Year two after a longtime natural food store converted to co-op
Basics Cooperative, in Janesville, Wisconsin, started as a privately owned store in the late 1970s. It was briefly a workers’ collective, but soon became a corporation consisting of my dad, Peter Roang, his sister, Karin Jordan, and his partner, Debra Ramsdell. They worked through the 1980s in a store with homemade shelving and bins, and briefly attempted to run a vegetarian restaurant in this blue-collar town. Later, my dad bought out Karin and Debra, and spent the next 10 years owning and running the store.
Then, in 2003, Dad died very suddenly. It was a very difficult time for the store, but the employees helped me through the rough first few months. We came out on the other side of the tragedy with me running the store and my law practice in a town about 45 minutes away. The store had a very capable staff, but we were stretched thin.
Before he died, my dad and I had a few superficial discussions about the possibility of turning Basics into a cooperative. But he never really focused any effort on the idea because he had been occupied with the sale of Blooming Prairie Cooperative (he was chairman of the board through that time) and then with the illness that finally took his life. I knew he would have wanted me to pursue the idea, so in 2004 we set out to transform the Basics business into a cooperative.
We looked for models to follow, both inside and outside of the natural foods world, but we came up empty. We had to make things up as we went. A critical first step was finding a general manager who could lead Basics into this brave new world. Luckily, we had a veteran supplements manager already on staff, Sara Kirchoff, and she agreed to tackle the job.
We developed a brochure to attract members to the idea and began taking memberships in the summer of 2004, with the goal of selling the business to the new cooperative as of January 1, 2005. Our initial membership drive fell a bit short of our expectations, but we still went forward with the sale. On January 1, 2005, the cooperative purchased the entire business and began anew.
At first, very little changed. We faced the same challenges as any business: to increase sales, decrease expenses, and bolster the bottom line. We made great strides in 2005 but still generated a net loss for the year. Nonetheless, the transition from what was essentially a sole proprietorship to a board-governed cooperative was very smooth.
Frankly, I had anticipated the worst when we moved to a cooperative board. I was concerned that decisions would get bogged down and we would not be able to respond quickly to issues in the business, but that has not been the case at all with our cooperative. We immediately developed a hands-off approach to the day-to-day management of the store, which has helped us immensely. We have given the management the freedom to make decisions, within reason, without being concerned about second-guessing from the board.
The biggest challenge for the new cooperative was when Sara, our general manager, decided to step down. She loved the store, and the board appreciated everything she was doing for the store, so replacing her proved to be a steep challenge. But our young board pulled together, interviewed many candidates from all walks of life, and managed to find an excellent replacement. We were somewhat lucky in this regard, but we also knew what we were looking for: a personable manager with retail experience and a good working knowledge of financials and performance. I imagine every co-op in the country would love that mix, but we managed to find it. Lynnette Wirth started in February, and already she has made great strides in improving the store’s bottom line.
As we move forward, we will face many typical challenges being faced by other cooperatives. For example, we are in an old location with poor traffic and no space to expand into areas that our members are clamoring for: prepared food and more fresh options. We are making new strides in our relationships with local producers and local schools—we look for those to pay off in the years ahead. We also have significant financial challenges ahead. Once we improve our cash flow and our bottom line, which already has been happening during 2006, we are confident that our cooperative will continue to compete effectively in our community.
I am extremely proud of the store, its staff, and its customers for taking in stride our transition in the cooperative world. The transition has been great for the store, great for me personally, and a fine addition to our community.
S. David Roang is president of Basics Cooperative in Janesville, Wisconsin ([email protected]).