ByDennis Oda, Star-Bulletin
Bike Way owners (from left to right) David Cheever,
his wife, Cindy, with their daughter, Bike Way manager
Jill Wheatman. With expenses rising and no sales growth
in sight, they will close at the end of June.

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With rent rising and sales flat,
the Bike Way is closing after
15 years in Kakaako

By Russ Lynch
Star-Bulletin

Longtime Hawaii marketing consultant David Cheever is giving himself some advice for the late 1990s: When business has been flat for a long time and you don't see it getting better -- quit.

Cheever and his wife Cindy and daughter Jill Wheatman will start closing their Ward Avenue cycle shop, the Bike Way, on Thursday after 15 years in business, sell off the inventory at "store closing" prices and be gone by the time their lease expires at the end of June.

They've sold 15,000 bicycles since opening at a Kapiolani Boulevard location in 1982 and about four years ago made it to the magical mark of $1 million in annual sales, Cheever said. The trouble is, that's where sales have been stuck ever since and there is no sign of the economy improving enough in the near future to make it worth hanging on.

The business isn't broke; it's paying its bills. It's not a big business, with a staff of eight counting part-timers. But the rent was going to go up and the Cheevers had to ask themselves if it's worth continuing to put so much energy into something that isn't going to improve.

While rent is the big worry, there are other negatives at work too, Cheever said.

"I think we're pretty typical of small Hawaii businesses today. We basically work in isolation out in the middle of the Pacific and just getting goods here can be a pain and very expensive unless you bring in huge quantities."

Wheatman said the key is growth. "We've seen no growth for a long time and a business just doesn't work very well without growth. That takes the fun out of it too," she said.

In the end, according to Wheatman, the family looked back and saw the picture had been rather bleak for several years for small retailers in Hawaii and the outlook wasn't any better.

Cheever said the store's $1 million in annual sales astounds mainland bike shop owners who would need much bigger stores and staffs to generate that much.

But that doesn't alter the fact that the store is paying rent of about $60 a year per square foot, a total of about $100,000 a year. "The mainland stores, if they have to pay $24 a year (per square foot) they say, 'wow'," Cheever said.

Cheever came to Hawaii in 1969 to join an advertising agency and spent seven years as a marketing vice president at Bank of Hawaii before starting his own marketing consultancy in 1979. He said his approach to the Bike Way was businesslike from the start.

The family came up with the initial $60,000 capital and didn't need to borrow.

"We did a marketing plan. That's what I do for a living." He was doing a lot of running for fitness and so were many others. "I said, 'I'm going to want something else to do.'" Moving up to bicycling seemed right, he said, and he assumed others would too.

But Cheever said he didn't let his enthusiasm for the athletic side get hold of his business brain. "We approached it as a business. We are not enthusiasts. I like to ride a bike but I don't drool over bicycling."

Even so, he was impressed that the first year's sales came out right in line with the prediction of his business plan and that was 1982, when Hawaii was trying to pull out of a major recession.

The store moved to the Ward Estate property in 1987 after the Kapiolani location was no longer available. "The only thing that really hurt was the rent. I respect the landlord. He signed a lease and so did I," Cheever said.

The building owner, attorney Rick Fried, has helped by not passing on all of the added ground rent he has been charged by the Ward Estate, but Fried has his own costs to meet, Cheever said.

Still, Fried made a good offer to try to keep them on, but the risk in signing a lease for another five years just seemed too high, given the state of the economy, Cheever said. "We tried everything. We spent a lot of time and thousands of dollars trying to sell the business on the mainland."

The family decided to look for other opportunities. Cheever himself, who said his income came only from his consulting business and not from the store, still has David Cheever Marketing Inc.