Shop Profile: Downtube Rising

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When a fire destroyed his 42-year-old shop, Robert Fullem rebuilt it into his dream shop

Words by Peter Koch

Downtube Bicycle Works is, without a doubt, one of the best-loved, most successful independent bike dealers in New York’s Capital District and, when you go in person, it looks the part. Sunlight floods through oversized windows at the front and back of the store, reflecting off of gleaming rows of bicycles and their tastefully displayed, carefully edited accoutrements. Right next door—and connected via a small seating area that practically spills onto the sales floor, but for a gate—is a buzzing café and “partner business,” 3Fish Coffee, that beckons Downtube’s customers to linger for a bit with gourmet joe and locally-sourced small bites.

Surveying the scene today, you’d be hard-pressed to believe that, less than three years ago, a catastrophic fire had severely damaged the 42-year-old business beyond simple repair, and the café didn’t even exist. But it was that disaster—and the outpouring of support from the community in the aftermath—that ultimately gave Downtube a new lease on life, allowing founder-owner Robert Fullem to start all over from scratch, and build the shop of his dreams.

A Total Loss
Early on the morning of March 20, 2015—the first day of Spring—Fullem was awoken by a phone call from an employee bearing terrible news: In the middle of the night, a fire had ripped through the apartment above Downtube. Though the flames were contained to the apartment, there was extensive mortar and smoke damage throughout the shop, as well as water damage from extinguishing the blaze. Within hours, the local buildings department slapped a “Condemned” sign on the shop door, and the utility company cut off electricity and gas. Soon after that, his insurance company dispatched a “major loss adjuster,” who took one look at the damage, and declared his inventory and assets a “total loss.”

The damage to the apartment above the current location of 3Fish Coffee.

The damage to the apartment above the current location of 3Fish Coffee.

It was a devastating blow to Downtube. Fullem had spent decades—assisted by a rotating cast of managers, salespeople and mechanics—slowly but steadily growing the business from an apartment-based, appointments-only operation into one of America’s Best Bike Shops. Along the way, they’d become profitable (every year since 1982), become a fixture on regional “Best Of” lists, and finally reached a point where every year was their best ever. And they did it all while ignoring the conventional wisdom that business would be better in the suburbs than in the urban heart of Albany, where he owned the now fire-ravaged building.

Now Fullem was at a crossroads. He’d have to close his well-loved bike shop, at least temporarily, and either 1) rebuild in the same location; 2) pull up roots, and relocate to the ’burbs; or, for that matter, 3) quit the bike business altogether. “We didn’t have a second location where we could move everything while we rebuilt,” he says.

A Series of Fortunate Events
“There was a part of me that wanted to eat my pride, and move to the ’burbs,” Fullem says, and that part of him looked hard for a better spot, racking up miles driving from busy plazas to sprawling strip malls to cavernous big boxes across the Capital District. But back at the condemned shop, customers streamed in (by appointment only) to pick up their repairs, and expressed an outpouring of support for Downtube. “Some people told us, ‘We didn’t know if we should bring food for you,’ like a family member had died, or something,” Fullem recalls. “Another said, ‘You’ve stuck with the City all these years, and that’s why I stick with you. You are going to reopen, aren’t you?’” He heard similar sentiments from so many people that finally it got to him, and he decided to make it work right where he was.

There was a part of me that wanted to eat my pride, and move to the ‘burbs.

He did own the building, after all, and over time it became increasingly evident that it was going to be financially viable to rebuild. First, his insurance adjuster told him that, under his coverage, “total loss” meant the insurance company would buy everything—including size 48 SIDI shoes and past season stragglers—from him at wholesale cost, and he could start fresh on inventory. “So now we had the chance to rebuild entirely,” Fullem says, and “take advantage of the opportunities that were already here.”

Next, he realized that his 19th-century building—which now includes 3Fish and Downtube, both of which he owns—was eligible for major tax credits, as part of the Washington Park Historic District. He could get 20% of eligible rehab costs back as a federal tax credit, and 20% back as a state tax cred. Add to that insurance money (at least enough to restore the building to its pre-fire condition) and a city property tax abatement, and he could begin to think bigger than just rebuilding Downtube. “All of these factors argued, ‘Stay here,’” Fullem says, while noting that the city is on a rebound and growing.

Albany’s Hottest Bike Shop
Fullem envisioned a café in the old garage space next door—he’d wanted one since the 1980s—four new luxury apartments (with hardwood floors, walk-in showers, all tile, and washer/dryer units) upstairs of both the bike and coffee shops, and a remodeled, reimagined shop. Together with his life partner, architect Marilyn Kaplan, he drew up plans for what would eventually become a $1 million project.

“We really started a whole new operation from scratch,” Fullem says of the new Downtube, only this time with decades of expertise, a personal architect, ample help and advice from Trek on setting up the showroom and integrating a cafe, and—when it was all completed—a built-in community eager to patronize it. There would be new computer systems (covered by insurance), a new POS, new displays and new, higher-end finishes on everything. The cafe would have gallery-curated art hanging on the walls, and a secluded, leafy back patio that doubles as an outdoor performance space.

