It’s only March, but the Weasel Word Award for 2008 already has a front runner: McNally-Robinson Booksellers.
Posted by John Manzo on March 14, 2008
McNally-Robinson Booksellers is abandoning downtown Calgary on August 1, 2008. And that sucks. They opened a gorgeous new store in a historic space on Stephen Avenue in 2002, and it heralded the continuing growth and strength of that street, especially its 100 SW block, which is home to some very good restaurants and lots of well-maintained old (for Calgary) architecture. McNally-Robinson has been one of my favourite hangouts, and Brian and I have both spent oodles and oodles of cash there.
When I read about its imminent (sort of imminent- August 1 sounds far away right now and also sounds like a long, painful death to watch) closing yesterday, it felt like a sock in the stomach, and I was prepared to damn our overheated economy, ridiculously tight labour market and all the other problems inherent in The Boom for killing another independent business, an important and to all appearances viable one for the downtown.
Then I read today’s story about this tragedy in the Calgary Herald, and I changed my opinion.
This isn’t about a struggling business being “victimised” by our hard-to-handle economy. This is about greed, and about carpetbaggers who have made a quick buck and are trying to make us feel sorry for them even while their story holds no water at all. Consider these two excerpts from Paul McNally’s “official statement”:
1. “Current real estate prices in downtown Calgary make it difficult to sustain a bookstore. The value of the real estate over-reaches the potential of the bookselling business.”
2. “In an average cost structure, the store would be viable and profitable. In downtown Calgary, not so much.”
Okay, let me look at each of these like the good critical analyst that I am.
On 1: Yes, “current real estate prices” do make it difficult to sustain a bookstore, but NOT IF YOU OWN THE BUILDING. McNally-Robinson BOUGHT the Clarence Block (the name of their building) in 2004 from the good, community-minded people at Encorp (the developers of the wonderful Art Central project at Centre and 7th Ave) for $5 million after presumably leasing the space for two years. Then a couple of months ago McNally-Robinson SOLD their building FOR EIGHT AND A HALF MILLION DOLLARS. Not a bad profit, especially when it was Encorp that had invested millions in the historical renovation. So Mr. McNally pockets $3.5 million. I guess this is what he means by “the value of the real estate over-reach[ing] the potential of the bookselling business.” He means they made a big pile of cash selling their business. Now, what happens to that money? Read on.
On 2: The money goes to the owners, I guess, but also to pay for new projects in markets THAT DO NOT HAVE ANYTHING REMOTELY APPROACHING “AVERAGE” COST STRUCTURES. I am talking most specifically about McNally-Robinson’s bizarre decision to allow their daughter to open a bookstore in that bastion of “average cost structures” known as Manhattan. So we’re supposed to believe that Calgary is too expensive, but MANHATTAN is not? No; what we should “believe” is that Mommy and Daddy had to dump a Canadian property so this “proud” Canadian (Western Canadian even! Oh, wait, hold that thought) bookseller could support a new venture in an already saturated (with bookstores) and ridiculously, absurdly expensive city like New York. New York, USA. Our loss is your gain! God Bless America!
I might add that McNally-Robinson has a huge store in Saskatoon, a city with labour pressures exactly the same as Calgary these days.
With respect to that Western Canadian thing: McNally-Robinson did once use this angle it their advertising, that they were “Western” (to the extent Winnipeg is “Western” but I digress) and didn’t have to kowtow to publishers or booksellers in Toronto or New York. Well, guess where they’re opening another new store? Why, Toronto!
This closure was about McNally-Robinson’s chance to cash in while they’re also pursuing this quixotic dream in NYC. It shows how shallow their commitment was to Calgary. They had plenty of business and the same patterns of customers as every store downtown: Massive crowds at lunch that keep you afloat, smaller crowds otherwise, but the store was NEVER EVER empty. No bookstore is packed day and night, and thank God for that. If they’d come clean instead of talking in weasel-worded doublespeak I’d say something besides “good riddance,” but right now, I can only say that.
I’m pissed off.
March 14, 2008 at 5:13 pm
I’m not impressed either. My office this summer is right on 7th Ave and 3rd St (the Canada Trust tower), and like last summer, I was looking forward to picking up my magazines at McNally, but I guess that’s not going to happen anymore. At least I’ll have Artigiano one block away.
