American Main Street

Main Street Coronavirus Survival Guide: How an Art Gallery, Jewelry Store, Home Furnishings Store, Gift Shop and Florist Will Survive Shutdowns

Small businesses’ opportunity to apply for their piece of the initial $379 billion CARES Act funding has come and gone. Overwhelmingly popular, the National Federation of independent Businesses reports that 70% of its 300,000 members applied for loans.

While Congress moved quickly to add additional funds to the program for small businesses, tax attorney Logan Gans, partner with Shutts & Bowen law firm, says getting bank approvals and funds out to small businesses has been bumpy at best. “Certain banks are moving faster than others, and community banks seem to be moving faster than the larger banks.”

The most popular and best-funded provision in the CARES Act is the Paycheck Protection Program (PPP) which provides $670 billion forgivable loans if funds are allocated to cover 2.5 months of payroll. In addition, $20 billion is allocated for an Economic Injury Disaster Loan (EIDL) and $17 billion to cover six months of principal and interest payments for and Small Business Administration-backed loans.

Overall, he says, “At the end of the day, independent retailers are going to have to cobble together multiple programs to get them through,” advising retailers to also look to their states for additional funding.

In addition, the Federal Reserve Board has set aside $2.3 trillion funds for a Main Street loan program for businesses up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. But with loans starting at a minimum of $1 million, this program misses the mark for most Main Street retailers.

“Politicians pay lip service to small businesses being the ‘backbone of America,’ but they almost never do anything substantive to help,” believes attorney Tristan Snell, former assistant attorney general for New York state.

“The system is rigged in favor of larger businesses that can lobby government for special assistance and get the laws and regulations written in their favor. Mom-and- pop retailers in America are basically 60 days or less from being shuttered,” he continues.

Snell sees a dark side to the government’s weak support for Main Street retailers in the coronavirus crisis. “The larger players in retail are quietly hoping that this clears out the underbrush from their point of view. Are they telling their politician friends not to be too generous?” he asks.

Agreed, the forced closures of many Main Street retailers will certainly clear out some of the retail underbrush – Federal Emergency Management Agency says 40% to 60% of small businesses do not reopen after a disaster. But a group of five Main Street retailers I spoke to are determined this won’t happen to them.

All have applied for government assistance to tied them over, yet they also know that the loan programs are not what’s going to save them.

It will take a combination of their resiliency to move faster than the big retailers, their ingenuity arising from being forced day-in, day-out to solve unexpected problems with creativity and inventiveness, and their resourcefulness learned from operating a small business when everything seems to be stacked against them.

I took a virtual tour among a group of retailers you’d find on most any American Main Street, including an art gallery, jewelry store, pet specialty shop, gift store, and florist, to understand how they are meeting the coronavirus challenge head on and planning for better days when their businesses open up.

Art gallery’s challenge is to hold onto its customers and highly-trained staff

Patina Gallery in Santa Fe, NM has a two-fold challenge: keeping connected with its affluent customers, many of whom live all over the world, and holding onto its highly-trained staff of ten who know how to sell to that demanding clientele. Patina’s offerings include fine art, crafts and jewelry, ranging from $300 to over $30,000.

“We have invested the last five years in developing our staff of young professionals. I don’t want to lose that investment,” shares Ivan Barnett, co-owner of Patina with his wife Allison.

As soon as he gets his PPP funding, it will go toward paying his currently furloughed staff. However, not all of the staff of ten had to be let go when the physical gallery closed, since Patina has been ahead of the curve in developing its e-commerce capability, which continues to bring in sales.    

Having founded the gallery in 1999, the Barnetts have been through tough times, first after 9/11 and again in the recession of 2008, but nothing compares to this.

“This is unprecedented, being both a health and an economic issue. We expect there to be great guardedness even when the ‘coast is clear,’” he says.

“We only have 2,000 sq. ft., so I am going to have to limit the number of people I can let into the gallery at one time. So special events and openings, which are extremely important to us, are off the table for the rest of the year, at least,” he says.

Patina will also lose the lift from Santa Fe’s community events, which are now cancelled for the city’s “high season” in July-August, which accounts for about 50% of the gallery’s revenue. Given that, Barnett is expecting sales this year to be down by at least that much.

What keeps Barnett up at night is the worry about how willing his clients will be to splurge on luxuries afterward. He shares how a long-time client just postponed a special order for a $50,000 hand-crafted ring.

