Rosenthal Interiors moves flagship to Minnetonka from downtown Minneapolis

The Rosenthal Interiors showroom, the last of the independent furniture stores in downtown Minneapolis and a fixture in the heart of the city since 1895, has moved to Minnetonka.

But the siblings who own the store, the fourth generation of the founding family, are hanging onto the property. And they are keeping an eye on what happens downtown as it comes back from an extremely difficult year.

For several years, Rosenthal Interiors has struggled against lower-priced suburban chain stores and the reluctance of old customers to journey downtown. Sales had declined by about half in recent years from a revenue peak of about $4 million.

Then came the pandemic and the riots following the police killing of George Floyd last year. The store at the corner of 5th Street and 1st Avenue N. was shuttered for weeks, thanks to barricades and the loss of its parking lot, which police used as a barrier for the nearby downtown precinct station on 4th Street.

"We weren't ready to go out of business," owner Rosie Lebewitz said. "The furniture business is great. But we weren't doing great business downtown. Nobody wanted to come downtown last year.

"The [police station] abuts us. Our parking lot was inaccessible. They had National Guard armored vehicles in the alley. It was scary. We bought parking across the street and advertised, but it didn't matter what we did. We kept on the employees. We just didn't generate enough business."

Rosie's brother Joel joined her last year after retiring from a 45-year career in accounting. Their parents, Sherm and Bobbie Lebewitz, owned the business before them.

"We were boarded up for weeks because of the riots and our proximity to the police station," he said. "A couple weeks later somebody shot out a window. It was crazy."

The Lebewitzes last week moved Rosenthal's flagship business to the Ridgehaven Mall, just west of Ridgedale in Minnetonka. It's in a remodeled Famous Footwear store near a Lunds & Byerlys grocery store. It's about half the retail square footage of the downtown store.

But they decided not to fold and sell the downtown building, which is assessed for tax purposes at less than $2 million. The downtown store will remain open on a limited-hours basis, with closeouts and specials targeted at nearby condo and apartment dwellers.

The Minnetonka store will accelerate the Rosenthal recent-years commitment to high-end furnishings, design services and local art. Rosie Lebewitz took an 18-month lease and invested up to $100,000 preparing the space.

"Our gut says we'll make up the investment in more sales in Minnetonka," she said.

Even after Sherm and Bobbie Lebewitz sold to Rosie in 1999, Sherm was usually there most days until his death at 87 in 2016. Most the old warehouse-area retailers closed or moved to the suburbs over the 50 years that Sherm and Bobbie owned the business.

Rosie and Sherm had started on a transformation from discounter of traditional furniture to more contemporary furniture. But they had mixed success tapping the younger crowd moving into the booming North Loop, which has become known for its vibrant arts, nightlife, restaurants and pricey housing.

That makes the departure of Rosenthal Interiors flagship business understandable, particularly in these pandemic- and-crime-distressed times for downtown.

Joel said he believes downtown Minneapolis will come back, but he and Rosie just don't have time to wait.

"It's always difficult to lose" retailers, Downtown Council CEO Steve Cramer said of Rosenthal Interiors and the estimated 40% of small businesses that have closed temporarily or permanently since March 2020.

The trends are ticking up downtown. Building occupancy has increased to 23% in May from 15.5% in April, according to the Downtown Council.

Big landlords such as the IDS Center and City Center, after a year-plus of losses, are finally starting to announce new and reopened restaurants and retailers.

Meanwhile, state officials have lowered capacity restraints on public places and mask mandates are ending.

Optimists predict the return by fall of many of the 200,000-plus workers who once showed up downtown daily. It can't happen soon enough for me, a downtown visitor since I was a kid with a bus token on 38th Street more than 50 years ago.