The voices of small-business owners in Arkansas betray their anxiety, even anguish approaching grief, as they fight for their future — and a future for their employees — in a world upended by a deadly pandemic.
The COVID-19 outbreak presents a situation not faced by the United States, or the world, for 100 years, since the Spanish flu pandemic of 1918 killed some 50 million worldwide and about 675,000 in this country.
The Arkansas Department of Health, in an effort to stem the contagion, has ordered all restaurant dining rooms, bars and gymnasiums closed, as well as beauty parlors, barbershops, nail salons, massage therapy studios and tattoo parlors. Last week, the department banned indoor gatherings of more than 10 people. Many retailers had already shut their doors.
Retailers, restaurants and others interviewed by Arkansas Business varied in their responses to the pandemic, from completely closing down to greatly amplifying their online business and in the process earning potential new customers. And, of course, the nature of their businesses dictates how effective a beefed-up digital presence can be.
Ted Herget, owner of Gearhead Outfitters, an outdoor supply chain based in Jonesboro, called the business disruption “a slow death.”
“It’s tough,” he said. “Being a small business, you can never plan for this — ever.”
Gearhead, which just last year acquired 13 new stores with its purchase of Rock/Creek Outfitters of Chattanooga, Tennessee, and Uncle Dan’s Outdoor Store of Chicago, now has 22 stores, but only four remained open last week in the face of the pandemic.
“Resilience is kind of the theme right now,” Herget said. “It’s kind of day-by-day. It’s almost hour-by-hour. Everything changes so quick, so fast, the information and the misinformation. I think everybody’s so desperate for something concrete to sink their teeth into.
“We’re getting creative,” he said. “We’re doing things we never have.”
Gearhead’s mantra, Herget said, has been “people, place, product. We try to have the best real estate, best people, best product. And when your ‘place’ comes under attack, what do you do?”
He added: “We feed off our customers as much as the customers feed off of us. It’s just a lonely time.”
Responsibility vs. Paying Bills
Adding to the stress, Herget said, is the effort to balance being “socially responsible” with paying the bills. “You take heat if you’re open, but then again you take heat because you’ve got to lay people off. This is just a damned if you do, damned if you don’t moment.”
Herget’s telephone interview with Arkansas Business last week was interrupted several times as he sought to serve customers himself, including a customer who wanted Herget to roll the bicycle he was buying out of the downtown Jonesboro store.
In navigating this moment, Gearhead has increased its online and social media presence and has experienced a big uptick in online sales. It was offering free shipping, delivering products curbside and, at least for the moment and taking recommended precautions, offering private shopping.
“We’re scrambling, just scrambling,” he said. “We’re doing everything we can.”
“I’ll admit no one needs anything we have. We’re just a store,” Herget said. But “we’ve been selling a lot of bikes. We’ve got a lot of people going hiking. Being outside, that’s the safest place to be, and that’s the business we’re in.”
Although Gearhead had furloughed a few managers, as of midweek the company was employing almost its full staff of 270 employees. That could change, depending on what Congress comes up with in terms of aid to businesses and their workers.
Trying to plan, seeking to answer employees’ questions “like how much longer am I going to get a paycheck — it’s brutal,” Herget said. “We’ve never been in this position.”
“We’ll all be better and stronger coming out of this,” he said. “We’re just trying to figure out what does retail look like in three months? Man, I don’t have the answer.”
Following are other accounts of small businesses in Arkansas strategizing to survive a pandemic, with almost all of them emphasizing the uncertainty of the situation and noting that everything could quickly change.
Russ McDonough, a partner in Yellow Rocket, the Little Rock restaurant group behind ZaZa Fine Salad & Wood Oven Pizza Co., Big Orange, Local Lime, Lost 40 Brewing and Heights Taco & Tamale, said, “Our strategy is 100% about our employees. Obviously, the big question is how long is this going to last.
“If it’s four weeks, we’ll be OK. If it’s eight weeks, it’s really going to hurt. And if it’s 12 weeks or longer, I don’t know what that looks like. So our strategy has been to try and pay everyone, even if we have to reduce everyone’s pay to 80%.”
McDonough added, “We have built a successful company based on these employees, and so this is our time to give back as much as we can.”
But, he said, he and his partners want to keep their restaurants alive so their 500 workers have jobs to return to. “It’s a balancing act.”
