Video rental, antiques, shoe repair: Old-fashioned shops struggle to hang on

A big red house stands in the middle of Telegraph Avenue, two blocks from the Berkeley border with Oakland. It resembles Santa’s workshop: fun, colorful and packed with a massive amount of “stuff.” The building is two stories high and even on a normal day, found objects hang all over the property. From giant drive-thru Jack in the Box signs to headless mannequins, vintage Victorian furniture or small quirky ceramic figurines, James Cross, the owner of the Antique Centre has it all—hidden somewhere in a corner of his store.

But it is Christmas season, so Cross has dug out all his decorations that were crammed somewhere in the basement and his attic in dusty containers. Cross has spent days building his own Christmas wonderland, digging out all the oddities he can find—trees, colorful spheres, lights, seasonal china plates, and miniature ceramic Christmas towns—hoping to bring more customers into the shop. But even though Cross works hard decorating his business, the traffic flow remains the same: slow. Cross makes around $25 or $100 on a good day, when he sells a vintage chair, table or a dresser.

“Let’s say, if I had to pay a $2,500 rent or something, there’s no way I would be making any money,” said Cross. “I’m just lucky to own my house, and it keeps me busy. It also helps me to keep the stuff at the right prices here.”

Like Cross, many small business owners are struggling to stay open—despite the growth spurt in the tech sector—selling goods and specialty services that few people still want today. It’s a competitive world for a small business owner, when trends quickly change. According to the Oakland Chamber of Commerce, in 2015, Oakland was home to 446 tech establishments, employing 6,150 workers, which is an increase of 11.3 percent over the previous year.

But it’s a harder market for owners like Alfonso Ramos, owner of the Fruitvale Shoe Repair Store, which has been providing customers shoe repairs and handmade leather boots for the past 20 years. Although there are not as many customers around as before, Ramos continues to cater to the predominantly Latino Fruitvale community and fluctuates his schedule depending on the community’s needs. (Click on the video at right to learn about Ramos’ business.)

It’s also tough for Bill Wedemeyer, the manager of the Video Room, which must compete against incredibly successful streaming video sites like Netflix. (Click the video at right to meet the employees of the Video Room.) Cross, Ramos and Wedemeyer and his crew keep their doors open to the community because they want to preserve a family memory, love working more than 40 hours designing a shoe, or want to preserve their business as a service to the community.

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Cross was born and raised in the antique business.

His parents, Bill Cross and Pamela Cross, moved from England to America during the late 1940’s. They had planned only to escape for a vacation, but Oakland became their new home. They ran their business from home, and sold vintage furniture imported from England, setting up furniture out on the front lawn—only to be later scolded by fellow renters to clean up their act. Bill Cross acquired their current shop on Telegraph Avenue, finding a large place for growing their business and raising their children.

Working in the antiques business almost his entire life, Bill Cross shared his passion with his family, and inspired his son James to take over the family treasures after his passing. “I started when I was a kid in the 80’s,” says Cross, adding that his father “pretty much motivated me into buying and selling furniture and fixing it up.”

“The moment of getting a shipping container, I got to share that with my dad,” said Cross, recalling one of his childhood memories. “It seemed pretty fun at the time, and it was exciting to bring stuff home and look at it all. It was like Christmas!”

Today, Cross restores the furniture he buys at auctions or after cleaning out people’s homes because they’re moving out or someone has passed away. But he has stopped spending the time to work on long projects because he “can’t get the same value out of his time anymore,” he said. The only jobs he takes on now, at age 55, are 5-to-10-minute fix jobs with Gorilla Glue or a few nails.

Cross finds it difficult to compete against corporations like Walmart or Ikea, which can sell masses of cheap new items for not much more money than the used ones. For instance, a “Home Gear Alpine Deluxe 6 foot Artificial Green Christmas Tree” at Walmart is $26.99. At the Antique Centre you can find Christmas trees at the same price or less—depending on Cross’ mood or the weather—that are bigger and already decorated. The only difference is the box.

“It’s hard to compete with the stores today. They already got 50 percent off before it’s even Christmas. I don’t get it. It’s a crazy world now,” he said jokingly.

But prices are not the only issue. Cross has accepted a crueler reality: “Nobody really buys a lot of used stuff.”

Cross’s shop continues to stay afloat selling a variety of “stuff”—furniture, dishes, books, ceramics, lamps, dolls, home repair tools, cameras, bikes, and toys to name a few—trying to appeal to a broader clientele. There’s plenty of treasure to find. Cross’ biggest personal treasures are the antique cars, a Lincoln, Rolls Royce, and a Jaguar, he stores in the garage that belonged to his father.

