The Merc may be experiencing its final Christmas.

The downtown Powell clothing store has seen sales slide dramatically this year and traffic is down, according to a board member. A shareholders meeting will take place in early January, according to board member Diane DeLozier, and a decision to remain open or to close the store may be made then.

“You don’t want to keep beating a dead horse,” DeLozier said. “But it comes down to stay local, stay local, stay local.”

That’s the problem. Not enough people are doing so, since sales have slumped 25 to 30 percent for the past several months, she said. The Merc had sales of around $300,000 during the 2013-14 fiscal year, she said, but likely will not hit that figure this year.

“We still have money,” DeLozier said. “But it’s a slow bleed. We just don’t have the traffic.”

The Merc is now located at 227 N. Bent St., although it started at another location. In 2013, the business sold half its building, and now three businesses — Golden Buffalo, Electric Graffix and Wyoming Wireless — share that space.

That was a sign that The Merc was in trouble, DeLozier said. The number of employees has been reduced. Manager Ronnie Sommerville is the sole full-time employee; there are four part-time employees.

“I think Ronnie’s done an awesome job,” DeLozier said.

Other steps have been taken, she said. The board members want to keep The Merc open, but they are torn, with their hearts saying fight to keep it alive and their heads well aware of the declining sales.

“We did cancel our spring orders,” DeLozier said.

Sommerville said sales were down compared to last year during the Sample the Season and Country Christmas events.

She said she is waiting to see what the board recommends to the stockholders, but she isn’t ready to say the store is on its last legs.

“I think it could have a future, absolutely,” Sommerville said. “I think the store needs to be reorganized a little bit. We should do away with the men’s department and cut down the shoe department. We just have too many shoes. We’re trying to serve too much.”

The reality is, people “want an experience” when they shop, DeLozier said, and many go to Billings to find that. Powell’s small downtown cannot compete with people wanting more shops to choose from, she said.

In addition, people want bargains and discounts that The Merc cannot offer. Chain stores buy in bulk and can drop prices to levels that a small local store cannot match.

The continued rise in online shopping, where people can study items and prices online and get them delivered right to their door, is another factor, DeLozier said.

“It’s just a changing environment,” she said.

In 2001, the community rallied to open a clothing store. More than 800 people paid $500 per share to raise more than $400,000 and The Powell Mercantile — the business’ formal name — was born.

For years, all was well with The Merc. Sales were plentiful, and the homegrown business received glowing reports on CBS, CNN and other media outlets.

Ken Witzeling served as chairman of the committee that raised the money to open the business. During an interview for the CBS story, he was asked how he felt when he drove past and saw people shopping at The Merc.

“Oh, I think, uh, it’s a feeling of satisfaction that we’ve done a good job,” Witzeling said then.

Those proud days of building a local business are in the past now. The board, which will meet this week, will send invitations to shareholders to ask them to attend the annual meeting, which usually is held in the late fall, and offer their thoughts. The meeting will be held at the store in January, DeLozier said.

Board members are Kelly Brandt, Sharon Earhart, Susan Richards, Keith Sande and DeLozier. Board members are nominated or express interest in serving and must be shareholders. The positions are for three years and are voted on by shareholders.

While there are about 500 shareholders who own around 800 shares of stock, the vast majority do not attend the annual meeting. When that is held early next year, most votes will be cast by proxy.

Most shareholders designate friends or relatives to cast votes on their behalf, either with or without direction, DeLozier said. Some hand their votes to the board, she said.

“Some are mailed directly to us and we can vote them,” DeLozier said. “Most often, for instance when we have voted on a new board member, we will split the votes that have come to us equally among the candidates so that as a board we are not ‘controlling’ the situation.”

City Councilman John Wetzel is a shareholder and a former longtime Merc board member.

Wetzel said he recently received a postcard urging him to shop there. He said he hopes it can keep its doors open and said the shareholders and the entire community should let their feelings be known to the board.

“It’s such a great downtown institution,” Wetzel said. “Hopefully they can figure it out and not throw in the towel.”

“I would love to see it stay,” Sommerville said. “I have the energy to make it work. I just don’t know if it’s going to happen.”