Tuesday, December 13, 2016

Discontinuing Comics After Three Years

It seems like only three months ago that I set forth the case for comics at a game store.  Little did I realize before the year was out that I would be exiting the category.
I wrote before that the main reasons to stay in the category were money now, the bounceback effect, and the attraction of crossover.  This stood against the negatives of immediate cost, space load, labor load, Diamond frustration, and the simple reality of dead tree media being on its way out.

Right around the end of September, the bottom fell out on comic sales.  The category has been in free fall ever since, but with regular weekly revenue and the ordinary seasonal downturn, the weakness of the category didn't become clear until I ran a bunch of numbers earlier this month.  If I were a superstitious man, I might point to the article as having "jinxed it," but as I don't believe in such hokum, I chalk it up to a coincidence of timing.

I do a lot of doomsaying here on the Backstage Pass, and that's not really where I want to go with this.  We all know comics has a sunset on the horizon.  We also don't think it's happening right now.  (If it is, you all can thank me for being the harbinger.)  I have stated before that I think it's likely a few years out.  However, the Pacific Southwest has proven to be what I am calling an "economically hypersensitive" consumer market.  We can't see canaries in coal mines from out here, because we are the canaries.  So if the earliest furtive tremors of the end of dead-tree media comics as we know them are in fact shaking, I absolutely believe they may be shaking here.

What is more likely is that the current comics downturn, the existence of which there is much less disagreement about within the industry, is sufficiently harsh for a store in my position that it turns too many of the factors negative at the same time, and triggers a core dump.  Comic stores operating at greater scale can weather the downturn.  Comic stores in less economically sensitive areas can weather it.  Comic stores with deeper subscriber box rosters can weather it.  Comic stores that auto-tap credit cards are probably better off to weather it.  My stores are none of those things.

We've been closing about a dozen subscriber boxes a week lately.  The shine of the DC Rebirth apple wore off, and nothing Marvel is doing right now matters.  I'm in a trackless suburban waste where we can't create our own hits, so nothing indie matters once you pass The Walking Dead.  Gamestop got their special deal on Kotobukiya/ARTFX+ so they can sell some of the best statues and figures at basically our cost from Diamond, to anyone who walks in the door, and that has ground sales of those items to a halt here.  We saw interest in Funko POPs drop again, despite carrying literally more than we ever have before.  There are probably things we are doing wrong in terms of merchandising and promoting the product.  For hand-selling and direct promotion, though, comics have been getting more love than anything else, and our comic staff has been diligent and industrious.  In the absence of a more concrete idea what we may be doing wrong, I have to assume we're busy firing Nerf bullets here, and they aren't punching through the target's armor.

The labor load issue isn't the biggest factor against comics right now, but it's about to become that on January 1st, due to a scheduled 20% increase in the local minimum wage and the anticipated even higher amounts that I will be paying because merit raises will remain at least proportionately in place.  About 10% of DSG Gilbert's payroll is a directly attributable increment servicing the comics category alone.  And that doesn't count the gargantuan amount of comic work that simply doesn't get done, mostly having to do with back issue curation and merchandising.  None of that counts the ordinary work of the staffer on duty ringing up a comic sale.  That sale could have been anything and would not have been significantly different.  With the other 90% of DSG's payroll about to increase by 20% in cost, that pretty much wipes out the available budget for the comics increment.  I think in a situation without the minimum wage increase, I might fight to keep comics alive at DSG.

The space load issue used to be a big factor against comics, and stopped being that.  Even now with closing one of the newly-acquired stores because its financial fundamentals were too far gone and its lease wasn't tenable, I still have gained enough space that it more than mitigates the every-square-inch-counts reality at DSG Gilbert.  I think in a situation where I had acquired more inexpensive space sooner, I might fight to keep comics alive at DSG.

The effective margin on my comics category has been among the worst in the store since at least the changeover to Crystal Commerce in June.  The best it got was 30% just as the summer ended.  For November is was in the negatives, actually cash-flow negative.  In the meanwhile the TCG singles category has become healthier and healthier and is sustainable and pushing volume.  Video games is lower on volume but makes TCG singles look like comics by comparison.  The opportunity cost of a dollar invested is kind of absurd unless I use it for TCGs or video games.  I can get miniatures, accessories, or some modicum of board games to round out the offering, but comics is about the worst option.  I think in a situation where I didn't have such far better opportunity spends available to me, I might fight to keep comics alive at DSG.

Ultimately it became a question of whether to keep comics alive at DSG, rather than me simply asserting that there were greater problems rotting the $1.2bn comics trade from its core.  God help us if I'm actually right about that.  But let's suppose I am not, and that the case for comics simply no longer favors them in my specific region and deployment.  You can safely disregard what I have done and keep on truckin' those funnybooks wherever your store is located.  I want to see my peers do well, to be healthy and prosperous.  I truly do.

I am sad to see comics go, and I am sad to be closing my University location as a result, as comics were all it really had left and it was impossible to sustain with the existing lease.  The first comic store I ever visited was at ASU, and it was beyond my wildest childhood dreams that I might own a comic store right in the heart of Sun Devil Country.  I guess I only got to have that for three weeks.  It was still pretty great, even for that brief time.

I move forward now once again as Desert Sky Games.  I won't use the old logo in the future as it did not translate well when not colored in, and reads "deh-ZERT-skee."  But at least my marquee sign, which in that original logo says only "Desert Sky Games," will now go back to being wholly and unambiguously true.

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