Over the last five years, the store lost an average of $67,090 per year

Despite best efforts, Powell’s community-owned store, The Merc, is once again facing closure. On March 3, the store’s 429 shareholders will vote on whether to approve the store’s board of trustees’ recommendation to call it quits.

“The bottom line is we just aren’t making enough money,” said John Wetzel, president of The Merc board. “The customers that come in supported us incredibly well and we had a 14-year run of being open and we are pretty proud of that.”

Similar to how Borders bookstores fell to the rise of eBooks and ordering online, The Merc’s troubles stem from competing with online retailers, according to Wetzel.

“Our competition in the last five years has been online shopping, period,” Wetzel said. “You can buy X amount of inventory, but compete against millions and billions of dollars of inventory online. That is what is killing retail across the country.”

The estimated total quarterly U.S. retail e-commerce sales has increased steadily each year since 2006, according to the U.S. Census. In the first quarter of 2006, online sales represented just under 3 percent of total retail sales. By the first quarter of 2015, it more than doubled to about 7.5 percent on a national scale.

In 2013, the largest retail merchandise category for e-commerce sales in the electronic shopping and mail-order houses industry was clothing and clothing accessories (including footwear) with $40 billion, according to the U.S. Census’ report, E-Stats 2013: Measuring the Electronic Economy.

According to the U.S. Census Bureau’s report on e-commerce sales for the fourth quarter of 2015, online sales were $89.1 billion, an increase of 2.1 percent over the third quarter of 2015.

Meanwhile, rural communities such as Powell have been impacted differently as the options are to either drive about 200 miles roundtrip to Billings or just go online to find the cheapest possible price.

The difference is Billings has always been within driving distance, but Internet accessibility has grown during The Merc’s lifetime.

“Consumers are smart,” Wetzel said, noting that the Powell area was still on dial-up connections until 2009 when PowelLink went live and about the same time The Merc’s sales started to drop. “If you think about it, when on dial-up you didn’t look for dresses for an hour. But with high speed (Internet), it got pretty convenient. When we were on dial-up we weren’t spending hours and hours online.”

Over the last five years, the store lost an average of $67,090 per year.

According to previous Powell Tribune coverage, The Merc’s year-end available cash statements were:

• 2010: $102,300

• 2011: $74,973

• 2012: $58,503

• 2013: $74,197

• 2014: $35,827

Then in 2015, the store ended with essentially no cash due to debts.

“We had basically no cash on hand because we had some debt,” Wetzel said.

Shareholders were faced with the same situation last year; they voted to keep the store open and decided to infuse funds into the shop. A new board of directors was brought in and The Merc shifted gears to cater more to female clientele.

Sales were slow throughout 2015 but there was an increase in profits in December — though not enough to keep the doors open.

The Merc’s board met multiple times in January and February to review the store’s numbers and options, but was unable to make financial gains and sustain enough cash flow to remain open.

“It’s been a long process of watching the numbers and hoping to figure it out, but unfortunately the end numbers don’t lie. There was a difficult separation between emotion and financial,” Wetzel said. “Everyone wants it to go, but knows financially it isn’t going to make it.”

The Merc’s manager, Ronnie Sommerville, will remain at the store until the end of the month and the board doesn’t believe there is time to train a new manager.

As the store’s future began to look uncertain, Sommerville sought employment elsewhere, which sped up the decision to close — though the outcome would have been the same, Wetzel said.

“Any last-ditch effort had to include her,” Wetzel said. “The decision would have been the same; the cash flow wasn’t enough.”

To move forward with the board’s decision to close the store, a vote from the shareholders is needed with a quorum of shareholder votes counted. Many of the shareholders have ties to Powell, but may no longer live in the area — so they can send a proxy to vote on their behalf.

After that, inventory will be cleared out and the building will go up for sale.

An additional shareholders meeting will be held after that to determine a plan for any remaining assets.

Wetzel said he hopes a different business will fill The Merc’s spot downtown to keep the area economically healthy.  

Scheduled for 6:30 p.m. March 3 in The Merc.