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Trials and Tribulations

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Newbury Comics Company Update – by Mike Dreese Co-Founder

What a year 2009 was! Last year at this time, we were wondering if the company would survive or not. October and November of 2008 were two of the worst months in the company’s history. Like most of retail, we were a bit caught up in the real estate and consumer credit bubble, and were having trouble in many locations with profitability. It was a tough year for way too many people.

What we did was twofold: Reign in costs in a way to minimize the impact on our customers and staff, and begin to reassess our overall cost structure. I think we did a pretty good job of it, and after the support shown this holiday season by our customers, I am very glad to report that Newbury Comics is now in a much healthier condition! We have been able to restore nearly all of the wage cuts we implemented, and have successfully negotiated new, lower, rent structures in those locations where leases have been coming up for renewal. As such I very much look forward to an interesting year!

Challenges and opportunities ahead:

1. Social Media Marketing
We have launched a Facebook effort, which is starting to show real traction. We now have some 45,000 Fans to our page. We also have a modest Twitter following, which has not really been worked with too much. These compliment the over 90,000 e-newsletter subscribers we have. We have experimented with “flash” sales, lasting for a window of a day or less, which have proven to be an interesting way to engage our customers.

What we have found most difficult, is figuring out how often our customers want contact, as well as what sorts of messages they are interested in. What is beyond clear, however, is that different things work for different folks, yet we don’t have the scale to fine tune things too much. I have tried to focus staff on honest, personally enthusiastic communication, rather than vendor driven hype.

The new year will bring many more experiments in this area, so please continue to deliver feedback to us, it really, really helps.

2. Brick and Mortar Store Rationalization
How many stores should we have? Where should they be located? What should we sell? These are tough questions, as our product mix shifts from music to DVD to fun stuff to fashion. Some want us to never change, but the commercial pressures of the marketplace say otherwise.

We realize how important our store experience is to so many, and yet the demands of competing in a Wal-Mart mentality world is indeed extremely challenging. It now looks as though we really may be the “last man standing” in terms of traditional music specialists. Part of the reason, I believe, is because we have never really been traditional. The fact we started as a comic book store, and never changed our name, always kept us open to the idea that Newbury Comics could morph.

We will be looking at additional new store locations in the year ahead, while also working hard with landlords to be sure our economics are in line with the realities of a rapidly deteriorating retail rent landscape. I personally believe that the glory days of enclosed mall and “shop til you drop” retail expenditures are over. The combined pressures of web sales, viciously efficient operations like Wal-Mart, and a somewhat more thoughtful, greener, consumer, (let alone broke!) are forces which will continue to point out that vast over-building of retail storefronts in years past. This will lead to lower rents for the remaining viable retailers. We plan to be one of those!

Our more recent forays into used CD and DVD media, along with videogames and fashion, have kept folks in the company always thinking of the next big idea that our customers will appreciate. So long as we continue to be a fun environment, I know I’ll want to be here, and I hope customers will want to come!

3. Web Sales
Our web sales continue to add synergies to the company. We now sell tons of CD, DVD’s, toys, and fashion online, through Amazon, Ebay, and newburycomics.com. These sales help keep our buyers on their toes, allow us deeper discounts, lower our overall risk of holding goods, and add efficiency to our home office building operation. Plus, doing a lot of new stuff is a lot of fun! It energizes people! Web sales now comprise almost 15% of our sales, and contribute somewhat more than that to our profitability.

Coming in 2010 will be punk.com, a fashion website, focusing on some of the styles we sell at our fashion store Hootennany, in Harvard Square. After we launch that, we will re-visit newburycomics.com in the summer, to move it into a more modern merchandising world.

4. Human Resources
Our people remain strong. I think we have done a pretty good job of retaining a ton of pretty interesting people, whose ideas continue to propel the company forwards. I continue to be amazed that the little one room store that John and I started 31 years ago at 268 Newbury Street has sustained itself through all manner of competition and technological change. The fact that we have endured and remained healthy, versus the competition of Tower Records, Virgin Megastores, Best Buy, Borders, and Wal-Mart, is an ongoing tribute to the heart and creativity of our employees.

5. Our Customers
Remain the best! So thanks from all of us!


cheers, mike dreese
co-founder – newbury comics

p.s. any comments can be directed to mike@newburycomics.com
(please do not reply to the address this was sent from, as i won’t get it)

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