Retail Trade News

The Survival Of Small Business: Area Owners Share Their Experience During These Tough Economic Times [top]⇑

By David M. Johnson

When individuals envision the typical "Mom and Pop" store, they picture a Norman Rockwell painting with the rural-type setting. In the cities, there are the neighborhood grocery, department store, gas station or hardware store on the local corner. In the country there were hundreds of mom and pop stores found in all the small towns and located in the rural townships. Along with the family farm, the mom and pop are disappearing from the national scene. There are 22.9 million small businesses according to the U.S. Small Business Administration. They produce 41 percent of all private sales in the United States.

In the instant satisfaction society that we live in today, people are patronizing the big box and chain stores because they can buzz in and buzz out with the items that they had been seeking. There are the numerous selections, one-stop shopping, open long hours and the reputation of cheaper products. Yet, there are the complaints of consumers of the impersonal and crowded atmosphere of these type stores.

What is desired is the less stressing and more personalized service that once was the dominant feature of the retail market. The advantages of the smaller retailers, the "mom and pop" stores, are the flexibility, the staff or owner "knowing" his customer, the better service and the hometown ambiance that is the stereotype of the smaller store.

So why is the smaller, independent store not flourishing more than it is? How does the mom and pop survive in the villages and smaller towns in the rural areas? Several mom and pop owners were contacted within Allamakee County and were asked about their experiences and their ability to survive in this climate of bigger is better.

John and Joyce Grissom have operated J and L One Stop in Harpers Ferry since April of 2001. From Cedar Rapids, they were introduced to the area through fishing and ended up staying and buying their establishment.

In New Albin the locals are familiar with the City Meat Market and its owner, Alan Wuennecke. A family business for five generations, Alan has been involved for the last 30 years.

Charles (Bear) and Robbie Van Buskirk moved into the area and liked what they saw and were enticed to purchase the Mini Mart in Harpers Ferry two years ago and are managing the store since.

Dave Moritz grew up in the auto business with his dad running an auto body shop. Since 1991, Dave has been involved with Lansing Auto and is today the owner of the parts store.

Another Lansing fixture is the Bartels Hardware Store, owned and operated by Susan and Bill Bartels. Bill's family has had the business since 1920 and Bill is the third generation of his family to run the business. Bill and Susan bought the business in 1985 and have survived and expanded since.

On the Allamakee-Winneshiek County line there exists a destination, a spot on the map that is not only known locally but has attracted the attention of people of the Upper Midwest. The Sattre Store has been owned and operated by DuWayne and Raffaela Rude for the last 32 years. The Sattre Store existed before that, the original building constructed in 1892, and was a business operated by Halvor Ford. It was nothing unusual to see country stores doting the countryside just 40 to 50 years ago but these stores are almost non-existent today.

Some of the operators had previous experience in the retail business, some did not. Robbie Van Buskirk was born and raised in a retail environment, with both grocery and convenience store backgrounds. Alan Wuennecke and Bill Bartels are continuing a family tradition and Dave Moritz had some experience with the auto aspect of his business. Joyce Grissom was an accountant and the Rudes had no previous retail experience. One thing in common with all these businesses is that all are facing similar challenges and have struggled and succeeded in a tough environment.

Is it a disadvantage to operate a small store in an environment favoring the mega and chain stores? Is there a strategy there to survive in the present market conditions? All the stores have diversified. Sattre has groceries as well as antiques. Raffaela loves to cook and offers baked goods fresh from her oven. They had also sold farm feed until just a few years ago.

J and L has a laundry mat, sells gas, operates a car wash and has a variety of food offerings, nuts and bolts, plumbing supplies and fishing products. The Mini Mart sells gas, groceries and is a liquor store. City Meat operates as a meat locker, a grocery store and has items for the hunter and fisherman. Lansing Auto Parts sells auto parts and is a service center for small engines - snow blowers, chain saws and lawn mowers. Bartels operates as a hardware, appliance and department store.

All agree it is a tough climate to survive in but they feel they play an integral part in the communities they serve. Joyce and John at J and L have the coffee going at five in the morning and feel a great deal of satisfaction of what they do, even with the long hours. Robbie and Bear know they are at a disadvantage because of their size but also know they have become an important cog of the Harpers community. Raffaela feels it is busier now at Sattre than in past years. She feels that, "We are unique and I feel that if we closed there would be a large number of people who would miss us."