March 14, 2008 at 10:01 pm
Actually the difference between other stores in downtown and the bookstore was that people don’t walk into the Bay, check out their prices, try on their clothes, pick the brains of the sales people, and then go buy their stuff on Amazon.com to save a buck.
Also the NYC store has been open for about 4 years, it is not a new venture.
March 14, 2008 at 10:34 pm
Gina, why not close ALL their stores then? And the NYC store has to suffer from all the same “cost pressures” as does the Calgary one (or for that matter the Toronto store- and good luck getting the hard-to-hire intelligentsia to drive to Don Mills to work there!).
I never said NYC was new. I said it’s a drain and it’s inexcusable to use proceeds from the sale of a Canadian store to keep that store, an obvious money pit so dear daughter can continue to play Yankee Doodle there, afloat.
March 16, 2008 at 12:15 pm
Sorry, the way I read it, it seemed you were implying NYC was a new store. Sorry about that.
The other stores are in suburban malls, and have parking, etc. If you walk through the downtown mall in Calgary, you’ll see that there are empty shops. Eau Claire is a ghost town. Sears has even pulled out of downtown, but no one seems to be making a big deal of that. There’s also no place to park, except on weekends, and you have to pay, so most people seem to prefer going to the suburban malls for free parking, more stores, and closer to home. Also, most of the parking lots in downtown are being destroyed in order to make way for new condos and office buildings. Eau Claire will be torn down soon for this very reason.
Certainly a person could take transit, deal with the trains and buses never coming on time, dirty interiors, homeless people creating shanty towns on the trains, etc.
Also, I don’t know how much McNally’s hires at now, but Chicken on the Way advertises their starting wage at $15.00/hr.
I’ll just agree to disagree with you, and I guess I’ll see you at Pages in the fall.
March 16, 2008 at 12:33 pm
The vacancy rate in Eatons Centre, Bankers Hall, etc is actually rock-bottom- yes there are empty spaces, but not as bad as at, say, North Hill or (God help us) Northland. We have a very strong retail sector downtown.
Sears pulled out because it only stayed open as long as it was forced to remain open after it bought Eatons. What’s happening there is that Holt’s is moving into a space twice its current size (the same format as the new Vancouver store); we’ll be seeing all sorts of Yorkville-esque retail moving into its former space. Retail is not only viable downtown; it’s booming.
Destroying surface parking lots is a GOOD thing. We aren’t Winnipeg or Dallas. This is GOOD. The new Eau Claire plan is incredible- have you see it?
March 19, 2008 at 7:21 pm
One may want to consider the staff that planned on working at that store for life, the way Tory cried telling them all the store was being shut down and that fact that they are being admirable by giving you as much notice as they have before one talks about a community he knows little about. The McNally’s made a gamble opening their store in Toronto and it went bad. The Calgary store brings in the least money, and yes the building did bring in a lot of money but it was sold months ago with the plan being to rent. The McNally’s are not business people, Paul was an English professor and Holly (I believe) owned a small book store. I think they did very well as far as trying to form a national business goes and am sorry it didn’t pay off.
March 23, 2008 at 9:46 pm
I tend to mostly agree with the other staff member, although i don’t know who he/she is. The store seemed to be very close to Tory’s heart. While not a publicized reason, the McNallys sold the property to Balboa investments to gain some financial breathing room to help both keep the store afloat and to help with the opening of the two new stores. How much was allocated to each is another story, I’ll admit. The details are hazy but the buzz from management is that Balboa is raising the lease to almost $1M/year.
With the slim profit margin of books these days, the Canadian dollar and contracts with American publishing firms, the wages that have been raised (in the restaurant, at least) from $8.50/hour in 2004 (what I was hired at) to in excess of $16/hour just in order to lure in and keep staff, and the ghost town that is Calgary after 6pm, one can hardly blame them from throwing in the towel. There have been some admirable efforts to draw people through those doors in the evenings, including a change in branding, some fantastic new music acts, and evening book signings, but the numbers just aren’t there. From what I understand, the Winnipeg stores are thriving, their labour isn’t sky-high, and they have excellent traffic through their bookstores and restaurants. Perhaps the Don Mills store will be a flop, but you can’t blame them for taking a chance, as they did with Calgary some years ago. Saskatoon may be in our boat in the future with their booming economy. We’ll have to see what happens there.
