These Trying Times : Sales: While some luxury industries have lost their luster, other merchants are saying the recession has actually improved their business.
The boating industry is barely afloat, but surf stores are riding high.
Dom Perignon with dinner appears to have lost its fizz, but caterers are partying hearty.
And diamond sales? Well, let’s just say they lost a little luster as the ‘8Os came to an end--but then, so did much of the rest of the South Bay’s economy, in everything from maid services to thrift shops to fine dining.
The indicators that have muddled the financial picture nationally--some sunny, others signs of recession--similarly reflect a mixed scene in the South Bay as merchants struggle to bring postwar cheer to a sluggish local economy.
For most, the going has been tough, but a few have conquered the greenback blues. Take T J Maxx, for example, the off-price clothing store in Rolling Hills Estates, where Saks Fifth Avenue ties normally priced at $80 retail were recently on sale for $3.99.
Nationally, the chain has reported an uptick in sales, from $1.7 billion in 1989 to $1.9 billion last year, and the Rolling Hills Estates store--despite its upscale locale--has been following suit.
“We’re doing a lot better than we ever have,” said assistant manager Art Gonzalez. “The recession helps us a lot. . . . Instead of going to Buffums, they’re coming here.”
Eddie Talbot, owner of E. T. Surfboards in Hermosa Beach, said surf stores, too, have so far ridden out the recession.
“It’s recession proof,” Talbot said. “They’re gonna surf no matter what. It’s a lifestyle when you come right down to it.”
However, Talbot, who has been in the business 20 years, said stores that primarily market surf-related clothing are not doing so well.
A surfer “won’t need 10 pairs of shorts or one pair of $40 shorts,” Talbot said. He or she will need a board and suit.
Rea’s Hardware in El Segundo’s downtown shopping district has also weathered these leaner times. Paint, pipe and plumbing fixtures, tools, nails, nuts and bolts and hinges sold briskly in recent months despite reported sluggishness elsewhere in the economy, store officials said.
“More people did things on their own as opposed to paying to have them done,” said Mike Russell, manager of the venerable South Bay store. “They put new plugs on TVs, new washers on faucets and new coats of paint on their houses. They asked what they could do to make things last.”
Nor has the recession taken much of a bite out of South Bay Executive Businesses Caterers, a Redondo Beach firm that caters corporate and private parties. Co-owner Mary Ann Schoon McIntosh says business is as strong as ever.
“We were worried,” Schoon McIntosh said. “But people don’t seem to be cutting back on their partying.”
Business has also been strong at New York Food Co. in Hermosa Beach, said Susan Boise, the catering company’s office manager. But some of the bookings appear to stem from the hard times affecting other industries. Said Schoon McIntosh: “Last year we did a lot of Hughes retirement parties.”
Those, however, are the exceptions. For most South Bay businesses, times have been tight in recent months.
At this time last year, for example, the Camilo Fine Original Jewelry store in Rolling Hills Estates enjoyed brisk sales of its jewelry, which is crafted on the premises. This year, that’s not the case.
The only new jewelry being sold now is in the “lower-priced” $400 to $600 range, says Frawn Granados, co-proprietor of the store. The vast majority of the store’s business now, she says, is remounts and repairs.
“Instead of buying a new diamond ring, people are digging out grandma’s old diamond and remounting it,” Granados said. “Some people are bringing in really mangled things and saying, ‘Hey, can you fix this? . . . Our repair man used to work two days a week. Now he’s full time.”
At nearby Finley’s jewelers, company president Thomas Thielman says that although the recession has not checked bauble-buying by the wealthy, it has definitely curbed spending by people who earn less than $100,000 a year.
“I don’t think you’ll find a retailer alive who will be telling the truth if they’re saying they’re having a great year,” Thielman said. “People who have a lot of money will continue to have money. But the upper-middle-income and the middle-income people have been hard-hit.”
Sales of boats and other marine equipment appear to be sinking, too.
Merl DeWitt, sales manager for Anchor Marine in Wilmington, said October marked the beginning of a major slowdown. A key cause, he says, is that boaters who work at local aerospace companies have decided not to take to the water this year.
“Take McDonnell Douglas,” DeWitt said. “A lot of those people would have little fishing boats out on weekends, but this year they’re not sure they’re going to have a job next week to pay for it.”
Local restaurateurs have also felt the pinch, from family eateries to the fancier establishments.
Fred Tabesh, who once owned six coffee shops in the South Bay, was already in dire straits when the recession hit last year, partly because of layoffs at local aerospace companies whose employees provided the bulk of his lunchtime and dinner clientele.