Whether customers have big or small pockets, everything here is priced for someone on budget, and his mother, Pamela Cross, a former interior designer, always has suggestions for those seeking to decorate cheaply.

But still, the customer flow doesn’t increase too much. Pamela Cross spends most of her days sitting in a chair inside or out in the front, watching over the shop and the few people who are here mostly because they are curious about what this place is really about, rather than shopping. Cross spends all his day roaming around the shop bringing out more “stuff,” and going out for runs to get even more “stuff.”

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It’s a slow-paced business, too, for the folks who run the Video Room, a small DVD and Blue Ray disc rental store along Piedmont Avenue. The Video Room was born in 1983 when two brothers, Ed and Joseph Lum, concentrated their efforts on what they thought would be latest cutting-technology: laser discs.

“They thought this was going to be the future of video entertainment,” said Bill Wedemeyer, the manager of the Video Room who has supervised the business for the Lum brothers for the past 20 years. “Nobody else was selling them. Nobody else was renting them.”

But the laser disc rental idea did not boom. Many people at the time didn’t own laser disc players, which were released in 1978 and were the first optical disc storage medium sold to the masses. The discs themselves were as big as records. They were scarce. They were expensive. They were a closed medium—you couldn’t record over them. And nobody bought laser discs when you could purchase a VHS tape for a quarter of their price and have the luxury of running towards the TV to record your favorite show over an old movie.

But the Lum brothers weren’t wrong. Laser discs provided twice the high definition and quality of a VHS tape. They made it easy to skip through chapters, while finding your place on a VHS tape was time-consuming. It also allowed room for recording bigger files and was the first time bonus features came along with a film. Nonetheless, only hardcore video fans owned laser discs players. (Wedemeyer still owns two.)

Over time, the Video Room adapted to technological changes, reshaping their vision from laser discs to VHS to DVD to Blue Ray. But although tape rentals were initially lucrative, that medium also became obsolete in the early 2000s, and video stores began to close. Oakland lost four local stores in 2010:  two Hollywood Video stores in Oakland, as well as Videots and—despite a strong effort to save it—Reel.com in neighboring South Berkeley as Anrica Deb reported for Oakland North.

Customers renting from the closing neighbors came flocking to the Video Room, even after the store shrank to one third the size of its original blueprint and slimmed down its collection. “For a while we had laser discs, VHS tapes, and then DVD. Eventually it became clear that we needed to jettison the VHS tapes,” said Wedemeyer. “Now we have DVD and Blue Ray. Where the laser disc failed, the DVD technology did catch on, is still popular, reasonably priced … but what isn’t so popular anymore is renting them.”

“We are sort of the ‘Custer of last stands’ in terms of video rental stores. We’re the only one left in Oakland,” said Wedemeyer. “We are down to three in the East Bay area and we are struggling.  It is a constant struggle just to keep our head above water.”

Wedemeyer blames in part the streaming video industry: Hulu, Crackle, Tubi Tv, Amazon Prime Instant Video, Vudu, Pure Flix, Klowd TV, Crunchy Roll, Drama Fever, ConTV, PopcornFlix to name a few—and of course, Hollywood’s top streaming service, Netflix. If recording a favorite TV show on a black plastic brick was revolutionary, online streaming has changed the game even more. Netflix is the world’s leading Internet television network with over 86 million members, including more than 47 million in the United States, in over 190 countries. Viewers can stream more than 125 million hours of TV shows and movies per day, including original series, documentaries and feature films.

Netflix was the first service of its kind and introduced two firsts to the world. In 1998, Netflix launched the first DVD rental and sales site, and in 2007 launched its streaming service with 1,000 titles. By 2005, there were 35,000 different film titles available, and Netflix shipped 1 million DVDs out every day. Streaming business continue to grow although the DVD rental business continued to decline, even for Netflix, when they introduced Qwickster, a DVD rental-only service in September, 2011. They quickly rejected the idea a month later after many subscribers refused to pay the extra service fee. According to the company’s annual report to the Securities and Exchange Commission for 2015, the company made a revenue of $5.5 million in 2014 and nearly $6.8 million in 2015.

“The problem is every day there are more streaming opportunities,” said Wedemeyer. “You can stay at home. You can dial up what you want … sometimes you pay for it. Sometimes you don’t.”

But the media streaming conglomerate, and even video rental kiosks like Redbox, do not entirely intimidate the Video Room staff. Wedemeyer feels confident that customers come back to the store and rent a DVD when neither outlet has a title available or to enjoy a chat with the clerks, discussing sneaky plots, camera techniques or to crack a joke or two about awful acting.

