Closing of Holm Brothers to leave a gap, owners say

WILLMAR -- The closing of Holm Brothers Sportshop and Hardware will leave a gap that's hard to fill, say the store's owners.

"We love customers. We treat our loyal employees as family," said Kornell Erickson. "I've enjoyed what I've done and I'm going to miss the relationships that I've developed here."

Erickson and co-owner Randy Klein announced Jan. 2 that the store, a retail fixture in Willmar for nearly 30 years, is going out of business. A liquidation sale is under way.

The closing of the store will put 25 to 30 people out of work. Some employees have been with Holm Brothers for upwards of 20 years.

The owners said they broke the news on New Year's Eve.

"We didn't want to ruin their Christmas," Erickson said. "The hardest thing I think I've ever done in my whole life was to tell my employees... They were in shock. I think it took everybody by surprise."

At its peak, the store had just over 40 workers.

Holm Brothers built its business on treating customers as individuals and employing people who were knowledgeable about the products they sold, the owners said.

"Personal service is what the smaller stores thrive on,"Klein said.

But a series of factors made it increasingly tough for the independently owned store to stay profitable, he said. "You really can't pinpoint one thing."

Successive winters with little snow had cut into sales of winter sporting goods and clothing, which made up a large share of the store's merchandise, he and Erickson said. Sales of hunting gear also were dwindling, partly over fears about chronic wasting disease among deer.

Sales were further hurt this past year by higher energy prices and less disposable income for many people, Klein said. "Every time you take a chunk out of available income to spend, it cuts back on retail."

Erickson and Klein took on extra debt last summer when the store's other two partners, John Holm and Roger Holm, decided to leave the business and sell their share of the ownership. When the bank threatened to foreclose, Erickson and Klein managed to get an operating loan from another local lender, North American Bank, but had to reduce their inventory by $500,000 to help pay off the original note.

"We ended up losing a lot of money," Erickson said.

Sales rebounded somewhat in the second half of 2005 but fell flat again in December.

Erickson and Klein said they'd also been struggling with what many small, locally owned retailers face: competition from big-box stores and Internet shopping, pressure from suppliers to buy more inventory, a shrinking base of loyal customers.

It became clear that Holm Brothers was facing an uphill battle for survival, Klein and Erickson said.

"It's hard after this many years. You always have that hope in your mind," Klein said. "But you can only absorb so many losses."

The Holm Brothers name has been part of the regional business landscape for close to a century. The original Holm Brothers Hardware Store opened in 1914 in Kandiyohi.

The Holm brothers -- there were six of them -- were keen entrepreneurs. During its heyday, which lasted into the 1980s, their business included six hardware stores, farm implement dealerships, funeral homes, a furniture store and a couple of farms. They also ran a finance company and a plumbing and heating company.

The Willmar store has been in business since 1978. Erickson joined the store as manager in 1986 and became a partner in 1988. Klein was hired in 1995 and became a partner in 2000.

Erickson and Klein have 120 days to liquidate the inventory. They said they plan to pay off all their creditors before closing the doors of Holm Brothers.

The building itself is owned by Skylark Partnership, which has been renting the space to Holm Brothers. Erickson said another tenant will likely be found. "We've got people already in line wanting to rent it. I don't think it'll be a problem," he said.