Ralph Hicks Bought and Saved an Independent Bookstore
Curiosity House Bookstore in Creemore, Ontario, is the platonic ideal of a small town bookstore: handsome wooden shelves, stationary by local artists, sweet gallery in back—there were some strange linographs and found-object pieces that I think had something to do with bugs on the walls when I visited. It was a sunny day, warm enough to eat lunch outside as long as you brought a sweater. The shop was never full, but also never empty. Ralph Hicks—white-hair, jaunty round glasses, roughly gregarious manner, and the current owner of Curiosity House—asked me to let him know if I couldn’t find something I wanted. I pointed out a surprising dearth of David Mitchell. The woman at the counter immediately said they’d recently sold out, but had a few titles on order. I left with copies of The Wreckage (Michael Crummey) and How Should A Person Be (Sheila Heti) (both Canadian) (like me). I was fuzzy, high, blissful, the way I always am after buying new books. I didn’t ask for a bag because I like holding the books in my hands, feeling their meaningful weight.
Ralph purchased Curiosity House last year. This has made him a legend in Creemore, and a true believer of kindness and right to me. We recently exchanged emails because I wanted to know why he had done such a foolish, beautiful thing. This is what he said.
Meghan Nesmith: So, Ralph, my hero. You bought a bookstore. Tell me about that.
Ralph Hicks: About 18 years ago a couple approaching retirement started Curiosity House Bookstore. They kept it running at breakeven (probably not paying themselves much) for about 10 years. Then one of their part-time staff bought it and ran it for another three or four years (probably also not paying herself much), again at roughly breakeven. Then when she wanted out, three affluent retirees bought it and kept it going for another three or so years. At this point, the landlord decided to redevelop the building and the owners and employees decided to call it quits, with the investors taking a bit of a loss.
The closure was announced in the paper one Friday in May 2012. At 9 a.m. on Monday morning, I was driving around and musing about this sad event, thinking that all it needed was a helping hand and an infusion of energy to keep the store going. I realized that it needed someone a bit like me – with some ready cash, with few time-demands, and with enough experience that the management task wasn’t daunting. At 9:30 a.m. I called the owner and said I’d buy it.
MN: That’s crazy. Did anyone try and talk you out of it?
RH: Nobody had the chance, because it was essentially an impulse buy.
MN: So what exactly made you believe you could run a bookstore?
RH: In an earlier life I was a strategy consultant, primarily working with consumer-oriented multi-national companies. Much of this work involved assessing new business opportunities and handling acquisitions. I knew that some of the key factors to investigate thoroughly in order to accomplish a successful expansion were…
• make sure it’s a growth market;
• make sure there are no major competitors who can determine prices;
• make sure there are no technological changes that could affect demand; and
• look carefully at the financials.
Obviously there could be nothing less attractive than a bookstore! I’d be breaking all the rules. I knew that!
MN: Rebel. So what happened next?
RH: On the Tuesday we met and signed an agreement to purchase. Then I asked if there were any financials to look at. On the Wednesday I looked at a new retail site and signed a five-year lease. On the Thursday the formal purchase of the store was signed, and on the Friday the transaction was the main story on the front page of the local newspaper.
As soon as I made the decision to buy the store, I knew what I wanted to do with it. I didn’t want to simply have a dull little hand-to-mouth store servicing local demand. I wanted to strive for something more. Not size … quality and vitality. Within minutes I knew that we had to have a clear objective, and that was to be “the best little bookstore in Canada” – a slogan we started using immediately.
Within four weeks of the old store closing, we had finished the leasehold improvements and moved into the new location. With the help of a local contractor and his carpenters, we’d installed a hardwood floor, lots of bookshelves with library-like alcoves, and great lighting. A designer friend was immensely helpful in this: Chis Wright of Figure3, a Toronto design company, is a weekend neighbour in the country. He is also the preeminent store designer in Canada. I gave him a rough idea of what I wanted the store to look like and he gave me about an hour of his time and a scribbled sketch, determining the appropriate size, height and style of the shelves, the right lighting system etc. As a result, although this store was only about 10% more in square footage, we’d installed about 45% more linear shelving, with lots of room for browsing and mingling.
