Across the United States, residents of many rural towns have to travel 20 miles or more to buy underwear, jeans, sneakers, a toaster, towels or an inexpensive watch. Their locally owned department stores closed years ago, unable to compete with chain stores. Then, many of the chains faltered and faded as out-migration cut the customer base while regional “big-box” superstores kept pulling people farther away from home town Main Streets.

In other cases, communities with no place left to buy everyday clothing and small appliances have tried to attract a big-box retail store to locate in their town, but lack the population base to lure one. This was the case in Powell, Wyo. With a population of 5,500, the community–located 20 miles north of Cody, Wyo., and 90 miles south of Billings, Mont.–simply did not offer the economy of scale sought by a big-box retail chain
Sharon Earhart, director of the Powell Chamber of Commerce, can laugh now as she remembers the situation. “I’m so glad that when we asked the big stores to come open up in our town, they said, ‘Are you kidding? Get a life.’ So we did! And a much better one. I’m grateful to them that they all said no, or we never would have started down the road of this great adventure.”

Powell takes the plunge

That adventure began five years ago, when some local business people and other Powell residents incorporated as The Mercantile and began selling $500 shares in the company to their neighbors. Within months, they had raised $400,000 in start-up capital.
They opened the door of their new store in the summer of 2002. Community response was enthusiastic. Residents with special expertise stepped forward to help when asked. “Nobody ever turned us down,” Earhart says. They were fortunate to have a retired department store buyer and manager, Mike Reile, in their midst. His willingness to work pro bono until the company was formed enabled them to move ahead and begin buying inventory sooner than they had planned to do.

“He’s very bold,” she says. “You have to be that way because the rag industry is tough and very fiche. You can’t let your feelings get hurt, or buy just what you like.”

The three or four potential competitors already established in Powell were very supportive of the project and all have benefited from The Merc’s presence. Earhart notes that the town had a precedent for this sort of commercial cooperation. When one of Powell’s two car dealers closed, the remaining dealer was the strongest advocate for attracting another one. “His business fell off because people perceived that without competition the prices would go up. When the original dealer who’d closed re-opened, both businesses did better right away.”

Earhart says people come from as far as Billings, Mont., a city of 95,000 people nearly 100 miles away. “All the malls are like cookie cutters, they all sell the same thing,” she explains. “Here, you don’t know what you’re going to find, but it will be something you won’t find at the mall. People like that.”

Five consecutive profitable years

A good merchandise buyer is key to a store’s success, Earhart stresses. Powell was prepared to mount a national search until they found Mike Reile. But, she adds, a community may not have to look that far. While meeting with a group in Upstate New York, a steering committee member recalled that her employer’s wife was a buyer. “When the idea gets to the point where it becomes real and people see its validity,” she notes, “people step forward.”

And step forward they did, in Powell. Within months of selling the first $500 shares to local residents in early 2002, The Mercantile raised $400,000 in start-up capital. They opened the door of their new store that summer. They have had five straight profitable years, and in 2006 they purchased the store next door in order to double their size. “We’ve become a tourist destination, who’d have thought it!” Earhart exclaims.

Similar efforts have started in a number of rural communities in Wyoming and Montana, and are now sprouting in the Northeast. One of the first towns to take a hard look at community ownership of a retail department store is Greenfield, Mass. A group of Greenfield citizens have been pursuing the idea of starting such a store for two years. This past November, in partnership with the Cooperative Development Institute (CDI), they invited Earhart to share her town’s story. As of this writing, they were awaiting state approval to launch their stock sale.

Co-op oriented town

Greenfield has more than three times the population of Powell, but–sitting halfway between the thriving Hampshire County college area of Northampton-Amherst, Mass., and the popular tourist destination of Brattleboro, Vt.–competition for retail dollars is fierce. There’s even a department store on Main Street already, but it deals mostly in more upscale, pricier products.