While the plans were made, and permits and approvals obtained, Fullem developed a workaround for keeping the shop open. “We could only work here in the garage side of the building, and we couldn’t let people come inside.” So, they simply rolled up the garage door, set up the counter and POS out front, and did repairs and bike sales—ordering and showing, at most, four bikes at a time—from inside the garage. “We just ordered things as we needed them; we had no storage space.” Privately, he worried they’d be shut down, but publicly he showed a characteristic optimism, erecting a sign in the shop’s window that read: “Downtube Bicycle Works: Albany’s Hottest Bike Shop. Watch us come back, better than ever!” Red-orange flames licked the words from beneath.

At the end of September 2015, Downtube closed its doors as construction began and, when it reopened the following March, it picked up right where it left off, turning a profit and beating its previous year’s earnings. A year later, in March 2017, 3Fish Coffee opened as a separate but connected “partner” business, owned by Fullem and run by his daughter, Emma, who moved home from California for the job.

3Fish has been well-received by locals, many of whom stop in to grab a coffee while they’re out walking their dogs, or on their way to work. At lunchtime, it’s nearly a full house, with customers meeting up for a quick bite or clicking and clacking away at laptops. Occasionally, some of them wander over to Downtube, where they squeeze a brake lever or admire the origami folds of a Brompton. “It ties in well with the bike shop,” Fullem says, proudly demonstrating how the gate closes when only one shop is open. “We’re doing good business here.”

SPECS
Downtube Bicycle Works

Albany, New York
Locations: One
Years in Business: 46 (since June 1972)
Square Feet: 2,400 (1,200 showroom, 1,200 basement)
Employees: 4 full-time
Avg. Bike Sale: $700-800
Major Brands: Trek, Brompton, Seven, Surly
Online: downtubebicycleworks.com
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Lessons From a Lifetime in Bikes

Numbers, numbers, numbers!…and other advice from retail vet Bob Fullem

1. Know Your Numbers. “You’ve got to look at profit. You’ve got to forget about the product that you like, and instead look at the numbers. One way I do that is by paying attention to my monthly NPD (click here—it's FREE—to become an NPD retail partner) report to better understand what’s selling regionally and nationwide, and for how much. When we restocked the shop post-fire, I wanted to cut down on inventory and SKUs. We had too many shoes, for example, and when I looked at our bell curve-shaped sales numbers and compared them to the NPD data, they told the same story: Brick-and-mortar doesn’t sell $300 bike shoes. In fact, pretty much any month of the year, the average retail price of bicycle shoes sold in all of the brick-and-mortar shops across the country is about $100. So we got rid of low-end and high-end shoes, and now our inventory turns much more frequently.”

2. Join P2, the NBDA Profitability Project. “I’ve been part of P2 now for four years now, and it’s the best thing going for a bike dealer. The P2 group gives me very quick feedback on my important numbers—things like Return on Investment, Margin by Major Category, Gross Profit per Full-Time Employee Equivalent, Percentage of Gross Going to Rent—compared to their numbers, and a dealer needs that kind of feedback to not feel lost. And, twice a year, we get together for two days, and we talk about all this stuff face-to-face. So it’s not just guys looking at the numbers late at night in the office; I’m talking to other people about it. Even now, in our P2 group text, we’ve got a little discussion going, ‘How did Black Friday go for you?’  And if you’ve got a tough problem, you can talk to another dealer—a noncompeting dealer, who you’ve built up this trust with over several years—about it in confidence. I’ve noticed, over the years I’ve been participating, that everybody’s margin has risen closer to the highest-margin stores in our group. It costs $3,000 per year, but it’s worth it.” (Click here for more info on P2.)

3. Ride/Wear What You Sell. “[Santana Cycles founder] Bill McCready once told me, ‘Don’t customize your Santana Tandem; ride it stock. Otherwise, you’re telling people it’s not good enough the way they bought it, and it’s bad messaging.’ I still agree with that.”

4. Focus On Customer Interactions. “All this stuff you’re doing—selling a particular brand, opening a café, serving beer—is secondary to each and every individual interaction with a customer. I repeat, each and every individual interaction with a customer. Chris Kegel used to tell new employees, ‘If you can’t get a customer to laugh or smile in the first 10 minutes, then you’re too boring to work here. It’s not the customer’s problem, it’s you. And you can’t work here anymore.’ So all of these other products and programs are secondary. If you think you need a specific brand or product to be successful, then the message you’re sending customers is that your skill set is irrelevant, and if that’s the case, why buy from you?”
6. Get the Ascend POS System. “Stop messing around already. Ascend is made for bike stores (you don’t have to be a Trek dealer), and no other POS system is. The people who set it up know that you’re going to have different sizes of bike tubes, for instance, so you don’t need to customize your categories nearly as much. They know what goes on in bike shops; they know about service writing, they know about layaways, and they know how it all applies to the bike business. And they revise and improve it four times a year. It’s a no-brainer. Why would you have any other system?”