I don't think the instant gratification angle works too well. I went to a Hobby Store a few years back after going to a train show (seance express was there) and was looking around at the kits they had there...everything was very expensive. They had a good selection of Miniarm stuff, but everything was in the $70+ range, when you could get the same items online for half of that! I think I can put off instant gratification if I'm going to save 1/2 of what I paid for online and well Amazon can get me 90% of my orders to me with 48 hours...I have lots of other things to keep me busy till it shows up

There kind of a directory on Scalemates.com at the top it is under the Shops tab. https://www.scalemates.com/shops/ Now keep in mind the shops are only listed if people add them.

Also when ever I am traveling I do a google search for shops to check out. I went to a LHS in Hampton Virginia a few weeks back and another customer was nicer than the man behind the counter. The store had really weird inconvenient hours.

Before my trip to Munich I asked on this forum for shops there and got a quite a few nice responses and I checked them out. I picked up a Revell BMW i8. (Still have not seen this kit in the US).

The south S.F. bay and Monterey bay is pretty much void of any decent hobby shops. D&J still exists but isn't anywhere near the store they used to be. Plastic is an afterthought.

I think Yannis was the last 'real' model store here in the bay area.

Times were good when we used to meet at San Antonio Hobbies and carpool up to Littlefield's property for the afternoon.

Thanks for the update, Charles.

D&J had a massive "Buy one, get the second 50% off" sale at the end of 2015 that I didn't know about. I went after the sale and the whole store looked raided; I could hardly find anything I wanted left, not even paints as those were all sold. I haven't been back since that sale and I do fear that D&J may not have restocked to the level as before the sale (just like Franciscan Hobbies which closed). With fewer stock, that means fewer items to buy, which means fewer visitors, which could mean decreased revenue, which could lead to closure. I am very curious to see how they well they restocked. D&J dropped their railroad, wargaming, doll, and R/C sections compared to their old location.

The Sunnyvale Hobbytown isn't so bad for the size...could be better, could be worse.

Not to be nosy or to pry (since it's none of my business), but no one has heard from Yannis since he closed? I just find it odd that someone who knew so much about hobbies and had a career in a previous hobby shop before opening his own went to sell clothes. And I thought some modelers would still be trying to get back their build models because he had quite a few of them and some very pricey.

Were the rumors true that after the closing of San Antonio Hobby, the R/C guy went to start his own R/C shop; the railroad guy went to start his own railroad shop, and Yannis went to start his own hobby shop? Or is it that Yannis was the only one who started a hobby shop after San Antonio Hobby (advertised in the 1990s as "The largest hobby shop in the USA" in FineScale Modeler) closed?

However, some niche hobby shops seem to be doing well (I guess). Check out the video on Michigan Toy Soldier (MTS) done six years ago. MTS is by far one of the best hobby shops I've ever been inside (I've no affiliation with them) as the store comprises of several rooms joined together and they have massive amounts of stock, mainly catering to figures of all sorts (they're not really a general hobby store). And many of the items in the store are not listed on their website because they just have so much stock.

http://www.michtoy.com/page-About_Our_Retail_Shop.html

We are in a changing world. The time of the bricks and mortar hobby shop is changing. I live in a city of one million yet there is really only one good hobby shop. A couple of others but not in the same depth. We are lucky here because I belong to a great modeling club (Sonoran Desert Model Builders. We are able to buy from each other and one of our members is able to hold 'Model Swap Meets" at a local F.O.P Hall. Dealers come from far away to sell.
I have not needed to buy through the internet as yet.

According to this link, DJ Hobbies in SanJose is now gone.

http://www.mercurynews.com/business/ci_29204187/san-jose-hobby-store-long-history-closes-doors

Wow, that's really a surprise to me! I haven't seen any mention of this on the forums (here). Thanks for the link.

I assume a new business took over the store since D&J closed in October.

Sad...D&J had Vallejo, Vallejo AIR, pigments, washes, and other items none of the LHSs had. Some of their prices weren't bad either with some kits a few dollars BELOW retail or right at MSRP. While I do buy a lot online, it's sometimes nice to see paint colors in the store with one's own eyes since online color chips aren't totally accurate. Facebook and Yelp confirmed that the store is closed. I just haven't been to D&J since their last sale last year (I missed the sale and just saw the results...the store looked nearly empty) and I didn't know that the store closed shortly afterwards.

