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In 2005, Peavey's Hardware on Market Street in downtown Portsmouth closed, joining a decades-long list of departing downtown businesses where Portsmouth residents could buy some of life's essentials.

In 2006, New England Travel Life Magazine named Market Street as New Hampshire's top shopping destination. Those two events illustrate how growth has affected the city's downtown retail landscape.

Peavey's sold coffee makers and, in the end, was all but cordoned off by cafes, Aroma, Breaking New Grounds, Starbucks, Popovers, each within a block.

While some reminisce about a time when you could buy groceries or fill a prescription downtown, or decry the rising rents that undid The Den, most downtown merchants are ecstatic about Portsmouth's prospects as a destination.

Downtown Business Association president Paul Sorli, owner of the Portsmouth Gas Light Co., said in June he is certain the new Hilton Garden Inn on Hanover Street will increase foot traffic to local shops and restaurants.

Retailers are already seeing increased traffic. "I have definitely noticed an influx from the new hotel," says Robbin Levin, owner of Bead Shine. "We can only hope the Sheraton expansion adds to our downtown sales. There's no way it can't. It's just a matter of marketing." Still, the DBA is wary of a tourism trap where only moneyed chain stores have a chance and has spent much of 2006 brainstorming programs to build local loyalty.

"It's a conundrum," says Nancy Carmer, director of economic development for the City of Portsmouth. "Can you fault an owner for getting a market rate for their property?"

An eclectic mix

Retail in downtown Portsmouth includes high-end fashion and shoe shops (Ashley & Victoria, Stiletto) on Deer Street, toy and gift stores (Les Cadeaux, Prelude, Tree House Toys, G. Willikers) along Market Street, and shops, such as Attrezzi and Stonewall Kitchen, that feature food and kitchen accessories.

On Congress Street, along with Starbucks and The Gap, one can find Oriental rugs at Pars, soy candles and light fixtures at Portsmouth Candle Co., and racing flats at Runner's Alley, the state's only store devoted to running. Necessities are not always easy to buy downtown, but gifts and luxuries big and small abound.

Strategies for success

Despite the challenges of high rents, seasonal tourism, and increasing competition from malls, discount stores, and the Web, there are ways to succeed in retail downtown.

Owning one's space (e.g. Stuart Shaines, Summerwind Jewelers) provides security from rising rents and affords merchants the time to develop a clientele.

Mel Reisz, owner of Summerwind Jewelers, spent 17 years tucked away in Commercial Alley before buying the four-story building at 49 Market Street 10 years ago. "It's definitely better out here," says Reisz, who rents the top two floors.

Moving to a better space as a business grows is more common.

RiverRun Book Store was set to move out of its Commercial Alley basement to the new building on Congress Street right next to Popovers on the Square - two blocks, and a world away.

"My first space on State Street was great - it got me known as bead store," says Robbin Levin, who opened Bead Shine eight years ago. "Bridge Street was a ghost town, but being on Ladd Street near the square is fabulous."

Offering unique products is another key. When people ask where they can buy New Hampshire souvenirs, retailers invariably send them to Warner's Hallmark shop in Market Square.

Tenacity is another key. In this age of Staples, it's hard to imagine how a local office supply store could survive, but Hoyt's has lasted more than a century.

Manager Brian Light attributes Hoyt's success to "not ever giving in, and looking into new ways to serve customers." Hoyt's can compete with anyone on business form printing jobs, and has struck gold in selling refurbished manual typewriters.

Traditional handcrafts, such as knitting, sewing, and beading, are enjoying a renaissance and consumer interest is helping businesses such as Bead Shine, The Yarn Basket, and Portsmouth Fabric Company to thrive.

"Classes are a great way to develop new knitters," says Elaine Wilder, who has owned the Yarn Basket on Ladd Street since 1988. "We are always here to help them move on, and to solve problems if they drop a stitch." The Yarn Basket offers workshops in knitting and crocheting at all skill levels as well as specialty classes that focus on finishing items such as sweaters, knit mitts, and argyle socks.

"Customers really appreciate the availability of classes and that means more people showing up in your store," says Levin. "They get the word spread."

Though it's a tough market, Nancy Carmer says help is available, both from the DBA and the City. "The DBA and the Chamber of Commerce are working to help give the downtown a voice," says Carmer. "The City offers aid in the form of business consultants and financing to help micro-enterprises and we will continue to do so."

Pushing boundaries

For some retailers, the main challenge is getting shoppers to go the extra block beyond the Square or Market Street. While scouting locations for their store, Maine-ly New Hampshire, Deborah Bouchard-Smith and her husband, Ken, looked at State Street and Market Square before selecting a space on Deer Street.

Bouchard-Smith said the choice came down to Market Square's skyrocketing rents, and a wish to create a slower-paced shopping experience for customers.

"We love to talk to people and wanted to be able to explain the products and the artisans that we represent in our store," says Bouchard-Smith, whose shop opened in April. "We love our Deer Street location and the fact that people can pull right up to our front door at almost any time of day and come in and shop."

"As a new business owner, I can tell you that downtown Portsmouth is a great place for a retail business," says Bouchard-Smith. "We are fortunate to be the only shop in town that specializes in New Hampshire made products." One thing that surprises Bouchard-Smith is that 90 percent of her customers are local, and says her main challenge is having shoppers broaden experience past Market Square. "Deer Street is a lovely shopping destination and I think that the transient market misses out on it," she says.

In general, retailers note slower sales than last summer, due in part to high gas prices. "Sales have been erratic," says Robbin Levin. "My numbers are down from last year, but nonetheless summer did kick in around the end of July, and I had a super-busy August."