Can Christmas save Sonoma County’s small businesses?

The promise of a new aid package and a vaccine offer hope, but many local retailers are still fighting for survival.|

At the end of the month, Marta Koehne will celebrate her 38th anniversary as owner of Hot Couture, the vintage clothing shop in Santa Rosa’s Railroad Square. She has never seen a year like this one.

Koehne shut Hot Couture for 4½ months as the novel coronavirus upended American health and economic vitality last spring. Foot traffic has been light since she reopened. The two cash-register turbochargers across Third Street, the Hyatt Regency and Courtyard by Marriott hotels, have been at low occupancy throughout the pandemic. Koehne has had to cancel the shows she typically does at conventions in San Francisco and Los Angeles. Sales were off 50% for the first couple months, and are still down 35% to 40%.

Despite all of that, Koehne is hopeful as she scans the horizon.

“I feel like by the beginning of the year, we’re going to have turned a corner,” she said recently, sitting beneath the ancient oak tree that looms above her home in the Wright neighborhood. “There’s so many things coming down the pike. Vaccines. The new administration. And I believe they’re going to put some relief back into people’s pockets.

“And my message would be, if you can possibly hang on for another couple of months, please try to if you’re a small business.”

Hanging on will be an immense challenge for some mom-and-pop shops, though. The holiday season is usually the most wonderful time of the year for retailers, and some report a recent uptick in sales. But with the virus surging in California, Gov. Gavin Newsom on Thursday issued a statewide order that may soon place further restrictions on Sonoma County’s retailers.

“We are hearing angst, anxiety, frustration, fear. And that continues to grow,” said Sheba Person-Whitley, executive director of the Sonoma County Economic Development Board, which provides guidance and resources to local business owners. “The governor’s announcement has heightened that fear and anxiety. Because some are just trying to eke by without closures, and without permanent layoffs.”

The big question right now is whether holiday sales and the support of core customers can help businesses survive long enough to benefit from a new federal stimulus package, should Congress ever get around to authorizing it, and from a widely distributed vaccine, whenever that miracle might appear.

Until then, the environment will remain tenuous for retailers.

“It hurts my heart,” said Neena Hanchett, executive director of the Cloverdale Chamber of Commerce. “I don’t want to be negative about this. But this is like the round-bottomed clown. You get knocked down, you get back up, you get knocked down again, you get back up again. People are kind of tapped out.”

Hanchett’s dismay goes deeper than concern for some of her Cloverdale neighbors’ profit margins. “I don’t know how this little town is gonna survive,” she said.

Many people in many other towns have similar misgivings, and their fears are not unfounded. According to Opportunity Insights, an economic database run out of Harvard University, 28.8% of California’s small businesses have closed in 2020. An October survey by Small Business Majority, which counts 70,000 members, revealed that 35% of them fear they will be out of business by mid-January without an aid package; the figure was 41% for Black- and Latino-owned businesses.

“The disparities were already there, and they were exacerbated by the pandemic,” Person-Whitley said. “We’ve seen disproportionate impact on communities of color. I think a lot of that has to do with structural issues like access to capital and access to loan assistance.”

The devastation has touched almost everyone.

In August, Sonoma State University economics professor Robert Eyler presented a study to Person-Whitley’s office on the projected economic impacts of COVID-19 in Sonoma County through 2023. Under the best-case scenario, he forecast the county would lose 20,700 jobs, $1.5 billion of income and nearly $330 million in state and local taxes. His worst-case scenario: more than 48,000 jobs, $4.1 billion in income and $800 million in tax revenue, out the window.

Already, the damage to small businesses is more than theoretical. Indigo Denim Bar and MacPhail Wines in Sebastopol. Sonoma Taekwondo Center and Kovacs Motors in Sonoma Valley. Twice Told Books in Guerneville. Bistro 29 and Bollywood Bar & Clay Oven in downtown Santa Rosa. Three Twins Ice Cream in Petaluma and the Raven Film Center in Healdsburg. That’s just a small sampling of the recently departed.

From the beginning of May through the end of October, 42 businesses that belonged to the Santa Rosa Metro Chamber closed and another 56 stopped paying their dues, citing financial hardship, said Peter Rumble, CEO of the business group. And those cases were limited to the chamber’s 800 to 900 members. The true number of impacted Santa Rosa businesses undoubtedly is much higher.

Rumble said the large majority of those business failures occurred in May, before an influx of federal Paycheck Protection Program loans and an early-summer relaxation of stay-at-home rules allowed proprietors to regain their footing. Person-Whitley said the county helped facilitate distributions of $2.5 million to more than 500 local businesses through the CARES Act.

