February 17, 2025 • 43 mins
Russ's story is one of resilience and reinvention, especially in the face of a natural disaster that devastated the business. Undeterred, Russ and his team, supported by the community's goodwill, demonstrated remarkable determination to rebuild and relocate. This episode sheds light on the realities of entrepreneurship, emphasizing the dedication, energy, and strategic planning required to overcome adversity and keep a business thriving. Tune in for a captivating discussion filled with lessons on perseverance, the power of community, and the unwavering spirit needed to turn a small idea into a successful venture.
guest bio:
Russ is the founder and co-owner of Second Gear, a consignment-focused retailer specializing in outdoor adventure gear, clothing, footwear and accessories since 2004. He has over 35 years of commercial and investment real estate experience, including assisting numerous Asheville entrepreneurs to secure locations for their businesses. Russ is a graduate of Leadership Asheville and currently serves on the boards of the Asheville Area Chamber of Commerce and the Asheville Buncombe Regional Sports Commission. He was named by the Asheville Area Chamber of Commerce as the 2016 Small Business Leader of the Year for businesses with fewer than 15 employees. Russ is a 1987 graduate of Cornell University and a 1985 graduate of Paul Smiths College.
Thanks for Listening. You may contact me at https://billgilliland.actioncoach.com/
All the best!
Bill
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Bill
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Bill Gilliland (00:02):
Hi there, welcome to this week's episode
of Epic Entrepreneurs.
I'm here with my friend RussTowers from Second Gear.
How's it going, russ?
Russ Towers (00:10):
What's going well, bill.
We've had a pretty amazing lastfew months coming out of the
flood and relocating andreopening and we just went
through the holiday season in anew location.
So it feels good to be kind ofback in business.
We never worked totally out ofbusiness but yeah, it's a relief
(00:30):
to kind of be somewhat back tonormal in business.
Bill Gilliland (00:34):
Yeah, let's come back to the flood, but let's
back up first.
I do want to talk about thatbecause I do think it's an
interesting story and yourresponse to it.
I think there's some lessons inthere story and your response
to it.
I think there's some lessons inthere, but tell us a little bit
about Second Gear and how yougot involved in Second Gear and
all that Sure.
Russ Towers (00:52):
Yeah, okay.
Well, like a lot of smallbusinesses, second, gear was
started kind of out of apersonal experience that I had
shortly after moving toAsheville.
My wife and I moved here in2000.
I had a worked in corporatereal estate in Charlotte and
Atlanta, but we had family here.
So anyway, we moved here in2000.
(01:13):
She already had family here, sowe had some some familiarity
with Asheville.
And early on I was looking for aroad bike and I also was
interested in buying.
We moved here.
A big draw was for the outdoorexperiences here, the outdoor
opportunities, as well as beingin a smaller city.
So anyway, I was looking for aroad bike.
(01:36):
I was also interested in buyingother equipment.
You know whether it was a kayakor other things.
I wanted to try some outdoorendeavors that I had never done
before, but I didn't have thegear.
At the same time I was.
Also I went from working insalaried commercial and
investment real estate to beinga real estate broker, all
commission.
(01:56):
So I didn't have a blank checkto spend on gear and you know.
So I was looking for a roadbike.
I was looking for a used roadbike, but that was hard to find.
This is back in early 2000,.
Like we moved here in 2000.
So I eventually found a usedroad bike and through one of the
(02:17):
stores here they don'ttypically carry road bikes.
That was back before Craigslistand other platforms where you
could find things online.
So I bought this used bike anda little bit later it kind of
occurred to me that a lot ofpeople in Nashville were on a
budget this is before remotework and people were moving here
(02:40):
for lifestyle but they weren'tearning a lot.
So a lot of people were on abudget like me.
And at the same time I wasdoing a lot of real estate
brokerage activity, particularlyon Haywood Road in West
Asheville.
This is like 2002, 2003.
And so I had this idea you know,like wow, why isn't there a
place in Asheville where you canbuy used gear and some
(03:03):
technical wear?
We weren't really thinkingabout clothing, and so that was
kind of the spark for the idea,coming from a personal
experience and then just also,you know, connecting with other
friends here in the area that Iwas making that were kind of in
that same boat of, you know,wanting to save but also wanting
to get out and experience theoutdoors affordably.
So, you know, we started thebusiness and we were kind of
(03:25):
putting it together in 2003.
We started in a really smallspace on Haywood Road, at 415
Haywood, in the same buildingthat now houses Harvest Records,
and so we started out with just1,200 square feet, and so we
started out with just twelvehundred square feet, very, very
low key, very bootstrap At thetime when I started.
(03:48):
I'll just add and kind of takea pause you know I mentioned, I
was working in commercial andinvestment real estate by 2004.
When we opened I had gottenfairly established here in the
brokerage community and so Iwasn't looking to open second
gear as a launch point for mycareer, to move into something
else.
I was looking more.
(04:09):
I was more interested in justkind of this, this
entrepreneurial opportunity.
Haywood Road was really up andcoming at the time with a lot of
new businesses and it justseemed like that would be a good
place and a good fit for abusiness like this in Asheville.
So, and you know, not knowingwhere it would go from there, it
was just kind of starting verysmall scale, very manageable.
(04:33):
I didn't have retail experience.
I didn't have, I wasn't a gearexpert, so I was exceedingly
underqualified to run thebusiness.
But I figured it was smallenough that I could kind of we
could kind of figure it outbecause it was only 1,200 square
feet, it was consignment based,we weren't investing tens and
hundreds of thousands of dollarsinto a business.
(04:54):
So that was kind of the launchpoint in 2004, very small scale,
just kind of to see where itwould go as an entrepreneurial
endeavor.
Bill Gilliland (05:07):
Yeah, and so then, what happened?
I mean, how did?
Russ Towers (05:14):
you, yeah, so early on, what happened?
So I partnered initially withthree other guys that all three
of those guys were formeroutward bound instructors and
outward you know.
So they had the outdoorexperience and one of the three
we opened the store together,buffalo McMurray.
And Buffalo is still with thebusiness.
(05:34):
He's 84 years old, he, he.
So that was 20 years ago.
He was in his early sixties.
So Buffalo and those guys hadthe gear knowledge and I had
some business knowledge and kindof the behind the scenes.
And so you know, like I said,we started out really small,
1200 square feet, thinking itwas going to be mostly, uh, the
(05:56):
product mostly would be hardgear and technical apparel.
But quickly it became apparentthat people had a lot more
clothing that they wanted tomove and move on from than they
did hard gear or in addition tohard gear.
So we outgrew that space reallyquickly.
You know, all these outdoorbrands have technical wear but
(06:19):
they also have a lot of justlifestyle wear and that's like a
lot of people in Asheville arewearing, you know, back then and
still, whether it's Patagoniaor Columbia or LL Bean or
whoever, that's just kind of theAsheville look and the same
with a lot of other outdoorcommunities, outdoor towns, so
we really outgrew that spacevery quickly.
(06:42):
We were there for four years.
We outgrew it within about two.
We moved across the street to444 Haywood Road in 2008.
We went from 1,200 square feetto about 2,000 square feet.
One bay there.
We expanded in 2011 to anotherbay that was in that space, so
(07:04):
we went to about 2,000 squarefeet.
When we moved across the streetthe first four years in 1,200
square feet, it put us on themap.
People found us, but it justwas not big enough to
financially be viable.
We just couldn't sell enough inthat small of a space.
When we moved across the streetin 2008 into 2,000 square feet
(07:24):
and later 4,000 square feet,that's when we really kind of, I
guess, got settled in or becamefinancially viable, became
profitable, and in 2012, I wasstill involved with real estate.
All during this time I wasstill doing brokerage, really up
until about 2012.
(07:48):
In 2011, like I said, weexpanded into a second bay and
the owner of that building was areal estate client of mine by
name of Bruce Smith and thatbuilding from 1973 to 2008,
bruce's family operated AceAppliance not Ace Hardware, but
Ace Appliance.
It was an independently ownedstore and Bruce was a real
(08:11):
estate client of mine.
He closed and retired in 2008.
And the property went on themarket for sale.
It's a mercantile buildingbuilt in the 20s.
Upstairs was boarding houseapartments that had not been
occupied for years.
Well, that property was on themarket for a couple of years.
I was not representing himbecause I wanted to own, I
(08:32):
wanted to buy the building, soit would have been a conflict.
So in late 2012, some partnersand I bought the property,
including the building behindthat was Ace Appliances' parts
and service department.
We did an 18-month historicrenovation to the property,
re-established 10 apartmentsupstairs.
(08:52):
We redid all the four retailbays, including second gear.
We operated while we were stillrenovating during that time,
operating one bay at a a time,and then renovated the building
behind us that had been theirparts and service department and
that became um as crossfitashville.
We have 10 apartments upstairs.
