Printer Version Of Inside Business
The city may be ignoring its inner-city market on Broad Street — again.
Monday April 23, 2001
Don’t talk to Willies Records about retail problems on Broad Street.
Willies, founded in 1987, has grown from one profitable location on the 300 block of East Broad to a 20-store chain with locations throughout the Southeast.
A manager at the Broad Street store says daily sales at his store, even with construction jackhammers blaring across the street from the convention center site, have almost doubled in the last year — the result of increased promotional efforts by the chain’s new owners. (Last year, Willies was purchased by Atlanta-based wholesaler The Music Network.)
Sometimes, the tiny store does $2,400 a day.
How does Willies do so well in a downtown market that many have written off? They do what any good retailer would do — cater to the market. In this case, Willies has a knack for serving inner-city customers, about 95 percent of whom are young and African American. It’s a strategy that’s worked well for Willies, but even the managers admit that most of the chain’s urban locations scare off the competition.
“You see [Willies] in markets where other retailers would be afraid to go,” says Jerel Johnson, the chain’s director of field supervision.
But take a peek at the city’s plans for its 640,000-square-foot, $160 million convention center and proposed luxury hotel on Broad, and it is hard to see a place across the street for rag-tag retailers like Willies. They don’t, for all intents and purposes, fit into the city’s grandiose plans for redeveloping the area.
It’s not just Willies. In that area between Fifth and Adams streets, there are about 52 stores, many of which are Korean-owned and selling everything from wigs to pagers to mops.
Some are Richmond institutions like Schwarzschild Jewelers. Others are incredibly unique like Colonial Hairgoods, while some stores bridge the ages like the Shaft-era Soul Station and dollar-store retailer G.C. Murphy.
Upscale they’re not, but all of Broad’s downtown retailers seem to have one thing in common: They thrive by catering to a strong inner-city market.
At stores like Willies, doors are frequently propped open to lure the traffic in, with music loud enough to entice passersby. Yet the Willies patron, young and partial to hip-hop music, is, frankly, not who the city envisions filling its multimillion-dollar convention center.
In the city’s published plans for Broad Street redevelopment, one block of this type of retail would be demolished to make way for a potential upscale hotel that would flank Broad Street. Some tenants at 6th Street Marketplace would also have to relocate if plans for redevelopment of the Miller & Rhoads building move ahead as originally planned.
In addition to demolishing the south side of Broad between Fifth and Fourth streets, the city has announced plans to create a central, indoor bus-transfer station off of Broad Street, where almost all the bus lines now converge.
While city officials have been careful not to say that they want to drive the largely African-American bus patrons off Broad completely, indeed the plan would do just that. The city’s official downtown plan advocates building a central transfer center to “reduce the visual and noise impacts of the cluster of stops on Broad Street.”
John Accordino, a professor of urban planning at Virginia Commonwealth University, has spent a lot of time studying the Broad Street retail market, which he believes is grossly under-served.
He says that Broad Street has four essential retail markets: residential, regional, office-oriented and tourist or visitor driven. Yet of the different markets, perhaps the most consistent and vital to the area’s success is the market dependent on bus traffic, Accordino says, which is largely classified as residential.
What happens to stores like Willies when the transfer station is moved and the convention center is opened should be of great concern, he says, because they serve the area’s biggest existing market.
The city should be careful not to repeat past mistakes such as 6th Street Marketplace, which was built on the hope that it would attract and create a new retail market for downtown rather than cater to the one already there.
“That’s a strong market. It’s something that the city has to come to grips with,” Accordino says. “You ignore that at your own peril.”
An eclectic and jumbled mix
Experts who study successful retail in downtown and inner-city areas generally agree on one thing: Companies that succeed don’t attempt to create a market where none exists, but instead capitalize on the market that is already there.
“It’s very important for retailers to depend on neighborhood traffic,” says Lisa Skriloff of Multicultural Marketing Resources Inc., a New York consultancy.
