87.3 F
San Fernando
Friday, Feb 23, 2024

Reporter Takes a Walk and Gets Snapshot of Crisis

Plagued by bankruptcies, store closures and layoffs, the retail industry in the greater San Fernando Valley, like elsewhere in the country, has been hit hard by the economic recession. A two-hour walk along Reseda Boulevard, getting off at the Orange Line stop near Oxnard and heading north past Sherman Way, provided a clearer picture of what local businesses are going through. It offered a window into the extent of the economic crisis, which has left many store owners crossing their fingers, holding on for their business’ life, and hoping for signs of recovery by the end of the year. It was a hot day and business, storeowners say, tends to slow down when the temperatures rise. But money has been trickling in less and less over the past months, they said, with consumers tightening their belts even more, and revenue flow has been drying up to the point of near drought. In many cases the losses have been steady and strong, leaving store owners no other choice but to abandon ship. “It’s terrible. Just look outside, the parking lot is empty. I’ve been alone in this store all day,” said Maria Verber, who has run her family’s store La Canasta Discount Market, in a small strip mall near the intersection of Vanowen for nearly two years. Last Easter Verber remembers hordes of customers coming in and out and daily sales reaching $900 dollars on most days. Now they’re lucky to get $300 in sales on an exceptionally good day, she said. Many of her customers, mostly Salvadoran and Central American families, have lost their jobs. She knows they are hurting because customers who used to wire thousands of dollars to their home countries through a money service offered at her store are now sending a fraction of the money they used to. “Our customers come in and buy less, only what they need to survive,” she said. The situation got so bad that the family decided to cut their losses. Next week they will finish tallying their inventory which they will sell off, and a new owner will step in to run a different business at the location. “It’s sad. You put so much energy into something. In the end, is it worth it?” she wondered. Similarly Casey Amini, who owns AutoMarket, a used car dealership on 6726 Reseda Blvd. said he’s thinking about leaving the business within the next month or two. “People have no money, no credit, the banks are not financing, it’s hurting everyone,” he said, shaking his head with a sad expression consistent with the sorry state of the auto industry. Nearby, 25 year-old Cesar Mendoza sat alone in the couch of his tire business’s lobby. “I’m nervous, yesterday it was slow, and today it’s slow,” he said. “But I can’t complain, business is not good but it’s been enough to cover the bills and pay the rent, I haven’t had to pay anything out of my pocket yet.” Mendoza, who had been working for the past 8 years in a tire supply store, decided to take the plunge and launch his own business, Reseda Tires, three months ago. “I know it was risky to open up at this time, but I’m already here and I can’t go back,” he said. “Tires are more a necessity than a luxury, but I know people don’t have money right now. I look at people’s worn out tires on their cars and I know that they don’t change them not because they don’t want to, but because they can’t afford it right now.” The Manager of Reseda Bicycles, near the intersection of Gault Street, said the market for luxury bikes has been impacted by the recession, and they’ve noticed a significant slowdown in sales, especially in the last month. “People are definitely tightening their pocket books,” said the manager, who did not want to be identified by name. “Even vendors are feeling it. They’re trimming down their inventory and we’re not getting the discounts we would get in previous years for last year’s merchandise, which eliminates all incentives for us to buy old merchandise and for our customers to buy last year’s bikes,” he said. Jaime Leves at The Anchor Marine Boating Center, said vendors they have relied on for years have gone out of business, which has reduced the selection of products and merchandise offered at the store. “Some are now letting us know on a weekly basis if they will be able to provide us,” he said. On the flip side, the economy has virtually eliminated competition in the Valley area, he said. At least two large stores that sell marine supplies have closed down in the Valley in recent months, he said. “We are the only marine supply store left in the area,” he said. That statement could not be confirmed by the Business Journal, but Mike Vaks, who was purchasing a small replacement part for his speed boat at the store, said he didn’t know of any other location in the San Fernando Valley that sold what he was looking for. The tough economy has not been bad for everyone. The Goodwill store along Reseda Boulevard near Sherman Way was bustling with activity in mid afternoon as people, now more than ever, were looking to find bargains and get quality products at a big discount. In a the 2009-2010 Mid Year Update Economic Forecast and Industry Outlook, published by the Los Angeles County Economic Development Corporation, the outlook for retail is grim. “To say the business climate for most retailers is hostile understates the magnitude of the challenges they are facing,” reads the report. The industry’s problems are compounded by consumer’s falling personal income, the collapse of credit availability and the deep plunge in consumer confidence, according to economists. After my walk along Reseda Boulevard it is evident that the report is right on the mark: “American consumers are unlikely to spend their way out of the recession any time soon, which is bad news for retailers.” Although economists predict the economy might be reaching bottom sometime this summer and slow recovery is expected next year, unfortunately the list of retailers who do not survive until then could be lengthy as those who are hanging on are facing huge debt among other problems. There are estimates that in 2009, approximately 10% of retailers will restructure, file for bankruptcy protection or liquidate, according to the same report. Staff Reporter Andrea Alegria can be reached at (818) 316-3123 or at aalegria@sfvbj.com .

Featured Articles

Related Articles