Alan concurs that his New Albin establishment serves a vital niche, that it is almost expected of him to be open and serve his neighbors and friends. The Bartels have seen profit margins in merchandise drop but because they carry quality products, they offer something to everyone to make them competitive. With Lansing Auto Parts, Dave and his affiliation with Car Quest is an advantage and he has heard from the "big city" customers that he is not only reasonably priced but is very competitive with his merchandise.

One thing that has emerged in conversations with these enterprising entrepreneurs is their acceptance that the business demands a great deal of sacrifice of their personal lives. Nobody clocks in when you own your own business and if you wish to satisfy your customers, you have no set hours. Susan Bartels sees it as a wonderful life for family, where being your own boss allows you to take an hour off and maybe pick the kids up at school. Wuennecke walks to work when he goes to open the Meat Market up and that is the extent of his commute. The Sattre store is also the home of the Rudes.

But running a mom and pop store is not all fun. Since J and L and the Mini Mart depend on the tourist trade as well as on the local residents, it has been tough. First, there were the gas hikes and then the economic crisis of Wall Street that has caused consternation and concern for millions of American citizens. These two Harpers businesses have seen a substantial drop off as of late from the out of county customers. Their local customer base has been loyal and has taken some of the financial hurt off of what could have been a very dire situation. "People are scared, they are afraid to spend and don't want to spend like they are used to," reports Robbie of the Mini Mart.

These businesses see the customer from Dubuque or Cedar Rapids coming once a month now instead of every weekend or every other weekend. The charm of the area attracted these customers but the high gas prices followed by concerns of job security has kept these regulars home. A summer that brings in the bucks for these types of establishments has been disheartening and what was a business cycle of feast and famine is becoming more famine than feast.

Another problem is the growing dissatisfaction with the supply network. Alan sees a vendor infrastructure crumbling, that there are no longer vendors that wish to service these types of operations, to supply the store on a regular basis. Harpers and Sattre are witnessing the same phenomena and it is becoming critical. They believe that vendors care about volume and are not willing to give the necessary service that is demanded by their individual businesses.

Alan is also worried about the increasing government regulations and rules shutting down his meat business, a threat that has shut down many a Wisconsin store, and could hit the Iowa stores such as Alan's. Susan Bartels and Dave Moritz have witnessed the growing cost of freight and its implications on day-to-day operations. Another problem is the escalation of documentation, paper work and regulations becoming a possible deterrent in continuing operations.

Continuing operations is a daily challenge but to start a business is tough. Some of the operations were fortunate to have been family operations, passed down from generation to generation. Dave did not have that situation and found it extremely tough to start the business, stressing that if anyone is going to start a business they better have someone there to support you financially.

Some of the stores are experiencing and sharing some of the pain that is enveloping segments of the country, plus there are additional slow downs on particular calendar months. January and February are particular tough months for many of these businesses and are another factor that has to be accepted. The commercial property taxes at the county level is becoming a growing concern and if local governments want incentives to keep businesses in the county, this is one element that can be addressed.

Each business knows and is familiar with the climate and shadows that the chain and box stores are famous for but accept that. This is a constant threat but all of these entrepreneurs know that as long as they satisfy their customer base, they will survive. Their fear is that if their customers do not appreciate their existence as a business, they will not continue to exist.

The one key for these businesses is customer service and that is one thing that all have excelled in. All parties involved in this article are very involved in keeping their customers happy not from just a business standpoint but because their customers are their friends and neighbors.

These businesses are not the only mom and pop enterprises in the county but are just a sampling. There is the local mechanic, the restaurant on the corner, the local tavern, clothing or department store. There are still a number of these operations in the county but they are dwindling.

People who don't shop locally on a regular basis will have no choice in the near future because the local, small business is fast disappearing from the landscape. As Robbie put it aptly, "it will be a matter of time and we will die off." It is nice to shop at the malls and the mega stores but consumers should never forget that there are other businesses out there more than willing to serve their needs.

Individuals who clock in and out, who have no vested interest in their place of employment other than their individual employment do not realize the amount of sacrifice and the demand on the owner and operator's time and finances. There is the constant worry by these owners about their investment in their business, there is no leaving their work at work, work usually follows them home. They have received unjust criticism for over-charging but some of the products they offer are priced on the cost they have incurred before they put that item on the shelf.

These businesses do not have large distribution centers providing them with the products like the super stores. Then there is the work involved, the paper work, the stocking, and the numerous demands that a small store will ask of its owners. They have all tried to diversify within reason and hope they can satisfy the customer that walks through their doors.

They all find it interesting when the customers from large cities visit and are positive and appreciative of their business. If local residents still want the choice that is being denied to the consumer from the large urban areas, they too should appreciate their neighbors and friends that are operating an establishment that might become a memory instead of a reality.

