Welcome to the third part in my series of Lee’s Comics history. In the fist chapter, we looked at my humble beginnings at a tiny hole in the wall at Alma Plaza in Palo Alto in 1982. In chapter 2 we looked at the addition of our San Mateo branch in 1987, and the opening of our El Camino Real store in Palo Alto in 1990.
In this final installment we will look at the circumstances that led to my leaving Palo Alto, and nearly leaving the comics business as well.
WORLD DOMINATION
I used to like to get together with friends and play a board game called Risk. I was pretty serious about it. If you win the game, you take over the world. In my head, I approached the comic books business as if it were this game. In 1990 I bought a giant map of Northern California. I put flags on it where all the other comic book stores were, and flags where my stores were. I also put up flags were I was planning on putting up new stores. My next plan was to open stores in San Jose, and San Francisco. Like in a game of Risk, I was going to get solid control of my base and then continue expanding from there. I had made trips to far outposts like Milpitas and Fremont to survey the territory in advance of conquest. They would be mine soon, as well. I would wear the crown of comic retail King, and rule from a sullen perch on my bloody throne of Diamond Comics shipping boxes.
A new store every 5 years seemed like a good plan. I started my first store in 1982. The 2nd store was started in 1987. So far, so good. After that, I moved my original store twice, but haven’t managed to open a 3rd location. Now I’m not even sure that I want to expand further, or if it’s even possible. My map of Northern California domination sits sadly, rolled up on a shelf in my garage, collecting dust. Things have changed a lot since I started, and it costs a bundle to move a store, let alone to start a new one.
THE PALO ALTO COLLECTION
There is a new generation of comic dealers coming up the ranks these days. Many of them do not feel the need to buy and sell vintage, collector’s comics in their stores. I like to think that I’m a modern comics dealer, but I part company with the new dealers that eschew back issues. Let me tell you, old comics have saved my store on several occasions. I would not still be in business if not for several timely acquisition of terrific collections. Here’s the story about one of the best such collections to come my way.
In 1999 a former soldier came in to my store with several boxes of high-grade comics that he sold to me. There were 449 comics in this collection. All of them were from the years 1950 to 1954. He had purchased them from another soldier in the 1970s. He had sealed them up in boxes and plastic bags. The original owner had purchased them new off the stands, and had not read many of them, instead deciding to seal them away in his footlocker.
These comics were in extraordinary condition. Many of them looked like brand new books, even though they were 50 years old. They had white pages, glossy covers, tight spines, and sharp corners. I had been dealing in comics for many years, but I had not seen the likes of this collection before. The titles included Batman, Classics Illustrated, Haunt of Fear, Mad, Marvel Tales, Superman, Suspense, Tales From the Crypt, Two-Fisted Tales, Vault of Horror, and Weird Fantasy.
I had heard a little bit about “Pedigree Collections” before. Previously I was a little dubious of the whole idea. After seeing the quality of this new collection, I changed my view. The price guide lists Golden age books all the way up to Near Mint in grade, but for the most part, they just don’t exist in this grade. If you find one, you likely have something that is one of a kind. To get a whole collection with many books in such great condition changed my view.
At this time, I was planning a 3rd store, so my thought was to sell the collection through an expert who could market them for the best possible return. I had a location staked out for my 3rd store. It was to be on the corner of Blossom Hill and Snell in South San Jose at the old site of Critter’s Corner (Now Payless Shoe Source). Although I had been selling old comics for quite a while, I had never dealt with a pedigree before. I decided that my books collection needed a name. I decided to call them the Palo Alto collection because I was based in Palo Alto. I had grown up there, gone to school there, and had my main office there. Chuck Rosanski had purchased the greatest Pedigree and had dubbed it the Mile High collection, after his hometown Denver Colorado. I figured that I, too, would name my collection after my hometown. If you dig deeper, you find that Palo Alto means “High Stick”, or tall tree.
My fist thought was to offer them through Sotheby’s auction house. I called Jerry Weist who was in charge of comics acquisitions for the company. I described the collection to Jerry. He asked for sample photocopies of certain comics from the collection. I sent out the ones he requested including the front, back, and interior pages of a Batman #62, that was later graded 9.2 by the CGC. He agreed that the collection was everything I said it was. For reasons I was unclear on, he passed on the collection. I then showed the collection to several dealers. None of them were willing to pay my asking price of $20,000 dollars for the collection. By guide, they went for $30,000.
