National Post (National Edition)
Businesses feeling pandemic recovery pains for a second time
Adapting has proved essential for survival
EVERYONE IS READY TO GO. WE'RE ALL DYING TO GET BEHIND THE CHAIR AND SEE OUR CUSTOMERS AGAIN. THE RATES HAD TO GO UP THE FIRST TIME. THEY MAY HAVE TO GO UP A BIT MORE. — PATRICIA TSAFARAS, CO-OWNER OF PRIVÉ HAIR GALLERY IN TORONTO
There was a light at the end of the tunnel for Patricia Tsafaras after the first COVID-19-related economic shutdown.
“We were slammed the first 10 weeks,” the co-owner of Privé Hair Gallery in Toronto said. “The revenues were phenomenal.”
After that, the regulars didn't come back as often, and monthly visits dropped to 230 clients from more than 600.
“That's a lot,” Tsafaras said.
Regaining that ground the first time required some adjustments, including longer hours to allow shift rotations so that distancing guidelines with other stylists could be maintained, raising fees and scaling back on complimentary services.
But Tsafaras believes recovering the second time around is going to take more drastic measures, a new business plan and all the luck they can muster.
“We're in an industry that is never going to be what it was before,” she said. “We will be rushed when we open, but it's the after, being at 25 per cent capacity, that we worry about.”
In addition to getting lower revenues, hair salons have to make up for the added costs of dividers and personal protective equipment. Tsafaras said they will likely need to be open seven days a week for some time in order to generate enough to pay their teams.
“None of the extras will be coming back,” she said. “We need the chairs to make us money right now.”
Fortunately, Privé Hair Gallery has managed to keep its staff of five stylists, plus assistants and receptionists, all of whom are anxious to get back.
“Everyone is ready to go. We're all dying to get behind the chair and see our customers again,” Tsafaras said. “The rates had to go up the first time. They may have to go up a bit more.”
The salon's co-owners were also savvy enough to work on a diversification plan. Prior to COVID-19, they had secured a North American distribution deal for hair extensions from Italy.
“We were ready to launch in 2020, but that was put on hold,” Tsafaras said. “We're trying to relaunch that now.”
Tsafaras, like other entrepreneurs, managed to survive the first lockdown, but Corinne Pohlmann, senior vice-president, national affairs and partnership at Canadian Federation of Independent Business (CFIB) in Ottawa, said the pandemic's second wave is taking an even greater toll on businesses, particularly in the personal services, food service, tourism, and arts and recreation industries.
Women entrepreneurs are especially vulnerable since their representation in those sectors is high.
“A larger portion of businesses in those industries are owned by women, but the challenges they face are not much different from any business owner,” Pohlmann said. “They're all concerned about getting revenues back, keeping connections with their employees, and the amount of debt they are accumulating as they start to reopen.”
That list pretty much ticks all the boxes for Karri Green-Schuermans, co-founder of Chambar Restaurant, which serves Belgian-inspired cuisine in Vancouver. Even though it is allowed to open, it can only have up to 40 per cent occupancy due to social-distancing protocols, and liquor restrictions have taken a bite out of late-night revenues.
The pandemic also means customers are wary of returning and the usual traffic from tourism and arts events isn't coming in either. All told, Chambar is looking at a long economic recovery.
“Our biggest competitor right now is Netflix. People aren't coming out,” Green-Schuermans said. “Theatres and concert venues are all within a block of us. All of that is lost.”
In the early days of the pandemic, she started a food coalition with half-adozen other chefs to supply meals to those in need. The move allowed her to keep her core kitchen team employed.
“It would be easier to close and wait to reopen, but we have to keep that core team or we would have to start from scratch,” she said.
The coalition also helps to address a major concern for Green-Schuermans and other restaurateurs, which is the very real threat of a food system collapse.
“We realized that if all restaurants are closed, food is not going to be planted,” she said. “We are facing a major food security issue.”
Maude Rondeau, founder and president of Luminaire Authentik, a lighting design and manufacturing operation in Montreal, considers herself one of the fortunate ones in the lockdowns. She was able to quickly shift from a largely business-to-business operation to a mainly consumer-facing one.
“In 2019 we were 70-percent commercial, 30-percent residential,” she said. “Now we are 90-per-cent residential.”
Luminaire Authentik completely closed during the first lockdown and began posting its wares online for consumers to buy. It even opened a store presence in Toronto in August in response to the growth of the consumer side of the business.
Things are moving along well for Rondeau for now, but her major pain point is the uncertainty in the market.
“We are trying to be creative, but we don't know which channels will come back or not,” she said.
For example, there was a sudden cancellation of a $500,000 order last March after the products were made. Rondeau is still working on moving that inventory.
“We have to prepare more carefully than ever, because we don't know when or if we will get back to normal,” she said. “We're all trying to manage the unexpected.”