“She sent us a note saying that she just can’t think about this right now. She’s not saying she can’t afford it. She is just too distracted to think about it. What can you do about that?” he says. His answer is to maintain a level of intimacy and caring for his clients, with whom he and his staff have developed personal relationships over the years.

“We have always been very personal with our customers and very experiential in the gallery. It has given us a level of intimacy with our clients that is very rewarding, but doesn’t necessarily translate into a sale,” he explains. “But we are trying to meet the clients where they are today and engage at a personal level. The closer we get to our clients, the closer we get to sales.”

In the near term, Barnett is having to completely rework his marketing, promotion, and event plans that were set at the beginning of the year. Only now has he found the time to devote to that since the last month was spent simply managing the temporary gallery closure and lining up finances.

He also is looking at his gallery’s numbers every day to see where he can cut costs, a practice that he honed after 9/11 and through the recession.

“If Patina and other Main Street businesses can figure out a way to minimize expenses and still stay in the game, they are the ones that will survive, but I am figuring we’re 12 to 18 months away from whatever the other side might look like,” he shares. “That is a long time to burn cash.”

This jewelry store is counting on customers’ celebratory life events to pull it through

A family-owned company since 1962, Bernie Robbins Jewelers has grown to five jewelry stores in premium shopping areas in the greater Philadelphia-New Jersey area, including a Somers Point store near the Jersey Shore.

With all stores forced to close, owner Harvey Rovinsky is proud to report all 57 employees have been paid throughout and with his PPP loan just approved, he will have funds available to keep them on the payroll for at least eight more weeks.

But he adds, “Nobody in our industry has enough money, but two months from now we should be in really good shape financially to return to some normalcy, whatever that looks like going forward.”

Rovinsky shares the company went into this hiatus from a position of strength, having learned hard lessons from the 2008 recession. “I earned a Recession MBA,” he says. “We came close to losing our business back then, but we are prepared now with a reserve that can sustain us for several months.”

What gives him hope is that his customers will continue to buy jewelry to celebrate events in their lives. “Holidays don’t go away. People still need moments of joy,” he says, as he looks forward to serving his customers for the upcoming Mother’s Day holiday via e-commerce, if the stores can’t open by then. Mother’s Day is his company’s second most important holiday after Christmas.

Like Patina Gallery, Bernie Robbins Jewelers is big on special events, especially in its Jersey Shore location, which are now on hold. Its annual Diamond Event held in early April was a painful coronavirus casualty, which typically yielded a month’s worth of business in less than a week.

But besides the question of how to host events in a time of social distancing, Rovinsky says once stores reopen, all systems are in place to keep the stores sanitized and staff members and customers safe with gloves and face masks.

“We expect to have to limit the number of people in the store to ten, but for a luxury jewelry store like ours, that should be our biggest problem,” he quips.

This pet boutique is rated an “essential” business

Godfrey’s Dogdom, a pet food and supply retailer outside of Reading, PA, enjoys the distinction of being classified as an essential business during the shutdown, so its doors have been able to stay open. But still the social distancing measures have put strain on day-to-day operations to keep both staff and customers safe.

For customers, Godfrey’s quickly implemented curbside pickup service with customers calling in their orders that are placed outside ready to be retrieved.

Each package includes a handwritten Thank You note and a special something as well. “We always include some type of free item, no matter how small, to let them know we are grateful for their business,” says owner Barb Emmett.

Maintaining safety for her lean staff is also critical. One employee, in particular, who is extremely anxious about being in the store, has been given two-weeks of paid leave, but that just puts more pressure on Emmett and the other staff members to keep the doors open.

Battling anxiety is also a daily challenge for Emmett, not for fear of contracting the virus, but worries about how to keep her business going in the face of these challenges.

“I feel exhausted. That anxiety is underlying every decision at this time; should I have done this or that,” she shares. “I just pray everyday that we will get through this.”

Like Bernie Robbin’s Rovinsky, Emmett’s experience through the recession was important learning to prepare Godfrey’s for this trying time.

“Before the recession, we were more of a pet gift boutique with a little food on the side. But my product mix was a little too luxury at that time, so I started to shift to stocking more and better food and supplements,” she says.

“The more I learned about pet food and health, the more I was convinced this is the direction I have to go. So I stock the best quality food and never went into lesser-quality brands, even if it would have been easier,” she says.

Coming through this experience, Emmett is now intent on implementing an online store that is integrated into the point-of-sale system.

