mike_s
Contributor
when you see the liquidation sale at Leisure Pro, you know this industry is in a tail spin that it can't recover from....
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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
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
when you see the liquidation sale at Leisure Pro, you know this industry is in a tail spin that it can't recover from....
The reference of Leisure Pro liquidating was in reference to them being one of the largest "dealers" (in sales number) in the country. supposedly the largest. They've got a lot of inventory.
However if another giant such as Scuba.com went into a "tail spin" (or dead spin), then I doubt there would be as much of a liquidation sale based on the speculatoin that Scuba.com doesn't keep as much inventory on hand and gets quick drop shipments to fill orders from Califorinia based scuba distributors.
what if ScubaToys went out of business? with an estimated $5million to $6 million in sales a year.
but one thing is for sure. All these shops are facing the same slow downs that all LDS's are facing.
that was what they boasted in a press article a year or two ago. I haven't kept up with or checked since. I doubt they've increaed that 5 fold though in the last year or two with the economy and down market. maybe I'm wrong (I'm not their book-keeper).
... Some people don't know the process involved (probably like the person you just mentioned) and run out.