Despite tradition and unique opportunities, Nickels Arcade shop owners struggle with high turnover

BY DEVON THORSBY
For the Daily
Published March 11, 2009

Whether as a quick shortcut between State Street and Maynard Street or as access to more than a dozen businesses, Nickels Arcade has been an unquestioned campus landmark since its completion in 1918.

While the Arcade’s intimate atmosphere is unique, it is less clear how successful of a business opportunity the shop gallery presents.

Nickels Arcade has been home to dozens of shops in Ann Arbor throughout its 90-plus years of existence. But businesses in the gallery have had a high turnover rate in the past few years, with at least three new businesses filling vacant spots in the last year alone.

Still, shop owners say the shopping experience provided by the arched corridor cannot be found anywhere else near campus.

While the current state of the economy probably has affected the boutiques in the Arcade, Jesse Bernstein, the Ann Arbor Area Chamber of Commerce president, maintains that the turnover rate of shops filling the spaces is not necessarily something about which to be concerned.

Bernstein said the turnover of businesses in the Arcade is simply an example of the inconsistency of business.

“I think it’s just economic reality,” he said. “Everybody assumes businesses last forever and they don’t. Things come and go; it’s not necessarily a bad thing.”

However, Bernstein said he still believes it to be a “great spot” in the city with unquestioned architectural beauty.

Despite the turnover problems in the corridor, some stores — like Maison-Edwards Tobacconist, which has been around since 1963 — have managed to succeed in the Arcade’s unique storefronts.

Tom Haywood, director of the State Street Area Association, said that with its distinct blend of boutique and one-of-a-kind shops, there are bound to be some failures.

“It’s been historically a place for unique shops,” he said. “Sometimes they work, sometimes they don’t.”

Haywood said the current turnover rate is simply a result of the ebb and flow of business paired with the Arcade’s unusual business opportunities.

“Businesses (in Nickels Arcade) will tend to have a higher turnover rate than other areas because of the intimacy of the shops,” he said. “But any turnover you’re experiencing now wouldn’t be much higher than it has been in the past 20 years or so.”

Haywood also mentioned that the storefronts in-set location from the street works to their detriment.

Despite the possibility that business could be a bit more difficult, there is no lack of shop owners eager to take their chances with a spot in the Arcade.

Jim Saborio, owner of Comet Coffee, a new café set to open for the first time in Nickels Arcade this Saturday, will join the ranks of some fellow business owners who have grown up in Ann Arbor and want to continue the long tradition of unique businesses in the gallery.

“Nickels Arcade has always been this kind of magical place,” he said. “It’s a meeting place between town and campus.”

Saborio said that while he is familiar with the high turnover of shops in the Arcade, whether or not a business succeeds is hard to predict.

“The thing about businesses is that you never know why they go out of business,” he said. “It’s just really hard to gauge.”

Gwen Kassa, who took over ownership of the University Flower Shop last month, said she believes in the tradition of the Arcade’s stores that provide the community with local, intimate settings.

“The Flower Shop has been a constant in Nickels Arcade for some years and has many loyal customers,” she said. “I wanted the opportunity to work with those same loyal customers.”

Kassa said that because of her store’s close proximity to campus, she “loves the energy of being around the students.”