must be really hard to keep a bike shop afloat these days. especially a shop like that - inner city rents in a big location, stocking a variety of bikes, a lot of custom stuff.
to state the obvious, it seems like the "selling" side of local bike shops is dying, as they obviously can't compete with online prices.
i can't help bit think that bike shops will have to move more towards a very heavily service-oriented business - gear it much towards building up and servicing bikes/parts that were bought elsewhere. perhaps also provide a consulting service to help customers select suppliers and parts, to help the customer get the parts in for a bike build, then build the bike for them. dunno, maybe it is already happening. or maybe people are too tight to pay for the service (that would save them a heap of time), and/or would rather do the research themselves (certainly the majority of people on here would be in that category). i can see a market for it though. if someone got a bit of momentum/volume, always had a few yet-to-be-picked-up recent customer builds in their workshop for people to be inspired by, it might just work. it'd have to be a pretty small low overhead business though, so to get a good location, you'd have to have a really cramped workshop "showroom". leave any warranty hassles for the customer to deal with (with whichever online supplier they got it from).
of course, this approach would lose the ability for customers to see/touch/sit on the prospective purchases.
having said all this, since '98 i have bought 3 bikes and 7 frames. before purchase, i only got to ride two of them. other than another 3 of them, the rest were bought online, without even having seen a similar one in the flesh, let alone sitting on a similar one. maybe this will become more the norm?
i have seen a few "workshops" lately. maybe that is the way it is heading.