“I never wanted to be into shipping orders and not knowing people,” she says. “But now we need an online store to sell a select group of products that people can’t get anywhere else. The problem is it has to be integrated with my inventory because I can’t have people ordering products online that I can’t fulfill.”

For this gift store, the shutdown came at the best time of the year

It is ironic, but for Dianne Crosell’s Chicago-based gift store, Crosell & Co., the shutdown came at the optimum time for her store.

“We had the best January-February ever this year and came off a really strong holiday season,” Crosell shares. “Being in Chicago, we don’t get a lot of business in the first quarter anyway. And we do two-to-three times more business in December than in any other month.”

With only two employees, Crosell doesn’t expect the PPP and EISL loans to give much of a lift for her business, since rent for her store’s off-Michigan Avenue location is by far her biggest operating expense.

“They aren’t helping us where we need help. The program is more for medium-sized businesses, but for small mom-and-pop operations like mine, we aren’t going to get the help we need. A lot of those aren’t going to survive,” she fears.

She hopes her store has the right stuff to survive. She anticipates when it reopens that customers will prefer to shop in smaller, neighborhood stores.

“They will be more comfortable coming into my store rather than going into a larger store with more people. I believe they will think it’s a safer environment,” she says.

As for what will draw customers in besides the more intimate environment, Crosell is very selective about the gift products she carries, including higher-end giftware and tabletop, but also more affordable selections for everyday gifts. And the products carried tend to be evergreen that don’t go out of style seasonally.

She also places a heavy emphasis on making the store look inviting. “We have to give people a reason to come in store, because you can’t get the full effect of what we have online. I make sure our visuals look fabulous.”

This florist sells products that make people happy when they most need it

Chicago-area Phillip’s Flowers is a family-owned business founded in 1923, so it has survived the depression and multiple recessions, a world war and 9/11.

Jim Phillips, who carries the business’ mantle from his parents and grandparents, believes that this temporary interruption to business is not going to shut them down either, though it has certainly disrupted operations.

Phillips has been fortunate to be classified as an essential provider of services to essential businesses, like funeral homes and hospitals, so he has been able to keep the backroom of one of his seven flower shops and the design center open to fill those and online orders.

However, the other shops and the commercial interior landscaping part of Phillip’s business have been temporarily curtailed.

“We had to furlough about half of our 200+ workforce. So we have 100 people at home waiting until restrictions are lifted, which we are hoping is in time for Mother’s Day,” he says, adding that Mother’s Day is one of the “trifecta” of spring holidays that is critical for the flower business, the others being Easter/Passover and Administrative Professionals Day, what used to be Secretary’s Day.

Looking to the rest of the year, he expects continued hits coming from canceled graduations, proms, and most especially spring/summer weddings. “Our sales are down only 50%, so that is pretty good under the circumstances,” he shares.

As he plans for the future, Phillips reflects that perhaps the company could continue to operate profitably with fewer Main Street locations, noting that many florists have gone “back room” to support specialty wedding and banquet party businesses and online orders.

“It’s been amazing to see how productive our trimmed-down staff has been. We see ways for being more efficient,” which also includes supplying flowers wholesale to other florists and floral designers.

As for the flower business, productivity matters, since flowers are perishables that have a short shelf life. But like the jewelry and gift business, the holidays and life events that occasion the purchase of flowers will never go away. 

“Flowers enhance the quality of life,” he says. “They’ve done research and found that flowers and plants really make a difference in mood and wellbeing. That’s why get-well flowers really help people get well.”

Final thoughts

All of these Main Street retailers, like everyone in the country, have been incredibly challenged by the nationwide shutdown that disrupted our lives and businesses.

They accept that it will be a long time for “business as usual” to return, if it ever does. Yet, they have approached the challenges with a positive attitude and adapted their businesses as best they can to meet their customers’ current and future needs.

In closing, Patina Gallery’s Barnett says, “I’m just hoping that when Main Street opens again, the American public realizes that any of us left have paid a dear price to stay standing. So, I hope they decide to buy their coffee from a local coffee shop, not go to some big corporation or conglomerate.”

After we all come through this, I along with these five Main Street retailers hope that people realize “Shop Local” is not just a tagline for one Saturday in November, but a reminder for all 365 days a year.

Comments Off on Main Street Coronavirus Survival Guide: How an Art Gallery, Jewelry Store, Home Furnishings Store, Gift Shop and Florist Will Survive Shutdowns