I hadn't heard about D&J closing either. I could have sworn the sign was still there about three weeks ago when we drove past. we were in the area for other business and my wife asked if I wanted to stop there (as we drove past) I wanted to get home and had no urge to stop so we kept driving. Probably passing an empty store with the sign still up!?
Sounds like you (Peter) must have hit the final sale as described in the article.
I hadn't heard of anyone but Yannis from San Antonio starting a related business and I haven't heard of Yannis since he closed. I did hear that he was starting a clothing store(?)which I thought an odd transition but who am I to say? I used to see him at the Kickoff Klassic model show every year passing out cards for the model store.

Thanks for the replies. I'm glad to have revived this old thread or else I would not have known about D&J's closing. So I suppose a business has not taken over D&J's store since October if the sign is still up.

If I'm ever in the area, I'll stop by to check it out, but Facebook and Yelp confirmed that D&J's closed.

Another article on D&J's closing.

http://www.bizjournals.com/sanjose/news/2015/12/03/san-joses-beloved-d-j-hobby-files-for-chapter.html

Facebook page:
http://www.yelp.com/biz_photos/d-and-j-hobby-inc-san-jose

It's interesting to note that it was theft, not entirely lack of sales, that made this hobby store close. Also interesting on the Facebook page were the (young) people at Event Night...and quite a few of them too.

I'm one of those who plans a day of vacation (on a trip I'm going on anyway) to visit a brick and mortar model shop (Hobbyland, Columbus OH). I don't buy an immense amount of stuff there, but I don't mind paying a buck or two more for a few things I didn't otherwise know existed, once a year. That visit - like the rest of my vacation - is entertainment and relaxation. That it costs money is understood. That it might cost a little more money than doing the same thing online is understood as well - but I'm getting entertainment value by browsing thru the stacks that I just don't get looking online. So, while I understand the economic arguments against brick & mortar model stores, I also understand that there are more issues than simply economics. Would I take a trip to Columbus just to go there? No, I don't have that kind of time or money. But since I'm there anyway and I've got money budgeted towards vacation that includes model purchases, I make the effort to go. And I'll be sad when they eventually go away - hopefully a long time from now.

I see this discusion it's for US people, but let me give you a few insights about how I see things about B&M shops today, since the closing of stores in the US has seen a lot discusion topics lately.

Here in Chile we have only a few hobby shops IN THE COUNTRY, in the capitol ( Santiago) 1 big and 2 smaller ones, plus 3 or 4 in other cities. And the big one not only caters plastic modelling, its main bussiness area it's RC stuff and a regular toy store, but their selection of plastic kits and supplies it's quite respectable. They also have a discount policy of 20% to registered members in kits. They are the representatives in the country of Airfix, Hasegawa, Miniart, Revell and Hobbyboss, which are really cheap even considering the distance (we can get a Revell or Hobbyboss at least 30% cheaper than in the US, I speak knowingly since I sent to the US for vacation last year and my wife let me go to a few model shops there). They also have Tamiya, Italeri and Dragon sourced elsewhere (and much more expensive that the other mentioned brands). And a few other more obscure brands are also available, but no aftemarket. And they also sells in country through their website. And they have been doing it for at least 20 years and the bussiness model must be working OK or else they should have stopped selling plastic kits.

The other shops are smaller, but sell the same brands plus Academy and Trumpeter at very good prices generally, and also have supply specialties lile Ammo of Mig, AK Interactive, Vallejo, etc. They do not sell through internet but take special order from customers through e-mail and facebook. So again, the bussiness model must be working since they've been in the market for quite a few years.

Now we even have a local manufacture of wxcelwnt quality paints and weathering products K4, which have been steadily expandinf its line theought the last years.

And in the city I live, Viña del Mar, a new store started, small bussiness of youger guys, which focus mainly in Gundam and related science fiction, role playing and has modelling supplies in good quantity and quality (Tamiya, Ammo of Mig, etc). They also sell through internet and Facebook and take special orders if you want, obviously charging a bit for the service. And again, the bussiness model must be working since they've been in the market, again, for a few years now and always have something new.

