Aug. 17, 2015 By Christian Murray
Elksa, the Hunters Point clothing and home décor store that was formerly known as LIC:living, will be closing at the end of September, according to a e-mail blast written by its proprietors.
Jillian Tangen and Rebekah Witzke opened the store, located at 5-35 51st Avenue, in 2012 with the intention to provide residents with a shop to find gifts, clothes and decorative items for their homes.
The name was changed from LIC:living to elska in April to reflect the Scandinavian flavor that the women had cultivated.
The owners, both active members of the Long Island City community, attributed the closure to an “unexpected and unreasonable increase in rent” and went on to thank their supporters.
Until the store closes, elksa will be selling its items at heavily-discounted prices.
The following announcement was released by Tangen and Witzke today.
“With heavy hearts, we are writing to inform you that we will be closing our store, elska, (formerly LIC: living) on September 30, 2015.
We faced an unexpected and unreasonable increase in rent and are unable to renew our lease. For three years, we nurtured this store, watched it grow, and established many treasured connections within it. We are proud of the fact that we know so many of our customers by name, and that we offered products and merchandise that were not only beautiful, but also high in quality and socially responsible.
We want to thank you from the bottom of our hearts for embracing our store the way you have. By supporting it, you supported us in taking our idea for a store from a dream to reality. That means the world to us. We could not have made it three years without you, and considering the many things that work against small businesses; we consider elska a success in its relatively short existence.
We are still believers in the elska brand. We love the Scandinavian influence and aesthetic we have cultivated, and hope to find a new home for elska- whether it’s re-opening in a new location, or as a showroom to the trade. We are exploring a lot of exciting possibilities at the moment – so stay tuned!
So, now what? Well, we have to sell everything. EVERYTHING. Beginning August 18th our entire inventory will be 30% off (including our new Fall arrivals). Each week, we will further reduce prices until it is all sold. Please understand from here on out, we cannot place any special orders, hold items, gift-wrap, honor elska crown cards, or return items. In addition to our inventory we will also be selling all of our fixtures as well. If you are interested in anything, please inquire for pricing. Again, thank you. This is an emotional time for us and we appreciate your understanding and support as we bring this chapter to a close with our heads held high.
Gratefully, Rebekah + Jillian
Bummed to hear they are closing. Hope they can reopen elsewhere in LIC. Looking forward to a vacant storefront or maybe a Sleepys Mattress.
Good call. With the HPS development new mattress demand surely to spike!
The reason small businesses sign short term leases is because they usually are just getting started and are proving out a new business concept. If they sign a ten year lease and the business does not do well then they are on the hook for the 10 years of rent. Larger retailers can afford to sign these longer term leases because they have a balance sheet to back it up and a tested business model. GAP can absorb a failed store and negotiate a lease termination (lumps sum) or sublease the space to another tenant. Most small business don’t have this luxury.
Too bad to see them go. I believe they were doing well despite the weak location.
Sorry to say but you are not correct. The proprietors could have negotiated extension options in their lease to mitigate for their “proving out” period (e.g 3 year initial term with a 5 year extension option, etc.). This simple (and very common) clause could have saved them from the pain that they are enduring currently. The fact that they did not have extension options leads me to believe that they did not know what they were doing.
Also, your assumption that only proven businesses sign long term leases is not true. The larger retailers actually get BETTER lease terms than the small business owner for the exact same reasons that you stated earlier (larger balance sheets, tested business model, etc.). Landlords need to protect themselves more with small businesses, therefore they structure in more protections in case the business fails.
I know that many of you readers probably know the owners of the shop personally but don’t let that cloud the fact that their business model had flaws. Just because you are good people does not make you a good business person. I am just as sad as everyone else here that these people’s small business dreams were not realized. But they really did not protect themselves adequately in this case.
I will have to disagree with you. I agree that you can negotiate extension options and you can even predetermine an escalation for each extension. However, from my experience this is not usually offered to small none-credit tenants. Landlords view small businesses as a risky tenant (rightly so) and the leases are usually heavily weighted to their side. They may offer extensions but they are usually tied to the market rents at the time of extension. You are correct that larger businesses get better terms and I believe that is what I said. As a landlord, having a “credit tenant” increases the value to your property and logically they are willing to give better terms as a trade off. When negotiating a lease (as with anything in life) it ultimately comes down to the amount of leverage each party has and small business usually have very little of it.
I don’t want to argue the minutiae of leases with you but you need to recheck your facts. Small businesses only being able to secure short term deals is absolutely wrong. Also, property value is not directly tied to signing a credit tenant. They may affect it indirectly but merely signing a credit tenant does not automatically increase your property value.
A commercial lease is usually secured by a personal guarantee from the renter or renters. As a landlord, I don’t want to assume the risk for a new business’ survival or failure. Most likely the renters had some personal assets and didn’t want to be personally on the hook for a long term lease when they started the business.
Also remember, this was 3 years ago, the renters probably didn’t anticipate the skyrocketing demand for property in the neighborhood and figured they could just do a simple renewal with a 3% to 5% increase after their initial 3 year term was up.
That’s just the way it goes in NYC real estate. Hopefully, now that they have a sound business plan they can re-open somewhere on one of the cheaper edges of the neighborhood, like more towards Astoria. If they are as good as some of the posters here say they are, people will find them.
Well I certainly never had an issue finding things to spend my money on in that shop:) I am really sorry to hear that it is closing.
However, the reality is MANY people living in LIC are transient and do not invest in the neighborhood. They are strictly there for the proximity to Manhattan and don’t go out in the neighborhood at all.
One would think any shop like this would have lines out the door with all of the young people with $ and lack of options in the area.
I am sorry to see them go- they had great taste and the 2 woman who ran it were lovely. Good luck to them in their next endeavor.
I think the owners did not have a very good business plan from the start. When starting a new business, one of the most important things to secure is a long lease. I cannot understand why the proprietors signed only a 3 year lease. Unless you know for damn sure that your new business is going to kill it from the get-go, operating on a 3-year lease is insane, especially in a neighborhood like LIC where everyone knew for years that rents were only headed in one direction.
Dave’s spot on. I wanted to support this place and went a few times shortly after it opened, but it’s hard to sustain this type of business model. What I don’t understand is why they didn’t secure a longer lease.
Sc – good question. Beer Closet is a joke. I’d be shocked if that place is turning a profit, notwithstanding its insanely high prices. Especially with all the good beer options in the neighborhood.
The store owner probably believes with the influx of new residents at HPS and the retail that is soon to follow that 51st will have a significant increase in foot traffic.
He/she is probably right. Still a shame to see a store that’s been trying to build something up be forced out like that.
Now if somebody could please tell me what the hell is going on with The Beer Closet…
I peeked in the other day and it looked like they had gutted the place. Maybe the landlord is trying to combine the spaces for a larger tenant?
While I am sorry to see any business go, I was in this store a few weeks ago and struggled to understand their core offering. They would have been much better served to offer services beyond the store, eg, interior decorating or personal shopping, since otherwise it was simply not clear why I would go there unless I were a stay at home parent/remote worker bored and out for a walk. That could work on a high traffic street, but 51st Street isn’t one. Of course, that begs the question of why the landlord feels that he can get more rent from a different tenant…
That should be “on 51st Ave”.
I suspect that the closure has nothing to do with the viability of the business itself. Just more churn and greed in LIC.