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I have wanted to write this article for awhile now, but just have not been able to find the time. But now with the recent opening of two more sex shops in an already saturated market in Ottawa, I should say my piece and explain why investing money in sex shops or opening more sex shops is just stupid business. Everything works in cycles. Everything has its highs and lows. Recessions occur every 8-12 years. Generations change. People change. Not to acknowledge these facts is again bad business.
People ask me all the time. Why move to Osgoode?
I knew coming out here that
1) The Canadian dollar was sliding.
2) Rents were going out of control.
3) Wages were going up.
4) All utilities are going up.
5) The cost of living keeps rising.
6) People have less spending money.
7) Strip clubs keep shutting down.
8) The industry has been trashed by cheap garbage from overseas.
9) Sex shops still look like dives left over from the 1970s.
10) Retail market is splintered.
11) Debt repayment
You may have noticed an alarming amount of both sex shops and strip clubs have closed their doors in the past 20 years. There is a reason for this. Some people argue that society has become more liberal and accepting, thus sex shops have become main stream. While I argue that business cycles and economics out-weighs that, and that what was once main stream will once again become a small niche market or dissappear all together.
The death of sex shops.
1) Magazine Sales.
Sex shops have lost all magazine sales. Why? First off all magazines have shot themselves in the foot. Magazine prices have gone from $1.00 to $15.00 in the past 40 years. The cost of advertising in magazines has also risen from $50-150 dollars for a small one time ad to tens of thousands of dollars for ads that quite frankly do not work. Lastly the internet has put the final nail in the coffin for magazines as they are all online now.
2) Video rentals & sales. Pornography.
Sex shops have again lost this as well, but this time solely to the internet. Why should anyone buy or rent XXX movies when they can basically get all the porn they want to from websites like pornhub and youporn for free or they can pay a monthly sub ., for some porn sites. You can even watch cam-girls from websites for a small fee, so why bother even going to a strip club. The death of blockbuster video and the rise of Netflix comes to mind.
3) Lingerie & Dancewear.
This is a category I know all too well. The apparel industry has basically been trashed by cheap garbage coming from slave labor overseas. First off, they took the lingerie, threw it into a box, put a picture of a photo-shopped chick on the front to grab the attention of the male shopper and then marked it at a cheap price. After 20 years of this, the shopper finally wised up and realized that all there getting is a throw away outfit that 9 out of 10 times doesn’t fit properly. Now they are scrambling to put things back on hangers. Too late, you kiled it already. The industry shot themselves in the foot to make a quick buck because all that matters is profit right now, today and fuck tomorrow. Even the strippers have stopped buying these products for Wal-mart and Valu Village bras and panties. Stores like Forever 21, Garage, Sirens and H&M. But just like Benetton of the 1980’s, these stores will go the same way. They are generational stores.
4) Sex Toys, Whips & Chains.
Let’s hear it for 50 Shades of Stupid!! To think that one of the worst book series ever written would fuel the sex shop industry for a decade is just beyond me. If it wasn’t for those movies and books, the industry would have gone under a long time ago. But, I am getting ahead of myself. Sex Toys have changed dramatically over the years. To think that they took a simple penis shaped toy and turned it into a “massager“ in order to appeal to a wider audience makes me laugh. Then they took the price of it and drove it to the moon. 200 bucks for a fuckin’ vibrator that will break after 1 or 2 tries and has no monetary value to it, yea no thank you. That trick only works so long before people wise up to it. Now you can also buy these same toys from websites for half the price of what sex shops sell them at.
5) Potions & Lubes
This category has been taken away from sex shops by your local drug stores, Wal-mart and the internet, so why bother.
6) Shoes & Boots
When I first started selling shoes in my store I had no idea that there was a market for it and quickly became Canada’s biggest seller of Pleaser shoes. In order to do this I had to sell them at the same price you find them on-line, which meant low profits, but because I was moving so much product the amount of shoes being moved outweighed the price I was selling them at. Most sex shops stay clear of this product because of the high cost of carrying the inventory that sits on the shelf for months before it is sold. Also now with strip clubs shutting down, there is no meat left on the bone. Strip clubs have been written off the books throughout North America. People don’t realize that every municipally has done something called “ amalgamation “ where cities swallow up rural areas to become one massive bureaucracy. This has been going on for 40 years across North America it is nothing new. What they did was they wrote off “ adult entertainment “ which strip clubs fall under, so once a club shuts down and loses its license no new license are given and thus ends the clubs. But again this is just another cycle. Amalgamation will ultimately fail in the next 20 years as cities go bankrupt, and all municipalities will revert back to their old state. Mega cities are economically unsustainable, not because they can’t work, but because the human being exploits weakness in the system to make backroom deals and money under the table for their own personal selfish gain. Inflation also hurts cities. The more things cost, the more people they hire, the higher the expsense to run the city, and the bigger the debt becomes. A debt that gov't has no intention on ever paying back. All they do is maintian it through inflation. When will people realize the reason why the Gov't wants inflation is to maintain the debt payments. It's like the dog chasing it's own tail. Gov't debt is something the entire planet is suffering from and not just the west.
The death of strip clubs
Strip clubs have been shutting down across North America. Just one example is Toronto who had over 60 clubs just 15 years ago and is now down to maybe 10. One of the reasons for that I mentioned above under shoes and boots. Another reason involves real estate. Most clubs are family owned and the owners are simply cashing out of there now million dollar properties knowing that this is a once in a lifetime chance to turn their property that was purchased for next to nothing 50 years ago into a nice sized nest egg for themselves. Some of them also realize that once the massive generation of millennials moves through the system real estate will come crashing down again. Real estate is supply and demand, basic economics. However, what you will see is strip clubs being replaced with brothels and burlesque, which is what we used to have once upon a time. You also have clubs who rent space. These ones will shut down due to higher rents, utilities, food and wage costs. You also have the fact that going to a strip club is just a waste of money that most men have finally come to realize. I myself have not stepped foot in a club since 2001. Why should I spend a cover fee for over priced beer, over priced drinks, over priced bad food, and 20 bucks for lap dance that lasts 2 minutes when I can basically and quite literally get more bang for my buck from a one night stand without paying for anything. The younger generation has realized this and are staying out of clubs. This is why memberships in fintess centers have sky rocketed. The new millenial thing. That and some guys just don’t have the spending money that the older generation had enjoyed for so long.
In conclusion, sex shops are zombies. Anyone opening one up or expanding what they have or investing money into one is a complete and total moron. Sex shops are left overs from the sexual revoultion of the 1960's and peaked at the end of the 1990’s. It’s been all downhill since 2000.
In the end I will always be around for the girls to buy their shoes and Excitables will live on under a new name as omly a store for the girls. I enjoy dealing with my customers and serving them, but I am out of the sex shop game and have been since 2014 when I moved the store.
One final thought on retail and brick and mortar stores. Ask yourself this. Do we really need 10,000 stores across the country? There is such a thing as over saturation of the market. To blame the internet for store closures is too simplistic. Internet sales only account for 10% of all sales. That is a small fraction. Store closures go far beyond e-commerce. The next thing that will go in retail is the big box stores that are left over from the 1990’s. Cities don't care weather you shut down or succeed. They will issue permits across the board because they are desperate for tax dollars. Gov'ts make the rules for you and they change them all the time without any consideration for you. Their attitude is "if you can't succeed under our new rules, tough." Arrogance and stupidity is in-abudance in politics, while Logic got thrown under the bus.
Stay tuned for the next chapter as I re-invent the store!