Earlier this month I wrote about three local store closures, one of which was Velocity Art and Design. And then the emails began. Some of you left comments in the post’s comments field, but more of you sent me emails testifying to the woes I mentioned, and asking me to please, please let you know if I got in touch with former owner John Tusher.
Well, I’m letting you know: Tusher and I emailed yesterday after a mutual friend put us in touch.
Tusher’s initial statement was "after 12 years of business, truly a business built on passion, and waiting out the last years of the recession by investing every last cent and I had into the company, and taking on extraordinary debt, we simply ran out of money in February and I was forced to close the doors and cease all operations practically overnight. My debt load was simply impossible to dig out of, and our plans of going online only were completely tanked by a terrible run of sales in 2011/2012. I tried everything to keep the doors open as long as possible, hoping, as always, to pull it out literally in the next week as I had done for years. When the money ran out, it forced my hand. We had no more funds to operate at all. I am in the process of declaring personal bankruptcy as I have nothing left. I sent out as many emails as possible to vendors, clients, etc before my email turned off, but we had to vacate our office immediately in order to satisfy that landlord. We liquidated everything we could to pay as many debts as possible, and sadly, everything else will be handled through my attorney in the bankruptcy."
Velocity’s former owner says he "realizes that people will be upset, and angry. The personal attacks, however, are sad. If I had intentionally run a company to screw people, or gained a giant sack or money, or had sold the company, or were skipping town, or retiring early, I could understand being royally pissed off. Fact is, I’m having to start over from scratch in my entire life without a darn thing. I’ve told all vendors that they can reach me at this address, however I don’t know what to say to clients at this point other than to contact their credit card company for a refund. I don’t even have all of their information as the server that I was able to get from the office has a data corruption and it’s taking weeks to get any information pulled out of there that could even show me client information."
In an effort to provide more closure on this issue, I submit the conversation that followed.
WWW: Were there other times in your design retail career that felt as scary as the last two years? Can you describe the change you saw in consumer behavior?
Tusher: The last three years have been terrifying. The entire world was flipped on its head. The model that we operated under from 1999 to mid-2008 was completely upended. What we created years ago was visionary. There were very, very few folks daring to sell home furnishings or artwork online. I had to really push to get vendors to even agree to let us sell online. Clients were also not as “connected” as they are now. Back then, if you wanted to look at home design, you read magazines, books, visited retail stores, and the few websites that were out there. Fast forward to the blog world and etsy, and the entire system changed. Magazines crashed, blogs took off, and all of a sudden everyone was launching a modern home furniture store online. It wasn’t clients’ expectations that changed, it was the entire landscape. You had online-only stores (pre-recession) that were grabbing vendors as fast as possible to drop-ship product without the overhead of a warehouse or store. I always loved the store so much because we could allow people to see and feel the products. Interacting with clients was critical to my enjoyment of Velocity.
Consumers however, decided (and rightly so in some cases) that things were overpriced, and started haggling over prices, demanding discounts, and not supporting the retail storefront as much. They wanted it for the cheapest price, in the shortest amount of time. That helped fuel the push for most all of our vendors to develop a sales stream direct to the customers through their own websites. If I had a company like that, I probably would have done the same thing. It was interesting how many of them over the years said that they never wanted to compete with their retailers, but in the end did just that. I’m not blaming them, as that is simply the nature of changing business. Many of our vendors also started to embrace the flash sale sites, thus discounting their products for a limited time up to 80 percent off retail. Again, I’m not blaming anyone, but rather pointing out that the retail scene has changed considerably in the last five years.
Have you seen how many small independent retailers have gone out of business in Seattle? It’s still a very difficult market out there. The arrival of West Elm and future arrival of Room & Board will also continue to change the landscape for home design in Seattle. The biggest player that came strong on the home furnishings scene was Amazon. They really hit a home run by allowing other folks to sell on their site. It was a brilliant business move, and brought so many of our vendors to much greater exposure. When we would hear people say that they saw it in our store or site, and then ordered it on Amazon, we knew that the landscape had forever changed.
So that it’s clear to the designers I’ve heard from: when you filed for bankruptcy, you lost the store and more or less everything in it? You were not able to take any of the goods with you, in order to return them to their original sources?
When the doors closed and in the weeks that followed, we liquidated as much as possible to pay as many folks as possible. I pretty much lost the whole enchilada. As debts to vendors go, according to what I have heard from other vendors and retailers over the last few years, our payments to them were nowhere near as old as others in the industry, but I’m not trying to diminish anything. A $50 bill to someone or a $5,000 bill carries the same weight to me. We did our very best over the last month to really tighten up and sell through all of our inventory and pay folks to make a go of it online only. The filing for bankruptcy should be official in the next two weeks as I still have a lot of paperwork to complete. The business doesn’t exist, so this is a chapter seven personal bankruptcy. Even though we were a corporation, I had to personally guarantee everything. Anyone that thinks that I got off just closing the biz is sadly mistaken.
If you knew then what you know now … anything you can share with us under the ‘what I would have done differently’ category?
That’s a pretty hard question to answer at this point. There is so much that I would have done differently, and it probably revolves around not having a physical store at all. I loved having a store. Really did. But it cost me big time. I could have also reduced my costs considerably by reducing my staff, only drop-shipping, etc. None of which would have been the company that I wanted to run. Also, simply deciding in 2007 to keep the business going might not have been the best decision? It’s all so hard to say in hindsight. There were things I could have acted on faster, or changed up knowing what I know now. No one could have predicted though that the lights were going to be turned out in October 2008 with the start of the biggest recession we will probably ever see in our lifetime.
Do you foresee a time when you’ll want to try to get back into the design, lifestyle, and retail realm?
I would love to get back into that realm as soon as possible. I loved and still love everything about art, design, style, fashion, and retail. That passion is impossible to snuff out overnight with something like a business failure. It’s time to simply reinvent myself and offer my services up to another company. I’d like to work for an online e-commerce company (Amazon would be a great fit; frankly in their home department—maybe I could make a modern home style division?), or consult with small business, or clients on their interiors, or lifestyle, or to just help them follow their dreams. For 12 years, I ran a company with a spotless reputation among vendors, the BBB, press, and most clients (you can’t please everyone). If I choose to define my life for the failure of the last three months due to economic conditions and loss then I’m really out of whack. It was a dream come true to start and run my own business—through the ups and downs. I learned that as much as I was Velocity, that Velocity sadly was just a business and it doesn’t define me completely. What defines me is the way that I have conducted myself with people over the years, supported artists, designers, staff members, family, friends, my ex-wife, and most importantly my son. It’s truly the greatest sadness that he will not inherit Velocity, but that will bring me to tears if I think about that right now. I have tried my best to live a life that is authentic, and unfortunately some folks are confusing the crash of Velocity with my intentions. That’s a sad connection to make, but people are entitled to their own opinions. I can only thank the countless amazing people that I met and worked with over the last 12 years: vendors, press, and clients alike, and say that I’m truly sorry for the way that it ended.