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The Running Shop and Hops

Morgan Hill, CA Small Business Lending

NDC GAF helps a Family Owned Shoe Shop Expand in a Unique Way

A family owned business turned to NDC GAF for assistance in expanding its shoe shop. Located in Morgan Hill, California, husband and wife team of Paul & Renee Rakitin opened the Running Shop in 2013.  The Running Shop is a specialty running store carrying the highest quality running and walking shoes, running accessories, nutrition and clothing.  The shop also provides foot and gait analysis services, matching the correct footwear to the individuals. In addition to running and walking shoes, they carry cross training shoes and special order tennis, volleyball, soccer footwear. As part of the successful business model, the owners have built business relationships with doctors, physical therapists, chiropractors, massage therapists, acupuncturists, personal trainers and school coaching staff.  These referral based relationships have compounded over the last three years driving annual and monthly sales growth.

The company approached NDC GAF to assist in a relocation and expansion into new retail space, attached to a brand new specialty craft beer tap room. The new location is less than a mile away from their current location.  This move allowed the company to expand from 750 square feet of space into 2,700 square feet.

The expansion was not just for retail space for more shoe offerings.  Running and beer have rapidly become intertwined and extremely popular with runners and athletes within the past 5 years. Beer or Pub runs, where runners run from bar to bar sampling beers have also become popular. Post-race expos always offer a beer garden for participants and spectators afterward, with many events having a craft brewery as the main title sponsor.  The Running Shop and Hops will be the first running shoe store and tap room in the state and the second in the country. The Colorado based business called Shoes and Brews gained national attention from countless magazines and newspapers for being the first in 2014.  With the economic impact of craft brews in California being the highest in the country, The Running Shop and Hops has been uniquely positioned for success.

To assist with the expansion, GAF provided a $150,000 loan for furniture, fixtures and equipment as well as opening inventory and working capital.  The financing package included a low interest rate of 5%, variable quarterly, and also provided flexible repayment terms with an extended interest only period to allow for the completion of tenant improvements funded by the landlord & with owner equity.

Since the expansion, The Running Shops and Hops has seen sales more than triple and increased employment by 9 FTE’s.  “We feel very fortunate to be a part of the Morgan Hill community and to have had the opportunity to anchor here what is truly a local family run small business. With the assistance of the Grow Morgan Hill Fund, we now have the liberty to expand and become the first specialty running shoe store and craft beer tap room under the same ownership, not only in California, but the entire nation. The residents of Morgan Hill have embraced and supported us and for that we are truly grateful.” Said Paul Rakitin, Owner The Running Shop & Hops.

NDC GAF and the Grow Morgan Hill Fund are proud to support the expansion of this veteran owned small business and are extremely happy to help this family grow its business meeting its financial goals and dreams.