By Charlie Bermant
Peninsula Daily News
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“We are planning to lose money in 2013,” said CEO Peter Quinn during the publicly traded company's first stockholder meeting Wednesday night.
“That is not unusual in a new business, especially in retail, where the first quarter is always challenging, and this past quarter has been especially difficult for retailers in Port Townsend,” Quinn continued.
Quinn said the store will follow a common retail pattern, where sales during the final five months of the year sustain the operation for the less-busy times.
Quimper Mercantile Co., or QMC, opened its doors in October and celebrated its grand opening in November.
Wednesday's meeting represented the first formal report to stockholders and took place in a vacant part of the store, located at 1121 Water St.
Swain's Outdoor closing
QMC was formed after Swain's Outdoor, which was in the same location, closed in early 2011 after having operated in Port Townsend since 1996.
The store showed a $220,103 net loss for the year, but the profit outlook will be more optimistic in future years since $250,000 in startup costs is not an expense that will be repeated, Quinn said.
A new board of directors was elected Wednesday, with 3,398 shares voting and providing 99.79 percent approval of the unopposed slate of candidates.
Elected were incumbent board members Quinn, Marty Gay, Deborah Stinson, Ian Keith, Tim White and Steve Moore, along with new members Ron McElroy and Xoe Huffman.
Stockholders had the option of approving or rejecting the new list of board members but not of voting on individual members.
Gay, the chief financial officer, said there is room for one more person on the eight-member board but attempts to solicit someone for that position were unsuccessful.
About 120 stockholders attended the meeting. Most stood during proceedings. About 40 chairs were set up.
The unused retail space where the meeting was held is where store officials eventually hope to expand the inventory.
Through its stock offerings, QMC has raised $576,000, which is short of the $750,000 goal and the $950,000 limit.
Initially, the offering was to end Jan. 1, but the store was granted an extension until Feb. 1, 2014, and stock sales have continued at what Gay characterized as “a trickle.”
The store was able to operate when it raised $425,000, with all additional funds to be allocated toward inventory development.
The store now has about $245,000 worth of inventory, an amount that Quinn said he would like to double.
“We had a minimum amount of money that we needed to open the store,” Quinn said.
“If there is anything that we've heard most frequently from people, it's that the inventory is a little sparse and there isn't a lot of depth,” said Steve Moore, board member.
“We have a store open, and we are in business, although we feel that if we had around $750,000 or $800,000, we'd have a level of inventory that we'd really like,” Moore said.
“We'd love to be able to respond by offering more product and what people are asking for.”
Moore said the best way to build inventory is to sell stock, which should be a less difficult process now that the store is open.
“The nice thing is that unlike when many of you stepped up and bought shares, we exist now,” Moore said.
“I remember people asking, 'Are you going to carry this or do that,' and we couldn't answer because those were forward-looking statements. There is no more forward looking because there is a pretty good indication of what we will have.”
Moore said the sale of another $175,000 in stock would bring inventory to an adequate level.
“We hope you can help us to reach more people,” Moore said.
“We are all in this together,” he said.
During a question-and-answer session, stockholder Deborah Hammond said she found the numbers encouraging, even if they were in the red.
“You already made so much money in a limited time, you are covering your losses,” she said.
“It would look a lot worse if you weren't doing so well, but this doesn't look so terrifying to me.
“It could be a lot more terrifying, but it's not.”
Jefferson County Editor Charlie Bermant, who owns two shares of QMC stock at $100 each, can be reached at 360-385-2335 or at email@example.com.