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Thread of local businesses that don't survive the coronavirus


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On 3/22/2020 at 12:48 AM, Wulaw Horn said:

Yeah- that make sure you order takeout thing that people are trying to do is a pipe dream that was never going to work. Those guys should all just shut down- they are dead men walking

I actually disagree pretty strongly with this in a way. You are using where the restaurant industry has been as your reference, and not where it's going. Sit down dining has been dying a slow death already, and delivery/takeout has been ascendant. This is going to accelerate that realignment.

 

But you are correct that places that are not equipped or skillful at this are pissing in the wind, and are definitely dead men walking.

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1 hour ago, PenelopeWitherspoon said:

Every single bar and restaurant in NYC is at risk.

Every single retail store, specialty business, and small exercise studio in NYC is at risk.

Why? So far ZERO allowance from landlords. The banks are giving relief on commercial real estate, but that is. Ot being passed on.
 

They're at risk everywhere.

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1 hour ago, closetojumping said:

I don’t really disagree that retail, of various types and in various ways, has been in trouble and this event is a kill shot for them. 

I think your method is an oversimplification for various businesses, but it’s a fine rule of thumb for small business, sure. 

I think service-based retail has both not been in trouble and might continue to not be in trouble and might actually thrive. That includes well-run restaurants. Things like grooming salons for men, hair and nail salons for women, I don’t see those things disappearing. Most women aren’t sitting around right now and talking about how much they realize they don’t miss someone else doing their hair and nails. I don’t think there’s a good replacement for a lot of that other than bad self-service. I think day spas and med spas fit that space as well. 

Gyms, movies, appliance stores, and that ilk? Yeah, I think they’re not well protected and a lot of people are finding out right now that they may not need them the way they thought they did. 

To me, restaurants and bars fall in the former space. A lot of home-cooked meals are nice, but they’re also conjuring the need to not be doing as many of them in the future. I see less restaurants but still a ton of them and hopefully better run when back operating. 

Yes- everywhere I wrote business I meant to write small business, and by small business I’m talking about something like 20 employees, tops

heres my question on your med spa type place- how many customers do you need to break even, and how many customers are you currently getting. If those numbers are really close to each other than post virus you are dead meat because your demand will be off... unless.:. You are the most well run business in that area and space in which case you are Forest Gump and you are rich. I agree- demand will still be there for women to go and do that. They seem all of a sudden not Going to want to do that. But demand will also be down because this thing is, at a minimum, sending us into a recession and when you see GDP numbers of —25 and -30 thrown around by smart people what’s that going to do to a luxury business like your day spa? If Your break even numbers and your current customer numbers are close then I’d argue you don’t have a business coming out of this unless you can consolidate existing demand spread over multiple stores into your location, or you can figure out a way to make more money per client/trip to the spa than you previously have (call that the Walgreens method if you read good to great which I’m sure You have)

I’m going to stop here because if you recall we had a conversation IRL on the other site where I know what you were doing about 8 years ago so I know who you are (lost your contact information a couple cell phones ago) and I know right now I’m the dumb guy giving advice to the smart guy on how to run a business, but I get the sense you are tossing around ideas and brain storming so I don’t think I’ve overstepped my bounds just yet. 

I mention all this merely to say that sometimes smart people that know lots of things over complicate decision making and this is a reminder to keep it simple stupid on the med spa thing. That isn’t a complicated business I’m sure. Yes, demand is still going to be there. Yes, demand is definitely going down some (not because of existential threat posed by virus but bc of economic impact on our country), figure out what % of your customers you will lose, for how long- and where your break even is and plan accordingly. 

My analysis of all the sector of service based retail and restaurants is the same as for the day spa. Demand still there and will always be there, but also way down to economic catastrophe I think is coming which will lead to lots of consolidation for ~5-7 years I’d guess (maybe overly pessimistic) before we see the pendulum swing back the other way 

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38 minutes ago, G650 said:

I actually disagree pretty strongly with this in a way. You are using where the restaurant industry has been as your reference, and not where it's going. Sit down dining has been dying a slow death already, and delivery/takeout has been ascendant. This is going to accelerate that realignment.