I’ve generally been a pretty stubborn guy. This mindset has had advantages and disadvantages for me over the years. Once I get an idea into my head, it’s hard to talk me out of it. I felt strongly that these books were exceptional, one of a kind books. I decided that it was time to take matters into my own hands. The plans for store #3 would have to wait. At the San Diego convention the previous year I was selling next to All-Star Auctions who were doing a simultaneous ebay auction. That seemed like a good idea to me. By using Ebay, I would get a large audience for my auctions, and I would not have to pre-qualify the bidders. I didn’t want to set up my own auction house.
I graded all the books by my standards. I created a catalogue with images of all the books. I was able to get a delightful painting commissioned by one of my favorite artists, Jack Davis, to use for the certificate of authenticity. I placed ads in the Comic Book Marketplace, and The Comics Buyer’s Guide, announcing the date of my auctions. At the last moment I decided to send in a number of the books to the CGC, the 3rd party grading service that had just started up. I felt that it would be a good idea to have an outside source backing up my claims of extraordinary grade on these books. From the 449 comics, I culled out the most valuable examples, and the highest graded items. I sent in 72 books to be graded. Many of these books remain the highest graded copies to this day. The CGC agreed with my designation of the books as a pedigree, and the Palo Alto Collection was the first CGC approved Pedigree. You can read more about the Palo Alto Collection and other pedigree collections here.
I started all my auctions at Overstreet guide price. There were 449 golden age comics in all, all on ebay at the same time. That represented nearly half of all the golden age comics being listed on ebay at the same time. There were a total of 300 CGC graded books being offered on ebay at the time. Of those, 72 were Palo Alto books. The auctions ran for 10 days. I started them just before I went to San Diego. When I got there, I showed off the books. I had a computer set up there so people could log on and bid on the books right there if they wished. It was fun watching the auctions. It seemed like all the big collectors came forward to bid, Steve Geppi was my largest single bid winner. Jim Steranko contacted me to purchase some Atlas comics. I emailed him back, and we began a warm friendship that continues to this day. Robert Roder from Pacific Comics Exchange purchased the CGC 9.2 Batman #62, which at that time, and for many years was the highest graded copy, and a Near Mint Action #150. Other winning bidders included Bill Hughs of Greg Manning auctions, Dallas Stephens, EC historian Grant Geissman, Richard of East Coast Comics, Metropolis, Chris Foss of Heroes and Dragons, and Rob at Capital City Comics.
Even after the CGC expense, the ebay expense, the catalog printing, the certificate printing, payment to Jack Davis for the certificate, the cost of going to San Diego, the ads for the auctions, I made many times more profit than the 20k I was willing but unable to get from any dealer. I banked a large sum, and had my war chest all set for a real estate purchase, or new store. I learned that I can market and sell a world-class high-grade collection just as well as anyone else can. If I get a collection like this again, I won’t bother to call the big name auction houses. I won’t need their services.
BEWARE THE LANDLORD, MY SON! THE JAWS THAT BITE! THE CLAWS THAT CATCH!
In 1990 I signed a 10-Year lease on my El Camino store in Palo Alto. My Landlord was a gruff, bull of a man with hams for hands. We got along very well. I was always on time with my payment, kept the premises clean, and never caused him any trouble. I could tell he enjoyed dealing with me, and I never had any trouble with him. The few times I called him with a problem regarding the unit, he always responded quickly.
After I auctioned off the Palo Alto collection, Lee’s Comics had a nice war chest in the bank. I had purchased my home in 1996, and it had proven to be a much better investment than the stock market. I also realized that by owning property you could build up equity for yourself instead of the landlord. After you owned the building you could keep working forever if you wanted to, or just walk away and lease out the building and live very comfortably. By owing your building outright, you would have the freedom to do what you wished. In 1999 I had one year left on my lease. I started looking for a location to purchase. By now, my competitors in town, Comics and Comix, and Heroes had both closed down. I was the only comics store left into town standing.
My Realtor told me that my building was on the market. It was a half a city block in size. It included my store, and 5 other businesses. It also included an apartment on the roof. It had a parking lot behind it containing 70 parking spaces. I was very interested in buying the building. I worked very had to try to obtain it. I was willing to put my own house on the line, plus all my savings. The sellers wanted 30% down, which I am told, is fairly standard for commercial real estate. The building was going for over 2 million, and I didn’t have nearly enough of a down payment. My Realtor set up meetings with numerous bank managers, to try to get me a loan. We got turned down all over town. While I was trying to get funding, someone stepped in and bought the building for the asking price. Unlike me, he was able to come up with the 30% down payment.