Source: The Standard, Waukon, Iowa ( http://www.waukonstandard.com/ )

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Unscheduled Worker Absenteeism Can Cost Companies Big Money [top]⇑

In times of a recession when profits are slim, it's a cost that most managers would prefer to eliminate.

By Jason Roberson, The Dallas Morning News

DALLAS  On any given day, about 1,500 J.C. Penney Co. employees are on a leave of absence from one of the company's 11,000 stores across the country.

About 1,200 workers a day will be out on disability.

It's a problem lamented in human resources offices across the nation, because lost days of work can add up to big money. And in times of a recession when profits are slim, it's a cost that most managers would prefer to eliminate.

The nation's 300 largest employers estimate that unscheduled absenteeism costs their businesses, on average, more than $760,000 a year in direct payroll costs -- and even more when lower productivity, lost revenue and the effects of poor morale are considered, according to a 2007 survey by the research firm CCH Inc.

In an effort to improve its numbers, Plano, Texas-based Penney implemented a program two months ago that is staffed with workers who gave up their daily customer service responsibilities to work solely on reducing absenteeism.

If you're sick and can't work for more than three days, you call the company's PowerLine. The PowerLine team, based in Salt Lake City, determines the type of benefit, if any, you receive -- workers compensation, short-term disability or a leave of absence.

The team notifies the store where you work, along with the appropriate insurance carrier, and sends you any necessary forms to complete.

The PowerLine employee follows up with absent workers, repeatedly checking on their condition until they return to work.

"I've found that when someone goes out on disability, that person undergoes a significant event in their life, and if no one checks on them to see how they're doing, they could stay out longer than necessary," said Jim Cuva, Penney's benefits manager. "It's letting them know we care."

So far the program is working, Cuva said.

"We're not even 90 days into it, but we're as good as we can be," said Paul Landry, a consultant with Watson Wyatt who is working with Penney on the program.

Only a third of all absences are related to an illness, said Susan Frear, director of education for the Dallas office of the Society for Human Resource Management.

"The rest of the absences are related to having to be someplace else or they just don't feel like coming in," Frear said. "So a lot has to do with the culture of the place."

For smaller companies, experts say a different managerial approach can often curtail habitual absences.

"Take a hard look at the climate," said Barb Ashbaugh, who owns Plano-based Ashbaugh's Trade Secret, a performance management company.

Ashbaugh said authoritarian managers "who make employees feel it's their way or the highway" cause most absences.

"I think a lot of managers, when people are absent, just write them off. Then as time goes by they say, 'Gee, this person has been out a lot,' " said Nancy Glube, a human resources executive in Atlanta. "If they're a good manager, they'll be in touch with what's going on in their lives."

Glube said company policies may also encourage absenteeism. For example, some companies count "occurrences" instead of days absent. "If I'm out three days in a row, I may try to sneak in a few extra days because that's still one occurrence," Glube said.

Profiles International, a Waco, Texas-based work force improvement company with 40,000 clients, says it's developed a system for determining which employees are more likely to miss work.

Its Step One Survey uses a questionnaire to find out whether a job applicant might have a problem with absences. For example, applicants are asked whether they agree or disagree with statements such as:

• I have asked a friend to punch my time card when I knew I was going to be late for work.
• If you're at work and just don't feel like working, it's OK to say you're sick and go home.
• It's OK to get around rules, as long as you don't actually break them.

For current employees, the company offers other online surveys to learn of employees' core characteristics.

"Once you have that information, you can do something like make sure you get them in the right job," said Terry Flaherty, vice president of strategy. "If they're not going to be happy, they're more likely to be absent."

Source: The Roanoke Times ( http://www.roanoke.com/ )

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Retail Rarity [top]⇑

By Linda Coburn, San Fernando Valley Business Journal Staff

Boutiques along the boulevard come and go all too frequently, but in its two years in business one has not only survived but prospered.

Alexandra Damiano opened Scandalo Boutique in March 2006 in a 720-square-foot space on Ventura Boulevard just west of Van Nuys Boulevard. They moved last November into a slightly smaller space next door, not because they wanted less square footage, but because the new space was cozier.

A long-time resident of the Westside, Damiano, now 28, took classes in sociology at Santa Monica College and then went on to attend Marangoni Art School in Milan to study fashion design. Most of Damiano's extended family live in the northern region of Italy and her great-uncle taught art at the University of Milan.

Initially, Damiano planned on becoming a costume designer in the film industry, but found getting into the union was a daunting prospect.

