In January 2011, when the local clothing and variety store went out of business, Port Townsend faced an increasingly common small-town dilemma: Where to buy underwear? Or socks? Or pillowcases?
Anchoring one end of the downtown business district, the Swain’s Outdoor store had been selling clothing, shoes and other household staples for years. It was the last in a century-long sequence of destination stores that once included a JCPenney and a Sprouse-Reitz. Suddenly, there was none.
As small towns go, Port Townsend is healthy. The 10-mile-long Quimper Peninsula, a narrow, crooked finger at the most northeasterly extreme of the Olympic Peninsula, is home to some 15,000 people, including a growing population of affluent retirees. There is county government, a school district, a hospital, a paper mill, a healthy real estate market, more than 30 restaurants ranging from fast food to fine dining, and dozens of specialty stores and galleries selling everything from antiquarian books to Native American art to sea kayaks.
But if you want basic stuff like underwear, shoes, blue jeans or bed linens, you have to drive an hour to the big-box stores in Silverdale or Sequim.
As Swain’s liquidated to the light fixtures, a group of concerned citizens met in the conference room of a local real estate office to discuss how to fill the void. The issue was more than mere convenience, says former Mayor Michelle Sandoval, a local real estate agent and city council member who called the meeting. It was about civic economics. “A real town needs a real store,” Sandoval says, a “magnet” to lure consumers to smaller shops.
Twenty months later, Port Townsend has one. Quimper Mercantile Company, offering shoes, bed linens, towels, sporting goods, blue jeans and, yes, underwear, opened this month in the refurbished, 16,000-square-foot, waterfront space Swain’s vacated. Quimper is not another JCPenney or Walmart. The store was envisioned, promoted and financed by the people who intend to shop there. At press time, that amounted to 700 individual investors who coughed up $100 a share, all in the name of a healthy local economy. Think of it as a hyperlocal and distinctly hometown version of Kickstarter.
It may be an extraordinary business strategy, but for Port Townsend it’s business as usual. Quimper’s genesis can be traced to a quiet little movement sometimes called “locavesting,” for which Port Townsend has become something of a national model. An extension of the familiar “buy local” maxim that begat the “locavore” movement among foodies, locavesting puts small businesses together with local investors.
Every month or so, 20 or so investors meet informally in a local pub or restaurant under the auspices of the Local Investing Opportunities Network (LION), and members listen to brief presentations from local business owners. At one session this summer, they heard from a person who is buying a local auto repair business, a promoter who has been organizing concerts at the local state park, and an organic farmer who wants to build his own poultry processing plant. By federal law, speakers are not allowed to solicit funds; they simply explain their business plans and make available the relevant documents. Potential investors ask questions, and any loans are arranged in separate meetings.
“It started when local people protested the new Hollywood Video store,” Sandoval says of the 2005 incident. “We decided to be proactive, not reactive, about our support for local business.”
Those informal meetings have led to more than $3 million in loans by local investors to local businesses—restaurants, farms, a bicycle shop, a maker of gourmet cheese, and more. The average investment is about $68,000, Sandoval says, but most are about $35,000, which is enough to finance a modest expansion or add a new product or service.
To date, some loans have been renegotiated, but there have been no defaults.
When Swain’s Outdoor closed, however, the townspeople needed more than a simple loan. They needed a startup. They talked to chain stores, but nobody was expanding to Port Townsend.
Eventually, they were left with the idea of a for-profit retail store owned by the community—not by local taxpayers, but by volunteer investors. For this, they had few models. The best known may be the Green Bay Packers, the professional football team that is owned by its fans. But more appropriate models were community stores in Powell, Wyoming and Saranac Lake, New York, as well as several small Alaska towns.
Peter Quinn, a veteran businessman who had opened many AT&T cell phone stores, stepped in and helped draft a business plan, based in part on a survey of local consumers. To get started, they would need $425,000 worth of stock—45 percent of the ultimate goal of $950,000. Investors must live in Washington, and none can own more than 10 percent of the shares. Shares will be available for purchase until January.
They spread the word with newspaper stories, luncheon pitches and a makeshift float in the spring Rhododendron Parade. It took about four months—far less time than in some other communities—to raise the startup fund.
By early summer, Quinn and other organizers had raised the seed money and were busy refurbishing the 50-year-old building that started out as a formula Safeway supermarket. They scraped asbestos tiles and carpet squares off the concrete floor, yanked out miles of obsolete wiring and installed new, and made the restrooms usable again. They recruited a sales staff and ordering up pallets of running shoes, blue jeans and bed linens. They’ve hired a manager, a local resident who previously ran a big sporting goods store in California.
It isn’t posh. There are concrete floors and pendant lights, says Ian Keith, a retired local contractor who serves on the board of directors and supervised the project. If it works as planned, they hope to add a separately owned food service shop and other amenities.
Why would Quimper Mercantile Company succeed where other enterprises have failed?
Keith believes it’s about the relationship between the store and the community. “We’re listening to what people say they want,” he says. “People stop by, peek in the door and ask, ‘Are you going to sell this or that?’ And those suggestions become part of our business plan.”