 

But you are correct that places that are not equipped or skillful at this are pissing in the wind, and are definitely dead men walking.

Sorry- I was t super clear and a little bombastic- what I meant was this- absent change of what your organization actually is you can’t get through this by switching to takeout and hoping your take is the same. If you are a takeout/delivery place you need 500 square feet of non prime real estate and a simple and streamlined menu with individual items that can sell for well more than you make them for. 

So, basically the opposite of almost every restaurant you go to now/ which hopes to break even on food and makes all their money with mark up on beverages. 

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1 minute ago, Wulaw Horn said:

So, basically the opposite of almost every restaurant you go to now/ which hopes to break even on food and makes all their money with mark up on beverages. 

What I'm saying is that isn't every restaurant anymore, and the ones that still are were dead men walking before this even happened.

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Just now, G650 said:

What I'm saying is that isn't every restaurant anymore, and the ones that still are were dead men walking before this even happened.

I think that overstates things a bit (how much the old way of doing business was threatened) but I’m not going to completely disagree with your take. 

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8 minutes ago, Wulaw Horn said:

I think that overstates things a bit (how much the old way of doing business was threatened) but I’m not going to completely disagree with your take. 

Oh, there will always be that segment, I don't mean to imply it's not going to exist. But the meat of the market is changing.

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51 minutes ago, Lat22 said:

They're at risk everywhere.

Yes, but those bars, restaurants, theaters, and retail establishments, probably more than ANY other American city, drive significant big bucks in NYC.  People want to come here and visit because of all those things.  They are part of what makes this city a great place to live, work, and play.  

Without them, NYC is screwed.  

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I wouldn't want to be in a service industry like a hair salon right now.  While I do agree that there is sort of a baseline required level of service for most women (probably something like getting their hair done every 4-6 weeks), the extra things like lashes, skin treatments, botox, etc. are just not going to be as necessary in a damaged economy.

I'm a middle-aged guy whose "need" for a good haircut disappeared over 20 years ago.  I transitioned from $60 shops (+ $15 tip) to barbers to even discount places like Supercuts now and again.  I simply don't care.

My next purchase is a pair of clippers.  #4 all over will be just fine.  Time to recoup my "investment" will be one haircut.  Next, black socks and flip flops.  I am my Dad.

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7 minutes ago, PenelopeWitherspoon said:

Yes, but those bars, restaurants, theaters, and retail establishments, probably more than ANY other American city, drive significant big bucks in NYC.  People want to come here and visit because of all those things.  They are part of what makes this city a great place to live, work, and play.  

Without them, NYC is screwed.  

I think the same thing could be said about Austin, Houston and many more cities across the country.

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Just now, jimmyjazz said:

I wouldn't want to be in a service industry like a hair salon right now.  While I do agree that there is sort of a baseline required level of service for most women (probably something like getting their hair done every 4-6 weeks), the extra things like lashes, skin treatments, botox, etc. are just not going to be as necessary in a damaged economy.

I'm a middle-aged guy whose "need" for a good haircut disappeared over 20 years ago.  I transitioned from $60 shops (+ $15 tip) to barbers to even discount places like Supercuts now and again.  I simply don't care.

My next purchase is a pair of clippers.  #4 all over will be just fine.  Time to recoup my "investment" will be one haircut.  Next, black socks and flip flops.  I am my Dad.

Had my wife cut mine last night after we watched a 4 minute youtube video. She did just as good as anywhere i have been. Boom...$40/month saved for the rest of my life

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On 3/21/2020 at 8:47 PM, jimmyjazz said:

Eldorado has closed until 4/4.  While I only know Joel to say "hi", I know some of his employees pretty well, and let's just say things are not looking good.