MN: How did the town respond?
RH: Creemore is just a little rural village, with a population of around 1,500. I’m told that the conventional wisdom dictates that a bookstore needs a catchment community of about 35,000. So there’s clearly a substantial stretch. But Creemore is a delightful community and it’s important to encourage the vitality of the core marketplace which has just a few businesses – a world-class brewery, two or three restaurants, a drug store, a hardware store, a post office, a gallery or two, two or three real-estate agents, a bank and a funeral parlour.
The village was thrilled. I became a local hero, and there’s enormous goodwill in the community. [I can attest to this – over mussels and fries at small French bistro down the street, literally everyone who passed waved or stopped to chat, like something out of a more upbeat Dickens novel.] The revitalized store has now been operating for nearly eighteen months, and we’re growing at about 20% ahead of a year-ago.
MN: I love books. I love you for doing this. But some people might say that a bookstore is one of the worst investments a reasonable person could make. How are you making this work?
RH: So it’s healthy until you talk to an accountant. Mine doesn’t get it! To be the best little bookstore in Canada, you have to spend a bit. Not only do you need a well-designed, well-built store, you need a terrific range of books, enough inventory and good management. That costs money.
As far as financial management is concerned, here are a few pointers…
1. We now carry over three times as many titles as the store had in its previous incarnation.
2. We also have about three times the investment in inventory.
3. There is no real risk in the margin structure: our cut is roughly 40% of the suggested retail price, and we can return unsold stock for credit after three months.
4. We do not discount normal stock, though we do sell a few slightly damaged books at a discount.
We know what financial issues we have to deal with. Our rent is fixed, our utility and telecom expenses are predictable, the manager’s salary is fixed, and we can make day-to-day decisions about discretionary expenses. However, I should make it clear that we have to look at a bookstore as a hobby rather than an enterprise; otherwise it might seem a rather silly way to use money.
MN: Can you tell me a little more about the actual dollars?
RH: Our little (1,000 square-foot) store has annual sales of about $250K. That means we have gross profit (40% of sales) of about $100K. Our fixed expenses (rent, utilities, telecom, insurance) are about $20K. That leaves $80K to spend on staff, marketing and financing.
We need the equivalent of two people (the manager plus part timers) to run the business our way, i.e. managing the buying and selling and having lots of mini-events and a lively website; and we have to finance about $100K of inventory. So however you look at it, it’s a squeeze.
So you won’t get rich running a bookstore, but you could get poor if you don’t watch things closely!
MN: Good decisions? Bad decisions?
RH: By far the best decision I made was to hire Jennifer Hubbs to be the manager. She had spent the last fifteen years as a teacher/librarian in Toronto and was ready for a change. I managed to persuade her to move to the country, to take on a job she had never done before, and to take a substantial cut in salary. And she’s terrific at it. She is simply so smart, so knowledgeable about books and so up to date with writers and publishers that she’s able to do far more than Amazon and the big book retailers can in terms of providing advice and opinions, and helping people choose. And she handles herself with grace, humour, and dignity. She has become an extraordinarily respected addition to the community.
One thing that Jenn has brought is an energy that I never expected to be important. If you simply fill a store with books and wait for people to come, you will fail. I now realize that a country bookstore almost has to be in the entertainment business. Jenn has established a program of book-signings, author readings, cooperative projects with schools, book-clubs (with Skype interviews with authors), story-time for kids etc. etc. She simply never stops. And that’s the key.
MN: What have you learned in all of this? Do you have any advice for someone considering making this sort of investment?
RH: I would always suggest that people going into new enterprises should expect expenses and investment to be higher than planned. There are rarely good surprises! Often bad ones.
Also, having a handle on the financials doesn’t mean you can easily be profitable. I hope we will be soon, but that’s not really the point. If it was, we’d shrink the business to its bare bones and we wouldn’t be the best little bookstore in Canada. And if you aren’t trying to be the best, you’re doomed to mediocrity. And I couldn’t bear that!
Meghan Nesmith lives in New York.