"I have people in my family who have worked in the industry," said Damiano, whose mother, Sonia Orlenko, is a former film director and integral part of the business.

Neither daughter nor mother had any experience starting up a retail shop. "I was not completely familiar with the business side," said Damiano," but I am confident in my creative instincts and I knew if we exposed the work then people would like it."

The store is stocked with Damiano's one-of-a-kind designs including leather handbags, silk and lace dresses, and funky embellished tank tops. Preferring to work anonymously, Damiano won't tell shoppers which items are hers unless she is specifically asked.

She also carries the work of local artists and designers and imports some clothing from Europe, although that is a smaller segment of her stock. On the day of our interview, the music playing at an appropriately subdued level was composed and performed by a local artist and friend.

"We try to carry mostly garments made in the United States," said Orlenko, "Quality is something very important to us."

Take buttons, for example. While many shoppers can't tell the difference between an inexpensive plastic fastener from China and one that is custom-made, Orlenko said that many of her discerning customers can.

One of Mom's tasks is to search out unique, high-quality buttons and trim, which means she spends a fair amount of time combing local antique and thrift shops for just the right touches to complete Damiano's designs.

"We spend a fortune in buttons," said Orlenko.

A place for all

But don't get the idea that this is a high-priced, snooty boutique where an average shopper will go into heart palpitations from the price tags. The garments and accessories are very reasonably priced, especially considering the unique nature of many pieces.

"We always have at least a small clearance rack," said Damiano. "I want young kids, teens, to be able to walk out of the store with something they love."

On the other hand, they have also added the work of two or three designers that create more expensive pieces because customers asked for them.

The designs are characterized by Damiano as "artsy pieces with a European flair," and Orlenko adds the word "timeless" to that description.

It's not the kind of place where you will only be comfortable if you are 22 years old and a size 0.

"A lot of our customers are size 12, 14 or 16," said Damiano. "And they thank me because they say, this fits me and it makes me feel good.'"

Regular patrons of the store range from the aforesaid teens to celebrities who generally go unidentified by the owner who said she doesn't even have cable at home.

"We had this very beautiful woman come in the store and after a few times I thought I should look her up," said Damiano. "It turned out she was Miss Universe 1989."

The store is also a favorite with artists  singers, photographers, makeup and hair stylists, and anyone who wants to be sure that when they show up at a party or a photo shoot, they are going to be wearing a one-of-a-kind creation that didn't cost them an arm and a leg.

Even men enjoy being in the boutique, they both affirm, thanks to the comfortable seating throughout the shop. The chairs and settee, covered in lush animal prints, are actually from old railroad cars.

Orlenko and her ex-husband had a business restoring and refurbishing trains.

Some of the other fixtures are also old train castoffs and the window display for Christmas features a train set-up.

One of their best customers is the daughter of their landlord, Leslie Elkan of Ventura Boulevard Properties LLC.

"Anytime (my daughter) Lisa has anywhere to go, she always finds just the right thing and they put it together for her," said Elkan. "They just have a subtle way of saying, oh, you know, how about this with that,' and then they put together these creations that look fabulous and make her feel so beautiful. She feels like she has personal private shoppers for her."

Elkan herself is a fan. "I can always find gifts there, and at any price range, too," she said.

Passion and hard work

Having owned two buildings on the Boulevard for about 30 years, Elkan has an idea of what it takes to become a long-term success and, she said, Damiano and Orlenko have it.

"Sonia and Alex have a real passion for what they're doing," she said. "They work very, very, very hard. They have talent and intelligence and it shows."

The shop is open seven days a week and one or both of the duo are there most of that time.

"There's a world of difference between them and some of the businesses that have gone out in the same location," said Elkan. "The other businesses that didn't make it had the same opportunities, the same location, the same landlord, everything, but some would come and go during the day  they would have terrible hours, open at noon, close at five, close to go to the doctor. It was like they were playing."

Both Damiano and Orlenko took classes through the State Board of Equalization to supplement their business knowledge.

"We've made mistakes," said Orlenko. Those include things like understanding what sizes and quantities would sell. "We did a little over buying. But those mistakes were not as bad because our philosophy of being honest and having high standards means you can bounce back."

They both stress that they are not pushy. "We want to sell, of course, but the key is to make customers feel so comfortable they will constantly come back," said Damiano. "I get people who leave me messages like, Alex, I went to the party and got so many compliments, thank you.' That's very rewarding."

Customer Susan Reid, upon learning that Scandalo was going to be featured in this paper, sent an e-mail from herself and her daughter outlining their experience with the store.