But the dinner hour at his Dee’s Coffee Shop in Hawthorne became distinctly quiet after the deployment of U.S. troops in Saudi Arabia last summer. Tabesh, who lost most of his restaurants after filing for protection from his creditors under Chapter 11 of the federal bankruptcy act last February, said business still has not recovered.
“Just before the war started, business was really bad and everyone was saying people were just at home watching television, wanting to know what is happening,” Tabesh said. “But the war stopped and nothing changed. In fact, everything became a little worse.”
In the past two years, revenue has dropped between 15% and 30%, Tabesh said. To cope, he laid off about half of his employees, cut back on air-conditioning and other utilities and started to close the shop--once open 24 hours--at midnight. He also began posting specials in the window and offering discounts on everything from bacon and eggs to full sirloin steak dinners.
Still, he has found it difficult to stay afloat.
“The people who used to come aren’t around anymore,” Tabesh said. “They don’t have the money or they don’t spend like before.”
Michael Franks, co-owner of the pricey Chez Melange restaurant in Redondo Beach (and the Fino and Caffe Misto restaurants in Torrance), said Chez Melange’s business has suffered as a result of the economic downturn.
Banquet business is down, as is spending by corporations, although Franks says he has detected a recent upturn of sorts in the latter category. Also, the slowdown seems to have affected discretionary spending by individual patrons.
“The people coming in and having a bottle of Dom Perignon as a whim has definitely gone out the window,” he said.
On the other hand, Franks said business at the less-expensive Misto, a trendy pizza and pasta eatery, has apparently benefited from the slowdown. Business there has been terrific, he said.
At The Chart House in Redondo Beach, general manager John Gerhardt said business has been down “a couple hundred dinners” a month. However, he added, people are spending more when they do dine at the restaurant. He guessed that people may not be going out as much in these days, but are spending a little more when they do.
Meanwhile, the recession has been especially hard on thrift and consignment shops.
Ruth Steinmetz, who oversees 10 Goodwill Industries thrift shops in the South Bay and Long Beach, said donations have plummeted and sales have been flat for the first quarter of the year “mostly because we didn’t have the goods to put in the stores.”
Last month, she said, was the worst of the year so far, with sales $20,000 below what they were for April of last year.
Maj. Esther Ruml of the Salvation Army Thrift Store in Redondo Beach concurred.
“Our clothing sales have dropped about 10%, and our donations have dropped at least 25%,” she said. “We have a broad scope of buyers, but they’re all being more cautious.”
Even cleanliness has taken a hit.
Maid services throughout the area say business is off as much as 50% over last year.
“We’ve had to face it,” said Mike Kelly, manager of Maids Plus. “When times are tough, you clean your own house.”
Next Week
The past year’s recession has touched down on many areas of the South Bay, throwing lives and businesses into disarray, while bouncing over other areas. For those who have lost work or businesses or income, it has meant changes in lifestyle, though the scattershot nature of the downturn has offered hope amid the gloom. Optimism is what keeps Andy and Kelly Jenkins, an out-of-work graphic artist and a recently laid-off Los Angeles teacher, going amid mounting debt.
Consumer Spending
Figures show the sales tax revenue returned to each city by the state for the last quarter of 1989 compared to the last quarter of 1990. Because the revenue is derived directly from retail sales, sales tax figures serve as a good gauge of consumer spending patterns in each city. Inflation, as measured by the consumer price index, was 6.1% in 1990, so any year-to-year increase of less than that reflects a decline, in real terms, of consumer spending. The State Board of Equalization returns 1% of the sales tax revenue collected in each city to that municipality’s government.
Oct.-Dec. Oct.-Dec. % change City 1989 1990 Carson $3,553,354 $3,430,826 -3.4% El Segundo $915,458 $993,245 8.5% Gardena $1,629,166 $1,507,292 -7.5% Hawthorne $1,688,602 $1,581,550 -6.3% Hermosa Beach $448,092 $531,978 18.7% Inglewood $1,761,689 $1,704,968 -3.2% Lawndale $489,145 $487,050 -0.4% Lomita $251,521 $269,318 7.7% Manhattan Beach $952,000 $915,000 -3.9% R.H. Estates $399,276 $414,241 3.7% Rolling Hills N/A N/A N/A P.V. Estates $51,787 $40,801 -21.2% Rancho P.V. $226,694 $202,567 -10.6% Redondo Beach $2,034,930 $2,003,700 -1.5% Torrance $6,604,495 $6,175,718 -6.5% TOTALS $21,006,209 $20,258,254 -3.5
Source: Hinderliter, de Llamas & Associates
Times staff writers Anthony Millican, Kim Kowsky, Janet Rae-Dupree, Gerald Faris, Deborah Schoch, George Hatch and Tim Waters contributed to this story.
