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Real Estate Plays a Role for Philly Retailers

Published June 5, 2011

PHILADELPHIA, PA (BRAIN)—Downtown Philly shops visited on the last day of the BRAIN Dealer Tour attributed much of their success to finding the right real estate.

Glenn Krotick calls Breakaway’s historic building with high ceilings and exposed brick walls its “jewel.” Breakaway Bikes and Training Center bought the building five years ago. Krotick said it was a risky commitment, after renting for the previous two years, but believes it will be a good move in the long run. “One of our long-term goals was buying Center City property,” said Krotick.

The first floor of the 10,000-square-foot building is retail space, with the second story set up as a fit area and indoor training studio with two banks of eight trainers. Riders take 12-week indoor training courses that follow a progressive training sequence. “We’ve been doing wattage-based training before there were even Computrainers,” said Krotick.

Co-owner Joe Wentzell, who has a degree in exercise physiology, conducts performance fits using a combination of industry standards including Retul 3D motion capture. “Joe is phenomenal with these fits,” said Krotick, a lawyer by training until he went into business with Wentzell.

Although the training business caters to the most committed and serious cyclists, who buy into monthly training packages, Krotick said they approached the retail business with the goal of catering to a range of customers with bike sales ranging from the $15,000 road bike to the $90 kids’ trike. “We’re a very unusual store,” said Krotick. “You see a lot of stores that are very fancy and very nichey that don’t carry the breadth we do.”

Krotick said the retail business is growing in all areas. But its sales have changed as it is doing less frame builds and more complete bikes. This year it brought in Trek, which became available after one of the local Bike Line chain locations went under. Breakaway still carries Giant and Fuji as well. “We’re very loyal,” said Krotick.

Bryan VanArsdale admits that he isn’t exactly a team player and that he prefers to hire employees who will do what he says—unless they can teach him something new. It’s that single-minded intensity, backed by his wife Heather Deronck, that makes their store, Bicycle Revolution, located in southeast Philly, the most unique shop on our three-day Dealer Tour.

The 37-year-old former bike messenger and shop mechanic moved into this narrow, shotgun-style storefront two months ago. He’s now in his fifth year as a retailer and had outgrown his previous spot nearby. Still this shop offers only 1,800 square feet of retail, service and office space, but the merchandising is excellent thanks to Heather.

The neighborhood, once known for its fabric shops, is rapidly gentrifying as a younger, more hip generation moves in. Art galleries, coffee shops, ethnic restaurants and organic food stores have sprung up on South 4th Street, VanArsdale said. And as a result, he’s enjoyed steady growth in sales and service. “Our numbers are small, but we’re still growing,” he said.

As for bike brands, he stocks a limited selection of Fuji, SE, Linus, Masi, Civia and Surly bikes. Still, this is a quintessential urban shop—trendy, hip and stocked with unique accessories from Lake House, Bicycle Printings, Chrome, Modrobes, Laplander, ReLoad, Bailey Works, Endura and Bern helmets. Some of the brands are manufactured locally.

“It’s a changing market. We’ve been doing more clothing and accessories, more handcrafted items from smaller manufacturers—more city style, less techy,” he said. “I had to do it my way; I’m just not content taking a paycheck,” he said.

As we enter Bicycle Therapy, owner Lee Rogers changes the iTunes playlist on a sleek computer on the floor for staff and customers to research products. It’s a fitting introduction to Rogers, who traded a gig as a nightclub DJ to open Bicycle Therapy almost 20 years ago.

At age 26, Rogers rented a 600-square-foot downstairs basement and opened up shop. “I can’t read or write, but I’m good with fixing things,” quipped Rogers, who had previously worked at a number of local bike shops including Via Bikes. “I’d always been into bikes,” he added.

In 2000 he bought a condo directly across the street. “I’d always had my eye on this space,” said Rogers. Formerly a fancy Persian carpet store, the condo had an ugly front. Rogers later put up a new façade and renovated the interior.
Over the years Rogers has reduced inventory and narrowed suppliers. Bicycle Therapy is not a concept store, but nowadays carries primarily Specialized bikes and parts and accessories. He also carries Jamis and Look, to cater to his mainly commuter and road clientele. “Every shop needs to have a euro brand,” said Rogers.

Rogers said bringing in Specialized and five years ago has improved sales. “We didn’t have an “A” brand before that and we did just fine, but once we got it, it helped us grow that much more,” he said.

Jay’s Pedal Power sits near the edge of a rapidly changing district, Fishtown, on a main thoroughfare in Philadelphia. But Jeff Rosenblum and his wife, Sharon, are watching and waiting as the area undergoes extensive redevelopment. Rosenblum, 58, bought the building more than 30 years ago when it had been the Penn Treaty Democratic Club, a saloon for local politicians.

The 100-year-old building is included in the “green” area, a section of Philadelphia eligible for a host of local, state and federal tax credits for solar power and super-high efficient heating systems. While the building may show its age, Rosenblum takes us into his basement to show off his solar power installation and to check whether today’s sunshine is generating enough electricity to cover demand. It is.

Rosenblum has installed an array of solar panels on his roof, spending $55,000 for them. But with various tax credits his direct cost has been about $25,000 and he expects to recoup that within four to six years. He’s watched his electric bill drop from hundreds of dollars a month to $77 in April and $128. “Our power bills were costing us more than our liability insurance,” he said.

He also took advantage of other programs to install new heating equipment as well. And he has nothing but praise for the city’s bicycle coalition for creating a more friendly commuter environment. “The Philadelphia Bicycle Coalition has been the most dominant force in getting cycling going here,” he said.

Still, Rosenblum said the recession, which began in September 2008, has hurt his business and he predicts more rough going in the future. “I’ve never seen an economy so affected as this one has been,” he said. “I’ve been through at least three other recessions and none of them has had the effect on me like this one.”

For photos of our store visits and of BRAIN editors and Dealer Tour sponsors Advanced Sports Inc., Campagnolo, Interbike and Gore touring the stores by bike, visit us on Facebook at www.facebook.com/bicycleretailer (click on above link).

Photo: BRAIN editors and sponsors ready to take over downtown Philly on brightly colored SE singlespeeds (credit Jake Orness).

Topics associated with this article: BRAIN News

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