In other cities we can find plastic models, but embedded in a traditional toy store or associated with collectibles, die cast snd stuff like that.

A few years back, we only could get modelling stuff online or in s few selected places in country, now we have more options to actually see the kits if you want, get the needed paint or glue and get knifes and other stuff. And aftermarket and the new brands that have come in the last years have to be sourced online.

With all that said, I see the problem for US modellers it's that B&M shops it's that have not evolved with the current trends. maybe the solution it's to expand their bussiness IN the hobby area (RC,roleplaying, regular toys, whatever) with a section being plastic modelling , conducting better client oriented service (discounts on registration, regular sales), selling locally through web sites, using the tools of social media (facebook, twitter, instagram, etc. ) as an integral part of their marketing strategies, establish a better integration with the importers or the manufactures to cut prices (trying to avoid the middle men as long as you can) and try to get rid quicky of their inventory to avoind keeping cost. Otherwhise, all B&M shops are doomed to die sooner or later if they not adapt. My call is that inefficient logistics on the shops side (including an outdates bussiness model) and a bit of greedy in the middle men have cause you the problem with local B&M hobby shops.

Now, As I said before, I've traveled to the US a lot last years, and always try to take the chance to go to a B&m shop, to look for that things that cannot be found In my country. As for prices and exception made about the brands named before, prices are more or less on par of what I can find in Chile, but the selection I found it's much better.

I'm speking with the view of a 36 years old guy who has been modelling since I as 10, so I can say I'm not old fashioned and more than willing to accept new way to fullfill its hobby needs, plus dealing with the traditional way of shopping.

The market allows for everyone to have a share in it, being online shopping, physical shopping, etc. all in out addiction benefit

My 0.02 cents worth

Cheers

January 2020 saw a lot of changes since this post first started.


D&J Hobby is indeed closed and as far as I know, no one took over the business so it is a vacant store. I haven't been to that area in a long time.

San Antonio Hobby is long gone and it became a Daiso discount Japanese Dollar Store. That closed and now it is a large Game Castle wargaming store that sells really excellent wargaming miniatures, paints, pigments, landscape products, books, and some of the latest and greatest items. It isn't a model kit store, but does contain the materials, tools, supplies, and paints to foster the hobby. There are tables and chairs to play wargames, paint, build, read, or converse. I say it is the best paint and supplies store in the Bay Area, but again, you won't find kits here.

Yannis Hobbies closed years ago and became a hair salon, I believe. That lasted for years and now I think it is a new art gallery. AFAIK, Yannis never returned to the business.

Now Talbots in San Mateo is totally closing after 63 years in business. The Talbots bike shop closed years ago, leaving the hobby store and toy store open. Truth is that the hobby store remodeled and reopened with lower shelves and a lot less stock. I think the lease wasn't renewed. One of the longtime employees who worked the counter got married, had a baby son, and then moved to the Midwest, leaving his hobby department experience and expertise vacant. So I think it was a combination of factors that caused the entire Talbots to close.

Franciscan Hobbies in S.F. closed years ago after a huge selloff at a model contest Expo. They just didn't restock as well afterwards and stock dwindled. The lease wasn't renewed and I think the owner just decided to retire. Last I saw, it was a furniture store.

The Hobby Company, S.F's only general hobby store, closed due to seismic retrofitting, mandatory for all apartments and condos by 2020. I don't know if they will reopen or relocate, but so far, nothing.

Chan's Trains and Hobbies closed as the owner retired. The store is vacant and left "As is" as if it was still there but with the lights off.

Ace Hobbies in Berkeley relocated to a new building and someone told me that their hobby section is downsized from their old location. They're still there although I haven't visited them at the new location.

J&M Hobby House is still there. I haven't been to it in a long time and it's still a nice general hobby shop, probably the largest now that has the best general selection of kits.

Gator Games in San Mateo is a very nice small wargaming store that sells paints and weathering products.

That leaves a few good small Gundam, comicbook, and wargaming stores in the Bay Area. S.F. JapanTown's hobby store in the basement is perhaps the best general hobby store now in the city. Gundams are popular so the Bay Area caters to them.

