Lisle entrepreneur closes store, offers advice to others

Randy Russell knows first-hand that even good business plans don't always work: The Lisle store he co-owned, Wine Expressions, closed its doors Saturday, transitioning to a virtual wine club and tastings model that Russell, one of three primary owners of Wine Expressions LLC, thinks can be profitable.

The wine club and tastings were Wine Expressions' two profitable pieces.

It says something of Russell's character that he indicates no bitterness about the shutdown -- and in a long conversation last week resolutely placed no blame. Instead, Russell is willing to share both his experience and some advice, in part to add to the store of knowledge other entrepreneurs might need.

First, the story:

Wine Expressions opened its doors in November 2002 in what owners thought would be a prime location in a soon-to-be-revitalized downtown Lisle. The business incorporated a prairie-theme ambiance meant to invoke the nearby Morton Arboretum, naming its club the Prairie Wine Club and dubbing a special offers program Prairie Big BlueStem; committed to high customer service; and had expectations of $1 million in annual sales in four years.

Instead, annual sales peaked at $500,000 each of the last two years; the downtown revitalization that was expected to bring foot traffic and downtown residences is now barely under way.

"We've been putting money back into the store on a monthly basis," Russell says.

Plans for a tax increment financing district that Russell thinks would have "made a big difference" were defeated. Also, the three comparable wine stores that were in a five-mile radius when Wine Expressions was in the planning stage totaled nine at closing.

"The store never made a profit," Russell continues. "Rent, utilities, inventory, employees. We grew 32 percent last year -- but no profit." In fact, Russell and Brad Mitchell, the main financial backers behind the business, together poured "between $500,000 and $750,000" into the store -- not including start-up expenses.

"When we looked (at the figures) in January, we decided this wasn't going to work and that we would shut down."

The concept seemed good at the beginning -- strong enough, in fact, to attract additional investors.

In the end, however, "our expectations of revenue growth were way out of line with reality," Russell says. "The market told us customers liked our store, the service and selection, (but) they didn't buy enough for us to be profitable. Ambiance and service were not that important."

Russell, who clearly has thought about what went wrong, offers advice for other entrepreneurs -- especially start-up retailers -- planning their ventures.

"That person ought to have a cash bank equal to 18-24 months of anticipated sales," he says. "You need that kind of stash. We would have been better off if we had that much. Don't believe anyone's promise.

"And customer service does matter. The question," Russell says, "is how much (consumers) are willing to pay for service.

"I don't have the answer. Obviously."

• E-mail questions, comments to Jim Kendall, JKendall@121MarketingResources.com.

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