Among the many compliments is this one that seems to sum up the Scandalo experience.

"Sonia and Alex are passionate about their boutique," Reid writes. "They have a true love affair with fashion and it shows."

SPOTLIGHT: Scandalo Boutique

Location: 14547-1/2 Ventura Blvd.

Owner: Alexandra Damiano

Established: March 2006

Source: San Fernando Valley Business Journal ( http://www.sfvbj.com/ )

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Fiserv's New Billpay Solution for Checkout Faces Challenges [top]⇑

By Gary Wollenhaupt

Bill payment and the self-checkout lane are transforming under the shadow of economic and political pressures  pressure that led Fiserv Inc., which provides technology services for the financial industry, to develop a barcode-based, in-lane billpay option for the CheckFreePay platform, which Fiserv acquired in December 2007.

New pressures facing the billpay industry include compliance with the Americans with Disabilities Act and mounting discontent from consumer-advocacy groups related to the fees payday lenders charge for their services.

It's all coming together to create a prime opportunity for aggregated billpay options at the checkout lane, according to Fiserv.

TowerGroup in 2007 estimated that walk-in billpay accounts for about 6 percent of all bill payments in the United States. And most of the people who use the service are cash-preferred or underbanked  a group that represents about 40 million households. That segment typically pays and buys prepaid cell phone minutes at convenience stores, neighborhood bodegas and payday lenders, not traditional financial institutions.

ADA compliance, consumer advocacy drive self-checkout change

Many retailers, because they are not banks, have opted for self-service billpay offerings, rather than tying up clerk time behind the counter for transactions that could hinder regular retail business. But the use of a self-service terminal or kiosk poses its own challenges  namely when things such as audio-enabled transactions and keyboard or keypad height are required to meet strict guidelines set by the government for ADA compliance.

And more and more states are starting to take the ADA and financial services issues very seriously.

In California, proposed legislation would require that any location that accepts utility payments meet ADA requirements. In Ohio, pressure from consumer groups led to tightened legislation that put caps on the interest rates payday lenders can charge. And in Cleveland, Tenn., Check Into Cash, another CheckFreePay customer, announced plans to shutter 32 of its 92 shops because of similar business pressures. Other states are expected to follow because of economic pressures and concerns about the high interest rates payday lenders charge.

As a result, many payday lenders in Ohio have closed or are closing, and those closures are pinching CheckFreePay's business in those states, said Paul Harrison, senior vice president and general manager of Fiserv's CheckFreePay.

Many of those payday lenders are agents for CheckFreePay, and if they close, CheckFreePay has to replace those locations so that its billers maintain sites for payments acceptance, Harrison said.

It would be very difficult and expensive for these small stores to be ADA-compliant, he added.

So CheckFreePay has developed a barcoded system that allows users to pay bills at the checkout lane, and it expects to promote and, perhaps, soon launch its solution to the likes of Kroger, Wal-mart, etc., to help reduce its reliance on payday lenders.

At CheckFreePay alone, 38 percent of the walk-in locations we support in Ohio are payday lenders, Harrison said. We will have to replace these agents to keep support for our billers.

Overall, CheckFreePay processes payments for about 160 billing clients at more than 13,000 agent locations.

The changing landscape led Fiserv Inc. to partner with PayScan America Inc. through an exclusive license for PayScan's patented barcoded payment process. The system integrates the PayScan process with the Fiserv CheckFreePay Link platform.

With the barcode system, CheckFreePay will offer walk-in consumers the ability to pay household bills at retail checkout lanes. The smart barcode will store processing rules and customer information, including the account number. And the system can be deployed at an existing point-of-sale terminal, whether it's in a self-checkout lane or in an assisted checkout lane.

CheckFreePay plans to launch a pilot program in early 2009.

The bills can be paid by cash or debit. Harrison said interchange fees on credit cards make payment by credit cost-prohibitive.

Consumer fees range from $1 to $1.50 per transaction. And in states that prohibit user fees on utility payments, the biller will pay the surcharge, Harrison said. The agents and CheckFreePay will share the fee income.

Challenges in store for billpay at checkout

To be successful, CheckFreePay will have to change the behavior of cash-preferred consumers if it wants utilities and agent locations to sign up for the service, said Hamed Shahbazi, chief executive of TIO Networks Corp., a recognized leader in aggregated self-service payments.

We don't see in-lane bill paying becoming a material consideration in the marketplace, at least for a while, Shahbazi said.

Why? Cash-preferred consumers may currently use CheckFreePay or another billpay system through a kiosk or clerk-assisted transaction at their favorite check-cashing spot or convenience store, Shahbazi said. But they aren't likely to use the service at checkout.