Interestingly, several large art stores such as Michaels, Aaron Brothers, Pearl, FLAX, Beverly's, and The Art Store closed in the city, leaving art stores open in the suburbs. I suspect personal electronic devices played an important role in the demise of arts and crafts in the Bay Area. This is very odd considering that the Academy of Art University with all its art students is one of the largest art universities in the city. (FLAX is open...moved to Ft. Mason area but I haven't been there. A nice Michaels art store is open in South San Francisco).

I have a friend who has a slot car business. He sells out of the store and online. He is a distributor for several brands and sells quite a few other brands. He has multiple tracks for customers.

He described the problem in the hobby. First, is the distributors selling to almost anyone. If you are a slot car racer and want better prices why not start a business out of your garage. You can now buy wholesale! Your cars now are as cheap as it gets. You can also start selling cars for a couple of dollars over wholesale to support your hobby. When you as a real brick and mortar and need to pay rent, labor, taxes, etc... you can not charge 2$ over wholesale and stay in business. When you are trying to sell' people say why should I buy yours when I can get it cheaper at the "Freds" garage. My friend blames the distributers for a big part of the problem. He said if they sold wholesale to only real brick and mortar then they could stay open and not get undercut.
Now you might think the times are changing and you have to adapt to survive. That is only partly true. Where are the new customers coming from? If there are no brick and mortar stores where will the young kids get interested? If you are 10 years old and walk into a good model shop or slot car track and the people are friendly and helpful, boom a new customer.
I have my doughts that 10-year-olds hang out on the Sprue Brothers web site. The same thing with the slot cars. If there is no cool track to race on, why would they buy a slot car?
Online shopping is great for the older people stretching their money and like it being delivered to your home but I think it is reducing the number of future hobbyists.
Just my opinion, your opinion may get better mileage.

Up until reasonably recently we had two dedicated stores in Salisbury with one closing due to the retailer passing away. Shops closing and making life more difficult for the modeller is very common and why I always make a point of buying from the shop that remains on a fairly regular basis. Thankfully the store appears to be doing well and long may it continue.

Greg;

Our hobby is an expensive one, both in cost of kits and materials and supplies and tools, and in terms of time and effort commitment. I've been in it and around it for about 60 years, now. Despite all the wishful talk and seeming interest in somehow encouraging and recruiting kids to the modeling hobby that seems to surface on sites and at model clubs and shows, I would have to say that it all sounds quite naive to me. Our's is an adult hobby. It has always been an adult hobby. Adults have money and adults are able to decide to make the learning and skills-development and time commitment needed to actually build models. The large majority of kids neither have the money nor are actually willing to say to themselves, and perhaps more importantly, to their peers and "friends", "Hey! This is COOL and I WANT to do this and get "good" at it! I'll skip "hanging out", Thank You!". A few of us did elect this route as kids - Perhaps yourself, certainly I. I saved my money as a kid and bought and built models when I could. I also found that most of my peers had no such interest. So I needed to choose... Do I hang out with my pals who would rather do a lot of other stuff than build models, or do I stay home and model? There was a lot of peer pressure back then, and my kids likewise saw this in their youth and teen years. And few "peers" provide much support for those who want to sit home and build models.

The fate of hobby stores is probably to come and go. Been that way since before me. LHS fading away is nothing new. They've been doing that for decades - the first two "important" LHS I knew about and haunted as a young teen closed their doors in the 1960's. Yes, they were key spots in fueling my interest in modeling, and were the key sources for kits, supplies, and chat with modelers. Oh, and BTW, the vast majority of the folks hanging out in these model-oriented shops were adults. Mostly older men.

It's no different now. I try to haunt LHS whenever I can get near one. My fav is located down in Glendale AZ 115 miles from me... Andy's Hobby HQ - the source of oodles of interesting kit review and build videos. Andy's is thriving. He's recently greatly expanded his store, increased inventory, and even started up a separate internet sales operation. And every time I stop in (perhaps monthly), ALL of his customers are adults - mostly middle-aged and older. And he will likely tell you that his customers are mostly such adults, were you to ask him.

