We Own Shares in OUR General Store

Sep 28, 2012 by

We Own Shares in OUR General Store

Shopping locally is about to get easier. Port Townsend’s fledgling community-owned general store has raised enough money through its Direct Public Offering to open its doors this fall. This is thanks to the vision and verve of this remarkable community—and, in small, part to us.

That’s right, this summer my husband Jeff and I became stockholders in the Quimper Mercantile Co., joining 855 other investors in raising $527,900 to date for the new venture.

You read that right. More than half a million dollars in capital, for a general store serving the Quimper Peninsula—which has a population of roughly 20,000. That’s “proactivity on steroids,” Quimper Mercantile’s CEO pronounced at a recent Chamber of Commerce meeting.

Jeff and I are equally excited about the prospect of again being able to buy socks and sheets downtown as we are about our foray into local investing (see my video summary of this trend).

 

A handshake deal

How often do you get to shake the hand of the executive of the company you just invested in?

I did, when I delivered my signed subscription agreement and $500 check to the office of Peter Quinn, CEO of Quimper Mercantile Co. (hereafter, QMC). And that handshake felt good.


$500 garnered us five QMC shares and two of the coveted “I’m in” buttons. They’re good conversations starters (“In on what?”—subtext: “What am I missing out on?”) and part of QMC’s clever marketing campaign that includes the slogan “We’re here so you can buy your stuff here.”

Not “stuff” as in the American consumerist mantra of “more for the sake of more,” but stuff we really need: clothes, linens, household goods. Decent quality items at a decent price.

QMC’s mission plainly states, “Jefferson County needs viable local shopping options for many essential goods.” It’s a great point. How can you “shop local”—or encourage others to do so—when basic products are not carried locally?

 

Filling a gap

QMC’s creation was a response to a critical situation here in Port Townsend: the disappearance of an anchor tenant in the downtown business corridor.

Swain’s Outdoor & More, the closest thing we had to a general store, closed in February 2011 (its parent store is still thriving in Port Angeles, under the management of a different branch of the family). Left behind was the 15,700-s.f. storefront Swain’s had occupied since 1996—the long, low, gray-roofed waterside building at right in this photo—as well as a big gap in the local shopping scene.

There are many boutiques and specialty shops in Jefferson County—and some darn good locally owned drug stores and hardware stores, too—but unless you’re a fan of sight-unseen Internet shopping or driving 45 minutes to a big box store in a neighboring county (I’m certainly not) or the second-hand hunt (that’s more my style), many of those “essential goods” are hard to come by. Plus, the longer the Swain’s storefront sat vacant, the more bereft our downtown appeared in these already tight times.

This could have been the end of the story—an all-too-familiar one in small towns across our nation—but this is Port Townsend, and we have enough audacious successes under our belt to launch another audacious plan. (There are also enough examples of community-owned stores for us to draw inspiration from: The Merc in Powell, Wyo., and The Community Store in Saranac Lake, N.Y., are two of the most celebrated.)

A board of “doers” formed, a community-wide needs survey was conducted online, a business plan was written. The rest is (almost) history. (See QMC’s archive of early news stories.)

Remember the slogan “We’re here so you can buy your stuff here”? Since QMC signed the lease at the former Swain’s retail space, lettering on the empty storefront window has proclaimed: “We’re here—soon.”

And soon is nearly here! Remodeling continues… The facade now looks like this, with inset doors and a covered entryway.

And a few weeks ago I stopped by to find two QMC board members and the CEO nailing up plywood for an interior wall. “This truly is a working board!” one quipped.

(Isn’t that a great mural? It depicts downtown Port Townsend as seen from the water.)

 

First funding deadline met

QMC has been selling ownership shares since January 2012. The company didn’t launch an IPO (Initial Public Offering), but rather a DPO (Direct Public Offering, aka Small Company Offering). The DPO was authorized by the state Department of Financial Institutions (DFI) and is limited in that only Washington residents may buy the stock, the sale ends in 12 months, and total sales are capped at $1 million.

QMC set a May 1 deadline for raising at least $425,000 through sales of its stock. If this “impound amount” (based on a pro forma of what it would take to open the doors of the new business) was not reached, QMC would return the investors’ money. In addition, “we’d have to assume the community wasn’t behind this and it wasn’t a go,” related Deb Stinson, a QMC board member.

“Reaching that goal would demonstrate a vote of confidence by the community,” she said.

Of course, I’m reporting on a happy ending. Board members bought $50,000 of non-refundable “founders’ stock” to provide funds for early operations. Vigorous outreach ensued: informational meetings and mixers, presentations to every service club and business group, a regular booth at the Saturday Farmers Market (see photo below), newspaper advertisements, plenty of networking face-to-face and through online social media. At public functions, a good quarter of the crowd would be wearing “I’m in” buttons.

The positive peer pressure worked. The funding goal was reached on April 17, two weeks early.

QMC CEO Peter Quinn was quoted in an April 20 Peninsula Daily News article as saying: “In some cases, it can take five years to raise the same amount of money [as we have in less than six months]. We are lucky to be in a community where people understand the importance of doing things for themselves.”