Others, like Jennifer Roth, a TowerGroup analyst, agreed. The new CheckFreePay format may likely find success at grocery stores and discount retailers but not so much at payday-lender sites, where cash-preferred users are accustomed to having financial services fulfilled and met.

If a consumer is going to a check casher, why would they then go to a supermarket to pay their bills, when they could pay them at the check casher, unless difference in fees is large enough, said Jennifer Roth, research director of global payments services at TowerGroup. I don't see how they're going to move consumers to use a new service.

Roth did see growth potential in walk-in bill payment services as the economic downturn means consumers may struggle to pay bills on time. Cardtronics in November announced a deal with MoneyGram International to provide MoneyGram money transfer and ExpressPayment urgent bill payment services at advanced-function ATMs in 7-Eleven convenience stores in the United States.

With the financial crisis, people will be making more last-minute payments, and if they don't pay online or over the phone, they may be more likely to use walk-in bill payment, Roth said. Providers like Fiserv and MoneyGram are looking for other channels to pull people in.

Source: Self Service World ( http://www.selfserviceworld.com/ )

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Shops at 'Hill and Colfax' Coordinate Marketing Efforts [top]⇑

By Gene Stowe, Tribune Correspondent

Five creative-edge independent retailers clustered near St. Joseph Catholic Church in South Bend are branding themselves "The Shops at Hill and Colfax," aimed at making the one-stop opportunity a destination for unique and varied buying experiences.

The collection includes Larry Piser's Piser Designs, Marybeth Saunders' Purely Modern Gallery, Jeanne Skelton's Inspire Me!, Joya Helmuth's Spark Design Studio and Kathy Reddy White's Circa Arts Gallery.

"It makes it so much more gratifying when all of us really value each other's products and talent," Saunders says. "It's easy to say to someone who comes into Piser Designs or Purely Modern Gallery, 'Hey, have you gone over to Spark Papershop?'

The shops - offering handmade furniture, modern art, one-of-a-kind gifts, designer clothing and fine paper products - bill themselves as a cosmopolitan oasis, an alternative to mass marketing and cookie-cutter selections.

Far from big-box stores, they're out-of-the-box settings - a painted mural on a brick wall, a meticulously restored firehouse, a home transformed into a showroom for furniture crafted in the former garage, a showcase for local artists and a salon for cultured conversation.

"We certainly don't have the power behind each little store to try to compete with any of those big guys," Saunders says. "We've all struggled because there's a lot of surface parking, but there's not a lot of density in there.

"The challenge is getting the word out there that this is really a hip destination. We're coordinating our marketing efforts. We talk all the time about how we can best market our own businesses and support one another."

White, who restored the building and opened Circa Arts in 2000, welcomes the focus on the expanded offerings in the area.

"It's a real godsend," says White, who represents more than 60 local artists and sells some arts and crafts items. "When you sit out here by yourself, you're not a destination. People want to get out of their cars and go to more than one shop at the time. I think it'll make a world of difference."

Helmuth, a graphic designer who opened Spark Design in 2007, stocks items that shoppers otherwise would seek in Chicago - fine stationery, pens, invitations, notes, greeting cards and handmade items.

"Everything we have here you won't find anywhere else in South Bend," she says. "It's affordable to keep my shop downtown, and it provides a lot of character. Our challenge is to get people to drive downtown, get them in the door and realize there is great shopping here.

"The word is getting around. We've been doing quite well since we opened. We've had a great response. They say they feel like they're in a boutique in Chicago."

The word is getting around partly because of ShoLo.org, a Web site that Helmuth started with Rebecca Maalouf, who owns Camellia in Heritage Square. The site urges buyers to Shop Locally and already has more than a dozen member businesses.

"It actually grew out of our customers and what they were saying to us," she says. "They specifically make the comment that they're happy to be shopping in a local place. In this economy, many people want to be very cognizant of where they spend their money and where their money goes."

Saunders, who has lived in Seattle and New York City, promoted a community music event Hip!pocket, for five small businesses in the area twice a year for three years before she started her gallery that officially opens Saturday.

"I missed the energy I experienced in a metropolitan area," she says. "I really got to know the small business owners and really appreciated what they were doing. I love the neighborhood. I wanted to support the neighborhood in a sustainable way.

"I'm trying to reach the folks that think they have to travel outside of South Bend to buy one-of-a-kind items," Saunders says. "There are a lot of people with a modern aesthetic."