My local model club puts on 2 "make n take" events each year. They are well-attended by local kids and their parent(s). I imagine a few of these kids may get the model "bug" for life, but I won't hold my breath. It's fun for the day, but make-n-take snap kits are far removed from almost any sort of kit anyone on this site has likely dealt with. All the club members are older adults. Again, it's these folks who have the money, the learning behind the kits, the time, and the willingness to make the commitment needed to build them. The kids likely won't get into this unless their parents fund them and guide and encourage their development of the interest and skill-sets needed to have a rewarding time modeling. Seeing stuff displayed in a hobby store MAY pique some bit of interest for some (it did for me - my LHS's had big displays of built kits and working train-lay-outs back in the '60's), but there's that big "ditch" of no funding and no real parental or peer-support barring many kids from moving beyond just seeing things in a store.

Think about it. It's the same for lots of other potential "hobbies"... You can look in the window (and all over the internet) and see the firearms, sporting goods, cars, tools, musical instruments, cameras and telescopes, camping gear, etc. If you don't have the money and you don't have peer or parental support, these things are not likely to actually happen. Same for scale models.

There's no point in being angry over LHS closing. They do, just as good local bakeries, small diners, local repair shops, etc., do. People will always go shop where their money goes further for whatever they want. Best you or I can do is to put our money where our mouths are and buy stuff at your LHS if you wish to encourage that guy to stay in that business. Otherwise, it's the 'net.

Cheers! Bob

I agree with Bob here. If you want to support your LHS, go there and buy stuff. But, as many have indicated here, the LHS, and thousands of other retail stores, face a stiff challenge. When I retired, I took a part time job in a LHS, mostly for fun and to stay occupied. That led to another part time job as a commission builder for a while, and then a third part time job as a contract researcher for my State Labor & Industries (L&I—one of the LHS patrons hired me). The L&I job really opened my eyes to retail business operations. Anymore, it’s a struggle for retailers to compete in any area, not just the LHS. Between the internet and the “big box stores”, increased rents, taxes, governmental policy, rising wages, insurance, and a host of other issues, these stores just can’t make it anymore. It’s not just the LHS, any “niche” store is at risk. Look around and see how many stores in a given locale go out of business. The age of “mom and pop” or “brick and mortar” is drawing to a close for many retailers. Bakeries, butcher shops, book shops and haberdasheries are disappearing all over. I walked through a local mall with my daughters just last week, and found a half dozen formerly thriving stores closed and OOB. See’s candy for goodness sake! And it’s not just retailers, it’s restaurants too. I recently read an article on a local icon restaurant which closed because wages and rent ($16,000 a month!) killed them.

The bottom line to all this— it’s hard to run any business today, not just the LHS. And if you’re in a “niche” business— it’s doubly hard. People want higher wages, governments want more taxes, profit margins are smaller, and you must spend every waking moment running your business. If you run a small business, you can’t compete for long, unless you’re the only “game” in town. And even then, you depend entirely on the consumer. If you can’t compete somehow for them, you’re done. Some of these places are so fragile (in profit margin) it will only take a bad sales month to put them out of business. So, it’s a risk to open any business in today’s market. And if you do, you’d better be willing to devote your life to it. The LHS I worked for went under because the owner died. His business partner was willing to continue, and even scrounged $100,000 in financing to buy out the family. But the family got greedy and demanded 6 times the value of the website and storefront. In the end, they got $16,000 for the stock as it went to auction. But, it’s not just the LHS business that’s at issue, it’s the whole small retail industry— we are in a completely different business model than in the past, like it or lump it.
VR, Russ

Not to stand on a soapbox, but some of the modelers here have been online at this hobby since the 1990s, practically three decades ago.

The replies are correct---it IS hard to run any kind of business.

I want to dispel the notion that the lack of sales and high rents have usually closed many hobby shops. I don't always believe that is true. One has to get into the nitty-gritty "behind the scenes of gossip" to understand why these hobby shops have closed, and by that it means having modelers in the area to discuss what really happened. "There is always more to the story."

Case in point, of my list, one closed due to unexpected theft, another closed due to retirement, a couple shops closed due to higher rent and leasing, another closed to seismic retrofitting (and fate remains unknown), the Ace at Berkeley closed and relocated nearby, and some closed as mysteriously as they began.