On Broad Street, neighborhood traffic can be quite an eclectic and jumbled mix. Not only are there tens of thousands of downtown office workers, but there are construction workers, tourists and, of course, the thousands of people dependent on GRTC buses for transportation. Steadily growing, but still scarce, are young professionals who continue to move into renovated apartments in the downtown area.
Finding stores that can cater to that mix is a difficult task.
Greta Harris, senior program director for the Richmond office of the Local Initiatives Support Corp., says in order to redevelop Broad Street, planners must actively go after a more diverse retail mix.
Currently, LISC is in the beginning stages of seeing what a revival in retail districts on Chamberlayne Avenue in Northside and on 25th Street in Church Hill would look like. Harris believes there are vast, untapped markets in the city, and strips like Broad Street and Hull Street can succeed by targeting the city’s under-served markets.
“It should serve the customers that are already there, not the ones that need to be created,” says Harris. “The vast majority of the residents are hard-working, taxpaying citizens who care and want the same things that everybody else does.”
But attracting more visible national retailers into inner-city areas is far more difficult today, namely because of a lack of space and ill-conceived perceptions of the market’s buying power. And it’s much easier to build a Wal-Mart in vast suburban counties than to tear down entire city blocks to make room for the same store.
Nevertheless, as suburban markets become saturated, Harris says that many national retailers, including Kmart and Kroger, are building smaller stores and beginning to operate more and more in inner cities.
In fact, local Kmart Regional Manager Ed Baldridge, who lives downtown, has been publicly interested in trying to find a city location for a Kmart, though he has yet to convince Kmart’s higher ups, he says.
Saul Gitlin, a vice president for strategic marketing services for New York advertising agency Kang & Lee, a subsidiary of Young & Rubicam, works with national retail chains like Sears & Roebuck and Bank of America on their inner-city marketing strategies. He says that the recent U.S. Census numbers have shown retailers that the fastest-growing markets are more diverse than ever, and much of the growth is taking place in the inner city.
Gitlin says that while the white population is growing by 5 percent, the African-American population is growing by 16 percent and the Hispanic population is growing even faster. By 2050, America will be a very different place, he says, even in older, conservative cities like Richmond.
“These communities are growing faster than other markets,” Gitlin says.
Retailers who traditionally sought markets in the suburbs have had to return to the city to increase margins. But many have not been successful, he says.
“They have seen [that they need to be there], but what they know and are good at is traditional, middle-class marketing,” Gitlin says.
He cites as the exception chains like Payless Shoe Source of Kansas City, Mo., which have identified a “clear corporate strategy to attack inner-city markets nationally.” Payless occupies a former Lerner Shops store on Broad Street, and has been there since the early 1990s.
“It’s about making sure product selection relates to the market,” Gitlin says.
‘Those guys are hardy’
Mayor Tim Kaine has high hopes for Broad Street. He sees the blocks between First and Fifth streets as woefully underdeveloped compared with Broad between First and Belvidere, which has seen hundreds of apartments and new offices develop in the last 10 years. That’s why the city is focusing further east toward Sixth Street.
“Those guys are hardy and can survive,” says Kaine. “We don’t view it as a Project One, where we pay lots of guys to move.”
Kaine says the 400 block of Broad is indeed slated for redevelopment for a luxury hotel, which would drive out a handful of minority merchants and the area’s only general-merchandise retailer, G.C. Murphy. He says that as plans for redevelopment have progressed, however, the future of that block is looking less like it would be the best spot for a new hotel, which could end up elsewhere.
“We’ve got a couple of options that don’t involve that block,” Kaine says.
What remains unknown is the effect of the city’s proposed bus-transfer center, which would force passengers elsewhere downtown to a yet-to-be-determined site.
Deputy City Manager George Harrell says the city and GRTC are currently looking at sites for the transfer station and are developing a report on the issue to be presented to City Council. Harrell says he expects there to be some sort of retail connected to the transfer center.
“We have asked GRTC to develop a report that would address all of the concerns,” Harrell says.
Kaine hopes the new transfer station will have a minimal effect on the Broad Street shopping market because it will be located close to Broad.