The gallery shares space with Piser Designs, with modern art by Mark Welch and Mary Burke complementing Piser's clean-lined wood furniture. "His modern furniture blends so beautifully with my own modern aesthetic," she says.

In the spring, the rooms will become the setting for European-style conversation-as-art gatherings aimed partly at bringing together people from the town with people from the University of Notre Dame.

"Something I will always have with me is that need to offer a place where people can come to have vibrant conversation, to enjoy a glass of wine, meet new people, to be together," she says. "Larry loves having parties.

"People don't have to be extroverts to join in the conversation. You have small groups. It's a very communal experience where hopefully people will have meaningful conversations."

Skelton, who has another store in Granger with a somewhat higher price point, chose to add the store downtown about seven years ago. Inspire Me! has mostly women's clothing with a smaller section of men's clothing, almost all at less than $200.

"We offer more of a casual designer denim. It caters to more the 18-35 range," she says. "I like the downtown feel. My kids go to school across the street at St. Joe. I like the charm that downtown offers, and I wanted to be part of it at the time. In my heart, it felt right."

The Shops at Hill and Colfax feel right, too.

"Every little bit helps, definitely," she says. "The more shops that open, the more draw for everyone. There's lots of loyal people. They try to shop downtown, to keep the business there. They make a point of pointing that out."

Taken with renewed interest in residential development downtown, such as Weiss Homes' Lofts at Notre Dame Avenue and boulevard homes in the Howard Park neighborhood, the shops could signal a revival of urban living.

White's two apartments above Circa Arts, for example, easily stay rented, and the owner of the old firehouse is restoring the second story as living quarters.

St. Joseph Catholic Church and school add to the stable feel of the area, and Macri's Bakery and Restaurant with Carmela's at Macri's is a short walk away.

City officials are fostering that growth, says Jennifer Laurent, senior economic development specialist with the city of South Bend, which owns the three-lot vacant northwest corner of the Hill and Colfax intersection.

Conceptual plans for the spot, which Laurent expects will be developed next after the former Rink property on the river, show a three-story building with apartments on top, offices in the middle and retail on the street.

"There's a lot of interest because it does lend itself to a kind of pioneer project," Laurent says. "We think the image and character of the building is going to matter there."

Helmuth grew up in Grand Rapids and her mother lives in Chicago, cities that she says inspire her commitment to local businesses.

"What I love about both of those towns is there are neighborhood pockets of unique shops and restaurants and boutiques," she says. "Inspire Me! and Circa Arts always had such a great building already. It was nice to be a half-block from them.

"It's a great collaboration of shops. We all obviously are making an investment in where we work and where we live."

Source: Tribune Business Weekly (www.southbendtribune.com/apps/pbcs.dll/section?category=TBW)

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Retailers Confront a Holiday Challenge [top]⇑

By Sally Connell and Tonya Strickland

As the traditional holiday shopping season kicks off this week, a key question is emerging: Will consumers who have curtailed spending remain tightfisted?

Given that economic experts nationwide expect the retail season to be grim, local retailers are trying different approaches to spur sales. Storekeepers in downtown San Luis Obispo are wondering if late store hours could lead to more revenue, Pismo Beach Prime Outlets retailers have sale signs out early and owners of Paso Robles shops plan to be more visible in their stores for an added personal approach.

Shopkeepers can't take much solace in the message coming from consumers like Lisa Irot and her mother, Mary Ann Gevas.

When asked while walking in downtown San Luis Obispo last week how the holiday season was shaping up for them financially, they burst out laughing. The duo works for First American Title and said they are directly affected by the real estate downturn.

"We've shortened our list for Christmas the last couple of years," Irot said. "We used to have (gift) exchanges, but we are doing away with that this year and just having gifts for the kids."

Gevas said the family is pulling back. "We have enough things. I think it's a time for families to come together and enjoy what they have."

Those are scary words for retailers who count on the holiday season to carry them through the following year.

But a local economic expert believes that may be the grim reality for many.

Bill Watkins, director of the UCSB Economic Forecast Project, said that kind of consumer approach is happening everywhere.

"We've lost a lot of wealth as a country, between housing prices being down and retirements being strapped," Watkins said. "I've heard stories that some people are not going to spend anything on Christmas this year, or cut way back on who they buy presents for."

Declining sales tax dollars dribbling into local government coffers suggest the poor economy has clearly affected consumer purchases. San Luis Obispo was down 4.8 percent in third quarter sales tax revenues over the same period last year, while Paso Robles was down 10.5 percent.

Local feelings

In interviews, store managers and owners were alternately frightened, optimistic, or simply unwilling to comment because they are tired of negative news stories.