That. Fucking. Sucks.  They busted ass to make a new restaurant not only work from a food perspective but they were a bona fide hit.

This one surprised me because it seems to be a place that everyone in the neighborhood is pretty committed to keeping in business.  I went there to pick up food on Friday evening.  In the 15 minutes I was there waiting, quite a few people cycled through to pick up orders.  It seems they were doing about as much business as when the dining room is open, and if anything the kitchen couldn't quite keep up with the volume of online orders.  It was Friday night, so I may have just seen the place at its busiest moment.  

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3 minutes ago, Ollie Slatt said:

This one surprised me because it seems to be a place that everyone in the neighborhood is pretty committed to keeping in business.  I went there to pick up food on Friday evening.  In the 15 minutes I was there waiting, quite a few people cycled through to pick up orders.  It seems they were doing about as much business as when the dining room is open, and if anything the kitchen couldn't quite keep up with the volume of online orders.  It was Friday night, so I may have just seen the place at its busiest moment.  

Joel made a strong call by first cutting all the high school kids.  He was trying to keep the adults, particularly parents, employed.  I just think the numbers aren't working.

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Joel is about as good as a guy in the business as you’ll ever find.  I hope he’s back up and running soon     

Does anyone know the exact specifics on the mixed beverage pick up?  Some Mexican restaurants are selling frozen margaritas outright while others are saying they can only sell you the prep.  There appears to be no uniformity at all.  

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As much as I applaud the ingenuity of Austin bartenders putting an app that brings you craft cocktails to your doorstep at an alarmingly high price (they need to eat, I get it)...I would really just like to have been able to buy wine with my groceries yesterday morning at Trader Joe's.  

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Went to Hays City Store yesterday for curbside.  Actually had to wait for a little bit.  Spoke to one of the managers and said everyone that has been there this week has been very generous with their gratuities.  The vibe was that they were managing OK.

They are delivering mixed drinks, btw.  

On a side note, as we were waiting, a super car club was making its way from Driftwood to Wimberley 20-30 cars.  When I got back towards my house, I saw 1/2 dozen cyclists.  

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2 hours ago, jimmyjazz said:

I'm a middle-aged guy whose "need" for a good haircut disappeared over 20 years ago.  I transitioned from $60 shops (+ $15 tip) to barbers to even discount places like Supercuts now and again.  I simply don't care.

My next purchase is a pair of clippers.  #4 all over will be just fine.  Time to recoup my "investment" will be one haircut.  Next, black socks and flip flops.  I am my Dad.

I bought a par of Wahl clippers about 10 years ago. #1 all over, about every 10-14 days. I have my wife clean up the back. It's glorious. 

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3 hours ago, Wulaw Horn said:

Yes- everywhere I wrote business I meant to write small business, and by small business I’m talking about something like 20 employees, tops

heres my question on your med spa type place- how many customers do you need to break even, and how many customers are you currently getting. If those numbers are really close to each other than post virus you are dead meat because your demand will be off... unless.:. You are the most well run business in that area and space in which case you are Forest Gump and you are rich. I agree- demand will still be there for women to go and do that. They seem all of a sudden not Going to want to do that. But demand will also be down because this thing is, at a minimum, sending us into a recession and when you see GDP numbers of —25 and -30 thrown around by smart people what’s that going to do to a luxury business like your day spa? If Your break even numbers and your current customer numbers are close then I’d argue you don’t have a business coming out of this unless you can consolidate existing demand spread over multiple stores into your location, or you can figure out a way to make more money per client/trip to the spa than you previously have (call that the Walgreens method if you read good to great which I’m sure You have)

I’m going to stop here because if you recall we had a conversation IRL on the other site where I know what you were doing about 8 years ago so I know who you are (lost your contact information a couple cell phones ago) and I know right now I’m the dumb guy giving advice to the smart guy on how to run a business, but I get the sense you are tossing around ideas and brain storming so I don’t think I’ve overstepped my bounds just yet. 

