Neighbors Bookstore no more

1/08 tahoe mt. news

By Kathryn Reed

With the average sale being $23.50, the cash register needs to cha-ching on a regular basis to keep the financial ledger in the black.
“Instead of moderate growth, we’ve seen moderate losses,” said Michael Stroschein, who with a silent partner opened Neighbors Bookstore on Dec. 22, 2003. The last sale will be Jan. 19. The 4 to 7 percent annual losses are forcing the lone new bookstore on the South Shore to write its final chapter. “We haven’t had a better than average month since August 2006.”
Stroschein estimates the Angora Fire cost him $50,000 in sales. The anticipated release of the seventh and final Harry Potter book on July 21 was supposed to save the summer. The $45,000 in sales wasn’t enough to even save the month.
The 40-year-old businessman attributes the store’s inability to make money to four factors: declining local population, fewer tourists in town, online book sales and discount bookstores.
The nearly 4,400-squre-feet of prime retail space along Highway 50 in the Village Center will not be vacant long. Terry Hackett, managing general partner for the center, expects to ink a deal with a new tenant this month. The finalists are an existing locally owned business and a national chain.
“It will not be a book use. If Michael can’t make it, I don’t think anyone can in the industry,” Hackett said, even though he had been in talks with Borders Bookstore before Stroschein signed a lease four years ago.
The center is largely local operators – something Hackett said he would like to stick with if everything pans out.
Stroschein said Hackett tried to make it work for him – even offered him a smaller venue. The bookseller is not sure a rent-free facility would have covered the overhead and gotten him out of debt.
Book selling comes with a thin margin. Pricing can’t be above what’s printed on the jacket. Music markups are even less. The big guys can purchase stock from publishers for less than independents like Neighbors. Costco was selling the last Harry Potter for less than what Stroschein bought it for directly from the publisher.
“There’s no room for error like a fire, bad winter, or slow off-season,” Stroschein said.
If he had to do it all over, he would have skipped the book business – despite a strong passion that is still evident.
“It’s a dying industry. It’s collapsing on itself,” Stroschein said. He worries what will be published in the future, or not published, because of the consolidation of publishing houses.
With a six-figure debt to payoff, Stroschein envisions returning to the Bay Area to obtain a corporate job – maybe as a district manager in retail. Years ago he worked for Barnes & Noble. In Tahoe, he has been an executive chef at Kirkwood and Heavenly. He’s also a minister – having presided over weddings, baptisms and funerals.
“Tahoe is so much different than when I came here in 1989. We are creating an elitist society in Tahoe,” Stroschein said. “We are restricting our customer base.”
Big bucks are being spent on hotel rooms in the redevelopment area – where he is located – but fewer people are coming to town. He points to skier visits dropping and lift ticket prices rising. He wonders if more people would come to the South Shore if it didn’t cost so much to sleep and play.
What the bookseller has found is the amount people spend on books is the same no matter what one pays for a room night – so the more affluent destination traveler isn’t necessarily spending more in the Village Center than someone staying across town at Motel 6.
“The real problem is we’ve changed the demographics, but not the business model,” Stroschein said. He points to the proliferation of Indian casinos in California, but doesn’t understand why the Stateline gaming outlets are sticking with the status quo – which monthly revenue numbers prove isn’t profitable.
He has lots of advice for the Lake Tahoe Visitors Authority – who it should market to (the Bay Area-Sacramento drive-up market) and how (create midweek activities, erect thank you billboards on the way out of town, signage in Sac-SF saying midweek is how to avoid the seven-hour traffic snarl).
“Why did we throw away Tahoe for the generic word blue?” he asks.
Stroschein looked around, saw thousands more square feet of retail space being built across the street in the convention center complex, couldn’t miss the commercial vacancy signs in the area or his store’s abysmal numbers. He knew it was better to leave while he has the strength to rebuild his life.
“I’m very disappointed the store didn’t make it. We have great customers,” Stroschein said, his voice trailing off as though he is sadder for their loss than his.
He loved selling books, children’s story time and his half dozen employees. Look for Stroschein and his gang in the bookstore Thursday-Monday from 11 a.m. to 7 p.m. until the big goodbye party on Jan. 19 to which the entire community is invited.