Publisher's Note: Tom Mast gave permission to re-post this article. The community store effort that has been discussed along with Ms. Eleson's article made me go look for some deeper information on this issue. The store in Torrington, WY is still apparently in business. The article below appeared in the Star-Tribune in January of 2005. Note also how much money they thought they needed to raise to get their effort off the ground. I did not see a reference in the article posted earlier on how the ownership model would be employed, but the idea of limiting the maximum number of shares an individual may hold seems like a good check against a large investor having undue influence in the direction the store might take.
One more bit of information: Our Clothing Store has apparently been sold to a Nebraska company located in Scottsbluff. More information to follow.
TOM MAST Star-Tribune staff writer
Sunday, January 16, 2005
One more bit of information: Our Clothing Store has apparently been sold to a Nebraska company located in Scottsbluff. More information to follow.
TOM MAST Star-Tribune staff writer
Sunday, January 16, 2005
Economic development officials in Goshen County hope to raise $450,000 by this spring in an effort to create a new clothing retail outlet.
By so doing, they want to reduce the "leakage" of money that results when local people shop elsewhere for goods, like in nearby Scottsbluff, Neb.
Brad Sutherland, executive director and sole employee of the Goshen County Economic Development Corp., said the effort to create a community owned store is similar to a successful venture launched in Powell.
The problems faced by Torrington are not unlike those confronting many communities with populations between 5,000 and 20,000, Sutherland said. Several years ago, Anthony's, a major clothing store, decided to close its Torrington outlet, even though it was operating at a profit.
"That leaves a huge niche to be filled," he said.
One problem is that if people have to travel out of town to shop for clothes, they often will shop for other things as well. The local economy thus is hurt not just by the loss of a clothier, but by the loss of sales across a potentially broad spectrum. For Torrington merchants, there also is the specter of a big Wal-Mart store about 30 miles away in Scottsbluff.
In order to keep more shoppers at home, and to reduce the leakage of local dollars, Sutherland and others are attempting to start a home-based establishment called Our Clothing Store.
In furtherance of this objective, Sutherland set up a corporation and then a private stock offering which is open only to Wyoming residents. Keeping the effort in the state means the offering doesn't have to be registered through the Security and Exchange Commission, which enhances ease of execution and greatly reduces the cost.
"I think our total start-up cost is going to be right around $6,000," Sutherland said, which includes the cost of printing the prospectus. "It's a cheap way to get a company up and going."
The next, and most critical step, is to sell shares in the store. A share will cost $500. Investors can buy up to 20 shares, thus investing $10,000. Eventually, organizers hope dividends will be paid on the investments.
Under the offering, at least $450,000 must be raised before any of the money can be spent. If the money can't be raised, it will be returned to the investors.
The Goshen County Economic Development Corp., which is spearheading the effort, has until March 30 to raise the money. If that deadline is not met but the board of directors feels sufficient progress is being made, the period can be extended until June 30, Sutherland said.
December was complicated by Christmas. "We're hoping to really get moving this month," he said.
So far, Sutherland has seen considerable excitement in the community about the project, "but people have to understand that these stores don't work unless a lot of average, ordinary families, that don't have a lot of extra money, invest. They gotta buy a share or two."
There are two reasons that broad-based support is crucial, he said. First, and most obvious, enough money must be raised to open the store. And secondly, involving lots of people has the effect of creating a loyal client base with a real stake in the store's success.
Despite a tough competitive environment, which includes retail outlets in Scottsbluff and clothing on the Internet, Sutherland said Our Clothing Store would have some advantages. With an all-volunteer board of directors, labor costs would be reduced. Through a grant, Sutherland hopes to provide the store with a cheap lease. And there will be no debt to service. "If you can start up a business without any long-term debt, that's a huge cost savings," he said.
If all goes well, Sutherland hopes the store can open by mid-year.
"We would really like to be up and running this summer so we have our grand opening sale and then the back to school sale, then Christmas," Sutherland said. "It would just work out real well if we could get up and running this summer."