I mention all this merely to say that sometimes smart people that know lots of things over complicate decision making and this is a reminder to keep it simple stupid on the med spa thing. That isn’t a complicated business I’m sure. Yes, demand is still going to be there. Yes, demand is definitely going down some (not because of existential threat posed by virus but bc of economic impact on our country), figure out what % of your customers you will lose, for how long- and where your break even is and plan accordingly. 

My analysis of all the sector of service based retail and restaurants is the same as for the day spa. Demand still there and will always be there, but also way down to economic catastrophe I think is coming which will lead to lots of consolidation for ~5-7 years I’d guess (maybe overly pessimistic) before we see the pendulum swing back the other way 

I think you're underestimating the inelasticity in demand for rich women who need facials, massages, etc. Your assumptions all make sense for a lot of the various industries, though. We'll see. They had a full calendar of appointments that they had to cancel and then push back into April/May. There's going to be pent up demand in the aftermath, provided there's some semblance of a return to social norms. If no return to what is socially acceptable, such as having someone else touch you for service, then all bets are off. 

Med spas and day spas are different. I can't speak to the former, and I'm pretty uninformed with the latter. I'm a silent partner and get financial updates monthly. Effectively, it's a pretty well known brand in the market and sells a bunch of related product as well. They're mostly just limited by square footage, so when we were looking at expansion, as recently as three weeks ago, the need for bigger space in a good location at an affordable price/sf was critical, and going to be difficult but doable. Rent is the biggest expense in the business. So that goes back to my prior thinking, which is, well, rent in good retail centers or other quality locations is about to be dirt cheap in Houston. Same for quality equipment that is usually hard to find being potentially liquidated here shortly. 

I don't know. Still thinking on it. Your thoughts all make sense and there's no overstep with me on it. I'm wrong a lot and usually like to have a bunch of people around me with different views than mine to ensure we're at least thinking whatever angles the collective can see. 

We're going to have to model out varying levels of ramp and return to norms and see what the numbers say. 

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2 hours ago, jimmyjazz said:

I wouldn't want to be in a service industry like a hair salon right now.  While I do agree that there is sort of a baseline required level of service for most women (probably something like getting their hair done every 4-6 weeks), the extra things like lashes, skin treatments, botox, etc. are just not going to be as necessary in a damaged economy.

I'm a middle-aged guy whose "need" for a good haircut disappeared over 20 years ago.  I transitioned from $60 shops (+ $15 tip) to barbers to even discount places like Supercuts now and again.  I simply don't care.

My next purchase is a pair of clippers.  #4 all over will be just fine.  Time to recoup my "investment" will be one haircut.  Next, black socks and flip flops.  I am my Dad.

I think all service based businesses are for sure fucked, right now. I think there'll be pent up demand in the aftermath for a chunk of the service categories though. One in particular will be women's wellness, starting with hair salons and nail salons. Those two groups aren't so luxurious that the expense can't be justified once things reopen. I was on a call with 4 well-to-do business women earlier and they were all bemoaning the closure of those two things and could not wait to go back to them when this is past. I'll envy survivors in those two spaces. 

Also, shaved head with a #3 every 3 months at Supercuts for the past 15 years. I'll probably go back to same, but I don't like getting haircuts and the small talk and people touching my head, so I've pondered just saying fuck it and getting myself a quality set of clippers. 

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29 minutes ago, Biff Tannen said:

Has anyone gotten to go beers from any local establishments?  If so, are they doing draft beer or just bottles and cans?

 

Got a bomber to go from Independence, and they had sort of table set up inside where it looked like they just had bottles and cans. A guy ran out, asked my last name for my order, then ran the bottle out to me. They weren't set up behind the bar by the taps where they normally are. 

Also called in dinner and margaritas at a restaurant I'll keep anonymous. I asked for them to add a to-go draft beer, and they obliged (plastic cup with a lid). I'm not sure if they were supposed to do that, and neither were they. The guy behind the bar hemmed and hawed a bit and the manager basically just said eff it, give it to him. Do with that what you will.