The new landlord was a fellow by the name of Sal. He owned properties in Palo Alto exclusively. He came and met me right away. We had dinner at a restaurant that he owned downtown. I told him that I was a little worried because I only had a year left on my lease. He told me not to worry, he knew I was a good tenant, and besides his son shopped at my store. He assured me that he would renew my lease. He told me not to worry about it.
Time went by and soon it was 2000. The year 2000 happened to be the height of the dot com boom. I was in the epicenter of it. At the time, venture capitalists were pouring insane amounts of money into all kinds of half-baked Silicon Valley schemes. Everyone around me seemed to be on the verge of striking it rich on the next big thing. New companies were springing up right and left. These new companies wanted office space in retail areas so their workers would be surrounded by plenty of nice shops and restaurants. These offices started to supplant the shops and restaurants, as they were willing to pay more money. They were paying as much as $5 square foot for properties that were going for less than half that much a couple of years before. Some landlords asked for and got a small percentage of the company, in addition to the high rents.
My lease was getting closer and closer to the point of expiration. I had heard nothing from Sal. I called him numerous times. I visited his office. I sent letters. He did not communicate with me at all. I was hoping to open up store #3, but I could do nothing because my lease was up in the air.
Finally at the last moment I heard from Sal’s office. Actually it was from his layer, telling me that my lease was up, and I had to get out. That was it. No negotiation at all. I was a little peeved. I called the papers. They put me on the front cover of the Palo Alto daily news. They quickly convened a meeting of the city counsel, and I was asked to speak there. Suddenly I was the poster boy for the destruction of Palo Alto retail by the dot coms.
I wasn’t going to wait around and live on the hope that the city would step in to help me, or that the landlord would sprout some decency and humanity and actually talk to me. I believed that it was imperative that I was open continuously without interruption. I could not afford to close up for a period of time. If I was in limbo while I was between locations, it could put me under. I feared that many of my customers would find a new place to get their comics. I didn’t want my fate to be uncertain. I had to take immediate action. I was peeved at the landlord. I felt that I was a good customer, and he was treating me like dirt. I think he felt that this was the beginning of a new golden era. Perhaps he thought that he would get huge rents for that property he bought, and he had no need for a lowly comics dealer in his grand scheme.
I saw the economic conditions of the moment to be a bubble. I felt that it would soon burst. One thing that I knew for sure was that my new landlord was the worst ever, and I didn’t want to give him one cent more of my hard earned money. Frankly he didn’t deserve it. I began looking for a new location right away.
Oh, and that landlord that was in such a hurry to get me out of there? My location stood empty for 6 months. Finally a store that sold cut-rate computer equipment and assorted other items and services opened for a while. Ironically it was called “Action Computers”. That place in turn closed down and stood empty for some time. Now there’s a shoe place in there. I wonder how long that will last. The building has been partially empty ever since I left. The landlord was so toxic, that almost all the old tenants left as soon as their leases were up. I believe that had I been able to purchase the building I would have been able to work with the tenants, and keep the building full. The lesson here is that if you are renting, you have no power. Even if you have a great landlord, don’t get too comfortable, you can loose them at any time. You can get a new one that will jack up your rent when your lease is up. They can just throw you out completely with no negotiation at all. It’s their land, and they have all the power. If you want power over your destiny in life, you need to own the land you occupy. At this point in life, I would rather own the land for 1 store than to lease 10 of them.
I looked all over Palo Alto for a new location. There were very few vacancies. What few were there were terrible locations, or ridiculously expensive, or both! Each store that I had opened had been bigger and better than the last. I had observed how Comics and Comix had moved to an inferior location, and had suffered in sales and prestige because of it. I wanted to find a location that was superior to my last one. I was forced to make a change, so I wanted to make it a change for the better.
There was one location that I had my eye on for a while. It was in Mountain View, 3 miles away. It was in a large regional center that included a Costco, an Office Max, and a Krispy Kreme doughnuts. Across the street was an In-and-out Burgers. This was a clean, modern facility with 1,500 parking spaces. There was a vacant building in that location that had once been a brewery. I talked to the landlords about remodeling the premises for my needs. Unlike the previous landlord that didn’t value my business at all, the new landlords were very happy to have me as a long-term tenant. I signed a 10-year lease with a 10-year option, and they got right to work in fixing the place up to my needs. They poured a new concrete floor, and put in tile flooring. They put up walls, doors, and air conditioning. They put in lighting and offices for me. They spent over 100,000 in renovations to make the building ready for me. The new building was ready for me before I had to leave the old one. I never missed a day of sales. I had several weeks to refer customers over to the new location. I had a 1-week cross-over period where both stores were open at the same time.
