Jan. 26, 2026
Kelly Grovijahn’s downtown boutique could have become the latest in a series of shuttered storefronts.
As age 62 approaches, “I just decided … life’s too short. It’s time for me to slow down and enjoy my life more. This is the time to do it,” she said.
“My lease was up at the end of June, and I’m like, at that point I have to re-sign for five years, and I don’t have that left in me. This is God’s timing, and it’s time to find someone else to take it on.”
Grovijahn listed MK Threads Boutique at 222 S. Phillips Ave. with a national broker that concentrates on boutique business sales. She submitted a video showing what it was like to walk through the door of her store and gave a virtual tour, noting that the space was turnkey.
Seven prospective buyers reached out, and from there, it narrowed down to three “who were very interested.”
The buyer who emerged actually had shopped in person at MK Threads in the past.
Kim Montgomery was in the process of moving to Sioux Falls from Wisconsin for her husband’s new job and was looking for a new path herself after a 27-year career with the U.S. Postal Service.
While downtown apartment-hunting last fall, she shopped at MK Threads and then found it listed for sale online.
“So I called her, and we spoke, and she remember me, and it kept going after that,” Montgomery said. “This sounded like something I wanted to do.”
She had owned rental properties in the past, including mobile home parks. The family moved to Sioux Falls on New Year’s Eve, and Montgomery closed on her new business the same day.
“It’s been great,” she said. “Kelly is staying on to help for a month, which is awesome. I couldn’t do it without her, so that transition is going very well. I love it. There’s so many businesses, and everybody is very friendly and nice, and we love the fact we can talk to just about everything from where we live and where I work.”
Grovijahn doesn’t sugarcoat reality as a boutique owner at a time when margins are squeezing and consumers are cutting back. But she also chooses to look at the upside.
“There’s two ways of looking at other boutiques closing,” she said. “You can look at it like, ‘Oh no, I’m a lone island, what’s going to happen?’ Or you can look at it like, ‘The competition is gone, and people are still shopping, and I have to beef up inventory.’ That’s the way I look at it because I try to take a positive point of view. I think we’re very well positioned to go into the new year. There is less competition, but there are still people out there shopping.”
Compared with sales declines she has seen nationally, her more minimal drop in business last year “isn’t bad,” she said. “But it’s because we have such loyal clientele and people love downtown Sioux Falls and love shopping in downtown Sioux Falls, and if you can provide the styles and merchandise they want, they’re going to continue shopping.”
Elsewhere on Phillips Avenue, more storefronts are closed than at any time in at least a decade. Behind the scenes, though, activity is in the works to fill them, or construction is underway as openings near.
“Heading into the new year, the prevailing sentiment downtown is one of measured optimism,” said Brandon Hanson, president and CEO of Downtown Sioux Falls Inc.
“We’re hearing real hope from businesses and stakeholders, supported by tangible indicators. Foot traffic continues to grow year over year, and January sales came in strong, a welcome rebound after a challenging December and a mixed 2025 overall.”
New businesses opening
Mark Dorame, who has owned Sneaker Flavorz at The Empire Mall since 2021, has closed his mall location and plans to move into 206 S. Phillips Ave., which most recently was Lauriebelles. The women’s boutique is still open in Tea, online and with an outlet store at The Empire Mall.
“I’ve been trying to get that space for two years,” Dorame said. “It’s beautiful.”
His business and Lauribelles were neighbors at the mall, “and once I found out about (the downtown space being available), it just happened perfectly. … My lease was coming to the end, and we worked out a deal,” he said.
He plans to change the store’s name when he opens this spring. It’s known for carrying sought-after and collectible sneakers, especially artist collaborations such as Travis Scott, Off White and Louis Vuitton x Nike.
“I’m going to carry high-end things, but also white Air Force 1s and black Air Force 1s and Nike Dunks,” he said. “If you have $100 or $10,000, you’ll be able to buy something in the store.”
He also plans to continue carrying hard-to-find vintage shirts, streetwear, sports cards and memorabilia and other collectible cards such as Pokemon.
“I kind of follow the trends,” Dorame said. “There was not really a shoe bubble, but the market has gone up and down, and when you look at sports cards and signed memorabilia and Pokemon, it’s at the height of it.”
He plans to announce more details about his concept closer to opening. Dorame said that even just working in the unfinished space, he’s getting a sense for the increased foot traffic downtown will bring.
“I want to be able to draw them in and give them a really cool experience where they don’t want to leave the store,” he said. “I just can’t wait to bring something to downtown that’s never been there, and when it’s open, it’ll be great, with something for everybody.”
To the north, OdeCo owns the building at 202 and 204 S. Phillips Ave. Both spaces are vacant, though construction on Black Watch is underway in the north half of the building.
Co-owner Paul Ode describes it as something the market hasn’t seen before and said he will announce more closer to when it opens this spring.
The south half of the building was Primp boutique, which shut down as part of a companywide closure late last year.
“A couple of boutiques are taking a look,” Ode said, adding that he expects to find out soon if one deal is coming together.
