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Why Some Stores Fail and Others Thrive in Austin's Second Street District

Update: Toy Joy was bought Monday by Fred Schmidt, owner of Wild About Music on E. Sixth Street. Schmidt told Time Warner Cable News he plans to keep the store downtown. "We're going to continue with this business as it has been — only make it more successful than it has [been] in recent years,” Schmidt said. “We're very committed to Toy Joy, its concept, its premise and what it has been in Austin for several decades now."

Original story (March 31): Toy Joy will be auctioned off today. The iconic Austin store closed its doors on March 16, after struggling for the last few years.

In 2013, the owners thought a new location in a hip part of town would help, so they moved from Guadalupe Street – close to the Drag – and into downtown’s Second Street District. But Toy Joy didn’t make it.

There were lots of factors in the closing. But Toy Joy isn't an isolated case in that part of downtown. Many businesses have failed after opening in the Second Street District.

There are two main reasons why businesses that move into downtown’s Second Street District fail. One is that many of those businesses have been run by people like Trevor Yopp, now the former owner of Toy Joy. Yopp says neither he nor his wife – who was also his business partner – knew anything about how to run a business. They tried everything they thought would make the businesses successful like moving it from close to the Drag and into downtown.

The move to the Second Street District seemed like a good decision for Toy Joy. Sales were good. The rent was cheaper than at their old location. 

Yopp, who is also an artist, got creative and designed new products, some of which were pretty unconventional. Take his so-called "unicorn farts.” Yopp put air and glitter in a bag and designed a spiffy tag. He sold hundreds of his “unicorn farts” online to customers all over the world.

So, if everything was so good, why did Toy Joy fail?

“When it comes down to it,” says Yopp, “we basically took on too much and basically smothered and died from it.” The Yopps' mounting debt from back in 2007, when they bought the business, ultimately killed them.

So, reason number one why businesses in the Second Street District fail is because many entrepreneurs are not business savvy.

Fred Evans is part of the City of Austin team that redeveloped Second Street. He says there have been other factors: “continued construction, a couple of economic down-turns and the slow buildout ofBlock 21,” just to name a few.

But those factors are in the past. What’s happening now?

Craig Stealy says the second reason why businesses fail in the Second Street District is because entrepreneurs want to open a “sexy” business instead of a needed business. Stealy is one of the owners of Royal Blue Grocery, one of the booming businesses in Second Street. Royal Blue is doing so well, in fact, that Stealy and his partners are working on opening a sixth grocery store.

He says few people have asked him what’s needed downtown. But if anybody were to ask, he’d say the next successful business downtown will be “some sort of general merchandise or hardware store.” Or perhaps a place “where you [people] can go and buy socks and underwear.”

Those businesses would actually be in alignment with the original goal of creating the Second Street District – a place that would not only cater to tourists, but also to the growing number of people who live in downtown Austin.

Texas Standard reporter Joy Diaz has amassed a lengthy and highly recognized body of work in public media reporting. Prior to joining Texas Standard, Joy was a reporter with Austin NPR station KUT on and off since 2005. There, she covered city news and politics, education, healthcare and immigration.
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