For many Pacific Beach businesses, coming back from coronavirus crisis is almost like starting over
Even for local entrepreneurs who live and breathe the challenge of business, the COVID-19 coronavirus has been abrupt and harrowing.
With Phase 2 of the state’s economic reopening plan, which allowed some establishments considered “nonessential” to reopen this month with limitations, some of the 1,524 primarily small businesses in Pacific Beach have begun the arduous climb out of the fiscal and operational hole created by the pandemic.
Many find themselves applying the same vigor, grit and innovation to restore their financial health that they used to launch their business in the first place.
“One thing I’ll say out of all this is the businesses have been so creative,” said Sara Berns, executive director of Discover Pacific Beach, the community’s business improvement organization. “It’s just blowing me away how quickly they’ve adapted and evolved. ... They are just trying to figure out how to adapt and help people and get their employees working.”
After two months of empty dining rooms and stores, restaurants and retail shops in the Pacific Beach area began reopening this week for inside service after San Diego County announced May 20 that it had state approval for them to do, as long as they operate under the county’s Safe Reopening Plan to help prevent the spread of the COVID-19 coronavirus.
Powerhaus Pizza on Garnet Avenue, which opened in January 2019, offers a menu of organic pizzas and other items. It was rapidly growing its niche by expanding into catering and partnering with local business offices and event venues, such as Yard and Sea, while securing a solid customer base of health-conscious consumers strolling over from yoga studios next door and across the street.
By January and February this year, the pizzeria was experiencing its most profitable months yet and the future appeared bright, according to owner Anisha Blodgett.
Though it was allowed to continue operating with takeout and delivery as an “essential” food provider following a statewide order in March that shut down many other businesses, Blodgett said her business sank and store sales fell by 15 percent to 20 percent. Her catering segment, which accounted for a quarter of all sales, all but vanished.
Further aggravating the situation, Blodgett’s main supplier closed amid the virus’s economic fallout, which left her scrambling to find a source for her ingredients.
“This process is not a reflection of our business, it’s a reflection of things completely out of control,” she said. “But at the same time, we have to at least break even. ... We’re lucky that we’re pretty small ... and we’re set up for takeout normally.”
Though San Diego County restaurants were allowed to reopen dine-in service after May 20 with safety protections against spreading the coronavirus, “we’re not a traditionally sit-down, dining-in restaurant,” Blodgett said.
As she searched for ways to overcome her foundering sales and with only two of her eight employees remaining, Blodgett began offering pizza kits with all the raw ingredients and providing live instructions on how to prepare the pizza at a set time via Zoom.
“It’s more interactive,” Blodgett said. “It’s just more of an experience. It’s like going to a cooking class.
“Then they get to talk to other people that are part of the class. While preheating or the pizza is baking, people get to chat.”
Launched in April, the concept took off and Blodgett conducted four classes by early May, she said.
Though the new item is now a permanent fixture, Blodgett is still anxious for her future because the business climate is so unsettled.
“I would say that one of the most difficult things is not knowing what the timelines are looking like, what the regulations are going to be, what consumers are going to want to see,” she said. “It’s hard to plan when things keep changing.”
Randall’s Sandals on Garnet Avenue was cruising along since opening in June 2016, averaging $8,000 per month in sales of sandals, sunglasses, towels, sunscreen and other beach gear. Then the shop was closed in March.
Owner Randall Engstrom said his wracked nerves were relieved when he was allowed to reopen this month because the period of May through September gives him 50 percent of his annual sales.
“I was hoping to get some assistance through some of the programs that were released, but none of them came to fruition,” he said. “That’s why I was happy we were able to reopen when we were. Things have been positive.”
Having only two part-time employees to train on safety protocols, Engstrom said the 21-item county checklist for reopening was easy to implement and didn’t add any costs because he already maintained high standards of sanitation so customers could try on sandals and other wear.
With an open courtyard in front of his store, social distancing and limiting customers in the store were as simple as demarcating 6-foot separation with sandals drawn in chalk.
Oasis Architecture and Design on Turquoise Street, designated an essential service in support of ongoing residential construction, was able to adapt quickly by having two of its three employees work from home.
However, the operation has not been the smoothest, according to owner Mark Morris. Design requires a tight team working collaboratively with spontaneous ideas discussed instantly and analyzed in a continuing process. It’s a dynamic practice slowed considerably by emails and scheduling conference calls.