Paso Robles merchants say community loyalty and tourism are critical. Merchants there are banking on the Paso Robles Main Street Association's annual holiday events to bring spenders through downtown.

"I'm hoping that the activity level in our community reminds (shoppers) of the presence of our retailers and we will have a good season," said Mike Gibson, president of the Paso Robles Chamber of Commerce.

Others hope their niche business will carry them through.

"We find that during these hard economic times, people are still looking to shop, but just are being smarter about their choices," said Joseph Scott, general manager of the Pismo Beach Prime Outlets, which has stores that typically stock discounted merchandise.

Mignon Jones started hopscotch kids on Garden Street in San Luis Obispo in January. It sells clothing and toys for young children.

Despite sales drops in September and October, she is trying to remain cheerful.

"I'm hoping for the best," she said. "I'm fortunate to be in a business for kids. People might forget about themselves and other adults, but still want a special outfit for the little ones for the holiday."

Crafting is another lure for shoppers looking for cheaper gifts.

Tam Bailey is the manager and Suzanne Warden the coordinator of classes at Beverly's Fabrics in San Luis Obispo. They say the downturn seems to bring more people into the store to make cherished gifts that will cost just a little bit less.

Bailey said she has been in crafts for years, and it seems to do well in good times, but sometimes even better in bad times. "We had a huge spike after 9/11. People like the comfort of (crafts)."

Marty Imes of Arroyo Grande sees savings in making his own gifts rather than purchasing the big-ticket items like he did last year.

"This year, we are looking to make 100 percent of our gifts while purchasing needed supplies from some small, independent stores," he said.

"In essence, we are planning on being more conservative with our resources, but hope our gifts will be more meaningful."

Big chains under stress

Many national retailers are experiencing financial distress and the effects are being seen locally. Mervyn's, Linens-n-Things - both with stores in San Luis Obispo - and Shoe Pavillion in Pismo Beach are undergoing liquidation sales and will close after the holidays. Circuit City filed for bankruptcy reorganization, although the San Luis Obispo store is reportedly safe for now. Still, Watkins pointed out, big-box discounters are weathering the downturn better than others.

"What we have seen right now from all the reports is that the strongest retailer is Wal-Mart," Watkins said. "That would imply that some consumers are switching to lower prices rather than going to local stores."

Wal-Mart also began hyping early Black Friday specials on Halloween Day. Black Friday is the day after Thanksgiving, when specials abound and shoppers are out en masse.

This season, holiday sales growth is estimated to be around 2.2 percent, according to the National Retail Federation. Previously, holiday sales grew about 4 percent each year.

A survey by retail design firm Callison found that shoppers are more likely to take advantage of sales and promotions this season. The nationwide survey found 53 percent of those surveyed are shopping as much or more this season. Of those, 44 percent seek out coupons, promotions and specials; 64 percent said sales and specials are top factors in deciding where to shop; and 59 percent said lower-priced merchandise has a positive influence on their decisions.

The San Luis Obispo Downtown Association is trying to advise its business owners to do just a little more, such as staying open later for longer hours.

"Some people who are just a little nervous are saying they have ordered less," said Deborah Cash, the association's administrator. But she said there is a strong belief that the diversity of downtown is still attractive to people. "I think there will be some impact. I am hoping it will be OK."

Retailers in the Paso Robles chamber have reported a 30 percent average drop in sales since last year, Gibson said, and they are looking to the holiday shopping season to save them.

"I think this year is very important," he said.

Not cutting back

Some consumers interviewed said they would absolutely not cut back on Christmas, even if that means they have to dramatically spend less on other parts of their lives.

Don and Lynne Cusey retired from jobs in Sonora and moved to Nipomo 18 months ago. They acknowledged that they bought at the very height of the real estate market and have perhaps lost their 20 percent down payment. When asked if they had lost some of their retirement savings and other investments due to the stock market drop, they too broke out in the same sort of painful laugh that others did during interviews.

"We've never been over the top," Don Cusey said of Christmas gifts. "We buy one main gift for each of the seven grandkids. We will still do that. But we are really cutting back on travel. We had planned to travel a lot."

Retailers may hope that there are plenty of shoppers like the Cuseys who will still try to keep up the gift giving this season. In Paso Robles, Gibson certainly argues the emphasis should be on the positive.

"It's been, 'Oh, it's getting worse, bah humbug,' " Gibson said. "But we're getting ready and saying, 'You know what, let's do this.' "

The Denver Post contributed to this report.

Source: The Tribune www.sanluisobispo.com

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