The owner of Valencia Street furniture store Gingko is preparing to close the store because rent increases and online sales have made the brick and mortar Valencia store financially unfeasible, he said.
Jerry Hsia, who has run Gingko with a business partner for 15 years, said their headquarters are in Mountain View and that store will remain open. Prompting the closure was the realization that the five-year-old Valencia store’s lease would end and rent would rise with a new lease.
“The rent keeps going up to the point that it doesn’t make good business sense anymore,” Hsia said. “We’ve seen the impact from internet retail over the years.”
Internet sales, he said, began hitting Gingko two or three years ago. Now, the furniture store is trying to gear up its own online sales to compete, and while it looks promising, it’s not yet profitable.
Hsia said the sentiment of supporting local brick-and-mortars is still there, but is not always practical.
“Everyone likes the idea but it has to make sense,” he said. “If you can buy these things at the same quality or better at 20 percent less online, would you still push yourself to support a local store when you know you’re spending 20 percent more?”
While stores would benefit from being able to offer their wares at lower prices, they often cannot. “That’s where the challenge comes up,” Hsieh said.
Ruby, a boutique on 20th Street, will also close for the same reason.
Locally, Hsia also wondered if Valencia has the foot traffic to support the number of retail shops.
“Valencia is growing very fast. You go down to 14th, 13th streets, there are lots of up and coming businesses. But the foot traffic did not necessarily grow along with it,” he said. “So there are more merchants on the street now for the same amount of foot traffic.”
He and his partner have been preparing for the transition out of Valencia Street for about a year and will continue to run the Mountain View headquarters store.