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Iconic Jacksonville toy store forced to reinvent itself

JACKSONVILLE — The collectible toy soldiers, planes and trains that long set Scheffel's Toys apart from competitors near and far are going away.

Like many mom-and-pop operations, Scheffel's is caught between online and big-box discounters that are wooing away customers — and even vendors.

Linda Graham returned to the Rogue Valley to take over the family business with her husband, Bill, in 1992. Over the past quarter-century, the store has both reached iconic status in the region and struggled with the new world retail order.

Pre-tax margins have been cut in half as buyers scan bar codes and then order from competitors on the Internet, said Linda Graham.

At one point three years ago, the Grahams were ready to shut the doors and move on, Linda said. A potential buyer came along, but failed to get financing, leaving the Grahams to rethink their plans.

The store on the northeast corner of California and Oregon streets will take a monthlong timeout in January and return in February as Scheffel's Toys & More. Bill, who retired from the Coast Guard prior to moving here, will bow out. Linda, however, is ready to turn the page and continue as a retailer. Instead of hanging out the shingle seven days a week, the new Scheffel's will take Mondays and Tuesdays off, and the back of the building, where many of the collectibles were housed, will be used for storage.

From a high-water earnings mark in the 1990s, Scheffel's saw its margins erode as more players grabbed shares of its market. In the early years, Scheffel's Toys considered a broad swath of Southern Oregon and Northern California its backyard. 

"Our local area was Brookings to Klamath Falls and Redding to Roseburg," she said. "Up until the advent of the Internet, we had a following that reached coast to coast because we were highly specialized. The Internet diluted the uniqueness of the mom and pops; it's hard to be special and competitive."

Seeing that the future included Web operations, the Grahams entered the fray, but found it countered their customer service standards.

"We tried to put ourselves out there on the Internet, not understanding the huge behemoth it would become," Graham said. "You can either be really good at retail or be an Internet store, but you can't do both."

Purely Internet operators, however, had the advantage in pricing because they didn't have commercial zone rents, property tax and personnel expenses, she said. Suppliers, too, had the upper hand.

"Some of our vendors found they could make more money selling on the Internet themselves rather than wholesaling to small business," Graham said. "Wholesaling to small business was not worth their time and effort. That's why trains and soldiers have gone away."

Overhead costs have doubled, she said, ranging from worker's compensation to liability insurance connected to toys. Small retailers remain locked in a two-front war, with chains and big boxes digging trenches on the other side.

"The rest of us have to figure out how to fit in," she said. "I'm going to counter them with convenience, best product knowledge, quality products, and unbelievable service, because I can't match them dollar for dollar. We've been proving to ourselves during the past year and a half that trains and collectibles are not supporting us."

The revamped store will offer souvenirs from Jacksonville and Oregon along with infant and toddler clothing and novelties.

"I want to be more diversified, but I don't want to get locked into a certain business model," Graham said. "I don't want to get where I can't wiggle around if I have to reinvent myself again."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31,  and read his blog at www.mailtribune.com/Economic Edge.

Three-year-old Django Tree surprises mom Bonnalee Ader of Cave Junction with a toy shark while shopping at Scheffel's Toys in Jacksonville. Mail Tribune / Bob Pennell