Austin market sees spree of shop closures

AUSTIN, Texas (BRAIN) — In a space of one month, three Austin retailers will close their doors.

Weather woes, low oil prices, high real estate costs and market saturation are among factors that have put the squeeze on the city’s retail landscape.

Austinbikes, a road-focused store that opened 10 years ago in the Clarksville neighborhood northwest of downtown Austin, closed in late January. The closure and farewell party were announced on the shop’s Facebook page in early January. Inventory was liquidated and owners held a farewell party on Jan. 29, the store’s final day of business. BRAIN was unable to reach the store’s owners for comment.

Brother-and-sister team Sarah and Aaron Goeth opened Windmill Bicycles three years ago in Austin’s eastside Cherrywood neighborhood, and will close on Feb. 29. Bicycle Retailer visited Windmill as part of its Austin Dealer Tour in late 2014.

Catering to commuters and urban cyclists, the 1,000-square-foot store features local art and handmade goods alongside bikes from Austin-born Fairdale, Biria, Papillonaire and others. Sarah said the decision to close was not an easy one.

“A lot of things led to it,” said Sarah, who opted to open a bike shop instead of going to graduate school for business. “It’s very multifaceted, but we’ve really felt the impact of low oil prices and the weather. There’s just no telling what either of those are going to do, so we’re cutting and running while we can.”

Goethe said local gas prices have dipped to about $1.42 a gallon, some of the lowest in her lifetime, making it that much easier for people to get in the car instead of going by bike.

“Even I’m susceptible to it,” Sarah said. “On our days off, we’ll jump in the car and get out of the city to go camping rather than ride our bikes because it’s affordable to do that right now.

“But it’s been a good run and I had lots of fun learning and am coming away with three years of experience running a business rather than going to business school,” she added.

Across town on Austin’s busy Guadalupe Street, Ozone Bike Dept.'s doors are locked and the lights are out. The shop’s large sign, which typically contains entertaining messages like “Dream big, be the unicorn,” now reads “Adios amigos. Thanks for all the love.”

Ozone opened 23 years ago across the street from the University of Texas. It carried bikes from Kona, Fairdale and others, as well as used bikes. Owner Vytis Vardys Jr. told BRAIN during its Austin Dealer Tour that service accounted for about 50 percent of Ozone’s business.

Vardys could not be reached for comment about the store closure.

Mirroring the city’s boom in population in recent years, Austin also saw an uptick in new bike shops — to the point where many retailers there regarded it as being saturated. At the time of BRAIN’s Dealer Tour, there were an estimated 60-plus shops serving the city, which has just under 1 million residents. Small-business owners in desirable neighborhoods have also felt the pressure of rising real estate values.

Bicycle Sport Shop’s Hill Abell, who bought the business 30 years ago, will soon downsize his 22,000-square-foot Lamar Street location by subleasing part of the space to cut costs.

“It’s just too big,” Abell said. “Our sweet spot is about 6,000 square feet, which is about what our other stores are.”

Abell said that besides rising real estate prices, the Austin market has had to deal with unusually wet weather. In 2015, Abell said Austin received 61 inches of rain — nearly double its normal annual average.

“Around 80 percent came in the first five months of the year, and in May alone we got half of the annual average,” said Abell, who currently operates three stores. “That’s a month that is a big one for shops here, so I think that would put pressure on any shop that was already in a tough financial position — and for some, it could have been a nail in the coffin.”

Like Windmill Bicycles, Bicycle Sport Shop also feels the effects of low oil prices, but Abell said that in Texas, what’s going on in the oil industry impacts local economies in a number of ways.

“You would think extra money from gas savings would infuse dollars into the local economy, but it doesn’t always work that way,” Abell said. “Jobs get cut and people are a lot more conservative with their spending.

“And it’s an election year, and the nervousness about that has started early. People are just more cautious when it comes to buying right now,” he added.

But even so, Abell said good weather in January drew people out of the woodwork and his stores had their best January on record. Casual cyclists who normally wait until March or April to buy came out with the sun in January. And Abell is also in the process of opening a fourth store in Bee Cave, a suburb about 15 miles west of Austin.

“There’s lots of growth out there and lots of families,” he said. “It’s a real prime area and it’s underserved by shops, so it really made sense to open a store out there. The last thing people want to do is drive into the city when they get off work to buy a tire or get their bike fixed, so hopefully we’ll fill that need.”

Abell is working with retail design guru Brian Hawkins on the 6,000-square-foot build-to-suit location. It should be open by mid-May.