I know I’ll definitely miss my job. Things were fantastic during the first few years, and as a salaried employee I enjoyed bonuses. However, these stopped over the past year, and the financial pressure was palpable. There has been trouble looming for quite some time now and I must say kudos to the McNallys for sticking it out this far.
March 23, 2008 at 10:26 pm
You and I have very different understandings of “ghost town.” I’m sick of hearing this nonsense. Downtown is quieter in the PM, yes, but considering the killing that downtown businesses make during the day, I can see why retail vacancies downtown are infinitesimal. As to high rents- that’s the market and cost of doing business in a vibrant city. In “ghost towns,” the city steps in to PAY (or otherwise provide incentives) to businesses to open. Balboa is not charging a mil a year because downtown is dead.
There is also the question as to why they didn’t just close at 6 most weekdays like their downtown Winnipeg store does- they had to stay open to serve “ghosts” and pay the overpriced but nonexistent labour?
Nice try.
March 27, 2008 at 8:35 am
Hey John,
I only found about this recently and I am quite upset. Like you, I am tired of having the boom used as an excuse to blame everything. I have spent a lot of time and money at McNally and loved it. The downtown location filled a void which was missing for years in Calgary of having a good bookstore amid all the downtown buildings, plus they had a good restaurant to go with it.
I have been to the Saskatoon store on two separate occasions. Once on sat night, where the place was packed. The other was on a weekday afternoon when it was much quieter. Maybe that store has inverse business times compared to the Calgary location but I don’t want to judge based on just these two visits. And yet, I am surprized that the Sask. location and the Winnipeg one (which I have been to as well) would pull in more money than the Calgary one. Ofcourse, as you point out the real reasons have to do with money, which does appear to be the case.
Ok, so if they are closing the downtown location, then why not try to remain in Calgary? Why leave the city all together?
Will downtown be only Condos and office towers soon? Actually, I think it already is. I was not happy that the A&B store had shut down a few years ago on Stephen Ave and now the only real bookstore in downtown follows. From what I hear, Eau Claire will be torn down soon as well.
Thanks for sending a letter to FFWD regarding your take on this.
April 2, 2008 at 11:03 pm
John, your letter in FFWD and published here is trenchant. Good calls on all fronts. You’ve brought up the points that the Herald article seemed to gloss over, and these points appear to be the subtext we sort of knew was driving the sale that made the official reasons smell slightly odd. MR was a terrific place while it was here, but the first question that came up whenever anyone learned they were leaving was, why not move to a strip mall where there is adequate parking? We know now, they didn’t really want to stay. I have to admit, I had a lot of respect for them and I often bought books there that were unavailable anywhere else in the city. Now I begin to question their original motivation. Perhaps they had their sights set on becoming the second English language books chain in Canada? I think you’ve called the spade exactly what it is, and I support your efforts to open the dialogue as well as to slam outdated cliches of this city.
The question remains, what does Calgary do now. Pages and the U of C bookstores are great but with very limited selections. I hardly dare call the near monopolistic box chain of Chapholes/Indignant bookstores. So I ask, are we one of the few university cities in North American without a decent academic/literary bookstore? Hey, we all still read and write and we want decent books, not smiling slackers who tell us they can order the book and it will arrive in two weeks, geesh, we can do that ourselves on Amazon or ABE for less. So who will have the guts in this city to pick up the gauntlet and open a decent, large bookstore with a wide selection of stock?
April 27, 2008 at 6:10 pm
As a former employee of McNally, the only thing I can think to say is “Hope the door doesn’t hit you in the behind on the way out.”
Good riddance to one of the worst places I have ever worked.
I could spend all day writing about the things that happened over the course of the two years I was employed by one of the greediest family businesses around.
Everyone who has worked at the store (and the list is massive in Calgary) knows exactly why the store couldn’t survive, the McNally’s just didn’t care enough about their employees to make it work.
Not only have the McNallys left a city full of disappointed and upset customers, but they’ve also left a city full of very bitter ex-employees who are happy to see them go.