Moreover, Morris said, the crucial information gleaned from clients through body language and facial expression is often lost in virtual communication.
“We found that every [interoffice] meeting takes at least 50 if not 100 percent longer,” Morris said. “So our office meetings usually take an hour and a half; now they take three hours. If I’m doing a client meeting, it takes a lot longer. It’s not a perfect science, but at least it’s working. It’s definitely costing us.”
Though still functioning through the pandemic, Morris had to cope with the economic deterioration created by it. The financial market’s collapse in March led to immediate cancellation of five projects.
Although his business recovered as the stock market improved, Morris said he has “no doubt that in the next three months there’s going to be a significant slowdown in our business. Everyone gets impacted. ... So we’re just trying to get as much done and stay as profitable as long as we can so we’re ready for when it’s not.”
If success is defined by having the right idea at the right time, the crisis has been a boon for Janelle Sistint, owner of Lotus and Luna, a maker of women’s fashion apparel and jewelry.
While operating a small boutique on Garnet, Sistint derives more than 90 percent of her income by providing her wares wholesale to retailers operating about 1,000 outlets across the country.
The economic turmoil caused by the virus resulted in cancellations of her new seasonal line while companies deferred payments to protect their financial position, she said.
Sistint had to lay off 15 of her 17 employees April 3 and was concerned about 200 workers dependent on her business in Thailand, where her production is done exclusively in villages.
Sistint said she spent the weekend after the layoffs searching for ideas that could save her employees and her business. She didn’t have to look far.
Since Thailand was one of the first countries affected by COVID-19, her manager there had sent a box of custom face masks in February to help protect Sistint and her staff.
“My wholesale director ... said ‘Make masks’ two weeks before the furlough,” Sistint said. “And I said, “No, I want to make pants.’ It took me awhile. But when you’re about to have not just 15 people here, who can get unemployment, but 200 people in Thailand, where there is no system, lose their jobs, the masks started sounding like a good idea.
“I literally spent all night making a mask. On April 6, we had samples and photos and a shipment coming. We ended up being one of the first companies to sell masks.”
Sales of the designer masks skyrocketed to more than 100,000 in the first month, retailing for $6 to $11, according to Sistint. She decided to donate one mask for every one she sold, providing thousands of free masks to places such as the San Diego Police Department, Rady Children’s Hospital and Father Joe’s Village. She also gave free masks to any PB business that wanted some.
Interest in her clothing and jewelry line increased with the mask sales.
“All of our sales shot up,” Sistint said. “We were able to also start selling our clothing because people are matching it to masks. We were able to keep everyone in Thailand employed and all of our suppliers [working]. We actually had to hire extra staff.”
Yet in business as in life, there are winners and losers, and the pandemic has accelerated the process.
Retailer Kay Thayer has been operating Traveler’s Depot since she bought the store, founded in 1985, in November 2006.
The Garnet Avenue shop had a loyal customer base for its travel books, maps, luggage, outfits, equipment and accessories.
Thayer furloughed her full-time manager and four part-time employees when the coronavirus shutdown came. Though she was approved for Paycheck Protection Program assistance, and Phase 2 curbside pickup offered a glimmer of hope, Thayer said bigger trends forced her to reach a fateful decision.
“The travel industry is going to be SOL for at least two years,” she said. “As I was reading the fairly early reports, it was clear that we would probably need a miracle to continue. ... People aren’t going to have the disposable income for travel ... so it’s sort of the death knell. ... I inquired. I read. I said we’re doomed.”
Thayer decided to shut her operation. All that remains is to liquidate her stock.
“It’s a sad story because the store had so much heart,” she said. “We’ll reopen only to close. We have to stay open long enough to move our inventory out.”
Whenever the pandemic ends, the business environment in PB figures to be altered, though no one could offer a clue on what the future will look like.
According to Berns, the businesses that get to see that future will likely be decided in the crucial summer months now upon us.
“The one thing in PB is that there is a lot of seasonal business,” she said. “Most of the businesses use the money they make through September and October to get them through that January and February [of the] next year when things are slow. ...That cushion is probably gone for some of our businesses. So we’ll see the long-term effects as the year goes on. I think we’ll see the effects probably all the way into next year.”
Having battled the economic crunch arising from the pandemic and triumphed, Sistint offered a bit of advice: “Don’t take no for an answer and don’t give up. And don’t say no to opportunity. You definitely have to say yes.”