GLENDALE : City Weathers a Rough Ride in Retailing

The city of Glendale’s first foray into the retailing arena has been turning old street signs, parking meters and other municipal relics into memorabilia, but it has failed to turn a profit and changes are in the works, city officials said Wednesday.

Inventory and personnel costs have been higher than officials expected when City Shoppe opened in the Glendale Galleria last November, said Robert McFall, assistant city manager.

The store was expected to roughly break even in its first year, with about $200,000 for overhead costs and about the same in sales.

But as of March the store’s expenses outweighed revenues $102,000 to $64,000.

“Obviously, this is a new type of venture for the city, and we’ve been watching the revenues and expenses very closely,” McFall said.

“Actually, the revenues have been very close to our original projections, but the costs have been a little greater than we thought.”

As of May 1, a private firm that was hired to run the store under contract will be dismissed and that job will be taken over by Rosie Veracruz, who is now employed as an assistant manager at the store.

Officials said the store will continue to operate as a separate business entity under the city’s ownership.

The main difference will be that the city will no longer have to pay a monthly management fee.

“The current management team has done a good job,” McFall added.

“(They) got the store up and running and we greatly appreciate their efforts.”

He said the firm realized the store was losing money and voluntarily withdrew from its contract with the city.

The City Council allocated $25,000 toward the store’s start-up costs.

Backers of the project pointed to the revenues and public relations benefits reaped by San Diego and West Covina, two cities that have operated municipally themed stores successfully.

Officials originally said they expected the store to eventually generate as much as $1 million in profits for the city’s general fund.