Second shutdown sees US Sun Belt businesses go bust
BUSINESSES left on the brink by the first lockdown in the US are beginning to go bust as the second shutdown sweeps across southern states experiencing a resurgence of coronavirus.
Nick Muscari, who owns a sports bar and restaurant in Lubbock, Texas, is one of many facing possible bankruptcy as states roll back the original easing of lockdown restrictions.
The 38-year-old had hoped to ride out Texas’ first shutdown with the help of a federal loan.
The state was one of the first in the US to reopen for business, with restaurants allowed to welcome customers from May 1 and bars shortly afterwards.
But when Texas later saw a surge in coronavirus cases, a second shutdown was imposed on June 26, with bars ordered to close immediately and restaurants to limit capacity to 50 per cent.
The state governor’s order – on a Friday morning – caught businesses unawares and caused huge financial losses for those which had purchased stock in anticipation of a busy weekend.
For Mr Muscari, like thousands of other business owners, this second shutdown ended any hopes of survival. “It’s all I’ve tried to do for a long time, just open my own place,” he said. “We did really well for 10 years and to have something so unprecedented happen, it’s heartbreaking.”
Michael Clintsman, who owns three bars near Texas Tech University’s campus, said he had just received stock orders when the second shutdown was announced. “It cost us a fortune; I probably threw away around $3,000 (£2,386). It was devastating,” he said.
It is a story repeated across America’s Sun Belt with Florida, Arizona and California also backpedalling on their reopening plans.
Nearly 66,000 businesses in the US have closed since March 1 and roughly 14 percent of those said they were folding for good.
Many economists believe the true number is in fact far higher and fear what the figures foreshadow.
According to the American Small Business Chamber of Commerce, small enterprises employ nearly half the workforce and account for a significant portion of economic activity.