Obviously, a lot of business is personal, private, and "Mind Your Own Business!" Work is work and after work is private. Closing could be a death in the family, a need for higher wages, higher rent, debt, retirement, lawsuits, stealing, insurance money, long hours, health reasons, bored and tired, office politics, model hobby enemies, wives and girlfriends nagging, moved away, started a family, bad decisions, low stock, bad stock, or no restock, too much noise, after hours activities, too many hours, accidents, reputation, etc.

I've learned over the decades, being online for so long, that there are a combination of reasons for closing a hobby shop and the lack of sales and higher rents aren't always the main driving factor of closing a "Brick and Mortar" hobby store.

I really never knew why Yannis Hobbies closed years ago and what he is doing now (and really none of my business since it has been so long). Yannis's business was booming and he was bringing in the latest and greatest stock, and all of a sudden, he pulled the plug and was gone. No modelers in the area divulged his reasons and I never saw him again. Even Yelp kind of purged the many reviews on his shop, and being in Silicon Valley with high-tech corporations that make high-technology, who knows what happened as each corporation has their own private corporate security force, which basically might have been his clientele (it might not look good for a (Boss) Geek or Nerd to be buying kits or the Big Boss's kids had a nervous breakdown in the store!). Therefore, one can assume away and away and away...

Nonetheless, please check out the Yelp and Google photos of hobby shops that DO exist here and overseas that DID survive the Recession and all these years to decades. You'd be surprised at how well-rounded, neat, stocked, and laid out they are to keep themselves in business. Some hobby shops look extraordinary! For example (and I have no affiliation), here is a small one in Spain. Not many hobby shops have that kind of selection of the latest and greatest paints, tools, kits, supplies, and landscaping materials in a clean, fancy, well-lighted place.

https://www.google.com/maps/uv?hl=en&pb=!1s0x12a4a2dab4347c53%3A0x5fef4ad243494150!3m1!7e115!4shttps%3A%2F%2Flh5.googleusercontent.com%2Fp%2FAF1QipM8i6Chy-1xkbhfxfBRrD6q-a5Ii-YFpP3z5v1h%3Dw300-h400-k-no!5sjordi%20rubio%20hobby%20shop%20-%20Google%20Search!15sCAQ&imagekey=!1e10!2sAF1QipM8i6Chy-1xkbhfxfBRrD6q-a5Ii-YFpP3z5v1h&sa=X&ved=2ahUKEwjvpPfPuu_mAhVH-qwKHdOaCDQQoiowCnoECA0QBg

To add, I think one problem with the LHS today is that they have branched out to the niche hobby of mostly catering to wargaming or kits.

Decades ago, a LHS had one important trait that it had to function for---it HAD TO HAVE Architecture supplies---and by that I mean the tools, styrene, paints, saws, trusses, trees, wood, people, metals, pipes, wires, poster and foam core, and materials to build models for Architecture and design students. THAT was how many students built models (besides LEGOs) because these stores had to have the raw scratchbuilding materials to construct. One can tell a great hobby shop from a mediocre one back then just by the amount of raw materials they stocked. These hobby shops were not meant for kids at all as one had to have skill to build, glue, saw, and paint.

Fast-forward years to decades later and many hobby shops have lost these scratchbuilding materials that cater to Architecture students. It's pretty hard to buy the materials online without seeing the size and scale of what you want and need to construct any blueprint designs. Hardware stores don't sell these miniature Architecture supplies, let alone paints or tools FOR MINIATURES as hardware stores are for 1:1 scale Real Life construction.

Instead, the LHS catered to R/C, railroad, kits, and paints and supplies. Lost are the materials for design, modeling, art, crafting, and Architecture students. Some LHSs don't even stock clay or putty to mold anything and many LHSs dropped drones, R/C, and railroad, or branched out from the three to one specific selection (R/C, railroad, OR kits (not AND)).

The art stories also loss the Architecture scratchbuilding materials and now many Architecture models either look very cheaply made and unprofessional, or very expensive and professional built by experts with 3D printers and laser-cutters. (LEGOs will never be used for Architecture models).