“We think we are sort of the barber shop of movies—the old-fashioned barber shop where you go down, you sit in the chair waiting,” said Wedemeyer. “You read a magazine or two. Maybe sneak a Playboy from the bottom of the pile. And you talk to the barber and the barber would talk to you. This is what we do here. We have a very loyal stable of customers who come in, who support us every week. Week in and week out. But that number, unfortunately, is not growing. We’re not getting any new customers. The new customers we get have come to us for a movie for that weekend, but don’t come back.”

“In recent years, family participation has dropped. We have fewer young children, but we still have a large family collection,” he continued. “We’ve lost a lot of young customers. We don’t have as many teenage customers or young adults as we used to have. We have a strong senior citizen contingent. And I would say that, without being disparaging, that’s because they’re reluctant to accept or adopt all the new technologies.”

On a recent afternoon, a father had brought his daughter on a field trip to the Video Room. As they walked around the DVD aisles, he told stories about growing up with a video rental store. He came on that day thanks to a request from his wife to find something “good and of high quality” and asked the clerk, Dustin Vaught, for a suggestion. Vaught happily took on the challenge. He spent the next 15 minutes retelling anecdotes of his favorite movies, hoping the man would snatch one the DVD cases out of his hands. When he finally did, the battle wasn’t over—the next challenger was the man’s young daughter, Chloe. As Vaught politely escorted her to the family section, he spent the next five minutes dodging the titles of the movies it turned out she had already seen on Netflix or at the movie theater. And it was hard.

“Well, I’m all out,” said Vaught, after running through the popular titles.

“No, keep going. You can’t be all out. I don’t believe you. You work in a movie store! You got a million of them!” the father replied.

Finally, after reassuring the father it had a good review, Chloe walked out with Finding Dory.

Employees of the Video Room are “happy to work with you, make selections with you and argue with you about what you like, about what they like, or what the other guy likes,” said Wedemeyer, but he has also has accepted a grim truth: The Video Room will never make a profit again.

“Nothing in the future indicates that we will make a profit again. Technology has outdistanced the capacity for a small little retail store like this to make it,” said Wedemeyer. “Having said that, there’s a lot of interest in the neighborhood in keeping it—some pride in keeping it in the neighborhood.”

Wedemeyer himself had come out of retirement after a career as an architect and devoted himself to his other love: movies. Every day he works, he opens up the store with a smile and wears his famous fedora hat. (If he leaves his hat at home, people want to know who he is.) “I love movies. I love the theater and television. Anything visual. And so I wear the hat, which collects my movie tickets and theater tickets and a few political buttons, as just a symbol of my interest in movies,” he said.

But beyond all the hardships of keeping the Video Room open—they’ve already “trimmed to an embarrassingly low staff,” cut inventory to a bare minimum, cut hours, cut rental space, and every employee makes the minimum Oakland wage of $12.55 per hour—Wedemeyer is the most upset at the thought of losing his customers. He keeps tabs on an elderly couple, both using canes, who come in every Saturday morning and rent two to three movies. Wedemeyer suggests movies with closed captions for the husband, who uses a hearing aid, and worries when they break their routine.

Wedemeyer has even volunteered his free labor. He hopes the Video Room will be treasured by the local community, and that when it cannot longer succeed as a business it can be turned into a nonprofit video reference library.

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But just like Wedemeyer’s purchasing inventory rule—“when something new comes in, something old has to leave”—in Oakland, some kinds of jobs are displacing the others.

Tech jobs have moved to the city and in fact, there are more tech jobs in the Oakland Metro Area than in San Francisco. Now, the fastest growing sectors in the city are tech and education, which both had 30 percent growth last year, said Marisa Raya, a city of Oakland economic and workforce development department specialist.

But even though technology is one of the fastest growing sectors, it only accounts for 2 to 3 percent of the city’s economy in terms of number of jobs, said Raya.

Healthcare is one of the biggest employers. Oakland’s Kaiser Permanente hospital alone accounts for 12,150 jobs in Oakland while Pandora, the popular internet radio company, only accounts for 1,100 jobs. The top entities making the highest revenue in the city are finance and insurance firms, followed by healthcare and social assistance, as reported to the U.S. Census Bureau in 2015.

Meanwhile, businesses losing out on revenue include museums and historical sites, according to the census report. Among the other jobs leaving the city are public administration positions and jobs working as tellers inside a bank. Banks are a business model forced to make changes since technology has brought personal finance closer to hand through online banking. “More and more people use online banking now instead of going to a teller,” said Raya. “There’s less need for the staff people that work the counter at the bank.”