Farther south at 220 S. Phillips Ave., the ownership group led by Kevin Tupy plans to open Area 52, pivoting a little on a concept he was going to call Velvet Thunder.
“Anybody who knows me knows I have a lifelong passion and fascination with sci-fi, and I’ve always wanted to do something space-themed, and there’s really nothing I’m aware of that is designed around a sci-fi recreational experience,” he said.
“I really wanted to do something that didn’t compete with everything else downtown and would provide entertainment to walking traffic during the day, not just focused on the night. So we’re going to focus on the menu and ensure there’s something there for everybody and give it a little sci-fi spin.”
Expect the lunch and dinner menus to revolve around wings, wraps and pizza, while the beverages will include cocktails, mocktails and “still keep the focus on the ‘thunder’ side with energy drinks and caffeine and coffee drinks,” Tupy said.
The location will be for all ages until 10 p.m. and 21 and older after.
“There’s going to be a recreational part as well, and we want it to be more than run-of-the-mill bar games,” he said.
The plan is to open by midyear.
The leasing activity leaves just the former Home Porch available in the most pedestrian-heavy part of Phillips Avenue.
While there has been interest from potential users, building co-owner Anne Haber of Pendar Properties is waiting for the right fit to fill the 1,400-square-foot space.
“We’ve had some interest, but we just want to see it as a nice retail store,” she said. “We really want it to stay retail if at all possible to keep the strength of the downtown mix alive. I think that’s important.”
Cascade, Cherapa Place filling up
With Pomegranate Market opening late last year and three food and beverage concepts operated by Bryan Moscatello open or opening soon, Cherapa Place is focused on filling its last retail spaces.
There’s 8,000 square feet in The Clark, the same building as Pomegranate Market, “which can be divided and offers great access to the traffic drawn by Pomegranate Market,” Haber said.
There’s also 3,000 square feet available in a corner space at The Dakota, the same building as Moscatello’s restaurants and SISU Fit.
“It’s lovely and has great parking,” Haber said. “I would love to see some sort of pet store there because we have such a great dog community.”
On the north end of downtown, The Cascade is down to one vacancy on its boardwalk at 701 N. Phillips Ave.
Laura Buller moved her business, Adorn, into a first-floor space last fall. She’s a registered nurse who now owns a business focused on needle piercing and permanent makeup and jewelry.
“This is always the place I was visualizing,” she said. “We looked all over Sioux Falls, and this kind of just felt like the right space.”
She hired another registered nurse shortly after opening, and “we’re quickly outgrowing the space,” she said. “Just having that background as a registered nurse was appealing to a lot of people, and providing a different space, not a traditional tattoo, piercing studio.”
The business is appointment-based and rarely accepts walk-ins, but Buller said her space on the boardwalk is still good for visibility.
“I think having restaurants and a bar on each endcap is nice because you have a lot of walking back and forth,” she said, adding that she often offers gift cards to other businesses on the boardwalk to young customers coming in on their birthday.
“It’s a good little dynamic here,” she said.
In the coming weeks, another vacant space will be filled by two sisters bringing their Pilates studio to Sioux Falls.
Power Pilates is owned by Jade and Rane Stehly. Jade first opened a studio in Mitchell, while Rane opened one in Vermillion while finishing law school.
“I’ve been a personal trainer for almost 11 years, and we started taking reformer Pilates in Omaha and fell in love with it,” Jade Stehly said. “There are a ton of ways you can do reformer, and with my personal training, I wanted to incorporate strength because I’m a big believer in resistance training.”
They plan to rent an apartment at The Cascade above their space and share the Sioux Falls studio.
“It’s going to be both of our babies,” Stehly said, adding that they also will hire additional staff.
“We’re going to have 10 reformers in there, we added some mirrors and … it was pretty easy to set up.”
The hope is to open sometime in February and add a selection of merchandise at some point.
“I love downtown Sioux Falls, and we’re very excited to be downtown,” Stehly said. “We literally have to ride the elevator down and go teach class, so we’re very excited.”
The remaining space in the building is nearly 1,900 square feet and includes a showroom, storage room and restrooms.
“It’s a little bigger space,” said Raquel Blount of Lloyd Cos., who has it listed and said the ownership prefers to keep it a retail use.
“They like the synergy for residents of the apartments who prefer to have the convenience of some retail below.”
She also has the former Pasque Boutique space listed at The Steel District and said there is interest in retail use for that space. Plus, there’s 5,000 additional square feet available between the former boutique and Jack Rose Social Club that also can be subdivided into smaller retail spaces.
“Small-shop retail in general is extremely slow,” Blount said, adding that’s not just downtown but across the market and the industry as a whole.
“This spring, I think things are going to shift a little, interest rates are going to go down, and I hope it spurs people to make a move,” she said, noting that it’s critical for the community to continue to support existing retailers.
“We’re not ignoring the reality facing small businesses,” Hanson said. “Closures are happening, and there’s understandable anxiety in the entrepreneurial space. That’s exactly why support matters more than ever. Independent businesses are the heartbeat of downtown. They’re what create vibrancy, walkability and a sense of place. Running a business downtown is unique, and as competition increases, maximizing every opportunity becomes critical.”
