What Does Atomic Comics’ Collapse Mean in the Big Picture?

Posted on August 23, 2011 by

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The news was shocking at first. But for many comic book retailers, it was also worrisome.

Atomic Comics, the Phoenix-based chain that was considered a leader in the comic book industry, has closed the doors to all four of its locations after more than 20 years in business. Mike Malve, the owner of the retailing chain, has confirmed that the company is bankrupt.

Mike Banks, owner of the two Samurai Comics stores that are also in Phoenix, has confirmed to Newsarama that Atomic customers will still be able to get their comics.

“We [talked] to Diamond Comics Distribution, and we will be receiving Atomic Comics shipment of product at our Samurai Comics, 1051 E. Camelback Rd., location this week,” he said.

Banks said his stores will also work with Diamond, as well as publishers and other comic retailers in Phoenix, to make sure any extra demand from former Atomic customers is covered. “We’re looking at establishing a temporary spot in the East Valley where customers of the Mesa and Chandler Atomic Comics can come to get their new comics,” Banks said. “Our Central Phoenix and West Valley location will have plenty of comics on hand to service those customers from the Paradise Valley and Metrocenter Atomic Comics locations.”

Yet while that news will put customer fears to rest, many people in the comic book industry are wondering: How did a leading retailer like Atomic Comics fail? And is their bankruptcy an early sign of things to come for the comic industry?

Joe Field, president of the comic book retailing organization ComicsPRO, called Atomic’s owner Malve a “long-time friend” and called Monday “a bitter day for me.” But he said the bankruptcy indicates more about the current state of small businesses than it does about the comic book industry.

“I think there’s a tendency for people to jump to conclusions when individual businesses fail,” Field said. “The last three years have been a challenge for anyone who owns a business, whether it’s in the comic book business or not. And the fact that we are a very small industry, a less than $1 billion industry, makes things that much more difficult. There’s no room for error.”

Banks called the end of Atomic’s business “worrisome,” but agreed with Field that it’s not necessarily indicative of an end to the comic retailing business. “I don’t think this is a comic book industry issue alone, but is something small businesses across America are facing,” he said. “I would urge everyone to shop locally and try to help keep small businesses in your community afloat.”

The challenge for comic retailers in the current economic environment, Field said, is to make sure they’re adapting and evolving. “From my time in business, I know that every small business has its own life cycle, and unless the ownership and management continues to remake that business in profitable ways, then that life cycle isn’t going to go very far,” Field said. “And what I mean by ‘remake’ is you change with the times, you do innovative things, but you do those things with a structure that still pays the bills and doesn’t have any huge surprises that come along.

“Mike [Malve] had a couple surprises, with someone putting a car through the front window of their largest store, and the flood that came as a result of that,” Field said. “I think some of these things were out of his control, but I think there were a lot of things that were probably within his control in terms of financial management that maybe wasn’t as strong a suit for him as the promotion end of things, and just the excitement that he brought to comics retail with Atomic.”

What’s alarming to many comic fans is that Atomic was one of the biggest chains of stores in the country, and had high visibility because of their high-traffic locations and their role in events and movies, like Kick-Ass. Banks said the retailer’s Chandler Fashion Square “looked right at home alongside national retailers in an upscale mall.”

But Field said Atomic’s expansion and high-profile locations may have been part of the company’s eventual problems. In a letter to the public, Malve did mention the high rents he was facing in his retail leases.

“There’s a reason so many comic stores are just one or two locations,” Field said. “It requires very specialized knowledge, passionate dedication by a small core team, and a consistency that comes from the same people being in the same places for long periods of time. And chain operations have a tendency to turn over staff more regularly and also have some higher costs that are likely to be attendant there, including… if you’re a chain store, you’re probably in better locations, which are more expensive. Your costs are higher.”

Field also wondered if saturation of the market wasn’t a problem in Phoenix.

“I think realistically, right now, and I’ve said this for the last couple years and I maintain this, that there is room in America for another 1,000 to 2,000 comic book stores,” Field said. “That may seem like a bold statement given where things are right now, but there are vast underserved areas when it comes to having access to comic book stores. And I know that whenever a new store opens in a new place, it creates new customers for the product.

“But I think there are some markets that are very saturated with stores, and I kind of get the sense that the Phoenix area has been kind of saturated with a lot of different stores, and a lot of quick in-and-outs for stores,” he said, indicating that some stores have opened then later closed. “That may have played into some of the Atomic’s problems.”

Banks said there have been other comic store closings in Phoenix, and said that during the housing boom, Atomic Comics went through “rapid expansion.”

“When the housing market bubble burst, Arizona was one of the hardest hit states,” Banks said. “As the economy continued its decline, I think everyone locally was having trouble catching up. At least four other smaller comic stores in the metropolitan Phoenix area closed over the last few years. I think ultimately the pace of the economic recovery has simply come too slowly to make up for the sudden decline everyone experienced in years past.”

Field said he also suspects that Diamond Comics, the main distributing company for the comics industry, is less willing to bank delinquent accounts right now. “We may be starting to see some pressure on Diamond’s side that they’re not willing to hold delinquent accounts very long, or as long as they have in the past,” Field said. “They’ve been incredibly patient, I know, with a number of retailers for a number of years. But it’s well within their rights to just stop servicing accounts that are not paying them. And this may be a part of the situation as well.”

Banks and Field both voiced concern about the former employees of Atomic Comics, but they also wanted to make sure customers were being taken care of. Banks said that’s why he spent most of the day Monday trying to make sure readers were being serviced.

“When a chain closes, there are a lot of people who are literally disenfranchised, and I think time is of the essence to retain as many of those customers among the local comic shops as much as possible,” Field said. “I know there are a number of good operations in that area, and that Samurai is among them. If something works there, I think that’s great.”

The Samurai Comics location that is handling Atomic Comics orders this week is located at 1051 E. Camelback Rd., Phoenix, Ariz. For more information on the location, or to get contact information, visit the retailer’s website.

Source – Vaneta Rogers @ Newsarama

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Posted in: Comic Book Stuff