Sales had been climbing for me every year. We had passed the million-dollar mark for the two stores combined in 1993, and we were nearing the 1 million mark for a single store. My Mountain View store was going to be double the size of my Palo Alto store. It would be 3,200 feet instead of the 1,600 feet that my previous one had been.
On April 28 2001 the new store had it’s grand opening. I promoted it heavily with newspaper and radio adds. We had a grand opening sale and celebration. I arranged for members of the Stanford Marching band to appear there unannounced and play. The event coincided with my 40th birthday. I couldn’t think of a better way to celebrate it.
I had a full roster of special events planned for the year to kick off the new store. It was a great venue. The store was huge, and there was plenty of parking. Before I even got started, Clinton left office after 8 years of prosperity. We got a new president, George W. Bush. The stock markets that was heading down before the administration change, continued down. The dot com bubble bust. The NASDAQ stock market that was heavy with tech stocks centered in Silicon Valley lost half its value in a few short months. Jobs were disappearing all over the place. The economy was in the tank. Then something even worse happened. 9-11.
Connie woke me up in the morning. She told me that the World Trade Center had collapsed, and the pentagon was on fire. I thought “Right! What kind of silly thing did she think she saw on TV?” and got up reluctantly to debunk whatever foolishness she had bought into. I few moments later, we both stood transfixed in front of the TV screen. The realness of the horror set in.
9-11 took a bad economy and made it worse. I don’t mean to make too much of how the event might have hurt my comic book business. I’m very lucky. I live on the West Coast. I didn’t lose any friends or loved ones. Comic books aren’t exactly a necessity for daily life. The event did have many smaller ripples. In my case, it took a lot of the air out of my attempts to promote my new store. I had an event with Brian Bendis and David Mack planned for September 22nd that had to be canceled.
The extra sales that I was hoping to get from the new, larger space never materialized. Sales actually decreased from our peak in Palo Alto, which had been humming along like a well-oiled machine in the late ‘90s. Soon I had spent my entire war chest on trying to get the new store open and running, and I had to start borrowing money. The new location, with double the square footage, was expensive. We had to start cutting expenses everywhere we could. We cut the stock down, and eliminated the lines that were not performing as well, such as videos. We cut the selection of shirts down, back issues were trimmed without mercy. We cut out role-playing games. We trimmed out hours back. Advertising went away. We stopped having custom merchandise bags made up. Staff was trimmed down. We reduced lighting. The increased rent was getting harder and harder to pay. From our peak in 2001, sales went down every year. This was quite a reversal in fortune, as sales had been heading up each year since the beginning in 1982. We were going further and further into debt. It was getting very discouraging, and I was near the point of just giving up, and closing down for good.
Finally some good news. We were able to reduce the size of the new store. A new restaurant, Goldilocks, opened up next door. They wanted a larger store, so they were willing to take a portion of our footage off our hands. We cut down the size of the store from 3,200 square feet to a much more affordable 2,000 square feet. We were still larger than our old Palo Alto location had been at 1,600 feet. The trouble was, that people perceived that we had downgraded. Even though downsized 3 years ago, I still hear people come in and say. Hey, you’ve gotten smaller. One customer said, “I mourn the loss of your larger store.” That one stung. If not for the loss of the larger store, we would be mourning the loss of Lee’s Comics.
When we first moved into Mountain View, I could have taken my current size of 2,000 square feet right off the bat, and it would have been a grand store, but I insisted on the huge size. I believe we would have weathered the economic downturn and 9-11 much better, had we stayed a bit smaller and leaner. For years, everyone had been telling me that we needed more space. We moved out of the tiny Alma Plaza to the larger El Camino space. After a few years we grew into it, and started using every inch. Being tight for space can be good for a store. It forces you to use every inch to its maximum advantage. Sometimes when you have a lot of space, you just waste that space with stuff that you should have marked down and eliminated long ago. You also make the displays larger, just to fill up the space. I am really enjoying my current Mountain View store. I believe that it is the perfect size for the ultimate full-service comic book store.
As I said earlier, it had taken me about 5 years to get any comic book store going, including just moving an existing store. You can get 90% of your old customers to follow you over, but still need 10% more new customers to get back up to speed. Then you need an extra 10% more on top of that to pull ahead. The margins are tight in this business. The difference between living comfortably and going broke can be just 10% in sales. I’m happy to report that we have reached profitability at last in Mountain View. After 5 years of declining sales, sales were slightly up in 2006. Sales continue to grow in 2007. We are now reacting offensively instead of defensively. If you study war, (and remember that business is very much like war in many ways) you will note that war cannot be fought defensively. Remember that the French tried that in WW2 with disastrous results. In business you must always lead the charge rather than sound the retreat. We are now building up our stock instead of cutting back. We are getting into new lines, and new ways to sell and display. Our displays of new comics and graphic novels have never been more attractive or more comprehensive. We are promoting the stores with an advertising campaign again. I am trying lots of new things again, and most of them are working. Optimism has returned. The old Lee is back! I’m out in front of the troops, leading the charge, and I could not be more pleased!