(09:13):
We had a restaurant kingdaddy's chicken and waffles uh,
we had a retail next to usthat's now occupied by whist,
and then we had the two bays andwe kind of you know, we brought
the whole business back to orthe whole building back to that
20s look and that was.
So that was 2012 through early14.
(09:33):
And that was really where thebusiness took off was in 2014.
After we did those renovations,several other businesses opened.
Several restaurants opened upon Haywood Road in 2014.
And that's when West Ashevillereally became from being kind of
a tourist destination to a bigtourist destination,
(09:56):
particularly for a youngeraudience that was into food and
beverage and quirky shops andthings like that.
So just one last thing duringthat kind of to that point of
our development or our growth,we had a downtown store briefly
from well, for three years from2012, 13 and 14 to try to tap
(10:16):
into the tourist market.
But after we bought thebuilding, the property in West
Asheville and renovated it andtourists started coming over to
West Asheville, we determined wereally didn't need to be
downtown and that downtown storewas not profitable for us.
So we closed that store in theend of 2014, beginning of 2015,
and really focused in WestAsheville.
Bill Gilliland (10:38):
So we were there up, and you know, up and up
through early on.
Russ Towers (10:44):
Uh, in 2020 we started looking at moving to the
river arts district because wehad outgrown the space in west
ashville and that was kind ofall during covid and all that
craziness and you know kind ofunknown of what was, what was
going to happen next yeah.
Bill Gilliland (11:00):
so I mean it sounds cool and you all, this
growth and everything, and maybea misstep or whatever going
downtown, but there had to bechallenges along the way with
this growth.
So what are some of thechallenges and maybe what are
some of the things you learned?
Russ Towers (11:18):
Yeah, well, first and foremost, you know, early on
, this is no breaking news foranybody that started a business
from scratch and you know havingto build that up was, you know,
just cash flow challenges.
Early on, you know, felt likekind of month to month check to
check.
You know we were a consignmentbusiness, which was great.
We weren't having to buy all ofour product up front but we also
(11:40):
had vendors and we had some newproduct.
But you know, each month at thebeginning of the month we had
to pay rent, we had to pay allthe consignors for everything
that you know sold the priormonth.
We had payroll, we had, youknow, other overhead.
So you know, the first fewyears were really challenging
and you know, until we movedacross the street from our
(12:01):
original location it was reallytenuous of you know.
Could we continue to be inbusiness?
But when we moved across thestreet, got a little bit more
space and a little betterexposure on Haywood, then we
really, you know, kind of feltestablished financially and
established as a business.
You know, early on there weresome challenges with you know, I
(12:27):
was operating, I was kind ofjuggling both my brokerage
career and trying to run behindthe scenes second gear and you
know not having really afull-time manager, one of my
other partners in the businesswho started out as one of our
first employees.
She wasn't one of the originalowners.
She was going to do the samething, kind of operating second
gear on the side.
So we really weren't to a pointwhere we were 100% committed,
(12:51):
where we had a manager who wasan owner.
And so in 2009, that partnershe moved out, she and her
family moved out to Utah, toSalt Lake City, and we brought
on a manager who was full-time,who then eventually became an
owner.
And that also was that was partof the growing pains of having
(13:13):
somebody there.
That was kind of day, you know,40 hours a week or so, day in
and day out, managing vestedinterest.
I continued to do real estate,but it was also, as Second Gear
was growing, being more and moreinvolved in the business.
So, yeah, those were some ofthose early challenges of just
having that focus and kind ofdigging out or not digging out,
(13:35):
but just getting financiallyhealthy without having to take
on a whole lot of debt.
You know, we, as I said, in2012, we went downtown.
That was not financially, itdidn't work out.
We were losing money down therewhile making money in West
Asheville, so we'd work thewhole year and then break even
and that just felt like, youknow, pounding your head against
(13:57):
the wall.
You're working all year for youknow, just to be at par.
So yeah, then, and then when webought the building and went
through the whole renovationprocess, like I said, we we
closed down one site, one, oneof the bays, while we operated
in the other bay and thenflip-flopped and that was about
a year and a half of having tolive through, you know, all that
(14:19):
renovation work upstairs nextto us behind us.
So there were some challengesbut it was well worth it when
that was all done come mid-2014.
Also, during that time, kind ofoperating the business early on,
it was really a lot of thetasks were just kind of done by
committee where everybody dideverything.
(14:40):
There was not a whole lot ofwell, you're the HR guy or
you're the marketing person oryou're the buyer, well, you're
the HR guy or you're themarketing person or you're the
buyer.
It was just we weren't bigenough to have that
specialization.
So it was.
You know it was OK to operatelike that.
But you know, in hindsight thatmade it challenging because
there was, you know just kind ofeverybody doing everything, and
(15:01):
so it could get a littledisjointed sometimes and feel a
little unstructured.
But that was kind of the natureof a small business back then.
Bill Gilliland (15:09):
Yeah, when do you?
I mean, it's an interestingquestion, like you were, you
were, I mean you were doing whatyou financially could and you
had a whole bunch of people moreor less working part-time, a
few full-time people, but thepeople running it it seems like
we're more or less part-time.
Like how, you know what was thedecision?
Was it scary to go with afull-time manager, or was that
(15:31):
just like a natural progression?
Russ Towers (15:32):
No, no, that wasn't scary.
It was kind of like we reallyneed this, that's what the
business is missing, becauseLissa and I were both, like I
said, working kind of part-timewith second year part-time with
our other endeavors and, no, wefelt like and at that time I was
taking very little or nocompensation, so, no, it didn't
feel scary, it just felt likegosh, this is what we really
(15:53):
need to do.
The business has grown to thatwhere it needs that focus and
somebody that is there, you know, every day, or you know, full
time.
And then we started adding andthat person had some background.
He had worked in REI.
At REI he had some goodbusiness experience and we
started adding other people tothe team.
(16:13):
That it went from.
It kind of went from when wefirst opened up.
We were hiring people that hadoutdoor gear, knowledge and kind
of generalist.
And as we've grown through theyears, and particularly in those
kind of in that 2008, 9, 10, aswe were really getting
established, then we started tobe a little more focused and
(16:33):
better at hiring people who notonly had some outdoor experience
maybe they had retailexperience, whether it was in
the outdoor retailing or otherretail where they had some other
skills that we needed at thatpoint.
You couldn't just get by onjust knowing having done some
camping and doing some kayaking.
You had to have some otherskills at that point because
this business was growing andthe clientele coming in, you
(16:56):
know they needed to know moreand want to know more.
We were selling more newproduct to go along with used
product and you know we broughtsomebody on the team who's still
on the team, who's one of theowners and also worked at REI
and he had really goodexperience with retailing and
retail sets and ordering.
So we were ordering more andChris was doing, you know,
taking on more of that role andone of the other partners.
(17:18):
So we started then divvying upand having a little bit more
people having their own silosthat they were working within,
but still kind of all workingtogether in this small, small
business that was, you know wewere.
We were seeing like 20% annualgrowth in revenue every year.
So it was a lot of.
It was just kind of trying tokeep up with that growth and how
to manage that and how to howto grow in managing the business
(17:41):
during that time.
Bill Gilliland (17:43):
So in some respect, the demand was just
there.
Russ Towers (17:47):
Oh yes.
Bill Gilliland (17:47):
Yeah, and so you were just responding to what
the market was telling you.
Russ Towers (17:53):
Absolutely yeah.
Some of our best growth wasduring the recession era, like
2008, 9, 10, when people stillwanted to get outside but maybe
they couldn't spend as much.
So we were a good alternativefor that, because people were
willing to buy things used oryou know, along with some new
(18:15):
accessories, and so, yeah, thatwas a really good period for us.
Yeah, it was so.
And then, when times after therecession, when particularly
tourism was really taking off inAsheville and all these people
are coming into Asheville tovisit friends and family, or
whether or they're just comingto visit, in general, they would
(18:36):
find us particularly, you know,after 2014,.
They were coming to WestAsheville or they found us
downtown, when we were downtownand had both stores going, so it
seemed to also thrive when,when the economy was really good
and when tourism was was reallygood as well, so we were really
fortunate from from thatstandpoint.
Bill Gilliland (18:53):
Yeah, when you started moving to new gear as
well.
Then you have new and great usestuff, so cause you're not
putting the junk out there.
So it's yeah.
I mean, yeah, people have achoice and they choose.
You know they can, they can,they can make a good decision.
I mean it's like yeah, it, it,it makes, it makes a lot of
(19:13):
sense, all right, so when?
How did you decide to gofull-time?
Like?
When did that become an?
Russ Towers (19:21):
option.
That was a pretty easy decision, but not easy decision.
That was pretty clear cutdecision in my mind.
And so, as I mentioned before,we opened a downtown store in
March of 2012.
And you know, that was a fewmonths leading up to negotiating
the lease, prepping the space.
We opened that store while wealso had the shop in West
(19:41):
Asheville and at that point Iwas doing brokerage.
I'm coming out of the recession,so you know, the commercial
real estate market wasn'tawesome.
I'd been doing brokerage forabout I guess at that point, a
little over about 12 years and Ifelt like, well, and that was
all commission and I felt like Iwasn't really doing either one
(20:02):
of them.
Well, bill, I felt like, when Iwas at Second Gear and focused
on Second Gear, I really, youknow, there were real estate
clients I should have beenattending to, or properties I
should be focused on, or findingnew real estate business.
And then when I was doing that,I felt like, well, there was
stuff at Second Gear.
Second Gear is thriving,growing and there's really
things I should be focused on.
I felt like, you know, I reallyneed to commit to one or the
(20:25):
other.
And so I committed to secondgear and paid myself a basic,
very modest hourly rate andthought you know this business
is growing, I've birthed it andyou know it's got a life of its
own and I really want to seethis through.
I think it has potential.
I'm going to put my cards, mychips, on second gear.
(20:46):
I still kept my real estatelicense and then, fortunately
later that year is when I hadthe opportunity to buy the
property with some partners onHaywood Road.
So I really went from doingbrokerage and being having a
client base of real estateclients to really focused on my
own properties and then ended upmanaging that property on
(21:10):
Haywood and managing all thoseapartments because I was right
underneath that second year.
So it really really lent itselfwell.
So I was really fortunate to beable to shift, to have really
still be in both of thoseindustries, but not letting a
bunch of real estate clientsdown, and being able to really
focus on my own business.
Bill Gilliland (21:32):
Yeah, I really get out of the sales of real
estate and get into theinvestment of real estate.
Yeah.
Russ Towers (21:37):
And I love doing that.
It was great the 12 years I wasin brokerage here.
I'd moved to Asheville notknowing really anybody much in
this market and I really wantedto be involved with work in a
city.
I'd worked in real estate butregionally out of Charlotte and
part of the draw here was Iwanted to be in a smaller market
and really be connected to acity or to a town and I really
(21:58):
got that opportunity over 12years to help businesses find
locations, to help people sellor lease their properties and
really was dialed into what wasgoing on in Asheville and that
was really satisfying to to havethat opportunity.
And I'm still involved, youknow, in the real estate
community and the businesscommunity here because of those
early connections that I was hadthe opportunity to be involved
(22:21):
with.
Bill Gilliland (22:22):
You can't know enough good people right.
Russ Towers (22:24):
That's yeah.
And that was a big attractionto Asheville was how
interconnected everybody was andsupportive of and you know you
couldn't.
You know in Atlanta orCharlotte or bigger cities it's
hard, I think it would be hardor maybe impossible to start
small businesses from scratch,you know.
But Asheville was a greatmarket, a great opportunity for
(22:45):
that.
Bill Gilliland (22:46):
Yeah, and I like the way you did it.
I mean you started small andyou just grew it as the market
was telling you.
Hey, you're doing some stuffright.
Yeah, I mean you're doing.
You got to do some things wrongto learn, but you know along
the way, but, but there's butyou were doing a lot more right
and so or at least enough rightto continue to grow.
So that's awesome.
(23:07):
Well, let's divert a little bit.
Let's talk a little bit aboutthe hurricane and the flood and
your response to that and whatthat looked like to you.
I mean, it's an unprecedenteddisaster, but every business is
going to go through something.
(23:28):
It may not be on the scale ofthis, but it's something.
There's something that I callthem an oops.
It's an oops, it's likely notyour fault, it's likely just
something that happened.
So let's talk about overcomingan ute.
Russ Towers (23:45):
Yeah, that's a very PG way to say it as opposed to
what I saw the flood but let megive you a little background
about how we got there and howwe drew upon past experience
that I think helped me andhelped Second Gear, hurricane
Helene.
So in late 2019, early 2020, itwas really evident that we had
(24:12):
outgrown our space on HaywoodRoad.
We were in 4,000 square feet.
We had been in that footprintreally for 10 years, just about
10 years since 2011.
So eight, nine years.
At that point, all the mean,all all the while sales are just
growing and the space isgetting more and more jammed up
(24:32):
with product and less shoppable.
But we're still successful.
But but, excuse me, but wereally needed to find a bigger
space.
So we started looking in theriver arts district, because
that's where we felt like wecould find a big enough space
and with enough parking.
And at that time also, all ofthat infrastructure was being
(24:53):
done was underway down in theRiver Arts District and it just
seemed like, you know, it was upand coming, much like Haywood
Road had been when we opened upin 2003, 2004.
It was not, we weren'tpioneering, but we were
definitely catching the earlypart of the upswing.
So so we started looking at thespace on Riverside Drive back
(25:15):
in April of 2020, right in theearly stages of COVID.
So you know, during during thoseearly stages of COVID, when we
reopened in May you know we kindMay like a lot of businesses
there was no playbook for how tooperate during a pandemic and
we were closed for nine weeks orsomething like that, from
mid-March to May.
(25:37):
When we reopened, it was justblowing up.
Everybody wanted to get outside.
You had to be separate, it hadto be distance, all that.
So, um, we, we lived throughthat.
So, um, in in 2020.
So we, we ended up getting thefinancing.
It was really hard to get thefinancing to to, uh, renovate
(26:00):
the space down on riverside.
And then the connection towhere we were on haywood Road,
the building that we moved to at99 Riverside up until 2008 had
been Ace Appliances Warehouseand that Ace Appliance was again
the client that I had as a realestate client, bruce Smith, and
Bruce hired me back in 2009,after he closed Ace Appliance,
(26:23):
to sell or lease his warehouseat Riverside and we sold it to
Darren Green here in Ashevilleand Darren had Old Wood Company
and he had operated Old WoodCompany and they're making
furniture from 2010 until 2019.
And so that building went.
He closed that up and wasinvesting in other real estate,
(26:43):
kind of focused on other things.
And so in early 2020, thatproperty was on the market.
I knew Darren and it looked likeit would just be a great fit
for what we wanted to do.
So we worked out a leaseagreement, we worked out the
financing.
That was really challengingduring COVID and I am going to
get to Helene, but this all kindof ties back together.
(27:04):
So we, you know, we signed thelease and at the end of 2020 and
beginning of 2021, you know,we're still coming out of COVID
we started renovating that spacefor our, for our use, and so it
was great.
We had basically a blank canvas.
We were going to bring in twoother businesses with us to
share the space, to kind of tie.
(27:25):
We brought in sugar and Snow, agelato cafe, an Asheville
adventure company, and they rantheir electric bike tour.
They were going to run theirelectric bike tours and their
whitewater trips out of thereand then we would have the bulk
of the space 10,000 square footbuilding.
Second Gear was going to occupyabout 8,000 of the 10.
We had some shared commonspaces, but we were able to
(27:48):
design that space exactly to fitour needs.
We were basically doubling ourfootprint and we were going to
have room to grow and we hadcontrol of that space for 15
years.
Three five-year options we putin.
So we renovated the spacebasically from February of 21.
We opened up in September of 21, while we were still operating
(28:11):
up on Haywood Road, and weinvested about $500,000 into the
outfit of that building andthat property and with the
intent and with the plan that,okay, we can be here for at
least 15 years and we're goingto spread that investment out
over, we hope, 15 years or evenlonger.
(28:33):
So we had just and you know wewere, we took the first year to
kind of get everything dialed in, operating within a new, new
space.
Now we're much more structured,you know, now we have 16, 18,
20 employees, seasonal employees.
People now have their veryspecific roles.
We have buyers, we have HRpeople, we have a marketing lead
(28:55):
, we have I'm doing a lot offinance.
We have, you know just, youknow very, very specialized
roles and it had really maturedas a business so that you know
that took us up to September of24.
And you know we have thingsdialed in.
It's going great.
Bill Gilliland (29:16):
I know it's a beautiful space, beautiful
business.
It was really cooking yeah.
Russ Towers (29:20):
It's thriving.
You know the economy here isthriving, the tourism's good.
Yeah, it's thriving.
You know the economy here isthriving, the tourism's good.
Yeah, it wasn't.
Yeah, we had some some downturnin the economy, a little bit
with tourism, but all in all wefelt like things were just
cranking along and we kind ofhad the joke like, well, just
don't F it up you know that wasright, yeah Things are.
Yeah, things are going well,we've got a great staff.
(29:42):
Yeah, things are going well,we've got a great staff and, um,
but all along my only concernbeing down there was the threat
of a storm or a threat of aflood in 2004, when Ace
Appliance was in there again,kind of giving you back
background when Bruce Smith hadAce Appliance in there, it was
full of full of appliances andafter Francis, the hurricanes
(30:04):
Francis and Ivan, that buildinghad a foot of water in it.
But that was kind of the extentof the damage.
When Oldwood Company was inthere, when Darren was in there,
for 10 years more or less, theynever had water in that
building.
Water came up to the buildingbut not, and the floor sits
(30:24):
about four or five feet, aboutfive feet off of the ground.
About, oh, two months or sobefore the storm, maybe in
August, john Boyle interviewedme and some other people about
the threat of flooding down inthe River Arts District and John
(30:44):
just popped in one day and Ikind of shared oh, right before
we opened in 2021, in August of21, we had water damage from
Tropical Storm Fred, much moreof an impact over in Canton, but
it didn't get into the buildingjust came up to the building.
We weren't open yet, but itleft all this silt and debris in
(31:08):
the parking lot.
So we had to deal with that.
So we had a little bit ofexperience from what I knew from
the past and what happened, youknow, right before we opened
and what, what could happen.
So, yeah, and so John, John,does this article that came out
on September 17th, the AshevilleWatchdog article about flood
potential and what businessesyou know were doing to you know,
(31:30):
address that.
Whether it was flood insuranceor so forth, we did have flood
insurance on our contents,fortunately, yeah, good.
So yeah, that kind of takes usup to right before the storm and
um you know it.
Bill Gilliland (31:48):
Yeah, so the storm's unprecedented.
Yeah, I mean water's 27 feet orwhatever, above normal Right
Wipes out pretty much the riverarch district.
But what's your like what?
What is how?
How did you attack it?
Russ Towers (32:05):
Well, I kind of attacked it two ways, you know.
One was my home's in WestAsheville and I was down there.
You know we tried to preparefor it.
You know we didn't have time toget things out of the store,
out of the business when Ipulled up there Thursday morning
before the storm.
We had a plan to get somethings out of there, but there
was already water to thebuilding.
The city was closing down thestreet, you know from all the
(32:31):
rain before.
So we had to go to plan B,which was to get stuff off of
the floor.
Our hope was maybe we get afoot of water in here like 2004.
Well, that didn't happen.
Everything got wiped out.
You know, part of the buildingcollapsed.
There was water up to the roof.
We lost 100% of everything,including consigned items that
the general public brought in,as well as all the inventory
(32:53):
that we own and all of ourfixture, all of our equipment.
So I looked at it kind of twoways.
I looked at as the waterreceded and you could see the
damage and it was obvious well,we're not going to go back into
that building.
And I thought well, this is a20-year-old business, it's
(33:14):
thriving, it's financiallysuccessful, we've got 18
employees at the time.
You know many of those peoplework full time.
Their livelihoods depend on it.
We have great community support.
It just didn't seem like, well,this is the time that we just
were going to close the business.
I mean, we could have closedthe business, but it didn't seem
(33:36):
like that made sense to closethe business.
We had too much of a good thinggoing, too much support.
We also also had a COVID loan,an idle COVID loan still in
place that you know personalguarantees on that, you know,
back from 2020.
So if you walk away from, ifyou close the business, then you
(33:56):
know somebody's got to pay forthat, that loan.
Those are not forgivable loans.
So that was motivation to keepgoing as well.
So there was all thatmotivational part, but at the
same time, I guess the part ofthe you called it an oops.
I didn't call it an oops, Icalled it something much more
(34:21):
salty about oh man, how do youtemporarily close business?
How do you unwind this locationand all the things that are
going to be involved withtemporarily pausing this?
All the vendors we had to dealwith, all the services, all the
staff we had to let some staffgo initially, how do we get
financing for that?
How do we get grants?
How are we going to fund this?
You know all the hundreds ofmoving parts of running a
(34:44):
business behind the scenes andthen trying to.
You know how do you run abusiness and how do you do this
during a natural disaster whenyou don't have, initially, the
first few days, you don't havepower, you don't have water.
You're just personally tryingto survive as well.
So it was kind of that, all ofthat anxiety and all that
pressure and all that struggleof how do you do that, but also
(35:06):
knowing that, ok, this is asolid business that's worth
saving.
If we can figure this out, wecan make it work.
But figuring it all out thatwas that was tough right off the
bat.
Yeah.
Bill Gilliland (35:20):
Yeah, I mean it's, yeah, it's.
I mean it's a, it's a, it's agreat story.
I mean it's a.
It's probably not one you wantto live through again, but it's
awful.
But deciding to stay open, Ithink, is a decision.
You just made the decision andfigure it out.
Russ Towers (35:42):
Yeah, in early October.
That's how I started attackingthis.
I thought pretty early on, ok,what's out there that we could
move into quickly.
You know, one of the silverlinings in our situation, in
Second Gear's situation, withour building being uninhabitable
, unrepairable, was you know.
Ok, well, we can move on rightaway.
Let's you know, we're not goingto spend months trying to clean
(36:05):
up and you know, gut a buildingand clean up like a lot of
businesses are having to do inBiltmore Village or in the River
.
Arch or other places.
So we could just move forwardand it occurred to me pretty
quickly like oh, there's theFrugal Backpacker space up in
the Westgate Shopping Center.
Bill Gilliland (36:21):
Yeah, nice place .
Russ Towers (36:23):
Has been available for a while.
Will Gay, who's the owner ofFrugal and Diamond Brand Retail.
Will's been a longtimeconsigner and I knew that space
fairly well from being at EarthFair being that shopping center.
And we looked at other spacesand knew it didn't need much
work, that we could get in therepretty quickly.
(36:43):
So I shifted gears prettyquickly on moving forward and
looking at that space and otherspaces and negotiating a lease.
It took about a month tonegotiate a lease agreement.
I worked with Austin Walker,who's a longtime investment
partner with me and a longtimereal estate broker here in
Asheville and worked with FIRC.
(37:06):
The Fraga family owns WestgateShopping Center.
They provided us a veryreasonable, very workable lease
agreement there for us to getback on our feet.
So those things just kind offell in place.
We got some grants that and Ialso need to mention we started
a GoFundMe campaign very earlyon to support our staff that we
(37:31):
let go and the staff that wekept on a recovery team and to
help us get back on our feetfinancially with.
You know, we lost $125,000 ofproduct that we owned, of
product that we owned.
So, yeah, working out thingswith vendors.
So yeah, things fell into placefairly quickly and we signed a
(37:52):
lease on November 15th and gotto work on getting the space
ready and we opened up onDecember 10th.
So it was a quick turn.
We spent 18 months from startto finish.
To get down to the River ArtsDistrict, we spent 18 days.
It seemed like to get startedat Westgate.
Bill Gilliland (38:10):
It was crazy.
Yeah, there's a lot of lessonsthere, but I think it's a
checklist.
It's just a long one.
Russ Towers (38:18):
Yeah, we didn't want to wait till spring also
and lose momentum.
We didn't want to miss theholiday season.
We didn't want to lose keypeople.
You know we could have waitedtill the spring and some
businesses are going to do thatand I'm not saying that's right
or wrong, but we, being aretailer, we didn't and December
being a big month for this, wedidn't want to lose that
(38:40):
momentum and then be startingfrom kind of from scratch and
being starting from a you knowfurther behind come spring.
And we also, frankly, I wantedto protect our place in the
market and I didn't wantsomebody else to come in and do
what we're doing.
Bill Gilliland (38:54):
Yeah, yeah, in other words, basically, you went
on offense instead of trying toplay defense, and I think
there's a lesson there.
Man, I think you and I couldprobably talk all day.
Let me ask you one lastquestion.
Usually, I ask people this.
The question is what do youwish you had known before
(39:19):
anything?
This could be life, or it couldbe business.
I'll let you pick the timeframe.
But what do you know now thatyou wish you had known earlier?
Russ Towers (39:24):
In business in general or related to the flood.
Bill Gilliland (39:27):
It could be either or both.
Russ Towers (39:32):
Gosh, I think what I wish I had known early on was
that when you're opening abusiness, starting a business,
it takes on a life of its own.
And I've coached and helped thefoundations class at Mountain
BizWorks, working with a lot ofstartup businesses and so,
(39:53):
having gone through a startupand as a business, evolved of
just how much work it is behindthe scenes to operate a business
and in front of the scenes aswell, but just how much energy
that it takes if you are reallycommitted to running your own
business and you know, had I,and for me personally, I was
(40:15):
trying to juggle two careers atone time and you know, maybe I
should have moved out ofbrokerage earlier and focused on
my own business earlier and itmight have been that much more
successful early on.
I don't know.
But just just not having justbeing naive about how much work
it takes to operate even a smalllittle dinky retail business
(40:38):
selling used clothing and gear.
And you know, if you reallywant to do it right, you really
have to put the energy into itto run it professionally.
And yeah, so I guess you know,you just can't, you can't
half-ass it.
You don't have to knoweverything, but you, you can't
half-ass it.
Bill Gilliland (40:56):
No, I get it.
You got to commit, you got tocommit.
Yeah, well, there's a lot oflessons here.
There's a lot of lessons,thanks, thanks for taking time
to be with us.
Russ Towers (41:03):
Thank you for the opportunity to share my story,
our story.
That's cool.
Yeah, yeah, it's cool.
I'm happy to talk to you in thefuture again.
Bill Gilliland (41:11):
Oh yeah, yeah, I think we got.
There's a lot more stuff.
There's a bunch of questions Ihave that we need to unpack at
some point.
So we'll have, we'll have.
We'll have a number two at somepoint.
Russ Towers (41:22):
Okay.
Bill Gilliland (41:23):
Yeah.
Hi there, welcome to this week's episode
of Epic Entrepreneurs.
I'm here with my friend RussTowers from Second Gear.
How's it going, russ?
Russ Towers (00:10):
What's going well, bill.
We've had a pretty amazing lastfew months coming out of the
flood and relocating andreopening and we just went
through the holiday season in anew location.
So it feels good to be kind ofback in business.
We never worked totally out ofbusiness but yeah, it's a relief
(00:30):
to kind of be somewhat back tonormal in business.
Bill Gilliland (00:34):
Yeah, let's come back to the flood, but let's
back up first.
I do want to talk about thatbecause I do think it's an
interesting story and yourresponse to it.
I think there's some lessons inthere story and your response
to it.
I think there's some lessons inthere, but tell us a little bit
about Second Gear and how yougot involved in Second Gear and
all that Sure.
Russ Towers (00:52):
Yeah, okay.
Well, like a lot of smallbusinesses, second, gear was
started kind of out of apersonal experience that I had
shortly after moving toAsheville.
My wife and I moved here in2000.
I had a worked in corporatereal estate in Charlotte and
Atlanta, but we had family here.
So anyway, we moved here in2000.
(01:13):
She already had family here, sowe had some some familiarity
with Asheville.
And early on I was looking for aroad bike and I also was
interested in buying.
We moved here.
A big draw was for the outdoorexperiences here, the outdoor
opportunities, as well as beingin a smaller city.
So anyway, I was looking for aroad bike.
(01:36):
I was also interested in buyingother equipment.
You know whether it was a kayakor other things.
I wanted to try some outdoorendeavors that I had never done
before, but I didn't have thegear.
At the same time I was.
Also I went from working insalaried commercial and
investment real estate to beinga real estate broker, all
commission.
(01:56):
So I didn't have a blank checkto spend on gear and you know.
So I was looking for a roadbike.
I was looking for a used roadbike, but that was hard to find.
This is back in early 2000,.
Like we moved here in 2000.
So I eventually found a usedroad bike and through one of the
(02:17):
stores here they don'ttypically carry road bikes.
That was back before Craigslistand other platforms where you
could find things online.
So I bought this used bike anda little bit later it kind of
occurred to me that a lot ofpeople in Nashville were on a
budget this is before remotework and people were moving here
(02:40):
for lifestyle but they weren'tearning a lot.
So a lot of people were on abudget like me.
And at the same time I wasdoing a lot of real estate
brokerage activity, particularlyon Haywood Road in West
Asheville.
This is like 2002, 2003.
And so I had this idea you know,like wow, why isn't there a
place in Asheville where you canbuy used gear and some
(03:03):
technical wear?
We weren't really thinkingabout clothing, and so that was
kind of the spark for the idea,coming from a personal
experience and then just also,you know, connecting with other
friends here in the area that Iwas making that were kind of in
that same boat of, you know,wanting to save but also wanting
to get out and experience theoutdoors affordably.
So, you know, we started thebusiness and we were kind of
(03:25):
putting it together in 2003.
We started in a really smallspace on Haywood Road, at 415
Haywood, in the same buildingthat now houses Harvest Records,
and so we started out with just1,200 square feet, and so we
started out with just twelvehundred square feet, very, very
low key, very bootstrap At thetime when I started.
(03:48):
I'll just add and kind of takea pause you know I mentioned, I
was working in commercial andinvestment real estate by 2004.
When we opened I had gottenfairly established here in the
brokerage community and so Iwasn't looking to open second
gear as a launch point for mycareer, to move into something
else.
I was looking more.
(04:09):
I was more interested in justkind of this, this
entrepreneurial opportunity.
Haywood Road was really up andcoming at the time with a lot of
new businesses and it justseemed like that would be a good
place and a good fit for abusiness like this in Asheville.
So, and you know, not knowingwhere it would go from there, it
was just kind of starting verysmall scale, very manageable.
(04:33):
I didn't have retail experience.
I didn't have, I wasn't a gearexpert, so I was exceedingly
underqualified to run thebusiness.
But I figured it was smallenough that I could kind of we
could kind of figure it outbecause it was only 1,200 square
feet, it was consignment based,we weren't investing tens and
hundreds of thousands of dollarsinto a business.
(04:54):
So that was kind of the launchpoint in 2004, very small scale,
just kind of to see where itwould go as an entrepreneurial
endeavor.
Bill Gilliland (05:07):
Yeah, and so then, what happened?
I mean, how did?
Russ Towers (05:14):
you, yeah, so early on, what happened?
So I partnered initially withthree other guys that all three
of those guys were formeroutward bound instructors and
outward you know.
So they had the outdoorexperience and one of the three
we opened the store together,buffalo McMurray.
And Buffalo is still with thebusiness.
(05:34):
He's 84 years old, he, he.
So that was 20 years ago.
He was in his early sixties.
So Buffalo and those guys hadthe gear knowledge and I had
some business knowledge and kindof the behind the scenes.
And so you know, like I said,we started out really small,
1200 square feet, thinking itwas going to be mostly, uh, the
(05:56):
product mostly would be hardgear and technical apparel.
But quickly it became apparentthat people had a lot more
clothing that they wanted tomove and move on from than they
did hard gear or in addition tohard gear.
So we outgrew that space reallyquickly.
You know, all these outdoorbrands have technical wear but
(06:19):
they also have a lot of justlifestyle wear and that's like a
lot of people in Asheville arewearing, you know, back then and
still, whether it's Patagoniaor Columbia or LL Bean or
whoever, that's just kind of theAsheville look and the same
with a lot of other outdoorcommunities, outdoor towns, so
we really outgrew that spacevery quickly.
(06:42):
We were there for four years.
We outgrew it within about two.
We moved across the street to444 Haywood Road in 2008.
We went from 1,200 square feetto about 2,000 square feet.
One bay there.
We expanded in 2011 to anotherbay that was in that space, so
(07:04):
we went to about 2,000 squarefeet.
When we moved across the streetthe first four years in 1,200
square feet, it put us on themap.
People found us, but it justwas not big enough to
financially be viable.
We just couldn't sell enough inthat small of a space.
When we moved across the streetin 2008 into 2,000 square feet
(07:24):
and later 4,000 square feet,that's when we really kind of, I
guess, got settled in or becamefinancially viable, became
profitable, and in 2012, I wasstill involved with real estate.
All during this time I wasstill doing brokerage, really up
until about 2012.
(07:48):
In 2011, like I said, weexpanded into a second bay and
the owner of that building was areal estate client of mine by
name of Bruce Smith and thatbuilding from 1973 to 2008,
bruce's family operated AceAppliance not Ace Hardware, but
Ace Appliance.
It was an independently ownedstore and Bruce was a real
(08:11):
estate client of mine.
He closed and retired in 2008.
And the property went on themarket for sale.
It's a mercantile buildingbuilt in the 20s.
Upstairs was boarding houseapartments that had not been
occupied for years.
Well, that property was on themarket for a couple of years.
I was not representing himbecause I wanted to own, I
(08:32):
wanted to buy the building, soit would have been a conflict.
So in late 2012, some partnersand I bought the property,
including the building behindthat was Ace Appliances' parts
and service department.
We did an 18-month historicrenovation to the property,
re-established 10 apartmentsupstairs.
(08:52):
We redid all the four retailbays, including second gear.
We operated while we were stillrenovating during that time,
operating one bay at a a time,and then renovated the building
behind us that had been theirparts and service department and
that became um as crossfitashville.
We have 10 apartments upstairs.
(09:13):
We had a restaurant kingdaddy's chicken and waffles uh,
we had a retail next to usthat's now occupied by whist,
and then we had the two bays andwe kind of you know, we brought
the whole business back to orthe whole building back to that
20s look and that was.
So that was 2012 through early14.
(09:33):
And that was really where thebusiness took off was in 2014.
After we did those renovations,several other businesses opened.
Several restaurants opened upon Haywood Road in 2014.
And that's when West Ashevillereally became from being kind of
a tourist destination to a bigtourist destination,
(09:56):
particularly for a youngeraudience that was into food and
beverage and quirky shops andthings like that.
So just one last thing duringthat kind of to that point of
our development or our growth,we had a downtown store briefly
from well, for three years from2012, 13 and 14 to try to tap
(10:16):
into the tourist market.
But after we bought thebuilding, the property in West
Asheville and renovated it andtourists started coming over to
West Asheville, we determined wereally didn't need to be
downtown and that downtown storewas not profitable for us.
So we closed that store in theend of 2014, beginning of 2015,
and really focused in WestAsheville.
Bill Gilliland (10:38):
So we were there up, and you know, up and up
through early on.
Russ Towers (10:44):
Uh, in 2020 we started looking at moving to the
river arts district because wehad outgrown the space in west
ashville and that was kind ofall during covid and all that
craziness and you know kind ofunknown of what was, what was
going to happen next yeah.
Bill Gilliland (11:00):
so I mean it sounds cool and you all, this
growth and everything, and maybea misstep or whatever going
downtown, but there had to bechallenges along the way with
this growth.
So what are some of thechallenges and maybe what are
some of the things you learned?
Russ Towers (11:18):
Yeah, well, first and foremost, you know, early on
, this is no breaking news foranybody that started a business
from scratch and you know havingto build that up was, you know,
just cash flow challenges.
Early on, you know, felt likekind of month to month check to
check.
You know we were a consignmentbusiness, which was great.
We weren't having to buy all ofour product up front but we also
(11:40):
had vendors and we had some newproduct.
But you know, each month at thebeginning of the month we had
to pay rent, we had to pay allthe consignors for everything
that you know sold the priormonth.
We had payroll, we had, youknow, other overhead.
So you know, the first fewyears were really challenging
and you know, until we movedacross the street from our
(12:01):
original location it was reallytenuous of you know.
Could we continue to be inbusiness?
But when we moved across thestreet, got a little bit more
space and a little betterexposure on Haywood, then we
really, you know, kind of feltestablished financially and
established as a business.
You know, early on there weresome challenges with you know, I
(12:27):
was operating, I was kind ofjuggling both my brokerage
career and trying to run behindthe scenes second gear and you
know not having really afull-time manager, one of my
other partners in the businesswho started out as one of our
first employees.
She wasn't one of the originalowners.
She was going to do the samething, kind of operating second
gear on the side.
So we really weren't to a pointwhere we were 100% committed,
(12:51):
where we had a manager who wasan owner.
And so in 2009, that partnershe moved out, she and her
family moved out to Utah, toSalt Lake City, and we brought
on a manager who was full-time,who then eventually became an
owner.
And that also was that was partof the growing pains of having
(13:13):
somebody there.
That was kind of day, you know,40 hours a week or so, day in
and day out, managing vestedinterest.
I continued to do real estate,but it was also, as Second Gear
was growing, being more and moreinvolved in the business.
So, yeah, those were some ofthose early challenges of just
having that focus and kind ofdigging out or not digging out,
(13:35):
but just getting financiallyhealthy without having to take
on a whole lot of debt.
You know, we, as I said, in2012, we went downtown.
That was not financially, itdidn't work out.
We were losing money down therewhile making money in West
Asheville, so we'd work thewhole year and then break even
and that just felt like, youknow, pounding your head against
(13:57):
the wall.
You're working all year for youknow, just to be at par.
So yeah, then, and then when webought the building and went
through the whole renovationprocess, like I said, we we
closed down one site, one, oneof the bays, while we operated
in the other bay and thenflip-flopped and that was about
a year and a half of having tolive through, you know, all that
(14:19):
renovation work upstairs nextto us behind us.
So there were some challengesbut it was well worth it when
that was all done come mid-2014.
Also, during that time, kind ofoperating the business early on,
it was really a lot of thetasks were just kind of done by
committee where everybody dideverything.
(14:40):
There was not a whole lot ofwell, you're the HR guy or
you're the marketing person oryou're the buyer, well, you're
the HR guy or you're themarketing person or you're the
buyer.
It was just we weren't bigenough to have that
specialization.
So it was.
You know it was OK to operatelike that.
But you know, in hindsight thatmade it challenging because
there was, you know just kind ofeverybody doing everything, and
(15:01):
so it could get a littledisjointed sometimes and feel a
little unstructured.
But that was kind of the natureof a small business back then.
Bill Gilliland (15:09):
Yeah, when do you?
I mean, it's an interestingquestion, like you were, you
were, I mean you were doing whatyou financially could and you
had a whole bunch of people moreor less working part-time, a
few full-time people, but thepeople running it it seems like
we're more or less part-time.
Like how, you know what was thedecision?
Was it scary to go with afull-time manager, or was that
(15:31):
just like a natural progression?
Russ Towers (15:32):
No, no, that wasn't scary.
It was kind of like we reallyneed this, that's what the
business is missing, becauseLissa and I were both, like I
said, working kind of part-timewith second year part-time with
our other endeavors and, no, wefelt like and at that time I was
taking very little or nocompensation, so, no, it didn't
feel scary, it just felt likegosh, this is what we really
(15:53):
need to do.
The business has grown to thatwhere it needs that focus and
somebody that is there, you know, every day, or you know, full
time.
And then we started adding andthat person had some background.
He had worked in REI.
At REI he had some goodbusiness experience and we
started adding other people tothe team.
(16:13):
That it went from.
It kind of went from when wefirst opened up.
We were hiring people that hadoutdoor gear, knowledge and kind
of generalist.
And as we've grown through theyears, and particularly in those
kind of in that 2008, 9, 10, aswe were really getting
established, then we started tobe a little more focused and
(16:33):
better at hiring people who notonly had some outdoor experience
maybe they had retailexperience, whether it was in
the outdoor retailing or otherretail where they had some other
skills that we needed at thatpoint.
You couldn't just get by onjust knowing having done some
camping and doing some kayaking.
You had to have some otherskills at that point because
this business was growing andthe clientele coming in, you
(16:56):
know they needed to know moreand want to know more.
We were selling more newproduct to go along with used
product and you know we broughtsomebody on the team who's still
on the team, who's one of theowners and also worked at REI
and he had really goodexperience with retailing and
retail sets and ordering.
So we were ordering more andChris was doing, you know,
taking on more of that role andone of the other partners.
(17:18):
So we started then divvying upand having a little bit more
people having their own silosthat they were working within,
but still kind of all workingtogether in this small, small
business that was, you know wewere.
We were seeing like 20% annualgrowth in revenue every year.
So it was a lot of.
It was just kind of trying tokeep up with that growth and how
to manage that and how to howto grow in managing the business
(17:41):
during that time.
Bill Gilliland (17:43):
So in some respect, the demand was just
there.
Russ Towers (17:47):
Oh yes.
Bill Gilliland (17:47):
Yeah, and so you were just responding to what
the market was telling you.
Russ Towers (17:53):
Absolutely yeah.
Some of our best growth wasduring the recession era, like
2008, 9, 10, when people stillwanted to get outside but maybe
they couldn't spend as much.
So we were a good alternativefor that, because people were
willing to buy things used oryou know, along with some new
(18:15):
accessories, and so, yeah, thatwas a really good period for us.
Yeah, it was so.
And then, when times after therecession, when particularly
tourism was really taking off inAsheville and all these people
are coming into Asheville tovisit friends and family, or
whether or they're just comingto visit, in general, they would
(18:36):
find us particularly, you know,after 2014,.
They were coming to WestAsheville or they found us
downtown, when we were downtownand had both stores going, so it
seemed to also thrive when,when the economy was really good
and when tourism was was reallygood as well, so we were really
fortunate from from thatstandpoint.
Bill Gilliland (18:53):
Yeah, when you started moving to new gear as
well.
Then you have new and great usestuff, so cause you're not
putting the junk out there.
So it's yeah.
I mean, yeah, people have achoice and they choose.
You know they can, they can,they can make a good decision.
I mean it's like yeah, it, it,it makes, it makes a lot of
(19:13):
sense, all right, so when?
How did you decide to gofull-time?
Like?
When did that become an?
Russ Towers (19:21):
option.
That was a pretty easy decision, but not easy decision.
That was pretty clear cutdecision in my mind.
And so, as I mentioned before,we opened a downtown store in
March of 2012.
And you know, that was a fewmonths leading up to negotiating
the lease, prepping the space.
We opened that store while wealso had the shop in West
(19:41):
Asheville and at that point Iwas doing brokerage.
I'm coming out of the recession,so you know, the commercial
real estate market wasn'tawesome.
I'd been doing brokerage forabout I guess at that point, a
little over about 12 years and Ifelt like, well, and that was
all commission and I felt like Iwasn't really doing either one
(20:02):
of them.
Well, bill, I felt like, when Iwas at Second Gear and focused
on Second Gear, I really, youknow, there were real estate
clients I should have beenattending to, or properties I
should be focused on, or findingnew real estate business.
And then when I was doing that,I felt like, well, there was
stuff at Second Gear.
Second Gear is thriving,growing and there's really
things I should be focused on.
I felt like, you know, I reallyneed to commit to one or the
(20:25):
other.
And so I committed to secondgear and paid myself a basic,
very modest hourly rate andthought you know this business
is growing, I've birthed it andyou know it's got a life of its
own and I really want to seethis through.
I think it has potential.
I'm going to put my cards, mychips, on second gear.
(20:46):
I still kept my real estatelicense and then, fortunately
later that year is when I hadthe opportunity to buy the
property with some partners onHaywood Road.
So I really went from doingbrokerage and being having a
client base of real estateclients to really focused on my
own properties and then ended upmanaging that property on
(21:10):
Haywood and managing all thoseapartments because I was right
underneath that second year.
So it really really lent itselfwell.
So I was really fortunate to beable to shift, to have really
still be in both of thoseindustries, but not letting a
bunch of real estate clientsdown, and being able to really
focus on my own business.
Bill Gilliland (21:32):
Yeah, I really get out of the sales of real
estate and get into theinvestment of real estate.
Yeah.
Russ Towers (21:37):
And I love doing that.
It was great the 12 years I wasin brokerage here.
I'd moved to Asheville notknowing really anybody much in
this market and I really wantedto be involved with work in a
city.
I'd worked in real estate butregionally out of Charlotte and
part of the draw here was Iwanted to be in a smaller market
and really be connected to acity or to a town and I really
(21:58):
got that opportunity over 12years to help businesses find
locations, to help people sellor lease their properties and
really was dialed into what wasgoing on in Asheville and that
was really satisfying to to havethat opportunity.
And I'm still involved, youknow, in the real estate
community and the businesscommunity here because of those
early connections that I was hadthe opportunity to be involved
(22:21):
with.
Bill Gilliland (22:22):
You can't know enough good people right.
Russ Towers (22:24):
That's yeah.
And that was a big attractionto Asheville was how
interconnected everybody was andsupportive of and you know you
couldn't.
You know in Atlanta orCharlotte or bigger cities it's
hard, I think it would be hardor maybe impossible to start
small businesses from scratch,you know.
But Asheville was a greatmarket, a great opportunity for
(22:45):
that.
Bill Gilliland (22:46):
Yeah, and I like the way you did it.
I mean you started small andyou just grew it as the market
was telling you.
Hey, you're doing some stuffright.
Yeah, I mean you're doing.
You got to do some things wrongto learn, but you know along
the way, but, but there's butyou were doing a lot more right
and so or at least enough rightto continue to grow.
So that's awesome.
(23:07):
Well, let's divert a little bit.
Let's talk a little bit aboutthe hurricane and the flood and
your response to that and whatthat looked like to you.
I mean, it's an unprecedenteddisaster, but every business is
going to go through something.
(23:28):
It may not be on the scale ofthis, but it's something.
There's something that I callthem an oops.
It's an oops, it's likely notyour fault, it's likely just
something that happened.
So let's talk about overcomingan ute.
Russ Towers (23:45):
Yeah, that's a very PG way to say it as opposed to
what I saw the flood but let megive you a little background
about how we got there and howwe drew upon past experience
that I think helped me andhelped Second Gear, hurricane
Helene.
So in late 2019, early 2020, itwas really evident that we had
(24:12):
outgrown our space on HaywoodRoad.
We were in 4,000 square feet.
We had been in that footprintreally for 10 years, just about
10 years since 2011.
So eight, nine years.
At that point, all the mean,all all the while sales are just
growing and the space isgetting more and more jammed up
(24:32):
with product and less shoppable.
But we're still successful.
But but, excuse me, but wereally needed to find a bigger
space.
So we started looking in theriver arts district, because
that's where we felt like wecould find a big enough space
and with enough parking.
And at that time also, all ofthat infrastructure was being
(24:53):
done was underway down in theRiver Arts District and it just
seemed like, you know, it was upand coming, much like Haywood
Road had been when we opened upin 2003, 2004.
It was not, we weren'tpioneering, but we were
definitely catching the earlypart of the upswing.
So so we started looking at thespace on Riverside Drive back
(25:15):
in April of 2020, right in theearly stages of COVID.
So you know, during during thoseearly stages of COVID, when we
reopened in May you know we kindMay like a lot of businesses
there was no playbook for how tooperate during a pandemic and
we were closed for nine weeks orsomething like that, from
mid-March to May.
(25:37):
When we reopened, it was justblowing up.
Everybody wanted to get outside.
You had to be separate, it hadto be distance, all that.
So, um, we, we lived throughthat.
So, um, in in 2020.
So we, we ended up getting thefinancing.
It was really hard to get thefinancing to to, uh, renovate
(26:00):
the space down on riverside.
And then the connection towhere we were on haywood Road,
the building that we moved to at99 Riverside up until 2008 had
been Ace Appliances Warehouseand that Ace Appliance was again
the client that I had as a realestate client, bruce Smith, and
Bruce hired me back in 2009,after he closed Ace Appliance,
(26:23):
to sell or lease his warehouseat Riverside and we sold it to
Darren Green here in Ashevilleand Darren had Old Wood Company
and he had operated Old WoodCompany and they're making
furniture from 2010 until 2019.
And so that building went.
He closed that up and wasinvesting in other real estate,
(26:43):
kind of focused on other things.
And so in early 2020, thatproperty was on the market.
I knew Darren and it looked likeit would just be a great fit
for what we wanted to do.
So we worked out a leaseagreement, we worked out the
financing.
That was really challengingduring COVID and I am going to
get to Helene, but this all kindof ties back together.
(27:04):
So we, you know, we signed thelease and at the end of 2020 and
beginning of 2021, you know,we're still coming out of COVID
we started renovating that spacefor our, for our use, and so it
was great.
We had basically a blank canvas.
We were going to bring in twoother businesses with us to
share the space, to kind of tie.
(27:25):
We brought in sugar and Snow, agelato cafe, an Asheville
adventure company, and they rantheir electric bike tour.
They were going to run theirelectric bike tours and their
whitewater trips out of thereand then we would have the bulk
of the space 10,000 square footbuilding.
Second Gear was going to occupyabout 8,000 of the 10.
We had some shared commonspaces, but we were able to
(27:48):
design that space exactly to fitour needs.
We were basically doubling ourfootprint and we were going to
have room to grow and we hadcontrol of that space for 15
years.
Three five-year options we putin.
So we renovated the spacebasically from February of 21.
We opened up in September of 21, while we were still operating
(28:11):
up on Haywood Road, and weinvested about $500,000 into the
outfit of that building andthat property and with the
intent and with the plan that,okay, we can be here for at
least 15 years and we're goingto spread that investment out
over, we hope, 15 years or evenlonger.
(28:33):
So we had just and you know wewere, we took the first year to
kind of get everything dialed in, operating within a new, new
space.
Now we're much more structured,you know, now we have 16, 18,
20 employees, seasonal employees.
People now have their veryspecific roles.
We have buyers, we have HRpeople, we have a marketing lead
(28:55):
, we have I'm doing a lot offinance.
We have, you know just, youknow very, very specialized
roles and it had really maturedas a business so that you know
that took us up to September of24.
And you know we have thingsdialed in.
It's going great.
Bill Gilliland (29:16):
I know it's a beautiful space, beautiful
business.
It was really cooking yeah.
Russ Towers (29:20):
It's thriving.
You know the economy here isthriving, the tourism's good.
Yeah, it's thriving.
You know the economy here isthriving, the tourism's good.
Yeah, it wasn't.
Yeah, we had some some downturnin the economy, a little bit
with tourism, but all in all wefelt like things were just
cranking along and we kind ofhad the joke like, well, just
don't F it up you know that wasright, yeah Things are.
Yeah, things are going well,we've got a great staff.
(29:42):
Yeah, things are going well,we've got a great staff and, um,
but all along my only concernbeing down there was the threat
of a storm or a threat of aflood in 2004, when Ace
Appliance was in there again,kind of giving you back
background when Bruce Smith hadAce Appliance in there, it was
full of full of appliances andafter Francis, the hurricanes
(30:04):
Francis and Ivan, that buildinghad a foot of water in it.
But that was kind of the extentof the damage.
When Oldwood Company was inthere, when Darren was in there,
for 10 years more or less, theynever had water in that
building.
Water came up to the buildingbut not, and the floor sits
(30:24):
about four or five feet, aboutfive feet off of the ground.
About, oh, two months or sobefore the storm, maybe in
August, john Boyle interviewedme and some other people about
the threat of flooding down inthe River Arts District and John
(30:44):
just popped in one day and Ikind of shared oh, right before
we opened in 2021, in August of21, we had water damage from
Tropical Storm Fred, much moreof an impact over in Canton, but
it didn't get into the buildingjust came up to the building.
