Rent costs blamed for business closures

NICOLA KALMARBroome Advertiser

A tough economic climate in Broome has seen a number of businesses bite the dust over the past year – one of the most recent is Clementson Street Cafe and Takeaway, where manager Mandi Brennan has flipped the closed sign over the door for the last time.

She said she was just one of many business owners anxious about their future in Broome, as they battled issues such as low tourist numbers and high operation costs including rent, which was partly a result of Broome’s land shortage.

As the Broome Advertiser went to print, at least three businesses were in the throes of shutting down, but others which have closed in recent months have included Rockmans and Denise Walker Art.

Broome Florist, formerly operating in the Boulevard Shopping Centre relocated to Hunter Street to expand. Owner Jen Jones said rising rent played a part.

“We needed bigger premises, that was the main reason for the move, but rent was a bit too demanding and we found a cheaper alternative,” she said.

Read more...

Another small business operator who did not want to be named, said she relocated out of Chinatown because the cost of rent was too demanding, and struggled to pay the rent due to a low profit margin and turnover.

A local branch of the Just Jeans chain is preparing to close down at the end of this month, with a spokesperson citing company performance issues as a reason.

Back at Clementson Street Cafe, Ms Brennan said she decided to sell the business after she was unable to negotiate rent payments with the owner of the premises, as her five-year lease came up for renewal.

“The property owner demanded $1565 a week in rent, a total of $65,000 a year, with an ongoing price rise over the past six years,” she said.

The new owners of the business said they had planned to keep Ms Brennan as the café manager, but were unable to secure a lease on the current premises. Ms Brennan then said there was no other option for her but to leave town.

She blamed soaring rents on greed and the manufactured expectation of a boom.

“The boom is not here yet in Broome, there was a lot of hype about it four years ago, and I think people are paying early for this,” she said.

“It’s frustrating. I think it’s sad for the town that this business is closing down because expenses are too high.”

Monsoonal Blues owner Julie Russell said rent was a major issue for small businesses, and a boost to tourism was vital.

“If you walk around town you can see how many businesses are closed – it is evident small businesses are struggling,” she said.

“Businesses can’t survive without tourism. If the industry collapsed, businesses would die. Operators work seven days a week to cover rent.

“There’s no support – you either pay or you get out.”

Ms Russell suggested owners could be more sympathetic to commercial tenants during the traditionally quiet wet season.

First National Real Estate Broome principal Allan Griffiths said rents had not risen greatly over the past five years, but higher rents in Broome could be attributed to higher costs of construction.

First time business operators fell into financial traps due to bad decision-making, he added.

“People need to do their homework before buying,” he said.

Shire president Graeme Campbell said businesses would come and go but noted there had been more businesses closing of late.

“While the shire has no control over commercial rent, we are working to ensure there is more industrial land made available in the future – which could be a mechanism for reducing rents.”

Broome Chamber of Commerce president Tony Proctor said the chamber played a very limited role because the competition of rental market through buyers and sellers of lease space come together to do a deal.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails