February 1, 2012

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Utah’s Small Retailers are Meeting the Tough Times Head On

Dianne Lewis

February 1, 2012

Change or Die
After buying Golden Braid Books 10 years ago, LaSalle says the business grew steadily—about 6 percent a year—until the economy tanked. Sales flattened out and the company was stagnant. So LaSalle and his wife, Jill, adopted a “grow or die” mentality. The previous owner feared big businesses like Amazon, Barnes & Noble and Borders would sink the small bookseller. LaSalle wanted to make sure those fears were never realized.

So the couple took the risk and made a $200,000 overhaul to the business. They made renovations, expanded their book offerings and brought in new products. LaSalle says the store was stuck in a narrow niche when they bought it, and the only way to survive was to keep that core but expand the business around it. So they did that—reorganizing the store and ordering a wider variety of things like books, jewelry, gift items, home and garden products, and other items—while keeping the “conscious living” idea the business started around.

Because the revamp was finished in the beginning of November 2011, it’s a little soon to tell if the risk will pay off. But LaSalle says Christmas sales were up 26 percent. The number of customers didn’t increase much, but LaSalle believes people came in to shop for gifts and found much more available than before so made bigger purchases.

Other small businesses are also taking new chances. Glaus Bakery is thinking big with plans to open a catering business, as well as a café inside the bakery with soups and sandwiches.

Idle Isle started a line of candy bars that have appeared in Utah grocery stores. While there are only two flavors now, Van Dyke said the line could be expanded up to 12 flavors once he sees how a year’s cycle of sales looks. He even partnered with his dentist to custom design the mold shape. “We’re in cahoots,” Van Dyke says with a chuckle. So far the candy bars seem to be a good move, he says.

McArthur is also going big. The company plans on opening a second location to be more accessible to the young Dixie State students who aren’t familiar with McArthur Jewelers. The second location, says McArthur, will hopefully create a new generation of loyal customers.

Roses—and Some Thorns
Despite these aggressive moves to make sure they stay in business for another 50 or 60 years, most of these businesses have had to make some cuts. LaSalle says many friends and fellow small business owners are struggling just to make it a couple more months.   

LaSalle, who also owns Oasis Café and Faustina Restaurant, says he’s heard from other restaurant owners in town who are in trouble. While he’s not totally sure why one business succeeds over another, LaSalle thinks part of his success is that he invested in his businesses instead of hunkering down and hoping to weather the storm. Other small business owners he knows are in trouble because their store is too niched.

Yet it’s not all doom and gloom. McArthur says the recession never really hit them. While people have been buying less expensive items than before, she says business is still strong and the store has never had to lay anyone off. What she hopes more people understand is that supporting local businesses can make a huge difference for a small business owner.

“A community can help a company survive. If we keep that money local and put it into helping our community and our neighbors, it’s just unreal what you can do for an area,” McArthur says.

Alba says employees at Glaus Bakery have taken pay freezes or cuts to preserve the quality of their food. She says they never compromise the product and everyone stuck around despite the freezes because it’s a family atmosphere. “We are one big, huge family environment. We all love each other and we all respect each other and have each other’s back. If one person needs the money, we step back and let them have more hours. We’re very flexible.”

Because small businesses are already operating at lower margins than big stores, it can be hard to find places to cut. Young says she and her co-owner don’t have many places to make cuts, but try hard to be aware of buying habits and cut back hours a little. They have invested more money into advertising despite the extra expense, because Young says it can really help.

Cutting expenses can be very difficult, so Van Dyke says when he saw sales dip two years ago he immediately unloaded some debt. Because so much of his business is during the fourth-quarter Christmas push, he says it can be hard to tell how a year is going until the last minute, but they dropped the debt and came out at the end of the year doing fine.   

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