The down economy has forced four small business owners in Metro Detroit to make some changes, but they’ve also found silver linings.
Paul Wasserman, president of Henry the Hatter, said the economy is certainly tough, but he’s discovered that people still want to look good.
“It’s been my challenge to find things at more affordable prices, and have more available that’s more affordable to more people,” he said. “My high end business has suffered.”
Wasserman said that people are no longer coming in for $160-$175 hats, but rather for $99-$125 ones. So the store has added items it wouldn’t have carried five years ago. These include wool hats that start at $39. Wasserman said less expensive lower end items have become extremely important.
He also said the haberdashery industry is much different than it was 40 or 50 years ago, when most men wore hats with their suits.
“Most of what’s happening today is being entertainment and music driven,” he said. “People like Kid Rock, Neo, Usher, Alicia Keys, Britney Spears, Johnny Depp, Brad Pitt. It’s a whole different ballgame. Stuff is a lot edgier and trendier. In all truth, it’s become a lot of fun.”
He compared it to the Oldsmobile commercials: “This is not your father’s old gray hat.”
Other changes Wasserman has made include the closing of the Hamtramck store, which had been open just shy of 25 years (he also has had a store in Southfield since 1992) to save on overhead costs.
Wasserman doesn’t believe the recently passed health care legislation will affect his company. He said they’ve always used Blue Cross/Blue Shield.
“My feelings on health care have always been that if you’re going to give it, give something meaningful,” he said.
Asked whether he might consider hiring additional staff if the health care bill ends up lowering his overhead, Wasserman said all that’s driven by the amount of business he’s doing.
“If in fact health care costs go down, and our revenue doesn’t go up, then no, I won’t be hiring anybody,” he said. “But should we ever come out of this recession — and I’m confident the time will come when we will — then yes, I’ll have to add people, and yes, most certainly they too would have health care.”
For Wasserman, one possible silver lining in this economic cloud has been the inclusion of merchandise he’d not have carried in the past, such as hats in the $39-$65 range. He said it’s been a pleasant surprise how meaningful those things have been in driving sales.
Another plus factor has been the closure of the Hamtramck store. He said he hadn’t realized how much work it was to have three locations until that store closed.
No one lost their job. The manager gave him 18 months notice that he’d intended to retire, and the other employee was brought over to the main store downtown.
Pat Jonas, owner of Royal Oak Books, a used bookstore, said the economy has led to a diminution of everything.
“There’s less customers, ergo there’s less income,” she said. “And I find more people trying to bargain.”
She understands their attitude that a book shouldn’t cost as much as it does, but said books have always been priced that way.
Jonas also been affected in that she didn’t take a vacation last year; she didn’t even take a long weekend.
She added that all used bookstores are feeling the economic pinch.
“There’s a thousand used bookstores a month that go out of business in this county alone, just from the computer. You add that to the bad economy and I’m sure it’s probably doubled.”
Other than one of two people who handle the store for her on Sundays, Jonas works alone. She said that the economy makes her less inclined to hire anyone else.
“It’s not like it used to be,” she said. “It’s a combination of factors, but the bad economy is really one of the major things.”
The economy has also caused her to cut back her hours. While she used to be open until 7 p.m., she now closes at 6, as she no longer has customers coming in as late as 6:30.
She said while she has people willing to work for her, the business isn’t there to cover their salaries.
Asked whether the health care legislation would help if the economy picked up to the degree that she could justify hiring a staff, Jonas noted that she didn’t know.
“I never had an employee that I paid health care for, and my health care has had sort of nothing to do with the business.”
On the positive side, Jonas now has a wider selection of books because more people are selling books than buying them. On the other hand, that’s resulted in extra work for her.
“It’s not all down,” she said, adding that some people are coming in to used bookstores for the first time because they’d rather not pay the prices at new bookstores.
Jonas acknowledged that the economy is hard for everybody, but is confident things will get better.
“We’re a resilient country. We’ll be back,” she said.
Larry Alebiosu, owner of Fashion International, a men’s clothing store in Southfield, said many of his customers have either lost their jobs or are making less money, which has led to his decision to cut back on prices.
Fashion International designs and manufactures the clothes it sells. Alebiosu said prior to now, it had always been an upscale store, with suits costing from $550 to about $1200. Now, to keep from losing customers to less expensive outlets, the company has decided to continue to bring in high quality merchandise, but at $199 to $495.
This decision is affecting the store’s overhead. Alebiosu said he’s more or less breaking even.
His longterm hope is that he’ll keep his existing customers by making sure they still get the quality merchandise they’re used to.
Because Fashion International is a specialty store, Alebiosu is not concerned that customers will migrate to stores with lower prices once his prices return to normal.
“Our customers come to us because they want something that is different, something that is not common, something that you cannot find everywhere else,” he said.
Fashion International can make a suit in less than 48 hours.
He said the health care legislation is great because it will allow his business to provide medical insurance to employees at a possibly lower price. Fashion International employs less than five employees full time. Alebiosu said the ability to afford better health care at a less expensive price would make hiring more people more attractive.
He appreciates the support of his customers.
Chondra Jackson, owner of Chon’s Unique House of Hair, said she’s struggling because a lot of people are out of work and get their hair done as often as they normally would.
She said her normal customers used to come once a week. Now they come once every two weeks or once a month.
While she’s lost some customers because of the economy, she has a core group of faithful customers she’s been serving for 25 years.
“They kind of work me into their budget,” she said.
Because of the economy, Jackson has kept her prices down, lest she lose more customers. Ironically, that’s brought some new customers in, as some of her competitors have had to raise their prices.
Her decision not to increase her prices is made a bit easier by the fact that her suppliers are working with her.
“They let you purchase supplies weekly, where you can pay weekly on your supplies,” she said.
She added that her suppliers are likewise trying to keep their own prices down, but said she’s pretty much breaking even right now.
As to the health care legislation, Jackson, who has one employee, said it hasn’t affected her.
Asked if she’s looked into any state of federal programs designed to help small businesses, Jackson said she hasn’t.
As to the economy overall, Jackson believes it’s currently at a standstill.
“I don’t think it’s getting better, I don’t think it’s getting worse,” she said. “I’m just happy I’m able to survive right now.”
Henry the Hatter is located at 1307 Broadway. Royal Oak Books is located at 28806 Woodward in Royal Oak. Fashion International is located at 15612 W. Ten Mile. Chon’s Unique House of Hair is located at 7136 W. McNichols.