Published in Small Business
Downtown Grand Haven. Downtown Grand Haven. MIBIZ PHOTO: MARLA MILLER

Lakeshore retailers adapt, move online as some scramble to stay afloat

BY Sunday, April 26, 2020 05:26pm

As the owner of longtime downtown Grand Haven retailer Down To Earth, Sholeh Veiseh has turned to hosting virtual fashion shows and offering sales on social media to bring in some revenue during the coronavirus closure.

Gov. Gretchen Whitmer’s initial executive order closing non-essential businesses through April 30 shuttered most storefronts on Washington Avenue, an established shopping district in one of the region’s busiest tourist towns, as Main Streets across the state are bearing the brunt of COVID-19 closures. 

While some restaurants and breweries have pivoted to takeout and delivery, retailers deemed non-essential fall into more of a gray area. Some have shut down entirely, while others are transitioning online to remain at least partially open for e-commerce.

Under a new executive order issued April 24, those stores now have more clarity: Retailers selling non-essential items can open for curbside pick-up and for delivery.

“I am totally shut down, but I am reaching my customers through my live (Facebook) fashion shows once or twice a week, where I walk around the store and show them what’s new,” Veiseh said, noting a recent Facebook Live fashion show garnered 4,000 views. “Right now, people are calling me or messaging me, ‘Please send me this or send this to my mother or my daughter or my niece. They are lonely.’ It’s not even close to what my regular sales are, but it really keeps me on my toes and busy.”

Now working from home, Jeremy Swiftney, executive director of Grand Haven Main Street Downtown Development Authority, continues to help business owners as best he can, sending out emails with updated information and forwarding resources for grants, loans and other assistance.

“I am sitting by my phone,” he said. “Anytime someone has a question, I try to find out what the answer is and make sure they are educated and ready to go for whatever their needs may be.”

Gray area

Some small businesses have shifted to online sales through their websites, while others are using social media outlets to drive sales rather than launching a full online e-commerce system.

Under Whitmer’s original order, retailers could perform basic functions to keep their stores afloat — like inventory, security and accounting functions such as payroll — but it didn’t specifically state that they can sell merchandise via online or contactless curbside delivery. 

“That has given a lot of retailers pause, so they have shut down their stores,” Meegan Holland, spokesperson for the Michigan Retailers Association, said prior to the new executive order. “We are urging the governor to allow retailers to reopen as long as they can sell products with minimal to no contact with the public, as restaurants are now allowed to do.”

The association was bombarded with calls and even set up a private Facebook group for retailers who wanted to share concerns and ideas and learn about available programs to help them. 

Veiseh turned to social media to stay visible to customers near and far. Down To Earth, at 105 Washington Ave., sells women’s clothing, accessories and home décor and has been in business for nearly 30 years. Veiseh continues to go into the store, answer the phone, take orders and arrange for pickup or delivery of merchandise while her part-time employees post photos on social media and send out emails.

She has a store full of spring merchandise and has held off on receiving additional shipments from her vendors. Veiseh credits owning her downtown building, having loyal customers and having a spouse with a job with helping her business survive. One customer even told her to add an extra $20 to a recent order to help her out. 

“I don’t want them to forget about my store,” Veiseh said. “I’ve never been through anything like this — it’s just a very, very different challenge for my business.”

Making do in a crisis

With business districts scattered throughout the city of Muskegon, new and established business owners face a similar plight. Some of the restaurants, coffee shops and breweries have scaled back hours but remain open for takeout, delivery and to-go sales.

Drip Drop Drink LLC, a coffee shop that started in a small space on Western Avenue and later moved to 926 Second St. in late 2018, and Aldea Coffee LLC are open limited hours for to-go and roasted coffee sales.

Aldea Coffee opened a coffee shop in the Grand Haven Armory building about five years ago and expanded to a second location in Muskegon’s NorthTown 794 building last fall.

Aldea owners Andrew Boyd and Jeremy Miller — along with Brittany Goode, the only remaining full-time employee — are keeping the operation afloat after laying off and furloughing 11 employees.

Aldea applied for emergency grants but hasn’t applied for federal loan support. Goode also said NorthTown’s landlord, John Essex, “has from the beginning been very willing to work with us.”

Goode said customers are still stopping in both the Muskegon and Grand Haven cafés, and they are limiting it to one customer at a time. Most of the other businesses in the multiplex office/retail buildings have temporarily closed, Goode said.

While Aldea’s wholesale program took a big hit with offices and churches closing, bagged coffee and online sales have skyrocketed.

“It really is individuals purchasing coffee for home or individuals purchasing coffee for others,” Goode said. “We already had an online presence before this, but it has blown up. I have never seen this many online orders.”

Still, the timing of the global pandemic put further expansion plans on hold. Aldea has a roasting facility in Muskegon Heights and recently hired more people to handle increased coffee production. Even so, the company plans to weather whatever is in store. 

“We will hang on as long as we have to,” Goode said. “We are not going anywhere. We are standing right here in the middle of it, and plan to be stronger as an organization when we come out the other side.”