We weren't open yet, but itleft all this silt and debris in
(31:08):
the parking lot.
So we had to deal with that.
So we had a little bit ofexperience from what I knew from
the past and what happened, youknow, right before we opened
and what, what could happen.
So, yeah, and so John, John,does this article that came out
on September 17th, the AshevilleWatchdog article about flood
potential and what businessesyou know were doing to you know,
(31:30):
address that.
Whether it was flood insuranceor so forth, we did have flood
insurance on our contents,fortunately, yeah, good.
So yeah, that kind of takes usup to right before the storm and
um you know it.
Bill Gilliland (31:48):
Yeah, so the storm's unprecedented.
Yeah, I mean water's 27 feet orwhatever, above normal Right
Wipes out pretty much the riverarch district.
But what's your like what?
What is how?
How did you attack it?
Russ Towers (32:05):
Well, I kind of attacked it two ways, you know.
One was my home's in WestAsheville and I was down there.
You know we tried to preparefor it.
You know we didn't have time toget things out of the store,
out of the business when Ipulled up there Thursday morning
before the storm.
We had a plan to get somethings out of there, but there
was already water to thebuilding.
The city was closing down thestreet, you know from all the
(32:31):
rain before.
So we had to go to plan B,which was to get stuff off of
the floor.
Our hope was maybe we get afoot of water in here like 2004.
Well, that didn't happen.
Everything got wiped out.
You know, part of the buildingcollapsed.
There was water up to the roof.
We lost 100% of everything,including consigned items that
the general public brought in,as well as all the inventory
(32:53):
that we own and all of ourfixture, all of our equipment.
So I looked at it kind of twoways.
I looked at as the waterreceded and you could see the
damage and it was obvious well,we're not going to go back into
that building.
And I thought well, this is a20-year-old business, it's
(33:14):
thriving, it's financiallysuccessful, we've got 18
employees at the time.
You know many of those peoplework full time.
Their livelihoods depend on it.
We have great community support.
It just didn't seem like, well,this is the time that we just
were going to close the business.
I mean, we could have closedthe business, but it didn't seem
(33:36):
like that made sense to closethe business.
We had too much of a good thinggoing, too much support.
We also also had a COVID loan,an idle COVID loan still in
place that you know personalguarantees on that, you know,
back from 2020.
So if you walk away from, ifyou close the business, then you
(33:56):
know somebody's got to pay forthat, that loan.
Those are not forgivable loans.
So that was motivation to keepgoing as well.
So there was all thatmotivational part, but at the
same time, I guess the part ofthe you called it an oops.
I didn't call it an oops, Icalled it something much more
(34:21):
salty about oh man, how do youtemporarily close business?
How do you unwind this locationand all the things that are
going to be involved withtemporarily pausing this?
All the vendors we had to dealwith, all the services, all the
staff we had to let some staffgo initially, how do we get
financing for that?
How do we get grants?
How are we going to fund this?
You know all the hundreds ofmoving parts of running a
(34:44):
business behind the scenes andthen trying to.
You know how do you run abusiness and how do you do this
during a natural disaster whenyou don't have, initially, the
first few days, you don't havepower, you don't have water.
You're just personally tryingto survive as well.
So it was kind of that, all ofthat anxiety and all that
pressure and all that struggleof how do you do that, but also
(35:06):
knowing that, ok, this is asolid business that's worth
saving.
If we can figure this out, wecan make it work.
But figuring it all out thatwas that was tough right off the
bat.
Yeah.
Bill Gilliland (35:20):
Yeah, I mean it's, yeah, it's.
I mean it's a, it's a, it's agreat story.
I mean it's a.
It's probably not one you wantto live through again, but it's
awful.
But deciding to stay open, Ithink, is a decision.
You just made the decision andfigure it out.
Russ Towers (35:42):
Yeah, in early October.
That's how I started attackingthis.
I thought pretty early on, ok,what's out there that we could
move into quickly.
You know, one of the silverlinings in our situation, in
Second Gear's situation, withour building being uninhabitable
, unrepairable, was you know.
Ok, well, we can move on rightaway.
Let's you know, we're not goingto spend months trying to clean
(36:05):
up and you know, gut a buildingand clean up like a lot of
businesses are having to do inBiltmore Village or in the River
.
Arch or other places.
So we could just move forwardand it occurred to me pretty
quickly like oh, there's theFrugal Backpacker space up in
the Westgate Shopping Center.
Bill Gilliland (36:21):
Yeah, nice place .
Russ Towers (36:23):
Has been available for a while.
Will Gay, who's the owner ofFrugal and Diamond Brand Retail.
Will's been a longtimeconsigner and I knew that space
fairly well from being at EarthFair being that shopping center.
And we looked at other spacesand knew it didn't need much
work, that we could get in therepretty quickly.
(36:43):
So I shifted gears prettyquickly on moving forward and
looking at that space and otherspaces and negotiating a lease.
It took about a month tonegotiate a lease agreement.
I worked with Austin Walker,who's a longtime investment
partner with me and a longtimereal estate broker here in
Asheville and worked with FIRC.
(37:06):
The Fraga family owns WestgateShopping Center.
They provided us a veryreasonable, very workable lease
agreement there for us to getback on our feet.
So those things just kind offell in place.
We got some grants that and Ialso need to mention we started
a GoFundMe campaign very earlyon to support our staff that we
(37:31):
let go and the staff that wekept on a recovery team and to
help us get back on our feetfinancially with.
You know, we lost $125,000 ofproduct that we owned, of
product that we owned.
So, yeah, working out thingswith vendors.
So yeah, things fell into placefairly quickly and we signed a
(37:52):
lease on November 15th and gotto work on getting the space
ready and we opened up onDecember 10th.
So it was a quick turn.
We spent 18 months from startto finish.
To get down to the River ArtsDistrict, we spent 18 days.
It seemed like to get startedat Westgate.
Bill Gilliland (38:10):
It was crazy.
Yeah, there's a lot of lessonsthere, but I think it's a
checklist.
It's just a long one.
Russ Towers (38:18):
Yeah, we didn't want to wait till spring also
and lose momentum.
We didn't want to miss theholiday season.
We didn't want to lose keypeople.
You know we could have waitedtill the spring and some
businesses are going to do thatand I'm not saying that's right
or wrong, but we, being aretailer, we didn't and December
being a big month for this, wedidn't want to lose that
(38:40):
momentum and then be startingfrom kind of from scratch and
being starting from a you knowfurther behind come spring.
And we also, frankly, I wantedto protect our place in the
market and I didn't wantsomebody else to come in and do
what we're doing.
Bill Gilliland (38:54):
Yeah, yeah, in other words, basically, you went
on offense instead of trying toplay defense, and I think
there's a lesson there.
Man, I think you and I couldprobably talk all day.
Let me ask you one lastquestion.
Usually, I ask people this.
The question is what do youwish you had known before
(39:19):
anything?
This could be life, or it couldbe business.
I'll let you pick the timeframe.
But what do you know now thatyou wish you had known earlier?
Russ Towers (39:24):
In business in general or related to the flood.
Bill Gilliland (39:27):
It could be either or both.
Russ Towers (39:32):
Gosh, I think what I wish I had known early on was
that when you're opening abusiness, starting a business,
it takes on a life of its own.
And I've coached and helped thefoundations class at Mountain
BizWorks, working with a lot ofstartup businesses and so,
(39:53):
having gone through a startupand as a business, evolved of
just how much work it is behindthe scenes to operate a business
and in front of the scenes aswell, but just how much energy
that it takes if you are reallycommitted to running your own
business and you know, had I,and for me personally, I was
(40:15):
trying to juggle two careers atone time and you know, maybe I
should have moved out ofbrokerage earlier and focused on
my own business earlier and itmight have been that much more
successful early on.
I don't know.
But just just not having justbeing naive about how much work
it takes to operate even a smalllittle dinky retail business
(40:38):
selling used clothing and gear.
And you know, if you reallywant to do it right, you really
have to put the energy into itto run it professionally.
And yeah, so I guess you know,you just can't, you can't
half-ass it.
You don't have to knoweverything, but you, you can't
half-ass it.
Bill Gilliland (40:56):
No, I get it.
You got to commit, you got tocommit.
Yeah, well, there's a lot oflessons here.
There's a lot of lessons,thanks, thanks for taking time
to be with us.
Russ Towers (41:03):
Thank you for the opportunity to share my story,
our story.
That's cool.
Yeah, yeah, it's cool.
I'm happy to talk to you in thefuture again.
Bill Gilliland (41:11):
Oh yeah, yeah, I think we got.
There's a lot more stuff.
There's a bunch of questions Ihave that we need to unpack at
some point.
So we'll have, we'll have.
We'll have a number two at somepoint.
Russ Towers (41:22):
Okay.
Bill Gilliland (41:23):
Yeah.
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