Large Firms Paved the Way in ‘95, Survey Finds

For businesses in Ventura County, it’s better to be bigger. But then Georgia Olivas Madrid already knows that.

She wasn’t at the Oxnard Hilton on Tuesday morning, when the Ventura County National Bancorp released its 1995-96 Economic Survey and Forecast report.

She was busy closing up her small retail store, Ladies & Gentlemen, at 477 E. Main St. in downtown Ventura. But the results of the report wouldn’t have surprised her: Although most business sectors in the county are seeing moderate overall improvements, the retail sector remains in a slump, with small retailers hurting the most.

“This is probably the worst Christmas I’ve ever done,” said Madrid, who is shuttering her couture fashion consignment shop after 10 years. “I don’t want to struggle it out another year.”

But according to the survey, now in its 15th year, the overall business climate in Ventura County is far from grim. Sales and profit increases have stayed fairly level with what they were in 1994, with fewer respondents reporting declines in those areas. And although sales and profits have yet to reach marks posted in 1990, gains in most industry sectors have continued for two consecutive years.

“Small businesses did not fare well in the county in 1995,” said Richard S. Cupp, president and chief executive of Ventura County National Bancorp, which sponsors the report. “The larger firms paved the way in both sales gains and increased profits.”

Nearly two-thirds of firms with sales between $5 million and $10 million reported sales gains in 1995, and 72% of companies with more than $10 million in sales reported increases.

In contrast, only one in four companies with annual sales of under $250,000 reported increases from the year before. The profit picture for large and small companies generally followed suit, with 47% of the largest firms surveyed reporting profit increases in 1995, while only one-quarter of the smallest firms posted gains.

Not surprisingly, bigger companies did the lion’s share of new hiring, as well, with 58% of $10-million firms adding workers in 1995, up from 41% in 1994. Compare that with the under-$250,000 business, only 3% of which increased their work forces last year.

Ventura County National Bank sent questionnaires in November 1995 to 5,000 county businesses spanning a spectrum of industries. The resulting survey, culled from the nearly 500 responses, is less a scientific poll than a tally of local business sentiment.

Manufacturing led the way in industry sector growth, according to the survey, with four out of five respondents reporting better sales and 56% posting increased profits. Only one in 10 manufacturers reported sales and profit declines.

The strength of biotech firms in Ventura County may have helped drive the sector, Cupp said. For example, Thousand Oaks-based Amgen, which participated in the survey, is enjoying a strong year, with third-quarter profits reaching $146 million, up 28% from $114 million for the same quarter a year ago.

“When you have 10 to 12 potential products in the pipeline it requires you to hire people and build new buildings,” company spokesman David Kaye said.

In agriculture, 54% of respondents posted higher sales in 1995 and 43% showed higher profits.

Construction was also strong, with 53% noting an increase in sales and 56% reporting higher profits, possibly reflecting the boom in housing in eastern Ventura County, Cupp said.

But is anyone buying anything for those houses? The general retailing sector of county businesses is the least healthy of all industries, the report says. Sales were down among 44% of all respondents, while profits fell 43%.

Hurting most are the small retailers selling locally. “How can I compete with the huge chains that have killer sales all week?” said Madrid. Indeed, large and discount chain retailers such as Price Club and WalMart, included in the survey under a separate “big-ticket” retail category, posted much better results--48% reported sales gains and a full half showed higher profits.

Although 1995 wasn’t the year that companies surveyed last year had hoped for, businesses this year are optimistic. In manufacturing, 63% predict increased sales in 1996. Even among general retailers, the weakest industry sector for 1995, about 43% said they expect sales gains this year. Agricultural firms were the most pessimistic, with only 39% expecting growth.

“We feel the economic conditions in the county point toward a slow, steady increase across the board,” Cupp said. In other words, cautious optimism for 1996.

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County Trends

Here’s a look at the percentage of businesses surveyed that reported gains in the following:

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1994 1995 Sales 44% 47% Profits 37% 36% Employment 24% 27%

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Source: Ventura County Economic Survey and Forecast