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Wednesday, 05 December 2012 13:50

Fate of liquor stores in Maggie Valley in holding pattern for now

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Maggie Valley’s ABC Board has put any plans to close one of its two liquor stores on the backburner for now.

“It is doing better than we thought it was initially,” said Colin Edwards, an ABC Board member.

Ever since Maggie opened a second ABC store in Dellwood in 2009, the ABC board has struggled to afford the overhead of two stores, without a sizeable uptick in revenue to justify both. As a result, the town has debated whether to close one of the two — and if so, which one? During the first three years of running two stores, the board lost more than $96,000.

“It was in such bad shape,” Edwards said.

Maggie’s new store was strategically built two miles beyond the official town limits, practically on Waynesville’s doorstep. Maggie annexed a satellite tract of land on U.S. 19, technically making it part of the town proper, to build the ABC store on Waynesville’s outskirts. As hoped, the store has successfully drawn business away from Waynesville’s ABC store.

But, between overhead and salaries for two stores, plus construction debt on the new store, Maggie’s ABC operation was losing money. Only now is it breaking even.

The board must pay $62,000 annually toward the debt it owes on its Dellwood store. And, as of its most recent earnings reports, the two ABC stores have nearly $64,000 left after expenses —just enough to cover its debt payment.

“We aren’t as bad as we think we are sometimes,” said Fred Moody, chairman of Maggie’s ABC Board at its meeting last month. The ABC Board is still 10 years away from paying off the debt it owes on its newest store, however.

Last year, some Maggie aldermen questioned whether the stores were properly managed after spending back-to-back years in the red.

“When they decided to build the Dellwood store, they never did their homework to see how that store would affect the Maggie Valley store,” said Edwards, who was an alderman at the time. “It’s pulled business away.”

Following a power shift on the Maggie Valley Board of Aldermen last year, the town’s ABC board saw some changes of its own as well. Aldermen increased the number of people serving the ABC board from three to five, injecting new oversight to the town’s ABC operations. The stores have since reduced their expenses, which Edwards credited as the reason the stores are now breaking even.

The new five-person board hired a new accountant at a cheaper rate and saved money by switching to the state’s employee insurance plan rather than buying private coverage, Edwards said. The new board also made it mandatory that two employees sign all checks, whereas only one was required before.

“Before, there weren’t no checks and balances in place,” Edwards said.

The ABC Board could further cut expenses by closing its old store and only operating the Dellwood location, but board members said that as long as the stores are no longer running a deficit, they would like to keep them both open.

“As long as they are both making a profit, we can keep them,” Edwards said.

Although the ABC Board projects that the tide is starting to turn for its stores, the old ABC store near town hall in the heart of Maggie is still drawing fewer walk-in customers than its Dellwood counterpart, which draws people from a much broader geographic area.

“In the wintertime, we get basically dead,” Nancy Helsel, general manager of Maggie’s ABC stores, said of the store in Maggie proper.

The old store’s bottom line is bolstered by the sale of mixed beverages, or rather liquor purchases made by restaurants and private clubs. The Dellwood location receives the majority of walk-in buyers.

The conversation about closing the ABC store by town hall is not done forever. Several changes could influence the stores’ bottom lines — and which one, if any, would be the better one to close.

Waynesville is building a new ABC store near the Walmart Supercenter, which could detract from Maggie’s revenues, and Jackson County has talked about opening an ABC store near the Qualla Boundary, which would take away some of Maggie’s Cherokee customer base.

“There are so many factors to all of this,” Edwards said.

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