CITYWIDE — Perennial business owners Larry Miller and his wife Ricky launched Wilshire West Stationers in 1996, a store that had existed in a strip mall at Wilshire Boulevard and Berkeley Street since the 1970s.
They revamped the interior, enhanced the U.S. Post Office contract station with P.O. boxes and widened the selection of products to include Hallmark cards.
Then Staples and Office Depot moved into the east side of Santa Monica.
“We could buy products that we sold from Staples or Office Depot at retail price that was cheaper than the wholesale price we could get from manufacturers,” Larry Miller said.
On the other side of town, Kathy and Chris Mittel are also facing the consequences of inevitable change.
The couple owns Mittel’s Art Center, which until March will be located on the 2000 block of Lincoln Boulevard. It has been passed down through three generations of the Mittel family, but when rents went up by 50 percent on the location the store occupied for a decade, it became too much.
For the first time in its 58-year history, Mittel’s will be moving out of Santa Monica to 2499 Lincoln Blvd., a Venice address.
“Most of our customer base is down that way,” Chris Mittel said. “We will disappoint a few people. Anytime you move you do that.”
Wilshire West Stationers, now Wilshire West Fine Paper, and Mittel’s Art Supply are long-time businesses caught between a rock and a hard place.
On the one hand, technology and big box stores have made their business models obsolete, tempting consumers with convenience and low prices in the place of personalized service and relationships.
On the other, a tepid economic recovery hurt sales while land values in sunny Santa Monica stayed strong, forcing rents upward at a time when small business owners could least afford it.
Miller has been at this crossroads before.
In 2001, he and his wife considered closing Wilshire West Stationers given their inability to compete with the large office supply stores in the area.
Instead, they created a leaner business, put it in a smaller space and changed the focus to stationary and invitations that people would buy in large quantities for parties, weddings and other events.
The store became Wilshire West Fine Paper, and carried 2,500 designs, colors and themes that customers could use to create their final product, what Miller believes was the biggest selection in Southern California.
But where the big box stores weakened the small business, the Internet killed it.
“In 2006, right around there, more and more people began using the Internet for invitations and thank you notes,” Miller said. “They were writing fewer letters because they were using e-mail. At first it was just the younger population, but as the mid-2000s passed, it became more older people as well.”
You could do anything online. Even wedding invitations, once a tradition for young brides and grooms along with wedding cakes and musical bookings, went online.
“In the case of the wedding, they can sit with their fiancée at 2 in the morning and order these things,” Miller said.
The store has a 50 percent-off sale now through the end of February in an attempt to clear inventory and boost profits as the owners decide if they want to pare down or bow out.
At Mittel’s Art Supply, the Mittel’s faced a similar problem.
Once upon a time, architects needed to buy supplies from their store to build representational models or draw out blueprints. Product designers had to build and paint models to show customers. If a prospective customer wanted to see it in a different color, they had to buy more supplies from Mittel’s.
Today, it works differently, Mittel said.
“Architects no longer draft as much as they used to. They use a program called CAD,” Mittel said. “People make home signs and do it on their computer. Labels are the same way. Everything is affected by it.”
Now is a particularly difficult time because any kind of transformative change in business model needs capital behind it, something still lacking for many small businesses, said Michelle King, director of the Small Business Development Center in Santa Monica.
According to the Small Business Administration, the third quarter of 2011 showed modest improvements in the lending environment for small businesses, but many banks continue to hold out for larger loans they can make money on rather than the smaller ones that could help get businesses like Wilshire West Fine Paper over its hump.
“Even if they just want to sign a new lease, you still need a security deposit,” King said. “It’s a challenge for small businesses. Not that it isn’t out there, but you have to know where to go and how to go about seeking it.”
The SBA also predicts a tough road ahead for small businesses as a graying population begins hoarding more of its money for retirement.
According to the SBA, small businesses with between one and 499 employees are the backbone of the Californian economy. They represent 3.4 million businesses in the Golden State, or 99.2 percent of all employers and 51 percent of the private-sector workforce.
Of those, most are considered “very small,” with 79.3 percent of businesses having no employees and a significant portion of those that remained employ fewer than 20 people.
Small businesses represented all of the net new jobs between 2005 and 2008.
For that reason — and the fact that 80 percent of small businesses fail within the first two years — the SBA in Los Angeles sends people over to visit King at the Small Business Development Center whether they’re just getting started or they’re established and in need of a change.
There, they can find the information and industry experts to help turn their business around, King said, although the advice they get may be to leave Santa Monica anyway.
“You don’t have to be in Santa Monica to service Santa Monica,” King said. “They have to look at those options. Rent is one of those fixed costs that we ask them to look at.”