"Mike's Video reorganizes, reopens"
June 12, 2008 · Updated 1:15 PM
"Less than two months after trustees for the U.S. Department of Justice locked its doors, Mikes Video Superstore is back in business.And this time dads in charge.Spiotti Investments Inc., owned by Mike Spiotti, was forced to close its Poulsbo and Port Orchard stores in November and file for reorganization because of more than $100,000 in unpaid payroll taxes to the IRS.But the operation was purchased back from bankruptcy court in December by Spiottis father, Joe Spiotti, who reopened the Port Orchard store Christmas Eve.The Poulsbo store will not re-open, the elder Spiotti said, and the Port Orchard location will see some major changes.The Poulsbo store was for sale anyway, he said. Then the building it was located in was sold and the new owners dont want a video store in there, so we just went ahead and closed it down.Mikes Video Superstore in Port Orchard, Spiotti said, will soon be somewhat less super, at least from the video standpoint. Where the store had devoted 1,600 square feet of retail space to the video operation, it will now cut back to about 900. In turn, Spiotti will expand the in-store tanning salon and add a drive-through window to the espresso stand.Some of the videos werent generating the kind of revenue we needed, he said. Forty-two percent of our stock never left the shelves last year. Obviously thats not an effective use of our floor space.Mikes Video had carried more than 17,000 titles, many of them older movies. Independent operators like Mikes typically maintain a larger stock of older titles to compete with the large chains Blockbuster and Hollywood Video which emphasize newer releases.Cutting back on its supply of older movies represents a risk for Mikess in light of the appearance of a new Blockbuster Video store in Port Orchard during November (see relate story).Even after we cut back well still have more older movies than Blockbuster or Hollywood, Spiotti said. Plus were cheaper than they are, even on the new releases. If you cant compete by offering the same thing at a lower price, I dont know how you can compete.According to Spiotti, it was the weather man, not the tax man, who closed down the operation last November. The tax thing had already been taken care of, and we were current with all of our suppliers, he said. But when the mudslides closed the highway and people couldnt get into downtown Port Orchard, it just killed our business.What with the mudslides and the bankruptcy, Spiotti estimated it will take another two or three months before business is back to normal levels. Spiotti bid against five other parties to purchase the business back from the bankruptcy court on Dec. 22. Under the reorganization, the company was bought by JMS Diversified Inc., owned by Joe Spiotti.The younger Spiotti, who opened the first Mikes Video in 1989, will be involved in the new venture (Its a family business and hes still in the family, said Joe Spiotti) but will have a smaller role, probably managing the expanded espresso stand."