“We want to make sure that Broad Street has significant public transportation,” says Kaine.
A ‘hurly-burly’ Broadway
In his 1982 book, Architecture in Downtown Richmond, architect and author Robert Win-throp describes an early 20th-century Richmond that had only 127,000 inhabitants. Still, a downtown retail district was created by civic boosters who imagined that Richmond would rival New York and Philadelphia. Racially integrated Broad Street, with its half dozen theaters, was akin to a “hurly-burly” Broadway; and East Grace Street was yet another large strip of retail, although more sedate and bespoke.
Today, shopping patterns have changed, but the empty buildings remain.
The main problem on Broad Street is the sheer volume of retail real estate between Belvidere and Fifth streets — a continuous run of retail shops that was once the leading shopping destination in the South, and as late as the 1950s the only real place to shop in the city.
In its heyday, Broad Street had at least a dozen department stores, as well as several smaller shops, banks, offices and retail establishments. Today, finding uses for the big boxes of yesteryear has been a struggle. As a result, most upper floors on Broad are still empty, with the exception of a handful of scattered above-store apartments.
Finding a solution for dealing with the empty shells has turned into a sort of virtual cottage industry. From the earliest plans of the 1960s, which included the redevelopment of buildings like New City Hall and the Richmond Coliseum, continuing through the 1980s with the construction of the Richmond Centre and 6th Street Marketplace, all projects have been promoted as one-time saviors of Broad Street.
Other examples of efforts to revitalize the area are evidenced in the 1997 Downtown Richmond Plan, which lists at least 32 studies in the last decade that directly involve the revitalization of Broad Street.
So far, nothing seems to have worked.
One typical white elephant was the former Raylass Department Store, located less than a block from the new convention center. Originally built as a Sears at a full 50,000 square feet, it was too large for most traditional tenants. Ten years ago, the first floor was split up into smaller spaces and renamed Fashion Plaza.
Today, the building continues to be underutilized. But Jimmy Appich, the broker with Advantis Real Estate that handles the building, says it is now under contract for renovation.
Appich says part of the problem on Broad Street is that some properties are owned by the original owners or by family trusts that lack any real motive to sell. Many times, owners have not wanted to redevelop the properties or have harbored unrealistic expectations.
“They just want to sell it or think it’s worth a million bucks,” says Appich.
At least now some of the property owners are seeing the opportunities. With the expanded convention center looming, new “for lease” and “for sale” signs appear almost daily.
Things looking up?
The type of retail that works on Broad Street now varies from block to block.
Toward Belvidere Street, stalwarts like Richmond Camera and Nick’s Produce soldier on, with a steady clientele as diverse as the pedestrian traffic on Broad. While much of the furniture district that centered around Adams Street has dissipated, including a recently closed Heilig-Meyers store, the jewelry and pawn district that runs from First to Third is still fairly strong, with jewelry names Bachrach, Schwarzschild and Waller seemingly impervious to any and all difficulties downtown.
Unfortunately, much of the information on the sales volume in the area is anecdotal. Lucy Meade, director of business development for Richmond Renaissance, has attempted to gather facts and statistics on the area, but just gave up since much of the tax information is private. In addition, while there are citywide statistics, none are broken down for the retail districts.
Nevertheless, Meade wonders what happened to the selling of everyday items like panty hose when Thalhimers closed. Where did those sales go? Or did they just disappear from downtown?
Despite those disappointments, Meade notes that there are still several strong businesses on Broad Street.
Louis Adams, owner of Jefferson Loan Office Inc., runs one of the oldest businesses in Richmond, though he might be considered a bit of a newcomer on Broad street as his family moved from East Main Street to Broad in 1973. His family business was founded in the 1880s and has continuously operated downtown since then. He now operates out of a large, restored building at 10 E. Broad St.
Adams says that while business is steady, what has hurt him most is the empty Standard Drug/CVS store on the 100 block of East Broad.
One of the busiest blocks on Broad is the 300 block. There, Rainbow Apparel Companies Inc., with headquarters in Brooklyn, N.Y., operates a store at 305 E. Broad St., next to Payless.
