Editor: My wife and I own three brick and mortar retail companies under the banners lou lou, Crème de la Crème and Zest. We operate 34 store locations and employ 210 people which equates to 100 FTE, since the majority of our staff is part time.
Just when the Corona virus came in sight, the retail business we own got ready for the transition to spring and summer. Seasonal product was bought and we were in the process of merchandising the stores.
Then the weekend of March 14 and 15 came along. Nice weather on the East Coast and the stores were ready for spring. It was supposed to be a good shopping weekend. However, when we got the traffic reports by store on Monday morning, the numbers were devastating. America was hunkering down.
By Tuesday, March 17, we decided to close all of our 34 store locations. The full-time employees were put on a two-week paid “Corona” leave, including the majority of our warehouse and office personnel. By Thursday, March 19 we had two of the 210 employees remaining.
So here we were. Millions of dollars in spring summer merchandise. Some of it got canceled, but a large portion was in the warehouse or in the stores. And no date in sight to start opening the stores again.
Then the government assistance programs were drafted. Two were relevant for us: The Small Business Disaster Loan Program, and the Paycheck Protection Program (PPP), as part of the CARES act. So we applied as soon as we could….
We went on the SBA disaster loan website, submitted all extensive financial information and finished the application on March 19. Since we did not hear anything on the progress of this application, we called the help desk on March 31, only to find out that they had changed the forms due to high demand and that the status of our application was put on in-active. We were advised to re-apply, which we did the same day. Checking back in this week, we were told that this process could take months, time we do not have.
In addition, we applied for the PPP loan application, as soon as it became available on April 4. As we were awaiting approval for the loan, we reviewed the details of the forgiveness portion of this program.It became clear that this program must not have been written with small retailers and restaurant operators in mind. The way the “forgiveness formula” works does not seem to make sense for retailers and restaurant owners like us, who will unlikely be able to re hire all staff, especially part timers. Too much of a reduction as result of the formula (number of pre and post FTE, which includes FT and PT ) results in the company having to contribute to the employee expenses, without any work that can be done ( since all the stores are closed). Without being forgiven any payroll expenses that have no added value at all for us at this time, we would only do the government a favor by re-hiring. Most of our employees seem happy to stay on unemployment insurance since the $600 per week “Corona”contribution creates a higher pay rate than we are able to offer.
So, with all good intentions Uncle Sam, your programs currently in place do not help small retail and restaurants business and will likely result in many bankruptcy filings once this terrible pandemic fades. Next time a disaster programs get rolled out it may be better to keep your “customer” in mind, just like we all do in the retail and restaurant business.
Ben Wegdam, Middleburg