Small-town determination at 25 percent off

POWELL, Wyo. - To people just passing through this town of 5,500 people, the department store on the main street, near the post office and True Value Hardware, must seem painfully ordinary. Inside, customers browse displays of clothing, shoes and jewelry, picking out what they want to buy.

But there's a lot more to Powell Mercantile than the shopping. It's 7,500 square-feet of small-town determination.

"It feels really good to come back in here," says Nancy Grant, who has her eye on a couple of sweaters. She's one of the local shoppers who have relied on the department store for decades and are saving it from a disaster.

A succession of chain-store companies whose niche was small towns - first Anthony's, then the Houston-based Stage chain - ran the store until two years ago. Then Stage went bankrupt and closed all its stores in Wyoming, Montana, the Dakotas, Washington, Oregon and Nevada.

For 16 months, the storefront here in Powell sat vacant. Folks had to drive out of town to shop: either 25 miles west to the Wal-Mart in Cody, or 94 miles north to the huge department stores in Billings, Mont., a regional trade center.

"It was really bad for (downtown Powell), bad for the community," Grant says.

The Chamber of Commerce tried to attract other chain stores, but "nobody was interested in coming to a small community like this," says Ken Witzeling, a retired pharmacist who worked on the effort.

So last November, the chamber's Retail Strategies Committee asked the state for permission to sell shares and reopen the store under community ownership as the Powell Mercantile. With each share going for $500, close to 800 have been sold.

"We've got many people that bought shares for their children. Schoolteachers, businessmen, you name it," Witzeling says. Elderly people bought in because they have a difficult time driving long distances to shop. Shares were even sold out of town, as far away as Laramie, Casper, Sheridan and Gillette, to people who used to live in Powell or who have relatives here.

The shareholders elected a Powell Mercantile board of directors that included Witzeling, a local CPA and other businesspeople. At the mercantile's grand opening July 12, says store manager Paul Ramos, "just about everybody" in town showed up.

As word spread across the sagebrush country and irrigated farmland of the Big Horn Basin, the mercantile began to draw shoppers from other small towns. "People are coming as far as 100 miles to shop here," Ramos says. "We're definitely doing better than expected."

With its community support, Powell Mercantile hearkens back to the farmers' unions of more than a century ago, when retail cooperatives stretched across the Midwest plains and into Montana and Wyoming.

"It worked in the past," says University of Montana economist Tom Power. But can the strategy work long-term in the future? "I just don't know," he admits.

In some places, small-town stores continue to do well, Power says, but, "There's this tide going a different direction," with more and more people shopping long-distance, either using the Internet or making all-day expeditions to regional trade centers.

In Wyoming, where the small towns are truly isolated and not growing much, "it's become harder and harder for the retail stores," Power says. "In more isolated areas, I could see them losing almost everything."

But Powell Mercantile is doing so well that another town in the Big Horn Basin, Worland, is attempting to resurrect its department store with the same strategy. And in northern Montana, an even smaller and more isolated town, Malta, has revived its department store by selling shares for $10,000 apiece.

Mike Reile, a retired district manager for the Stage chain who volunteered his expertise to set up Powell Mercantile, says people have a growing desire to shop locally. But local stores have to remain competitive: "One thing I don't say is, 'We're here, you have to shop with us because you shouldn't go anywhere else.' "

Among the reasons shoppers come to Powell Mercantile are the quality name brands: Hanes, Lee, Levi's, Tommy Hilfiger, Abercrombie & Fitch, DKNY, Anne Klein. Cody resident Nancy Wolfe shops here because she likes DKNY's clothing and can't get it in her town's big-box stores.

"There's not much shopping in Cody - WalMart, Kmart," Wolfe says scornfully. "Not good quality. It'll last you maybe a season. This stuff will last years."

Witzeling isn't threatened by Cody's Wal-Mart. "If you go to Wal-Mart, it's so goldarn big, nobody likes it."

The busiest shopping days at Powell Mercantile are the ones with special sales geared to locals. During Homecoming Week, the mercantile offered 25 percent-off any clothing with the color orange - the high school's official color - and, "We got a wonderful response," says manager Ramos. Now, the locals are coming in for 25 percent-off winter coats.

Karen Mockler, a former HCN intern, lives in Cody, Wyoming.

This story was funded with a grant from the McBride Family and Aspen Business Center Foundation.

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