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5 hours ago, PenelopeWitherspoon said:


Why? So far ZERO allowance from landlords. The banks are giving relief on commercial real estate, but that is. Ot being passed on.
 

That's a shame and hopefully wont' be the case.  Because federally insured banks are definitely getting guidance right now to enter into short term mods with borrowers that were current prior to COVID hitting.  Things are still a bit up in the air but my initial impressions are banks are going to be pretty conservative in the near term.  

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On 3/22/2020 at 8:51 AM, Chet Steadman said:

L.D. was kinda shocking.  A couple of the pizza restaurants I’ve talked to have said they’re doing quite well.  Figured they would have been doing okay.  
 

IMO, still the best pizza in town.  

Agreed. Always preferred Little Deli over Home Slice. We just got a pizza and dessert from the new Windsor Park location on Friday night and this is the first I’m hearing of their closure. Sad. 
 

I did Pluckers delivery last night and they were at my house in 15 minutes. It usually takes more than 15 minutes to bring an order to our table at the restaurant. Probably not a good sign of how busy they are. 

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1 hour ago, closetojumping said:

Also, shaved head with a #3 every 3 months at Supercuts for the past 15 years. I'll probably go back to same, but I don't like getting haircuts and the small talk and people touching my head, so I've pondered just saying fuck it and getting myself a quality set of clippers. 

Here's the one you're looking for:

https://www.amazon.com/Remington-HC4250-Shortcut-Self-Haircut-Clippers/dp/B014SG66UO/ref=sr_1_1?dchild=1&qid=1584987579&refinements=p_89%3ARemington&s=beauty&sr=1-1

 

 

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30 minutes ago, Skipper said:

That's a shame and hopefully wont' be the case.  Because federally insured banks are definitely getting guidance right now to enter into short term mods with borrowers that were current prior to COVID hitting.  Things are still a bit up in the air but my initial impressions are banks are going to be pretty conservative in the near term.  

Nope, so far, nothing.  One of my exercise studios basically said if they cannot start business again by May 1, they will probably have to close due to rent.  

That being said, they are doing classes online, and taking donations, and I told them to keep taking out my monthly membership as a donation, but still.

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4 minutes ago, PenelopeWitherspoon said:

Nope, so far, nothing.  One of my exercise studios basically said if they cannot start business again by May 1, they will probably have to close due to rent.  

That being said, they are doing classes online, and taking donations, and I told them to keep taking out my monthly membership as a donation, but still.

LL's may also be trying to (i) get 1 last rent payment in and (ii) make sure they get THEIR extension from the bank before offering any accommodations to tenants.  I don't do much on the R.E. side but represent lenders generally.  It started late last week and expect to see a lot of mods over the next few weeks.  My clients are pretty overwhelmed trying to analyze impact on portfolio and triage accordingly but based on what I've seen so far I think many impacted businesses with credit lines will see temporary relief (albeit with conditions attached)  But as is always the case, I'm sure some will be more generous than others.  And no doubt LL's will probably try to use this as an excuse to get rid of leases they want to move.   But hopefully in the aggregate this trickles down to relief for smaller businesses as well.  

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1 hour ago, Texas_Rocks said:


This is probably a good time to run on down to a dealership for a quick reminder that there’s really no good time to get a better deal.

I got a good deal on a vehicle on Dec 30, 2008.  The next few months is probably another good window to buy.

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2 hours ago, closetojumping said:

I think all service based businesses are for sure fucked, right now. I think there'll be pent up demand in the aftermath for a chunk of the service categories though. One in particular will be women's wellness, starting with hair salons and nail salons. Those two groups aren't so luxurious that the expense can't be justified once things reopen. I was on a call with 4 well-to-do business women earlier and they were all bemoaning the closure of those two things and could not wait to go back to them when this is past. I'll envy survivors in those two spaces. 

