” inside — a holdover from an earlier time — only two retailers remain on site — a Pompanoosuc Mills showroom and Designer Gold Fine Jewelry, the latter which has occupied space since shortly after the building opened in 1990.

When spaces in Hanover Park open up these days, more than likely they will be taken over by a restaurant or a professional office. The Skinny Pancake, a creperie that originated in Burlington, opened last May in the former lobby level space occupied by Essentials for Men and The Chocolate Shop. The third level, which became vacant after the Pompanoosuc Mills showroom moved downstairs and Subway closed, is in the process of partially being taken over by a real estate agency.

“The downtown Hanover market is reasonably good, but it’s changing,” Rubens said.

“There is an extraordinary amount of interest from businesses, financial firms and software-type companies that desire a setting that feels like a small urban downtown,” he explained, whereas “it might have been a retail business 10 years ago.”

To be sure, one factor often cited for the lack of new retail businesses opening in downtown Hanover is the steep cost of rent. The rents, in turn, are influenced by zoning regulations designed to preserve the small-town ambiance, architecture and quality of life.

“Part of the problem is Hanover is a small town, so space is limited,” Crate said. “Where space is limited, rents are higher.”

But small retail businesses are struggling even where space is more plentiful and rent is cheaper.

Musical instrument store Blue Mountain Guitar, which had been operating since 1980, closed its West Lebanon store in the Colonial Plaza along Route 12A in June, citing fewer walk-in customers. Encouraged by a nascent online business it had started 18 months earlier, owners Doug and Barbara McKelvy decided to switch to selling exclusively online and base their business out of their home in New London and a rental store facility nearby.

“We started Nov. 17 and it’s amazing,” Barbara McKelvy said. “This morning at 6:15 a.m., we had 23 people viewing our store online. By 7 a.m., it went up to 63 people and then in two minutes it went to 69 people. It’s like that many people walking through your store, only you’re at home in your bathrobe in front of the fire.”

Although it’s early, McKelvy said she expects online sales volume will easily surpass business at their West Lebanon store. The key, she said, is fast and reliable customer service. Customer reviews are posted online for everyone to see. If they don’t satisfy their customers, the world will know.

“The reality is this is the way the world is now,” McKelvy said. “Everyone is on their phone. We’re going with the flow.”

Symbolism in Shoes

The shift from bricks to clicks in retailing was made plain a year ago November, Rosey Jekes’ Fabrikant pointed out, when online shoe retailer Zappos undertook what many regarded as a publicity stunt by delivering 1,900 boxes stuffed with free gifts — headphones, backpacks and warm-weather gear — to Hanover residents on their doorsteps as a reward for the number of purchases to have originated from the ZIP code.

In a coincidence of timing that nonetheless was laden with symbolism, the Shoetorium shoe store on the pedestrian mall in Lebanon closed 10 days later, underscoring how a 6-year-old startup thousands of mile away in Las Vegas could undercut a 45-year-old business catering to the local community.

“The internet is just sucking it out of small businesses,” Fabrikant said.

Online retailers such as Amazon argue that their industry has created hundreds of thousands of new jobs from high-tech software programmers to forklift operators at warehouses, not to mention providing a greater variety of products and making shopping as simple as a tap on the screen of a smartphone.

Advocates of the shop-local movement counter that internet retailers have deleterious effect on local economies through the closing of Main Street shops that keep money circulating in the community and businesses generating tax revenue. The Institute for Local Self-Reliance, a nonprofit that advises communities on sustainable development, estimated that Amazon alone in 2015 caused more than 135 million square feet of retail space to go vacant, which it compared to the “equivalent of ... 700 empty big-box stores plus 22,000 Main Street businesses.”

Amazon, which was launched as an online bookseller in 1994 before expanding into hundreds of product categories, is credited with crushing bookstore chain Borders and seriously hurting Barnes & Noble, which was earlier reviled for killing off many neighborhood booksellers. To stay in business, many small independent bookstores have broadened themselves into community literary venues with ongoing author appearances and readings — with some clever marketing thrown into the mix.

The Norwich Bookstore has been particularly aggressive in this regard. A few years ago, as an alternative to the post-Thanksgiving Black Friday retail frenzy, the bookstore joined with other small stores around the country in “Plaid Friday” to promote “the diversity and creativity of independent businesses” in a bid to draw customers away from big box stores. That was followed by “Small Business Saturday,” “Slow Reading Sunday” and “Cider Monday” (versus the online retail industry’s “Cyber Monday” sales day) in a four-day promotional effort to kick off the holiday shopping season.

“It’s great fun,” said Liza Bernard, co-owner of The Norwich Bookstore. “People come in. They are so pleased to be shopping locally and supporting local businesses. They are really understanding how important it is to the local community.”

And how are things going?

Bernard noted that two years ago the bookstore did something very few independent booksellers can lay claim to: It expanded its retail floor space.

“We’re still here,” she said.

Kramer, the consultant, said that small, independent retailers actually have advantages over both online retailers and chains by “making the shopping experience enjoyable” through in-person service that no algorithmn has been able to replicate. Among the ideas that he has seen work are “shopping nights,” where downtown stores stay open later one evening a week — Thursday is popular — often promoting themselves together with restaurants and movie theaters to attract as many people as possible.

“But you need to get the community together and organized. This is where the chamber of commerce can really help,” he said.

Selling $8 Cards

Small retail stores that have managed to survive say they have done so through adapting to opportunities and maintaining relations with customers, although they acknowledge that competition from online retailers is making it harder. They also emphasize a deep knowledge of their merchandise, which enables them to select what to display in their stores and save customers time.

At card and stationary shop That Little Spot of Red, located on the back side of Hanover’s Nugget Arcade building, owner Laura Lichiello said that she deliberately seeks out custom handmade cards from artists. The result is delicately painted and quilled cards that can sell for upward of $8 apiece.

“I don’t want my customers to come in here and find something they can get at Kmart,” she said.

Lichiello, who ran the card and stationary department at the Dartmouth Bookstore (and is married to Ramblers Way’s Crate), said that one area in which she has lost business to internet retailers is in the sale of pens because they can undersell her on price. She took another hit when a hair salon next door closed and she lost the women who would stop in after their appointments.

But, Lichiello noted in a tone of relief and pride, “I got through the recession.”

Mia Vogt, the owner of boutique Indigo in Hanover, closed her other Hanover store, Bella, which sold casual apparel from a storefront in the alley between Molly’s restaurant and the Hanover municipal building. She then moved select inventory across the street to Indigo, where she had moved a year earlier into the space formerly occupied by Eastman Pharmacy.

“We have survived because we offer a good experience,” Vogt said. “A lot of our customers are mothers and their daughters; we know their families, or we know their mother, their daughter or their wife.”

Vogt allows she is not very savvy about online retailing.

In fact, Indigo does not even have its own website to advertise the store or its hours.

“It’s obviously not my strength,” she said. “I’m sure we’d probably increase our sales if we had that.

“It’s on my list for 2017.”

John Lippman can be reached at or 603-727-3219.