The aim is not to compete with other stores in town that carry limited selections of clothing, he added. Rather, the objective is to identify clothing items not currently offered in town and to stock accordingly. The buying power of Our Clothing Store could be enhanced by combining efforts with similar stores in Powell and Worland.
The cooperative model employed by Torrington and Powell is in keeping with a trend that has developed in small Western communities in recent years. In addition to Wyoming, stores of similar business design have opened in Montana and Nevada.
Business Editor Tom Mast can be reached at tom.mast@casperstartribune.net, or by calling 1-307-266-0574.
By so doing, they want to reduce the "leakage" of money that results when local people shop elsewhere for goods, like in nearby Scottsbluff, Neb.
Brad Sutherland, executive director and sole employee of the Goshen County Economic Development Corp., said the effort to create a community owned store is similar to a successful venture launched in Powell.
The problems faced by Torrington are not unlike those confronting many communities with populations between 5,000 and 20,000, Sutherland said. Several years ago, Anthony's, a major clothing store, decided to close its Torrington outlet, even though it was operating at a profit.
"That leaves a huge niche to be filled," he said.
One problem is that if people have to travel out of town to shop for clothes, they often will shop for other things as well. The local economy thus is hurt not just by the loss of a clothier, but by the loss of sales across a potentially broad spectrum. For Torrington merchants, there also is the specter of a big Wal-Mart store about 30 miles away in Scottsbluff.
In order to keep more shoppers at home, and to reduce the leakage of local dollars, Sutherland and others are attempting to start a home-based establishment called Our Clothing Store.
In furtherance of this objective, Sutherland set up a corporation and then a private stock offering which is open only to Wyoming residents. Keeping the effort in the state means the offering doesn't have to be registered through the Security and Exchange Commission, which enhances ease of execution and greatly reduces the cost.
"I think our total start-up cost is going to be right around $6,000," Sutherland said, which includes the cost of printing the prospectus. "It's a cheap way to get a company up and going."
The next, and most critical step, is to sell shares in the store. A share will cost $500. Investors can buy up to 20 shares, thus investing $10,000. Eventually, organizers hope dividends will be paid on the investments.
Under the offering, at least $450,000 must be raised before any of the money can be spent. If the money can't be raised, it will be returned to the investors.
The Goshen County Economic Development Corp., which is spearheading the effort, has until March 30 to raise the money. If that deadline is not met but the board of directors feels sufficient progress is being made, the period can be extended until June 30, Sutherland said.
December was complicated by Christmas. "We're hoping to really get moving this month," he said.
So far, Sutherland has seen considerable excitement in the community about the project, "but people have to understand that these stores don't work unless a lot of average, ordinary families, that don't have a lot of extra money, invest. They gotta buy a share or two."
There are two reasons that broad-based support is crucial, he said. First, and most obvious, enough money must be raised to open the store. And secondly, involving lots of people has the effect of creating a loyal client base with a real stake in the store's success.
Despite a tough competitive environment, which includes retail outlets in Scottsbluff and clothing on the Internet, Sutherland said Our Clothing Store would have some advantages. With an all-volunteer board of directors, labor costs would be reduced. Through a grant, Sutherland hopes to provide the store with a cheap lease. And there will be no debt to service. "If you can start up a business without any long-term debt, that's a huge cost savings," he said.
If all goes well, Sutherland hopes the store can open by mid-year.
"We would really like to be up and running this summer so we have our grand opening sale and then the back to school sale, then Christmas," Sutherland said. "It would just work out real well if we could get up and running this summer."
The aim is not to compete with other stores in town that carry limited selections of clothing, he added. Rather, the objective is to identify clothing items not currently offered in town and to stock accordingly. The buying power of Our Clothing Store could be enhanced by combining efforts with similar stores in Powell and Worland.
The cooperative model employed by Torrington and Powell is in keeping with a trend that has developed in small Western communities in recent years. In addition to Wyoming, stores of similar business design have opened in Montana and Nevada.
Business Editor Tom Mast can be reached at tom.mast@casperstartribune.net, or by calling 1-307-266-0574.
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