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What went wrong at Straub's?
![]() OCTOBER 27, 2009 - The Straub's grocery store in Ellisville is offering 20 percent off all merchandise as part of a closing sale as the business prepares to shut down after opening earlier this year. (Robert Cohen/P-D) ST. LOUIS POST-DISPATCH
ELLISVILLE — Trip Straub walked the produce section at the newest Straub's food market, yellow pad and pen in hand. Dressed in khakis and a pink button-down, he stopped where the fresh strawberries might have been displayed. Now the entire produce section was empty. The 42-year-old successor to the family business jotted down some notes — plans not for the store's future, but for how the store will, in corporate parlance, unwind. This Straub's location will forever shut its doors at 6 p.m. Saturday, after less than a year in business.The closing of a grocery is not typically of much note. But this involves a Straub's, the iconic local grocery chain that has long been a favorite among foodies, considered by many to be the St. Louis version of Dean & Deluca in New York or Draeger's in San Francisco. And this store was a spectacular, worrisome failure for the company. The sign outside the Ellisville location looks just like the ones at the four other Straub's markets. And the new store carried all the trappings that made Straub's famous — the choice meats ($25-a-pound sirloin strip and $4.49 American Wagyu Kobe burger patties), baked delicacies, rare cheeses and the secret-recipe chicken salad. But this store was different. It felt different. It looked different. For one, it was three times larger than any other Straub's market. This was "Trip's store." It was a name used by some workers to describe the new direction, though not everyone in the company was on board with the plan. "It was just an ill-conceived idea," said a former employee with knowledge of decision-making who asked not to be identified. "(But) he was just hellbent on doing it." Jack W. "Trip" Straub III is the fourth generation to run the family business. Straub's — long a staid, cautious company — had last opened a store more than four decades ago, in Town and Country. At the time, Trip Straub's mom was pregnant with him. The Ellisville store was supposed to be Trip Straub's vision for the company's future, his chance to make an imprint on the 108-year-old entity. "It's definitely my baby," Trip Straub told the Post-Dispatch last November, a month before the store opened. And it was Trip Straub who posed for a full-page photo in a trade magazine standing on a checkout counter at the new store, his arms outstretched, welcoming. He used his initials "JWS3" for the store's legal name. The names of his four children also found use in the new store: Ellie's Cafe, Wm A. Straub Fine Meats and J&B's candy shop. Trip Straub acknowledged in another publication how big a gamble a new store would be for the privately held company. "We couldn't afford to pick the wrong place," he told Grocery Headquarters, "so we really took our time." News of the Ellisville store's closure arrived suddenly on Oct. 13. A press release blamed a woeful economy and growing competition. Fifty of 125 workers will lose their jobs. Trip Straub, who acts as company spokesman, declined several interview requests, finally allowing for a brief discussion as he worked at the Ellisville store. He said he could write a book about the hard lessons of the store's failure. He noted that meats and cheeses did well at the new store, but items in the nine aisles lagged. He said he originally planned for the Ellisville store to take three years to "get up and running," but then the economy soured. The decision was made to cut the losses and close the still gleaming-new store. "It's been a hit financially, no doubt," he said, adding, "I'll be taking the hit personally." He declined to say how big of a hit. He noted the new store was created as a distinct legal entity to protect the other Straub's stores. But recent court filings hint at both a more interwoven corporate structure and the steep degree of the losses. In August, Fixture Contracting of St. Louis filed a lien against Straub's and the shopping center's owner, claiming it was owed $200,000 for installing wine cabinets, candy shelves and other decor in the grocery. A company official told the Post-Dispatch it expects to be paid eventually. Last week, the Fountain Plaza shopping center sued the Ellisville Straub's, claiming Straub's had violated its lease and failed to pay the last three months in rent, totaling a little more than $125,000. The shopping center consists of a series of low-slung buildings of blond stone, with a row of fountains burbling at the main entrance and several vacant storefronts at Clarkson and Clayton roads. According to the lawsuit, the Ellisville Straub's signed a 20-year lease for $500,000 in the first year, with payments escalating in future years, based in part on gross sales. And while the JWS3 LLC signed the lease, the corporate owner of the other Straub's stores guaranteed it, potentially putting all of the Straub's stores on the hook for the Ellisville store's failure. The lease also covers just the land. Straub's owns the building, estimated to cost several millions of dollars. The lapsed lease may limit Straub's ability to sublease or sell the structure. The Ellisville Straub's was 40,000 square feet, small by Schnucks or Dierbergs standards, but totally unlike anything Straub's had done before. At its stores in Webster Groves, the Central West End, Clayton and Town and Country, Straub's is known as a place where you literally rub shoulders with other customers in the narrow aisles. Those stores have an urban, European shop's density. Trip Straub saw this as confining. He envisioned a grocery that offered premium foods, only more of them. "Our small-store format has worked for us for 106 years," he told the Post-Dispatch in late 2007. "This design, however, will allow us to spread our wings." Distinguishing itself from other Straub's, the Ellisville store featured bulk food bins (dark chocolate sea salt cashews for $12.49 a pound), an entire aisle of cooking oils and vinegars (small bottle of Acetaia Leonardi Traditionale 30-year balsamic, $239), a 1,100-bottle wine cellar, a luxury home wares section with Riedel glassware and Wusthof knives, and a giant coffee roaster, so Straub's could make its own brand of coffee as customers walked by. But a bigger store meant higher fixed costs and more workers, especially at Straub's, where service is so highly regarded. Costs can go up in unanticipated ways, said Jim Hertel, managing partner for Willard Bishop, a consulting firm serving retail and food service industries. Many so-called fresh format stores, like Whole Foods or Straub's, have suffered in the recession, Hertel said. Adding to Straub's miseries could have been the learning curve for operating such a larger-format store. "If you're used to operating 10,000-square-foot stores, you might not be quite sure what to do with the other 30,000 square feet," Hertel said. Trip Straub seemed reluctant to blame the store's size for its failure. But he noted customers seemed to strongly identify Straub's with cozy stores. If he wanted to open a big store again, he said, he might go with a different name. At the Ellisville Straub's a few days ago, the coffee roaster already was gone. So were the meats and produce. The Acetaia Leonardi vinegars had been moved. The deli counter — once overflowing — was empty, except for some chicken salad and beef stew. The J&B's candy shop was cleaned out, the 72 jelly bean varieties gone. The store windows were covered by giant yellow signs promising 20 percent off everything in the store. And as was noted in white handwriting on the glass deli case, "Yes, even the chicken salad."
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