But Lee Lambert, director of the Alameda County Small Business Development Center, pointed out that one kind of small business has seen a resurgence. “Last year, nationwide, we had more independent bookstores than the year before,” said Lambert. “Amazon, in particular, really clubbed that industry and we have been losing bookstores for as long as I have been doing financial consulting. Now, we seem to have a trend stabilized where folks are defending their local bookstores and making sure they patronize them and find value in having physical books.”

Even so, he said, technology has changed the way people must do business. “Obviously, technology trends and social media are one of the ways we communicate now and has changed the way local businesses operate. It’s pretty hard to run a business without running some decent social media now. It’s rare,” said Lambert.

Several organizations exist in Oakland to provide tools to help owners expand small businesses. Main Street Launch provides small business owners in Oakland and San Francisco with a loan up to $250,000, and also helps businesses owned by veterans in California. One of their focuses is on helping clients who cannot obtain capital through banks, because many banks won’t fund a business that does not already have two years of profitability.

“We are hoping to close that gap,” said Katie Taylor, assistant vice president of communications at Main Street Launch. “We are trying to equalize the plane field a little bit, so people could get access to capital if they’re hoping to start a business.”

Last year the Oakland branch of Main Street Launch lent about $3 million to 30 companies. Across the board for the whole organization, they lent about $10 million to 76 companies in the Bay Area.

One of those is the Caribbean restaurant Kingston 11 on Telegraph Avenue. With Main Street Launch’s help, the two owners, Nigel Jones andAdrian Hendersen, were able to secure a $120,000 loan through the U.S. Department of Housing and Urban Development in partnership with the City of Oakland that allowed them to finish the restaurant’s construction, said Taylor.

“Nigel [Jones] wanted to bring Jamaican food to Oakland and they’re the only Jamaican food restaurant in the city,” said Taylor. “They’re not just following their dreams with this restaurant, but are trying to be good role models hiring from the community. And the best part is we get to enjoy their food because they are our neighbors.”

Main Street Launch also offers small business owners loans to help them weather unforeseen economic complications. Currently they are focusing their efforts on East Oakland after AC Transit announced that a bus rapid transit line would start construction there in May, 2016. “The potential of having a bus rapid transit line can really benefit the businesses operating there, but two years of construction can be really hard for businesses,” said Taylor. “We started working with the city last year to identify the businesses operating along the bus route and offered them resources and services to help them if they wanted to continue to operate during that construction period.”

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Some small businesses are trying to keep going the old-fashioned way: Through a long-term relationship with their clients. Alfonso Ramos, owner of the Fruitvale Shoe Repair store, learned the art of making shoes from his father growing up as a child in El Salvador at 11 years old.

“Trabajito siempre tenemos verdad,” said Ramos, speaking in Spanish. “Como este negocio tiene tiempo de estar establecido aqui, siempre emos tenido trabajo, gracias a Dios.” (“We always have a little bit of work. This business has a long time of establishment here, so we always have work, thank God.”)

Ramos has customers from all ages and ethnic backgrounds, and his income is as variable as his customer base. Ramos solely depends on orders for making keys and shoe repairs, plus a few requests for handmade boots, leather cases or bags. And these orders sometimes get forgotten. Sometimes they get left unpaid for a long time. Or sometimes, they’re not enough.

Ramos makes around $30 to $60 per repair, and takes his time and care to complete each one. He opens his shop every day; Ramos will always be in the back room standing in front of his tool table working on a shoe as he whistles along the romantic Spanish melodies playing on the radio.

“Esta es una reparacion de suela completa y anda por $60 repararla de nuevo,” said Ramos. “Pero usamos los mejores materiales que podemos comprar.” (“This is a repair for the whole sole of the shoe and it’s around $60 to repair it as new. But we use the best materials we can afford.”)

Across town, Wedemeyer, too, keeps working with his small staff and loyal customers, and James Cross can’t envision ever giving up the antiques business, even if it’s slow. When asked if he has consulted anyone for advice on maintaining his business, Cross stuffed his hands inside his pockets and said jokingly, “To tell you the truth, I don’t really care.” He paused and laughed. “I’m not trying to work that hard.”

Cross’s business, in fact, is open every day of the week from 11 a.m. to 5 p.m. Even on a rainy day, Pamela Cross will sit in one of her wooden chairs, peacefully waiting for a customer while petting the family cat.

“I don’t know—when I get too old to move, I’ll just sit in the doorway like my mom, probably,” her son said, laughing again. “And I’ll just sell a little bit at a time.”