Tough times for business, but town works to create opportunities

Marion --

By DAN KEGLEY/Staff

A national video rental chain is closing its Marion store after filing for voluntary Chapter 11 bankruptcy.
Movie Gallery Inc. is liquidating stock and closing about 760 of its stores, including those in Marion and Wytheville, according to its Web site.
The company’s Movie Gallery, Hollywood Video and Game Crazy stores being shuttered are closing “because they are not profitable and because funds from liquidating them can help us moving forward,” the company said, adding it will remain in business during debt restructuring and that its Canadian operations are unaffected.
Movie Gallery is the latest national chain in the region to close local stores during the recession. Goody’s and Old Navy in Wytheville closed last year. But in a bit of mixed development news Lowe’s Home Improvement has opened a store in Abingdon.
The video business has come under pressure wrought by technology and emerging services, according to Marion Downtown Revitalization Association Executive Director Ken Heath.
“The interesting thing about Movie Gallery, I think, is the expansion they went through with Hollywood Movie chain, and the bankruptcy that has followed,” Heath said. “With the rise of services like On Demand on satellite and cable, Netflix and other movie services, and the cost of new movies on DVD and blue-ray falling, and even vending machines that feature movie rentals here, the business plan of renting movies and games has changed dramatically over the past five years. Unfortunately for our community and the employees at the local store, the concept of a stand-alone rental business for movies and games has become a really tough business with the increasing competition.”
Locally owned businesses in Marion have also gone under in the rough waters of the recession. Heath counts four businesses that have closed within the last 12 months -- Plum Creek, General Store, 2 Hype, Je Grace.
Others are still open, but in new locations or consolidated, like Glenda's Auto that moved to North Main Street, Trajan Studio that went to Abingdon, and Cottage Boutique that closed so its owner could concentrate on one store in Chilhowie, Heath said.
A Touch of Utopia “never got off the ground, nor did the Sprint Store,” said Heath, who was uncertain “what happened at either one, other than the owners decided against opening after a month or so.”
Heath said the economy is a factor in most if not all business closure decisions.
“Right now, I’d think just about any business closing would be attributed to the economy,’ he said. “In the 15 years I've been doing the Main Street program, this is about as tough as I've seen for small business owners. Not only has the disposable income evaporated because of the climbing unemployment and sagging consumer confidence, but small businesses are getting hit with a perfect storm - almost impossible access to credit to cover gaps, skyrocketing electric and heating bills, and horrible weather that has kept customers from venturing out since late November.”
Weather of the like the region has experienced with only rare and brief respite since fall, also plays a role.
“Last weekend, when the skies were blue and the temps warmed up, the entire mood seemed better. People were shopping, eating out, and generally glad to be shedding cabin fever. But as the winter lags on and the economy still struggles, I'm afraid we'll see more business failures not just in Marion, but across the country. Not just Mom and Pops, but big-box retailers, too.”
Ever the optimist, Heath sees the positive in what has generally been portrayed as a negative economy, a recession that teetered on the brink of what some have dubbed the Second Great Depression. While businesses are challenged, there are opportunities if would-be business owners look for them.
“This also means that there are exciting opportunities that will come. While we've lost some really good businesses, we've also seen some growth in new businesses opening. Utility bills will lessen as the temperatures warm, and landlords are more willing than ever to work with prospective entrepreneurs on rent.”
Heath urges those who are in business to stay creative in their offerings to keep customers coming in. Business as usual can mean business closed.
“I'm encouraging our businesses to look for ways to strengthen their relationship with their existing customer base first and foremost, then to build that base locally by offering goods or services that may be missing that fit with their business,” he said. “For example, with people traveling to Marion for Hungry Mother Park or the Song of the Mountains, you'll have a market for Marion postcards, T-shirts, and the like. Not enough to open a store, but enough to add that product mix, perhaps, on a couple of shelves.”
For Heath, a business is only as successful as its marketing. The best inventory will not sell until people know it’s available.
“Anything a business owner can do to bring traffic through the door is what needs to be happening now,” he said. “Advertising is key. The complaint I hear a lot from business owners is that the only two times they are packed are during a grand opening and a going-out-of-business sale. Just think, why is that? It's because those two times are when the business is advertising.”
Heath can help with promotions, offering free marketing featuring “weekly email blasts to over 500 people. All a business has to do is email us information about a special sale, event, or activity, and we'll include it -- free.”
Heath said the association’s promotions committee is working to market “business clusters, like with the upcoming Wedding Showcase on March 6th, and we're planning to work with the Appalachian Spirit Gallery to offer more opportunities for businesses to expand the monthly Second Fridays Artwalk with sidewalk artists and live music.”
The association is partnering with the Chamber of Commerce and Smyth County to produce the next Entrepreneur Express, “a free workshop for prospective and existing business owners to learn how to develop a business plan, find access to state and federal government business, access to funding, and more,” Heath said.
Heath anticipates a new downtown environment for businesses and consumers that will come from the town’s current work on major infrastructure improvements downtown. At nearly $2 million, the project will include “new facades on businesses, new streetscapes, and additional amenities on the Farmers Market, all designed to bring more people downtown.”
Heath said the association is working with partners including the Small Business Development Center and Business Incubator at Virginia Highlands Community College, People Inc., and SCORE, a national small business counseling service, to bring resources to business owners free of charge.
“It's a different world than it was even a couple of years ago,” he said, “and we all need to see how we can not only weather the storm, but find smooth sailing as soon as the tides turn our way.”