June 19, 2009

Dear Friends of Avol’s:

A phone call tonight from a local newspaper reporter has prompted me to bring you up to date on my search for a new location for the store. Some of you will read about it in the local media, but for the rest of you, simply put, the search continues. In the meantime, if our landlord doesn’t rent or sell the building by October 1st, he’s agreed to give us a four-month extension, which would take us to July 1st of 2010. Thereafter, we’d be on a month-to-month, with a four-month notice in the event we had to vacate.

This may sound like good news, but it doesn’t stop the drain on our capital which will only continue as long as we remain in our present location. Sales are down about 15% from last year, and sales last year were down from the previous year. We can’t go on like this forever and still meet our debt obligations.

While I’d prefer to keep the store near State Street, I’ve found little willingness on the part of landlords to negotiate rent. I am looking at other Madison neighborhoods, such as the Williamson-Atwood St. area, and I’ve even considered leaving Madison altogether for a tourist community like Spring Green or Mineral Point. The four month extension, assuming we get it, will give us a little more time to find a suitable location, and enable us to move when the weather is better. But unless business improves, and I have no reason to believe it will, the extension may only drive us deeper into debt.

Ron Czerwien
Owner
Avol’s Bookstore

June 1, 2009

Dear Friends of Avol’s:

Like many other businesses, Avol’s has been adversely affected by the downturn in the economy. Unfortunately, the economic crisis only compounded an already-deteriorating situation, the result of a number of years of declining sales. In order to survive, the store had to rely more and more on paying expenses using credit cards and existing lines of credit. When those sources were maxed out, and the bank refused any further assistance, drastic measures had to be taken. Employees were laid off or had their hours cut, the store’s hours of operation were shortened, non-book sidelines were discontinued, and special orders of new books, which had to be deeply discounted to compete with new-book stores, ceased.

In addition, the lease was renegotiated, a couple of times, in the hope that better terms would allow us to continue operating. I’m grateful to our landlords for that, and for their understanding and patience, especially during those times when the stress of the store’s financial situation has made me an unpleasant person to be around.

A year ago, in spite of all these steps, I determined that the store still could not support the expenses associated with running an operation of this size. According to the terms of our agreement, I notified our landlord that Avol’s would not be renewing its lease beyond March 1st of 2010.

I am now in the process of seeking a new location for Avol’s, one which will be able to support a reduced retail operation, as well as our online presence, but still enable us to meet our debt obligations and operating expenses.

Some have suggested we become an “online”-only seller, which is what many other used bookstores have done. However, the reality of online-only book selling is that it, too, has suffered, mainly due to the relentless downward pressure on pricing which the internet tends to foster. Site commissions, hidden fees, inadequate postage reimbursement from Amazon and other selling sites, the cost of packaging materials, the time to process, pack & ship, all eat into the shrinking “profits” of selling online.

I’m not sure I will be able to find a location that will meet the store’s needs. Leaving the State Street area means losing most of our tourist business, which has been a vital part of our income. It also means losing business from the university community. However, other than a small number of students and long time patrons, that portion of our business has been steadily shrinking. And the Madison community at large has never accounted for a great deal of support, though a new location away from State Street, on either the east or west sides of Madison, might reverse that situation.

At this point, the store’s future is uncertain. There is a lack of suitable space, and many landlords are still asking high rents and triple net agreements, regardless of the current economic climate or the length of time their properties remain vacant. It’s a frustrating situation. One would think a landlord would rather rent their retail space to a reliable tenant, at a moderate rate, with a prospect for longevity, rather than leave it languish, empty, because they can’t get an unrealistically high rent, or rent it at such high rates that within a year or two the business fails and the process has to start all over again.

Perhaps it’s no longer possible to operate a store like Avol’s anywhere in Madison? Over the next few months, I expect to find out.

Ron Czerwien
Owner
Avol’s Bookstore