Disclaimers

The 54-page QMC disclosure document—which I did read—has all sorts of cheerless disclaimers, such as (I’m paraphrasing here) there is no guarantee there will be a market for selling your shares, so better not need to get your investment back. I understand that all stock offerings come with written disclaimers, but they usually don’t doubt the existence of a stock market!

(In personal conversations with a QMC board member, I have been assured that the Company will endeavor to facilitate a market for shares, and could buy some of them back as cash becomes available.)

We have come to expect liquidity in even our long-term investments. But how long-term is an investment, really, when you can dump it in an instant? In this new, ever-more-localizing economy, I believe we need to redefine investing as holding value in businesses we know and believe in.

To facilitate this, Port Townsend has the robust Local Investing Opportunities Network (LION). (See www.L2020.org/LION.) Its members have individually loaned money to dozens of business start-ups and expansions here—but not to QMC, since DPO rules disallow startup funds in the form of debt (hence the use of founders’ stock).

Our community could benefit from a local stock exchange for QMC and other ownership-stake endeavors, a need that has been discussed at at LION meetings. It could look like the Lancaster Stock Exchange, which provides equity funding for Pennsylvania companies. Or Mission Markets in New York, which uses a “private marketplace” model because obtaining SEC approval to become an “exchange” (where shares are traded) involves major bureaucratic hurdles and costs.

Alternatively, we could launch a website to facilitate local crowdfunding: think Kickstarter for businesses in a specific geographic area. An exciting example from my sister’s hometown of Fort Collins, Colo., is Community Funded. (Read about others in this Shareable.net article.)

By investing in businesses in our own community, we can help build value in enterprises whose success affects us positively because they improve or add value to our hometown. And we have an added incentive to help them be successful because their profitably gives us a greater return on our investment.

We certainly feel that way about QMC.

 

We will own it

As I have explained to my young son, when we walk into The Quimper Merc, we’ll think of it as “our store,” since we own a tiny part of it.

I sometimes say that about our Food Co-op, although that is a different business model: it is cooperatively owned, and our lifetime “membership” of $100 (the “capital investment” that makes you an owner) is refundable upon request—if, say, you move away. Non-owners who shop at The Co-op are charged a 10% mark-up on shelf prices.

You needn’t be a stockholder to shop at The Quimper Merc, and there won’t be a stockholder discount. (There might be dividends someday, and we’ll get to elect the board of directors). But Jeff and I are hoping there will be some really good parties for members of the shareholder club! [July 2014 UPDATE: A stockholder discount of 10% on all purchases is now in effect. I just used it this week to buy (I’m not kidding) underwear.]

The DPO expires on Jan. 3, 2013, or when $950,000 of stock has been sold. The more capital raised, the better start our general store will get.

Join the “In” crowd!

Learn more at: http://www.quimpermerc.com/buy-stock/

9 Comments

  1. We are in! This is one of the reasons we are so impressed with Port Townsend. The community is filled with people who have a “can do” spirit. After living here for six months, I continue to be humbled by the those I meet who are so committed to local sustainability. It’s an honor to live here. I’m looking forward to my first visit to the new Quimper Mercantile!

    • Kudos to you, Nadine, for investing in QMC as a newcomer to town. You are finding wonderful ways to plug into your chosen hometown. We are the better for you and Henry choosing to live here.

  2. Brian Goldstein

    Great blog Shelly. Creating local jobs and reducing our transportation footprint is at the heart of this endeavor. I can’t wait for the big opening. The QM embodies the “can do” attitude of the community, and the willingness of so many people to invest time and resources to create something meaningful and community-building. Hip hip hooray!

    • Thanks, Brian. I like your use of the word “meaningful” to describe The Quimper Mercantile. Shopping at the Mercantile will truly be more meaningful than shopping at a big-box chain store. It will be an integral part of our community, responsive and reflective of US. With profits staying HERE!

  3. What a great post on the process and the promise of the community owned store. From all of us on the QMC Team, thanks for investing. Thanks for getting the word out. Our plan foresees raising more funds to make our store more responsive and more sustainable as a community resource. QuimperMerc.com, click on the link BUY STOCK, if you want to read the “the 54-page QMC disclosure document”. It’s a good plan and, with our investors help, we are executing on it. Look for the opening in October.

    • Thank YOU, Marty, for all of your hard work on the board of this unique start-up. I’d be so pleased if my essay inspired more investment. One reader did e-mail me, “Thanks for this encouraging bit of information. Your work has me willing to invest more in QMC.” !

  4. Deborah Hammond

    Well done Shelly. I’m in too and happy to be. This is a really exciting and positive turn of events in our little town.

  5. NOTE: Quimper Mercantile’s direct public stock offering to Washington residents was recently extended through February 2, 2014. Learn more at: https://invest.quimpermerc.com/

  6. July 2014 UPDATE: A stockholder discount of 10% on all purchases is now in effect. I just used it this week to buy (I’m not kidding) underwear.

    The discount is extended to all shoppers who spend a certain amount in a calendar year. What a great benefit!