Those who survived that early tremor have mostly stabilized. Now Rumble worries that a deflated holiday shopping season and a winter of rampant infection and wet or chilly outdoor dining spaces will land another blow.

“I fear we’ll see another of those big shocks like we saw in May, with dozens upon dozens who won’t be able to make it,” he said.

Many businesses have had to adapt to survive this long. The most obvious move was toward online ordering and delivery.

“I’d say 99% of our orders go through the website right now, and shipping has definitely gone up,” said Jill McLewis, who co-owns Eye Candy Chocolatier in Sebastopol with Dr. Sonja Schluter. “Of course some of our customers are not comfortable doing it online, so I go through the whole process for them.”

Not every business is compatible with online sales, though. Koehne did substantial research and concluded her vintage apparel was too hard to find through search engines. Instead she turned to Instagram and has found it quite effective.

A robust online presence was no solution to Claire Fetrow, who owns the Hub Cyclery in Cotati along with her husband, Chaz. Their problem wasn’t attracting buyers. With gyms closed and people seeking outdoor activity, the early part of the pandemic was a boom time for cycling. For bicycle shops, the hang-up was the supply chain.

Starting in June, the Fetrows couldn’t get bikes. Claire said some manufacturers are reporting their models will be unavailable through 2021. Lately, the Hub can’t even acquire parts.

The shop focused on repair services, but that has its limits.

“Someone dropped off a bike for a simple shifter job,” Fetrow recalled. “Should have really been maybe two weeks (in the shop). It was here from May to November. We just couldn’t get the parts.”

The one common denominator for still-standing small business owners is a willingness to work withering hours. With employees furloughed and duties multiplied by the need for safety precautions, it has been exhausting.

“My workload I’d say has at least tripled,” McLewis estimated. “I answer the phone, fill mail orders, do no-contact deliveries. When you start a small business, you know you’re signing up for long hours. But Jeez Louise.”

All of it will seem worth it, McLewis believes, if she and Schluter can ride out the next few months. The holiday season will be pivotal, for them and many others.

Perhaps no one welcomes December as much as a toy shop owner. Darren Turbeville, who runs Toy B Ville in downtown Petaluma, said he would normally do about a quarter of his business for the year between Thanksgiving and Christmas. Turbeville was heartened by a sales climb in November.

Still, it has been a rough year. Turbeville closed his Napa Toy B Ville in May, a move he said was complicated by the pandemic, but not caused by it directly. Customer traffic is down about 40% at his Petaluma store, though his average sale is up about 30%.

“All in all, I survive on weekly birthday parties and people coming to town to visit, and none of that is happening,” Turbeville said. “I have no foot traffic. I have restaurants taking all my parking for outdoor dining. I can’t complain about that. They need to survive, too. They’re my customers. I need those waiters getting tips to come by for their kids. It’s a vicious circle.”

Turbeville has always seen his toy store as more than a business. He grew up haunting Toyworks in Healdsburg (the company left that space in 2002) as well as local trading card shops. He remembers the wonder of browsing through treasures, and fears it is being lost in a generation of kids much more apt to see a specific megabrand toy advertised on YouTube, and to buy it by tapping on a screen.

Long before this pandemic, it was getting harder to find the one-of-a-kind shops that help define a town’s character.

“You’re describing a sense of community,” Turbeville said. “One of the taglines we use for the store is, ‘I’m your friendly neighborhood toy store.’ It absolutely is a sense of pride.”

As small shops go out of business, corporations are there to fill the vacuum. Especially Amazon. The delivery goliath, far from struggling during the pandemic, has added 1,400 workers a day during the first 10 months of the year, largely in response to the explosion of online shopping during the pandemic.

Still, Main Street USA has proved surprisingly resilient, and a lot of people in Sonoma County are willing to fight for it.

Kris U’Ren is one of them. She was sipping a coffee outside the Peet’s in Petaluma last week as the morning chill was dissipating. U’Ren, who is retired, lives a mile from downtown and still does her shopping on foot. She had visited Hollingsworth Jewelers Gallery and Ethical Clothing already that morning, and was planning to hit Sole Desire Shoes, clothing store J Fermi and Rex Ace Hardware before reaching home.

U’Ren says she is “terrified” of losing these local businesses.

“It would be horrible,” she said. “Because the big-box stores won’t come in here. You’re not going to get a Macy’s or anything like that. I mean, I’d have to leave town. I can get everything I need in Petaluma. For now.”

You can reach Phil Barber at 707-521-5263 or phil.barber@pressdemocrat.com. On Twitter @Skinny_Post.

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