‘Riding out waves’

For stronger elixirs, Unruly Brewing Co. LLC, Rake Beer Project LLC and Pigeon Hill Brewing Co. LLC are still selling beer on a to-go basis. Pigeon Hill also has turned to Facebook Live to keep customers abreast of its operations and offer some comic relief, along with launching a Social Distance Series and canning beers that were meant to be served in the taproom.

Other local businesses — including spirits brand Burl & Sprig and BoomTown Market LLC — have turned to making hand sanitizer. BoomTown, the downtown’s new grocery store, also is open for curbside pickup and delivery.   

However, for several downtown Muskegon restaurants and bars, operations have stopped. In recent weeks, it was a similar scene in other retail districts, with dark storefronts and “temporarily closed due to the governor’s order” signs on the doors of Third Coast Vinyl and The Griffin’s Rest in the Midtown area, Vintage Redefined and The Century Club building in downtown, and most storefronts in the Lakeside Business District.

Louise Hopson, an artist in the Lakeside area, has owned and operated Art Cats Gallery for 20 years. She rents space in a multi-unit building at 1845 Lakeshore Drive and said her landlord has been willing to work with her.

Hopson is trying to stay visible on social media, put more items on her website, and is accommodating customers by shipping or delivering orders. She still plans to host a special invitational art exhibit in May to benefit Pound Buddies and Heaven Can Wait Animal Haven. She says she is fortunate to have customers seeking gift cards or wanting to buy art pieces.

As well, Hopson applied for a grant through the Small Business Administration, but as a longtime self-employed worker, she isn’t used to seeking out assistance and hasn’t applied for any loans. In late March, the city approved emergency loans up to $10,000 for Lakeside businesses because of an extended road project that resulted in lost revenue for most businesses during 2019.

“I’ve just got myself to worry about, and I have been around long enough that I have some money saved, but it’s retirement money,” she said. “Artists are definitely a group of self-employed people who are really used to riding out waves of ‘I have a ton of money’ or ‘I have no money.’”

Banks get flexible

Meanwhile, banks have been responding to the flood of demand for loans. The first round of funding through the CARES Act stimulus package was expended by April 16. As of press time, the U.S. Senate had passed another $463 billion aid package, including $310 billion for the Paycheck Protection Program. President Trump was expected to sign the aid package.

“We’ve had a lot of interest in those (PPP loans),” said Kelly Potes, president and CEO of Sparta-based ChoiceOne Bank. “We’re taking a lot of applications so far. We’re dispersing funds. We’ve been very active.”

Local banks are funding the Paycheck Protection Program loans as a way to help businesses cover payroll, rent, mortgage interest and utilities. Business owners must use 75 percent of the loan on payroll expenses to be eligible for loan forgiveness.

Business owners who take out a PPP loan should monitor how much they are using and keep some money aside to pay off the loan if they don’t need all of it for eligible expenses, Potes said.

“Within 10 days of approving that loan, the SBA requires those funds be taken by the client, and they essentially have eight weeks to use that money,” he said. “If their employees are working, they can use that money to pay their employees. Whatever isn’t used for that purpose won’t be forgiven by the SBA.”

ChoiceOne Bank is allowing business customers affected by the coronavirus pandemic to make interest-only payments or is offering a complete deferment of the payment depending on their need. The initial deferment is 90 days, but it may be extended as needed.   

Hudsonville-based West Michigan Community Bank also is issuing PPP loans and providing payment waivers for up to three months for existing loans, including lines of credit, equipment loans and mortgages, said President and CEO Phil Koning. Those deferred payments are added to the end of the loan.

Koning said business owners have to aggressively manage their business, especially expenses, so they can survive.

“Actually, most customers are adapting very well to this environment, both on the deposit and loan side,” he said. “At this point in time, we feel most businesses will make it through, but it depends on how long this thing lasts.”

Koning said bank employees are making contact with business customers via phone or email to let them know help is available. 

“We have already funded some PPP loans,” Koning said. “We think most will be forgiven within the next few months. People are using the money for what it was meant for, to keep paying their people. Those are qualifying expenses that will amount to forgiveness on the loan.”

Trusting the process

For PPP loans, local banks are backing them in good faith that clients will meet the terms of the loan and the SBA will pay off the loan. The Federal Reserve also developed a special program to help banks finance the PPP loans. Businesses that have to repay a portion of the loan will pay it back to the bank. 

“We’re believing the federal government and SBA are going to do what they said they are going to do, and the client is going to do their part,” Potes said. “There is a lot of trust built into this.”

Since the Federal Reserve dropped interest rates, ChoiceOne also has seen an uptick in customers refinancing existing home mortgages. If they keep the same terms and do not borrow more money, they should see their loan payment go down.

Potes’ best advice is for people to reach out early, rather than to simply stop paying or let a loan become delinquent.

“The key, especially on the deferments, is to talk to the bank early before you get into trouble,” he said. “We have more things we can do for clients if they contact us early as opposed to when they start missing payments.”

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