The Yellow Rocket restaurants are offering curbside and to-go pickup and have started doing delivery. “We’re not going to duplicate the revenues we had before with curbside and to-go and delivery,” McDonough said. “If we get to 40% or 50%, that’s fantastic. We’re still losing money but it kicks the can farther down the road and just hopefully gets us to the other side and [lets us] continue to employ our people.”
Emese Boone, owner of Box Turtle, a clothing, accessories and housewares store in the Hillcrest neighborhood of Little Rock, said the store’s website had always been lacking, so “we’re working super hard trying to get that up to speed and get more things on there.”
The store, which shut its doors March 17, has been promoting itself on Facebook and Instagram but has been trying to “be sensitive,” Boone said. “We know everyone’s hurting so not everyone can spend money.”
In an effort to generate cash flow, Box Turtle has begun offering discounted gift cards — for example, selling a $100 gift card for $80 “that people can buy now and spend once we reopen our doors. We’ve had a lot of good response from that.”
It also offers curbside pickup and free local delivery. “We’re open to anything,” said Boone, who has owned the store for 20 years. The store is “just trying to still be here when this does get better.”
WordsWorth Books & Co., a fixture in Little Rock’s Heights neighborhood, remains open but shut its doors to browsing by the general public last week “for the health and safety of everyone,” said co-owner Lia Lent. It’s still fulfilling online and phone orders, and last week it promoted on social media “private browsing” by appointment.
“People can be at a safe social distance from everybody, including us, and they can still browse,” Lent said. “We’ve already had people start signing up. Apparently, it is hitting a nerve.”
The bookstore will deliver orders over $25 the same day, if the item is in the warehouse, and is also offering curbside pickup. “We’re trying to make this as easy as possible while still offering a very wide selection,” Lent said. The store’s online sales are three to four times higher than previously, she said.
“We’re delighted that we have customers who are turning to us rather than Amazon.”
Legacy Wine & Spirits
New rules prompted by the pandemic have provided an opportunity to John Akins, co-owner of Legacy Wine & Spirits in Little Rock and president of the United Beverage Retailers of Arkansas, and to other liquor store owners.
The Arkansas Alcoholic Beverage Control Division issued new rules March 19 allowing liquor retailers to offer curbside service and delivery. Stores with drive-through windows are urged to use those exclusively.
“There are a lot of retailers that are in the process of trying to get that [online orders] set up,” Akins said. “Legacy, itself, we were able to go live pretty quickly because we already had all of our inventory online.”
His store is taking online orders, and delivery was rolled out on the day the new rules were issued. Legacy planned to encourage its customers to take advantage of curbside delivery and pickup, and though the store is remaining open, it may reduce its hours of operation.
Asked about any financial hit experienced by package liquor stores, Akins said, “as of right this moment” — March 24 — “retailers across the state are actually doing quite well. Because of everybody being off work and kids being out of school, retail liquor sales have actually gone up — quite a bit.
“To be perfectly honest with you, it’s great for business right now because of everyone having so much free time on their hands. That’s not to say that it might not nosedive if we end up going under a country-wide quarantine or the governor starts shutting businesses down in the state. We don’t really know where things are going right now so we’re just taking everything one day at a time.”
Cheers in the Heights, Etc.
Little Rock restaurateur Chris Tanner owns Cheers in the Heights, Samantha’s Tap Room & Wood Grill and the Oyster Bar, which he bought last year. He closed all three on March 17. Tanner decided to forgo strategies like offering to-go orders because of the potential risk to employees of close contact.
He paid his 130-plus workers, “so they’ll be good for two weeks,” and “did a mass unemployment for all three restaurants.” Tanner has talked with the state about ensuring his workers are covered by jobless benefits and provided his employees with cover letters explaining the terms of what he hopes will be temporary layoffs that they can provide to landlords if asking for rent forgiveness.
Some of his friends in the restaurant business are trying to make pickup and delivery orders work, but Tanner figured “don’t fight it. Just get the paperwork going and see what the Feds are going to do,” referring to the $2.2 trillion aid package working its way through Congress.
He can hold out a while, Tanner said, but “I want to make sure that they nip this [the coronavirus pandemic] in the bud, get this thing addressed, because I don’t want to go through closing a restaurant and opening it again. That’s my fear.”
He closed the interview with this: “We’ll muscle through it.”