DEL.ICIO.USSome small businesses surviving, thriving
The Atlanta Journal-Constitution
Monday, May 04, 2009
In these days of bleak reports of a global recession, Ted Arpon’s Sugar Cakes Patisserie is seemingly a paradox.
The downtown Marietta dessert shop was bustling on a recent weekday afternoon.
Jason Getz/jgetz@ajc.com
Lunch patrons enjoy their food in Marietta. Shops doing well attribute it to their location or specialty or ability to hold down costs.
Jason Getz/jgetz@ajc.com
Emile Baran Instruments Inc., guitar tech and instructor Ricky G. Rudica works on a guitar in his crowded shop in the back of Emile Baran Instruments Inc. off of Clairemont Avenue
“The economy’s still bad,” Arpon said, but “we’re still OK.”
Sales are steady or even increasing as pleasant weather draws more people to Glover Park across the street.
“Summer is coming,” he said.
Next door, summer won’t be coming for the Three Bears Cafe. It closed about three months ago.
Signs of optimism can be found alongside sobering statements of economic reality on the main street sidewalks of metro Atlanta communities. Small-business owners and managers in Marietta and Decatur report small upticks in sales, while proprietors are still hoping for an upturn in College Park. And in all three communities, vacant shops are common, mutely flashing “caution.”
Still, that could be a silver lining for survivors.
Some businesses could be doing better by virtue of being survivors, said Don Sabbarese, director of Kennesaw State University’s Econometric Center. A lot of restaurants and other businesses have failed, which means more traffic and sales for nearby competitors. Nationally, business bankruptcies that typically end in the firm being dissolved have increased almost 64 percent this year, he said.
“How does that affect people who are left standing? It certainly can’t hurt,” he said.
Consumer sentiment, recently at its lowest level in decades, jumped noticeably in April, according to the University of Michigan’s widely followed monthly survey. Consumer spending also rose in the first three months of this year, even as the overall economy plunged at more than a 6 percent annual rate in the first quarter, according to government statistics released last week.
But Chapter 11 bankruptcy cases — the type often filed by a company rather than an individual — are up more than 20 percent so far this year in Atlanta and other parts of North Georgia. Vacancies of local retail space are also up significantly, while rents and the pace at which businesses are leasing those spaces are down, according to CoStar Group, a real estate information firm.
Some small businesses also may be getting at least a temporary boost because fuel and food prices are lower than last year, and tax refunds are bigger, Sabbarese said. Such stimulus could be short-lived, however, because people are still worried about high unemployment and other issues.
Like other local business survivors interviewed for this story, Arpon, 43, cited a number of reasons why he thinks his enterprise has remained healthy and could even be seeing the beginnings of a recovery.
Arpon said he keeps his prices and expenses low. To minimize risks, he used his own cash rather than borrow from a bank when he opened shop three years ago.
“The ‘bankers’ are our customers,” he said, referring to the cash coming from sales. “We don’t borrow.”
It’s not surprising to see that Arpon and other business owners are slow to take on debt amidst such a murky economic picture.
In March, business sentiment among small-business owners nationwide hit its lowest level since the deep recession in 1980, according to an index by the National Federation of Independent Business, a trade group for small businesses.
It’s enough to make Sabbarese, the Kennesaw State University economist, skeptical that local retailers and other small businesses are seeing an improvement.
Even in recent casual conversations with local business owners, he said, “I’ve never gotten a comment where business is up.”
Still, some local business owners say they are bucking the recession to a degree, perhaps because they’re based in relatively high-income areas or have distinctive offerings or other advantages.
In Decatur, Ettie Wurtzel said sales have risen by a double-digit percentage over the past two months at Squash Blossom, the women’s clothing boutique she co-owns with her daughter.
While part of that increase is the usual spring jump, she said some nearby businesses aren’t seeing a seasonal upturn. She said her shop’s revenues may be holding up partly because it added some lower-priced dresses and other items to bring in customers. Recent sales volumes are almost matching the same period last year, she said.
“I don’t know if it’s booming, but we’re doing business and we’re seeing customers and we’re moving forward,” she said. “We’re pretty optimistic.”
Emile “Bill” Baran, a Decatur seller of musical instruments, said he continues to do well because his instrument makers and repairers have a following among many of his customers.
“Sales are up over last year,” said Baran, 83, who for decades has been blowing his trumpet and selling cellos, guitars and other instruments from his two shops.
A key business — leasing instruments — has held steady, he said, partly because the nearby Centers for Disease Control and Prevention supports a large pool of well-paid employees and their school-age children headed to band and music classes each fall.
“You have that bucketful of very good customers right here in my backyard,” he said.
Not everyone is as sanguine as Baran, of course.
Across Glover Park from the Sugar Cakes Patissierie, Marietta businessman Bob Pressley said sales are down about 25 percent this year at his business, which sells sports memorabilia. He’s hoping Marietta’s summer concerts and other events in the park will draw more traffic to his store, BP Sports Collectibles, which he said relies on “a browser market.”
“The quality stuff still sells,” he said, but “the casual collector has cut back quite a bit.”
In response, Pressley said he has become “a lot more conservative” by ordering less merchandise and cutting expenses.
In College Park, Wanda Holloway said customers have become much more price-conscious at her and her partners’ shop, So Very English! Boutique, which sells dresses, jewelry made by local artisans, and handbags.
“People are always trying to make the deal” by bargaining down prices, said Holloway, who recently added eyebrow arching to the shop’s services. “We give breaks, but sometimes it’s a little much.”
Customers “are not shopping like they used to,” said Fade Ibrahim, manager of the International Market Place in College Park, which sells foods popular in Africa. To adjust to sales that have dropped off perhaps 25 percent compared with two years ago, he has stocked up on faster-moving items such as fufu, a flour made from cassava roots or plaintains.
“We’re trying to be patient,” he said. “Hopefully we ought to see an improvement in the next six months or a year.”
For some, tough times bring opportunity.
Jeff Miller and Brian Babst recently were busy remodeling the space formerly occupied by Indie Coffee and Books in Decatur, which closed a few weeks ago. They plan to reopen any day now as Cafe Cliche, a shop serving coffee, sandwiches, desserts and Wi-Fi, but no books.
“It’s a great opportunity to get in a small business,” Babst said. “Our bank, they were very helpful.”
Miller said they found a location in a “great neighborhood,” maybe in time to benefit from an upturn in the economy.
“I think it’s starting to turn right now,” he said.
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