The next step in the near future will be to improve the San Mateo store. We have taken that store for granted for quite some time, and I feel it needs a re-model. After San Diego, I intend to spend a lot of time there, and study it, looking for ways to improve it. If you are a San Mateo customer, your feedback will be most welcome!
We aren’t completely out of the woods yet. I still have a considerable dept to pay off, but it’s much better to operate with optimism in your heart, rather than despair. How will we do in the long haul? Stay tuned. I intend to stick around for another 25 years, capping out a total of 50 years in this experiment of creating a comic book retailing empire.
It I continue to survive, I’ll post more reports at the milestone years. Through it all, I hope to remain your friend in comics.
Now let’s look at some of the pictures:
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The new Mountain View store’s grand opening in April 2001, with the Stanford Marching Band.
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Here’s the inside of that huge store. You can see Richard Garcia helping a customer.
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Here’s another view of the store. You can’t get it all in one shot.
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Here’s the front of the new store once we got our sign up.
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Our new store was a finalist that year for the Eisner award. We came in 2nd. It was a real pleasure to have breakfast with Will that morning.
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Alex Ross and Paul Dini made 2 visits to the new location. This picture is from their most recent visit in 2003, where they were joined by Chip Kidd. On the left is James from Heroic Fine Art, the leading dealer in fine Alex Ross reproductions.
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Here’s the Ross-Dini line from the back.
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Here’s the Ross-Dini line from the front.
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Here’s a composite picture of the line. I could live to be 100 years old, and I would never tire of looking at this!
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Alex Ross produced a full color art print for his last 3 signings here. They are highly prized by collectors. This is his most recent one.
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We were fortunate to get a signing with one of my favorite artists, George Perez. I would love to get him back again.
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Here's Terry Moore of Strangers in Paradise fame giving a talk at his appearance in October 2001. He was hesitant to come, because like many of us, he was rattled by 9-11. Luckily he changed his mind and came. It was a great event. We had rolling fixtures. For author events we moved them out of the way and brought in chairs and a sound system. Note the glass window that looks into the neighboring coffee shop. It was really quite a comic book store while it lasted!
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Here we rolled the fixtures away again and made room for 9 independent comics artists at our SPICE event. That's Small Press Independent Comics Event. The artists were Madison Clell, Roberta Gregory, Dan Clowes, Renee French, Donna Barr, Rafael Navarro, Serena Valentino, Howard Cruse, and Richard Sala.
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Here's my friend David Mack. He's one of the nicest and most talented guys in comics. I had the pleasure of meeting him when he was just starting out in comics.
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Shown here, J. David Spurlock, Michael Chabon, and Jim Steranko.
Here's one of the best events we've had. I have a very small comics collection these days. It's the complete silver age comics work of Jim Steranko. He's my favorite. It was a real pleasure to host him here at Lee's Comics. We had a very special event. Michael Chabon had just won the Pulitzer Prize for The Amazing Adventures of Kavalier and Clay. The main character was a comic book artist, and escape artist that was based on Steranko himself. These two legendary creators met in my store for the first time for a panel discussion with award wining pop-culture historian, artist, writer and editor J. David Spurlock. After that, Steranko uncovered a brand new full color art print that he created just for the event! Everyone there got a free copy signed by Steranko and Chabon. It was an incredible event that was covered on the front pages of all the papers in the Bay Area.
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Here’s the cover of the Metro.
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Here’s the spectacular print that Steranko created for the event!
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Here’s a look at one of the Palo Alto books. You see how nice this looks. It’s only in fine! You should see the near mint books!
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Here’s the certificate to this with artwork by the great Jack Davis!
In 2004 we get small. We chop the store in half.
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Here’s what the inside of the Mountain View store looks like these days. You can see my friend Chris J prowling the isles.
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Here's another shot, taken in the middle of the store moments later.
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Here’s Lee’s Comics rock, and secret weapon, the ever steady Dave Chin taken recently at our San Mateo location.
That finishes out the report. Next week, I’ll post a plethora of bonus features, and director’s commentaries. There are tons of great items that we just couldn’t jam in this time. Stay tuned!