deeper thoughts
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Divers Direct Orlando
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It's a ways down SR 192, but you could try Kissimmee Dive Center - they're open until 7:00 PM every night except Sunday (closed Sundays). I've had good experiences with them over the last year or so. Prices aren't bad and service has been good. The owner just spent an hour teaching me how to use a new Vytec DS I bought from them. I'm not affiliated with them in any way other than being a customer.
Jupiter31
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As always, I guess it depends on what side of the equasion you are on.
Seriously, many tenants just never budget to see how many "widgets" they have to sell to cover their costs, and excess rent is the main problem. Often staying in business is having a $2500 "nut" vs 5k in a fancier, maybe newer location.
When I was in banking I looked at a TON of Domino's pizza locations, nationally, and the main component of those making it and those that were not, other things equal, was the monthly rental.
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I know exactly what you mean. I have a shopping center down here that is new and in a great area. Therefore we get hefty rents. I had a dollar store go in there. I tried to talk them out of renting from me, but they insisted that the franchise company had all of the research showing that they would do well there. They lasted a year.
Think about how many dollar items you have to sell (that cost them 35 to 40 cent) just to cover $7,500 a month in rent. That's not even looking at the other costs of doing business like electric, insurance, salaries, etc.
Big G
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The Diver's Direct in Florida City is permanently closed, too. The "For Sale or Lease" sign is a dead giveaway.
mike_s
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Jupiter31
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Well put - using your example, even with a 60 - 65% gross margin, the store could not make it!
Buoyant1
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I don't know the situation at Divers Direct. They are certainly a big player in the scuba industry in the United States. Anything that happens to them is an indicator of the industry as a whole.
If you will take a look at scuba store closures (these days and in the past), the first ten days of the month are the most likely days to be "show stoppers" for the average scuba store. The vast majority of local scuba stores are property tenants, not property owners. If you are a property owner, you can likely get away with "missing" a monthly payment. It is much easier to contact the lending institution and "negotiate" your way through hard times. If you rent, most commercial leases are much less forgiving. When the first of the month rolls around, you have to have the cash to pay the rent IMMEDIATELY. Failure to pay rent in a timely manner triggers a rather rapid sequence of default clauses that result in quick eviction. In many cases (depending on state law), failure to pay within 5, 7, or 10 days can result in a landlord locking you out of your property, and seizure of inventory and equipment to cover the the future lease costs. I know of one store in Florida that faced that same fate in the past two months. When the first of the month came around, there was no money to pay the rent. Within 7 days, the owner saw the writing on the wall. Now, it doesn't matter that there were expected sales over the next week that would allow payment of the rent. The corporate development landlord simply stated their intention to enforce all paragraphs of the lease. The scuba store owner made a choice, and pulled the plug.
Trust me....ALL of us in this business face the same issues. I am sure that Divers Direct made a calculation based on the current economic situation and did what they thought best.
Phil Ellis
www.divesports.com
If you will take a look at scuba store closures (these days and in the past), the first ten days of the month are the most likely days to be "show stoppers" for the average scuba store. The vast majority of local scuba stores are property tenants, not property owners. If you are a property owner, you can likely get away with "missing" a monthly payment. It is much easier to contact the lending institution and "negotiate" your way through hard times. If you rent, most commercial leases are much less forgiving. When the first of the month rolls around, you have to have the cash to pay the rent IMMEDIATELY. Failure to pay rent in a timely manner triggers a rather rapid sequence of default clauses that result in quick eviction. In many cases (depending on state law), failure to pay within 5, 7, or 10 days can result in a landlord locking you out of your property, and seizure of inventory and equipment to cover the the future lease costs. I know of one store in Florida that faced that same fate in the past two months. When the first of the month came around, there was no money to pay the rent. Within 7 days, the owner saw the writing on the wall. Now, it doesn't matter that there were expected sales over the next week that would allow payment of the rent. The corporate development landlord simply stated their intention to enforce all paragraphs of the lease. The scuba store owner made a choice, and pulled the plug.
Trust me....ALL of us in this business face the same issues. I am sure that Divers Direct made a calculation based on the current economic situation and did what they thought best.
Phil Ellis
www.divesports.com
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