I find it very interesting how the LHS changed and morphed for better or for worse. Okay, off my soapbox.

Not to mince words here, but the link to the hobby shop in Spain above is a bit of a “red herring”. Jordi Rubio is a manufacturer who has an outlet. The same can be said for Academy models in Korea— they have multiple hobby shops owned and operated by Academy. Here in the states, that’s not so true. There are few US manufacturers anymore, and as far as I know, none maintain outlet stores. But an “outlet” for a manufacturer compared to a modest “mom and pop” retailer is like mixing apples and oranges. Yes, the reasons for a LHS going out of business are as varied as there are businesses. But, as I tried to say in my post above, the fragility of any small business today is the issue. If you don’t have the wherewithal to survive theft, death, the environment or high rents, then the business is struggling in the first place. I say this from having worked in a LHS which had a combined annual income from internet, distributorship and brick and mortar sales of about $300K-400K annually (varied by year, the best year was 2008). A little more than half of that coming from the internet and being a wholesale distributor. But the outgo in costs was at least $150K annually just to keep the shelves stocked— that doesn’t include rent, electricity, and wages. The owner even put up his house as collateral one year to stock the shelves with $50K in product. That’s where we find ourselves today in many small retail operations, not just in the LHS. Only larger more durable concerns can weather the test of time for most retailers today. Sadly, where there were 30 or more stores in my local area (roughly 100 square miles) there is only one store today, and he is even considering the future, not because he’s losing business, but because the business is increasingly under pressure. Even other “do it all” stores like Hobbytime (2 stores in my area) are reducing inventory and space. I’m not happy about any of this, and certainly don’t support the demise of the LHS by any stretch, but I think we have to wake up to the future. Not just in the hobby business, but also in any small retail business. I was talking just a few weeks ago with the owner of a small Jewelry chain in our local area, who told me she had to close two of her stores due to low traffic, high rents, and the demand for increased wages with a decrease in the labor pool. It’s tough everywhere if you are small— if you’re not resilient and innovative today, you’re going to have a hard go of it.
VR, Russ

Let me just give a side from outside the US.Her in Israel there are maybe 5 LHS country wide mostly in Tel Aviv Jerusalem and Haifa most deal with RC and a very small plastic kit section,kits wise Revel and academy mostly you will find Tamiya ,Bronco and Trumpeter.
Kits here have a minimum of 500% mark up as all the middle men need to make at least 100% profit on what they sell.So in my case I do not buy in any LHS as I do not like getting ripped off.I buy everything I want on the net at 10/20% of the price I would pay here and honestly I dont care if the Local hobby shops close there doors,

I'll take the lead Russ offered; I'm not going to mince words here.

Most new small businesses FAIL - soon after they start up. Doubt me? Ask the Small Business Admin folks, or the bankers who get involved in funding these.

Old, long-established LHS often fade away because, in part, of various factors pointed out - aging owners, fading energy and interest, nobody to take over, and the like. Same reasons old small stores of about any kind eventually close. Unless the rent suddenly soared way beyond the usual inflation, that's usually a finger pointed elsewhere. Same for rising labor-costs, utility bills, etc. But those do contribute some.

No, sorry to say, most small businesses fail because the owners simply are not very good at running businesses. Plain and simple. Running a business is not a "shovel-ready job". Like being a solid and successful tradesman, or being a successful professional marketing oneself and your abilities, running a business requires both skill and native ability, paying attention to how things work, doing the careful day-to-day work of actually managing your operation. MOST people are no more prepared for or perhaps able to be successful business-managers then they are to become doctors, lawyers, airline pilots or good plumbers. It's not for everyone, and it's not some sort of easy "fall-back" "If you can't do anything else, open up a shop!" position.

