I had two store that sell fly fishing equipment and supplies in my area and one of them (it sells all types of sporting goods) seems to be reducing its fly fishing department.
I always buy from local stores when I can. Even though the on-line guys are cheaper, you lose out on the really high shipping costs.
At one place, I paid almost $6 shipping and the supplies where sent by USPS for a cost of $1.29. Go figure.
Also, for most of my stuff I want to see and get a feel for what I am buying. Since I am new to fly fishing, this is very important to me and the advice I get at a fly ship is critical.
I think fly fishing will be with us forever, but times have been tough the last few years. People don't spend the way they used to, so a store has to be managed properly to be successful.

------------------
Many men go fishing all of their lives
without knowing that it is not fish they
are after.

Henry David Thoreau