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After 18 years of hosting Easter parades, helping parents pick out Christmas presents and handing out thousands of free helium balloons to kids, Capitol Kids clothing, toy and book store at 8 S. Carroll St. is closing, citing lagging sales.

The store announced it was closing on Friday night, and Saturday morning was “crazy busy” as parents came pouring in to express their appreciation for the Capitol Square store, tearing up and even bringing flowers for Peg Scholtes, the store’s co-owner.

“We really appreciate the fact that people came in to tell us they miss us,” Scholtes said on Sunday. “We’ve seen so many kids grow up. We’ve gotten to know so many families. Yesterday was a hard day but a great day.”

Over the years, the store has employed 119 staff, congratulated “countless” new parents and watched babies grow up, Scholtes said in a statement on the Capitol Kids website.

Scholtes co-owns the business with her daughter, Jenna Hansen. Hansen is still involved but no longer works at the store, having “moved on to her own dream job,” Scholtes said.

In a statement on the Capitol Kids website, Scholtes said there were many factors leading to the decision to close “but frankly, sales have been lagging for quite a while.”

While other independent toy stores around the nation have reported increased sales in the wake of Toys R Us stores closing its doors, Scholtes thinks people became “more careful about the way they spend money” after the recession. Though her store was still busy with lots of customers post-recession, those customers were spending less per gift and doing more online price comparisons.

“We’ve had people come in and try things and right there go online and order it,” she said.

The store has been a consistent Isthmus Mad Faves winner under the kids toy and clothing categories. In a 2013 Wisconsin State Journal article, Scholtes said the goal of the store was to “sell classic toys focusing on creativity and imagination, and wacky, silly toys just for fun — the kind of toys that are hard to find in big-box stores.”

Scholtes has a background in child development, and focused on finding toys with “high play value,” that were sturdy enough to last years, from companies with ethical business practices, she said.

“Lots and lots of people really appreciated that, but not quite enough,” she said.

“It’s really sad for downtown and for the kids, and for everyone’s attempt to try to make downtown more family-friendly and family-inclusive,” Jason Ilstrup, president of Downtown Madison, Inc., said of the closure.

The brick-and-mortar store bought unique expenses, Scholtes said, and Capitol Kids offered additional services like complimentary gift wrapping and free helium balloons, often seen circling the square on farmers’ market Saturdays.

Scholtes took joy in picking out “beautifully made” puzzles and wooden toys, and would encourage customers toward purchases like one quality set of blocks instead of a bunch of toys for Christmas.

She also put a priority on representation of different ethnicities and cultures in her toy and book selection. One particular Asian doll was the best-selling doll for years because diverse dolls were so hard to find in the area, she said. If companies only offered white toys, “I would tell them, ‘As soon as you have some representation, talk to me again,'” she said.

Before Capitol Kids, Scholtes was the executive director Family Enhancement, a nonprofit family resource center, working there for 23 years. But she always wanted a children’s store, and her Family Enhancement office hosted a framed black-and-white photo from around 1939 of the baby department in the former Kresge's store on the Square, according to a 2006 Wisconsin State Journal article.

While on the hunt for a condominium, Scholtes found the listing for the Capitol Kids store, at the time located at 106 S. Webster St. She and Hansen scooped it up in 2000, moving two years later to the current Capitol Square location.

“Retail was once an integral part of the Capitol Square, when Kresge's department store occupied what is now Block 89. Now, more than 60 years later, downtown workers, convention goers and those on the Square for numerous events can again shop for kids goods right on the Capitol Square,” the Cap Times reported in 2002.

The move expanded its retail space and brought in customers from downtown events, increasing its sales.

The location also facilitated 16 years of the store’s annual Easter Hat Parade, coordinated with the Madison Children’s Museum. Hundreds of kids and parents, all donning hats, would march around the inner circle of the Capitol Square, sometimes accompanied by Forward! Marching Band and joined by stiltwalkers and baby farm animals.

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A hat made entirely of Peeps still sticks out in Scholtes' memory. One year, a bride and groom exited the Capitol building and “ended up getting swept into this band and the parade,” Scholtes said.

During the Act 10 protests in 2011, Capitol Kids offered its bathroom to protesters and set up the store to act as a meeting place if kids got lost in the crowd. Former staff members sent donations to purchase water to pass out to protesters.

The store could have been cut off from regular business like some nearby retailers during the protests, but made money selling vuvuzelas and "Solidarity" and "Teach me how to protest" kids T-shirts.

The store made the news in 2007 when its beloved stuffed bear mascot, Webster, went missing on St. Patrick’s Day. Webster had been jauntily attired with a top hat and shamrock around his neck when he disappeared. Scholtes sent out a press release as “sort of a joke” asking for his return and put up “missing” signs in the storefront windows.

Radio and newspapers took up the cause, and a financial adviser with Morgan Stanley soon returned Webster. He had seen a stranger with the bear and had asked to keep it for his nephew, returning it when he realized it belonged to Capitol Kids.

"I was out bar-hopping with friends and this guy named Stu had the bear strapped to his back while he played darts, cards and quarters,” the man later said.

When the store closes, Webster will be awarded to a long-term employee, Scholtes said. Scholtes will retire, as she’s turning 70 this year, giving her more time to spend volunteering at the Humane Society and wildlife rehabilitation center.

She has “no idea” what could go in the space after Capitol Kids leaves, she said. The store’s going-out-of-business sale started Saturday, and will continue until inventory runs out. Items are 20 percent off, and updates on sale prices and merchandise will be posted on the Capitol Kids Facebook page every week.

As the last customers come in, Scholtes hopes they will share their memories to “make it fun,” she said. Even now, there are plenty of grateful comments on the store’s Facebook post announcing its closure.

“Thank you for envisioning and creating such a magical community, full of some quality whimsy,” one reads.

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