COSTA MESA, CA (BRAIN)—Nine years ago, Paul Deem took a chance on a new retail location. In Orange County, where the strip mall is ubiquitous, a local developer had pitched him on space in a strip mall with a twist.
“I bought it on concept,” said Deem, the owner of Cycle Werks. Two years later, he opened his shop in the center, aptly named The Camp, which exudes an outdoor, earthy vibe with an outdoor store, an action sports store, a yoga studio and a vegan restaurant.
“The center has only come of age in the last three of the seven years,” he said.
In addition to the walk-in traffic, he benefits from buying into a marketing pool with other tenants to promote the center. “I’m always amazed at how hard it is to market a strip center. They do a lot of activity from a marketing standpoint,” Deem said.
The 2,750-square-foot store looks bigger than it is due to high ceilings and windows, but has little space for inventory. That’s not an issue, Deem said, because he’s not in the business of storing bikes.
“That’s what bike companies are for,” he said, adding that inventory is a horrendous burden on the retailer.
“It used to be you could buy one model of bike and put them in a warehouse. Today that’s hard to do. No one can stock anywhere near the product representation,” said Deem, who carries primarily Trek bikes.
Having worked in sales for Lawee Inc. in the 1980s, Deem was well schooled by Ben Lawee in how to run an efficient business.
“I don’t think what he did in the industry many people understand,” Deem said, of the man behind Univega. “He could design a bike, he could negotiate with vendors and he could manage a warehouse.”
After he left Lawee, Deem slowly grew Cycle Werks into a five-store OC chain.
But feeling burnt out and overweight, the 51-year-old began to look at reducing his store count. The lanky former racer who rode on the ’76 Olympic team, wanted to spend more time on his bike. “I’d just assume ride my bike 300 to 400 miles a week,” he said.
He has whittled his stores down to two locations. He sold his original Mission Viejo store to the owner of the local Jax chain in June. “We just continue to simplify,” Deem said.
Though he believes the industry will weather this economic storm, he said the key for store owners will be to be present in their stores. “Owners have to spend more time in the store. A friend of mine who owns a pool business said I gotta go back to the store,” Deem said.
And though he, too, intends to spend more time in the shop, he still plans to put in 200 to 500 miles per week.
Photo: Cycle Werks owner Paul Deem talks business during day 3 of BRAIN's dealer tour of Orange County