Drop into Rainbow, which sells high-fashion knockoffs, and you will find a very different kind of retail. To enter, you must pass the beefy security guard who customarily checks your packages as you enter the store. If you pass inspection, you’ll be given a snappy little amusement-ride ticket embossed with the mod-looking Rainbow logo. Unlike many stores on Broad Street between Fifth and Adams streets, which are mostly Asian owned, Rainbow is a privately held national chain, with sister companies like Foxmoor and Ups N Downs that specialize in moderately priced ladies’ and children’s apparel. Founded in 1935 in New York, Rainbow has grown to over 650 stores nationwide, mostly in inner-city areas.
Jack Sopkin, the real estate representative for the chain, says that the Broad Street location is by no means the most profitable for the chain, but it does a steady business, and the company has no plans to close it. The chain does not release store sales figures.
“The store does OK,” says Sopkin. “I would assume it would be there for a while.”
Oddly, one of the longest-lasting retailers on Broad Street is Schwarzschild Jewelers.
David Norman, the company’s president, says there’s been a recent upswing in traffic. Coming off a weak March, sales for April so far look strong. “It’s double a year ago,” says Norman. “But one big sale can do that.”
He says customers have been trending slightly younger, which makes him hopeful for the future. “I think the best is way yet to come,” says Norman.
Barry Hofheimer, a senior vice president for retail sales and leasing for CB Richard Ellis, rents a number of properties on Broad Street. He says that he has had no shortage of interest in the storefronts, though they usually rent for what amounts to about $10 a square foot — a low price and evidence that it is an “area in flux.”
He says that the market is not yet taking off to serve the convention center — tenants are still usually interested in putting in independent businesses like nail and braiding salons.
But if things go as the city plans, all that will change.
Bill Baxter, director of the Retail Merchants Association of Greater Richmond, says the convention center will be a “gorilla” that drives retail on Broad Street.
He says the new efforts on Broad Street are unlike the failed 6th Street Marketplace, which, he says, did not have loading docks and had room only for small specialty stores that couldn’t accommodate typical mall-based retailers.
The Harlem Starbucks
Most agree that downtown Richmond won’t be revitalized by trying to create a market that currently doesn’t exist. And it certainly won’t work by pushing aside the one that is already there.
To strike a successful balance on Broad Street, Baxter says, there should be unique stores that serve both markets. “In Carytown, you’re not tripping all over Banana Republic,” Baxter gives as an example.
Nevertheless, he thinks there is a central place for the national chains, too. He agrees with Magic Johnson, who came to Richmond this winter to speak to the Metropolitan Business League on inner-city development.
Johnson told the audience that “the first person who has the guts to open a Starbucks coffee shop [downtown] is going to be a very, very wealthy person.”
Starbucks is at the center of one of the most publicized inner-city development efforts of late. A Starbucks recently opened in Harlem, courtesy of former NBA star Magic Johnson.
Lamont Blackstone, Chief Investment Officer of the New York-based $24 million investment fund The Retail Initiative, worked with Johnson on that effort to bring a Starbucks to Harlem’s 125th Street. Blackstone says the Harlem Starbucks has been successful serving both white and black customers.
He says that Richmond is on the right track, especially if it is developing a residential component along with the retail. Mayor Kaine and Baxter agree that residential development is absolutely essential to attracting those types of new retail tenants.
While big chains have found success, Blackstone says, cities should not just focus on national retail but should also incorporate ethnic flavor. He says the biggest tourist success in Harlem is Sylvia’s Soul Food, which is enjoyed by both the white tourists and locals; Johnson’s Grill in Shockoe Bottom has the same appeal.
Baxter says that with the new convention center being built in the middle of the oldest African-American center of trade — Jackson Ward — visitors would actually expect to find stores with ethnic diversity.
But the bottom-line questions remain: Can the convention market and the existing retail market on Broad Street coexist? Can we mesh retail and residential areas to serve everyone downtown?
“I say yes to both of those,” says Baxter.
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