Winnipeg entrepreneur Eric Olek started out hawking T-shirts at hip-hop shows from the trunk of his car, setting up tables to sell his merchandise at pop-up markets and, at one point, tricking out a van as a "mobile clothing boutique," to take his brand Friday Knights around the city.
Then, in June 2017, Olek’s ever-shifting retail operation entered a new phase when Friday Knights opened its flagship store in the Exchange District on McDermot Avenue flanked by a stationery boutique and a shawarma restaurant owned by a former Winnipeg Blue Bomber.
But 2-1/2 years later, the block’s complexion has changed drastically: Tiny Feast, the stationery store that cultivated a devout following of calligraphers and snail-mail fans, shut its doors in November, its owner citing personal reasons for the closure; Shawarma Khan and its owner, Obby Khan, have played a leading role in a push for city hall to consult with Exchange-based businesses on infrastructure changes; and at the end of December, when Friday Knights’ lease is up for renewal, Olek is opting to move to a new spot downtown.
"It’s a decision I’ve been wrestling with for the better part of 2019," Olek, 29, said shortly after he announced on Instagram that his brand would be moving on. The business isn’t closing, but Olek said it was time for a change. It’s next location will be less a storefront than a creative studio, but the company will still make and sell the hoodies, tees and other apparel it has built a name off.
Posted: 28/11/2019 7:00 PM
Dozens of Exchange District business owners frustrated with bike lanes popping up, loading zones taken away, and rising street parking rates have signed a petition asking the City of Winnipeg to hit the brakes.
The group of 67 is asking the city put in place a moratorium on any more changes for parking, transportation, construction or development before a comprehensive plan is put into place for the area, and following full consultation.
The reasons for the exodus are manifold, he said. For one thing, the current bricks-and-mortar retail-store model didn’t fit with his vision for his company’s future: he wants to shift his and his partners’ energy toward creativity, community involvement and collaboration.
Olek also said, somewhat ironically, the store—which sells rare, high-market sneakers from designers such as Virgil Abloh — was seeing fewer returns on foot traffic in the Exchange than ever before.
Last year, when construction in front of the store affected parking and foot traffic, Friday Knights' sales dipped, triggering a shift online — one-off releases, limited runs, more social media and digital marketing — that paid off well. Since then, online sales increased by 200 per cent, making the 30 per cent decrease in in-store sales more palatable, however desirable.
Moving toward e-commerce fits within trends in general retail and clothing sales. By 2021, an estimated 14 per cent of all dollars spent on retail in Canada will be spent through e-commerce options, according to eTail Canada’s most recent directors’ report. And though Statistics Canada shows household spending on clothing decreased incrementally between 2013 and 2017, the Canadian Internet Registration Authority found clothing and apparel make up a greater proportion of online sales than any other product group in Canada.
Even though Friday Knights is leaving for those reasons, Olek said the current business atmosphere in the Exchange played some part in the decision. More than five dozen businesses in the area, Friday Knights included, have signed a petition for a moratorium on changes to parking, transportation, construction or development, calling on city hall to develop a master plan for the area with business consultation.
"Don’t get me wrong, it’s still a vibrant area, but people weren’t stopping vehicles to park, come in and shop," he said. "It’s been a rough year, and there’s been lots of change in the neighbourhood," he added.
While the impact of changes to parking and sidewalk changes on specific businesses isn't known or quantifiable, a letter to the mayor’s office accompanying the petition states, "What we do know is that almost all retail businesses on Bannatyne and McDermot avenues west of Main Street... have suffered significantly."
Shawarma Khan and Tara Davis Studio Boutique have cited drops in sales of 20 to 30 per cent.
Sylvie Albert, a University of Winnipeg professor of management and strategy, says the struggles Exchange-based retailers face are the same, broader issues facing every retailer in the country in various ways. The shift to online — and its armchair convenience — challenges traditional models, and the general turbulence in retail can have negative effects on businesses that don’t or can’t adapt to the changing marketplace.
Albert said though she hoped entrepreneurs wouldn’t be discouraged about opening in the Exchange, business owners "really have to think twice" about who their customers are, and whether they’ll get enough traffic to justify high-priced physical locations.
Heather Thomson, the executive director of the University of Alberta School of Business School of Retailing, said though she’s not too familiar with the plight of the Exchange, the meaning of businesses leaving a neighbourhood varies. If the business never really made an impact, it’s not necessarily a bad thing and an opportunity for renewal. But, if they became local favourites, it’s troubling.
“Any time you see rising vacancy rates, or worse, if the empty storefronts become derelict, it has a huge impact on the city, neighbourhood and property values, and it snowballs from there.” - Heather Thomson
When told of the petition signed by 67 businesses, Thomson said she’d expect city hall to be motivated to do what it can to maintain a pro-business approach. "Any time you see rising vacancy rates, or worse, if the empty storefronts become derelict, it has a huge impact on the city, neighbourhood and property values, and it snowballs from there." A spokesperson for Mayor Brian Bowman said Friday his office had "preliminary conversations" with the Exchange District BIZ and the public service "as we work towards solutions."
Both Albert and Thomson said for retailers to be successful in this era, they must be nimble and not consider digital and brick-and-mortar strategies as separate business models. "It’s just one cohesive business," Thomson said, adding that unique customer experiences are extremely valuable.
Olek is hoping to put those ideas into practice once Friday Knights settles into its next location. He sees the change as an opportunity to reinvent the brand, continuing to grow the business with less overhead dedicated to rent and maintaining the store.
"I just feel that we’ve outgrown the current model," he said.
Ben Waldman covers a little bit of everything for the Free Press.