Also, shaved head with a #3 every 3 months at Supercuts for the past 15 years. I'll probably go back to same, but I don't like getting haircuts and the small talk and people touching my head, so I've pondered just saying fuck it and getting myself a quality set of clippers. 

The one thing I've heard repeated the last week was my wife fretting about not getting her nails done.

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How is this not a "taking" of private property?  Nuts.

Austin City Council to vote on 60-day grace period for rent payment during COVID-19 outbreak

 
And I agree that it would be stupid for a landlord to not work with an otherwise reliable tenant, but does Greg Casar and the Austin City Council need to interject itself into hundreds of thousands of private commercial agreements?
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2 minutes ago, lonestar3 said:

What are we looking at if the shelter-in-place is enacted in Austin as far as restaurants are concerned?

Limited to drive through and delivery? Or is pickup/takeout still an option?

Fairly certain that restaurants in California (to name one state under shelter in place) are still allowed to operate under a delivery/to-go only model. Goes without saying that Adler and co. can implement different restrictions.

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26 minutes ago, lonestar3 said:

What are we looking at if the shelter-in-place is enacted in Austin as far as restaurants are concerned?

Limited to drive through and delivery? Or is pickup/takeout still an option?

According to a statesman article it said restaurants were exempt

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3 minutes ago, UTPhil2006 said:

According to a statesman article it said restaurants were exempt

So, versus what's in place today, the main difference is going to be workers not going to "non-essential" jobs? Are you going to catch flack from the 5-0 if you're driving across town to see your family?

 

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6 hours ago, jimmyjazz said:

I wouldn't want to be in a service industry like a hair salon right now.  While I do agree that there is sort of a baseline required level of service for most women (probably something like getting their hair done every 4-6 weeks), the extra things like lashes, skin treatments, botox, etc. are just not going to be as necessary in a damaged economy.

I'm a middle-aged guy whose "need" for a good haircut disappeared over 20 years ago.  I transitioned from $60 shops (+ $15 tip) to barbers to even discount places like Supercuts now and again.  I simply don't care.

My next purchase is a pair of clippers.  #4 all over will be just fine.  Time to recoup my "investment" will be one haircut.  Next, black socks and flip flops.  I am my Dad.

Several years ago, I took a similar approach.  I went to Supercuts, told the lady I wanted their longest clipper (8 1/2) all over.  She tried to dissuade me-poor child had never seen the A-Team.  Years later, I am still sporting the George Peppard look.  

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I mentioned a little while ago that my sister in law opened a bar ang grill around Christmas.  They've actually been very successful, and since she works with me at one of our car lots, she has an income to pay her every day bills, and they have been able to just stash all the profits they have been making(which is a pretty good sum).  

This obviously has affected them as a Party Spot. But damn if they still aren't busy as shit with just food and drinker orders(they luckily diversified their menu from normal bar food like Burgers and wings to multicultural menus adding Bulgogli fries and Kimchee and such).  They are getting tons of higher tips than they were before and people are going out of their way to still help them.  Just good to see.

 

As for our other business...the Cleaners is shutting down for the foreseeable future(my in laws are close to retirement anyways, and were just leasing month to month at this point anyways) and they may not open again if they really don't feel like it.

The 2 Car dealerships are still super busy.  Between payments and people still trying to stupidly use their tax returns to buy a car at this time.  Until we get a "shelter in place" order in my city/county, we'll still be here.  Thanks to the financial prudence of my inlaws, even if/when we shut down, we'll be fine to reopen. Especially since we own the property and don't rent.

 

 

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On 3/21/2020 at 9:19 PM, Shaddie said:

Wife knows I get pissy if haircut isn’t every 4 weeks. Looks like the dog shears for me next week. 

Get your wife to cut your hair. Bought clippers from Walmart and set up a chair on my patio to have my girlfriend do it on Saturday. She did a better job than my regular barber. That's $30 I will save every month going forward.

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