90% of new restaurants actually crash within a year or so. Why? Not because the owner can't produce edible food. No. It's because of mundane business management. It's one of my life-experiences to have worked for an older couple who started up a family eatery back in ca 1970. He knew how to cook great food - a great menu. She knew how to keep books. Neither had any idea whatsoever about how to manage supplies and inventory, ID and hire good people over bad, or manage their staff. I was their second staff hire. Frankly, I'll claim some credit, along with another kid (that I hired), for keeping these folks "successful" and in business for 4 1/5 years. Along the way, I got fired 11 times by her (she just hated me!) and rehired 12 times by him ... I left finally to go serve my country... They decided to greatly up-size that same year. And went down the tubes by the time I came back home after 1 year away. Simply put; they couldn't run a business if their lives depended on it (sadly, it sorta did - this was their retirement gig, and they went bankrupt). Spin forward to 2016. My son was the first hire at a new start-up with a stellar easy-sell product line. Within 2 years, they made him floor manager... but wouldn't let him actually do that job, and wouldn't listen to any advice from a pretty sharp kid... They decided to up-size and relocate. They folded after a year of relocation... And why did they decide to relocate their store? Because they wanted "Bigger". But they had no idea whether their customer base actually shopped that new area (they didn't...), and they failed. Just 2 personal experiences. A local guy back in my old town of Lafayette LA came to our model-club one day and announced that he was planning on opening a national franchise hobby business in town, and asked for whatever thoughts and advice we might offer. Many of our members were long-successful business-folks, and all were keen on having an LHS open locally. "WOW! Finally, an LHS in our town!" We offered a lot of ideas. He opened up his store. He mostly ignored what folks had suggested, and followed some other lead... Managed to shove away all the modelers and crash a great start-up within 2 years, when there wasn't even any competition in a town of over 300k! I've hobbed with small biz folks and "entrepreneurs" for decades. Most were clear as to their ambition to make more money. All fancied themselves "great businessmen". Almost none had any clear idea about the nitty-gritty behind successful businesses - (and it AIN'T "I wanna make more MONEY"). Desire for more money doesn't make anyone a better business - manager.

Successful hobby stores are like other successful businesses. The owners know or quickly learn how to make it work as a business. You don't have to love plastic tank kits to be a successful LHS owner serving kit-buyers, but loving model kits doesn't make you a good business manager, any more than knowing how to cook makes you a good restaurateur. Knowing how to run a business is what counts.

Of course, this is but my opinion! Bob

Bob, et. al.
Really that's the crux of it, as Bob has said. And he's 100% right-- most folks who want to open a LHS like models, but that doesn't make them great businessmen (or great businesswomen). In fact, it probably makes them worse. The guy I worked for had a successful business until he died, but he didn't build models at all, he managed the store and inventory-that was his life, and he loved the folks who walked in the door. He hired me because I knew the merchandise and product, but I didn't manage the store. Unfortunately, the business went under after he died because he didn't plan for that eventuality, and his business partner (who managed the on-line business) was left out in the cold when the family got involved (greedy buggers they were, but didn't have a clue how the business ran). When it came time for inventory in the store, they counted each kit box, hobby product, die cast car and paint jar,then figured out what the most expensive and least expensive single items were, averaged the two values, and multiplied it by the number of products! at one point they told me there was 2.2 Million in inventory and they valued the website at $600K alone! so, when the store was put up for sale--they set the price way high, and it just languished until they couldn't afford rent, couldn't bring in new product, so eventually they moved to a large storage unit. With no income, they were forced to let the true wholesale value dwindle until they couldn't afford storage rent there either, so the entire stock (actual value was somewhere between $100-$150K was sold at auction for a mere $16K. and to top that off, they lost the owners house, because of the collateral loan he'd taken out a few years earlier. So, it does take some real business savvy to run a business, not just a desire to furnish models to the public (or any other item for that matter). You'd better love business, not just the product, is the bottom line. I still know a few guys that are in the hobby wholesale business from my time in the store-- and none of them are model builders.
VR, Russ

My two cents: my FLHS was well run, well supported and financially successful - and then the owner died. His wife had no interest in running it so it stayed open long enough to sell off inventory and his personal stash, and then it was gone. I personally believe that nearly every brick and mortar shop of ANY kind will be gone or financially hurting in twenty years aside from those which cannot be replaced by an online business. Grocery stores, gas stations, and places that offer services like haircuts and restaurants will be the survivors. Goods that are available online will replace B&M IMHO. The death of B&M model shops is a canary in a coal mine.

In the UK there are plans to put a tax in place on all online purchases to balance the field between online and physical sellers.