Local business leaders participated in a panel discussion looking at small business survival presented by the Marina Affairs Committee of the LAX Coastal Area Chamber of Commerce Wednesday, March 19th, at Tony P’s restaurant in Marina del Rey.
The presentation was part two of a series called, “Feeling the Pain; an economic look at the Westside micro-market during tough times,” and the local business people on the panel provided insight into the continued success they have enjoyed.
Six local business leaders said determination, a positive outlook and providing excellent service to customers are some of the main reasons they believe they’ve been able to stay successful and the economic downturn won’t have a negative effect on their businesses.
The panelists were invited to speak because their businesses represent “disposable services,” said Pat Younis of The Bridge Group, chair of the committee, which includes Greg Wenger and Jim Fawcett.
Younis said that each of these businesses could be considered as having services that are more of a luxury and not considered essential to daily life during the economic downturn.
Questions addressed to the speakers beforehand concerned current business volume comparison; plans for a budget strategy; what the forecast is for next year; whether they are adjusting pricing to reflect supply costs and whether they are passing these on in price increases; employee wages and benefits (cutbacks or layoffs); delaying purchase of equipment; and whether they would “huddle down” and slide through or face issues head on.
The speakers included Howard Pollack, owner of Rainbow Acres and Massimo’s Italian bakery and gelato; Shaun Kasparian, owner/partner of Swiss Jewelers; Willie Hjorth, owner of Mare Co. Sails; Fred Adriance, regional director of operations for Pacifica Hotels (Marina del Rey Hotel, Marina International Hotel, Jamaica Bay Inn and Holiday Express in Venice); Capt. Alex Balian, owner of Paradise Bound Yacht Charters; and Kelly King, general manager of Villa Marina Apartments and Marina.
Tony Palermo, owner of Tony P’s, and Mia Falkenstein, director of sales for Hornblower Yacht Charters, were scheduled to speak but were unable to attend.
Highlights of the presentations follow.
Kasparian said Swiss Jewelers is celebrating its 35th anniversary, having begun in Westchester in 1969 and then relocating to Villa Marina Marketplace.
This is the toughest year, with gold prices skyrocketing from $400 per ounce three years ago to a current price of $1,000 per ounce, he said, and the price of silver was $5 per ounce and is now $20 per ounce. Platinum has gone from $1,650 per ounce to $2,100 per ounce, and Kasparian said most usage of platinum is in the automobile industry for catalytic converters.
The Argonaut notes that as of Monday, March 24th, the price of gold was $922.50 per ounce; silver was $17.15 per ounce and platinum was $1,877 per ounce, demonstrating the volatility of these prices.
County Sheriff’s Lt. Rod Kusch of the Marina del Rey Sheriff’s Station has been informing the community and audience members about the increase in thefts of catalytic converters because of the platinum content.
Last year was very tough for Swiss Jewelers because the renovation and conversion of Vons into a Pavilions Market took seven months and half of the parking lot was closed, said Kasparian.
Compared to 2006, last year saw a 20 percent drop in business, Kasparian said. Swiss Jewelers is holding off and purchasing only what is necessary rather than attending jewelry trade shows and stocking up.
Price adjustments will be made according to need, but all jewelry is now more valuable than a year ago. Insurance reappraisals should be done, recommended Kasparian.
While the gold price has changed, Kasparian said he can’t change the price on the numerous pieces already in stock, so this is a good time to buy now.
He recommended the review of old jewelry and bringing in that jewelry that’s not being worn, and having it melted down, “recycling” it to make new jewelry pieces from it.
“We are looking at new ventures, such as investing in porcelain figurines and vases,” said Kasparian.
Adriance said that for Pacifica Hotels last year was a good year, but a bit slow, and “positive advertising gains were made on hotel room costs.”
This year is anticipated to be stronger, and summer should be busy, while the November elections will have some impact on market indicators, said Adriance.
International travel is expected to provide more business, and Adriance said that the consumer confidence locally is different than internationally, with the weak dollar benefiting foreigntravelers, who have already told him that shopping here is a bargain compared to Europe.
Adriance said his hotels are trying to give as much as they can for that dollar, educating team members “to prosperity” and a vision of excellent service.
Purchases will not be delayed and “we are building a strong bond,” Adriance said.
Pollack said that business for Rainbow Acres and Massimo’s has been up 20 percent and that he “refuses to participate in a recession,” which he believes is being promulgated by the news media.
“Someone is going to buy all of that stock that’s going down in price,” he said. “The economy is robust in this area, and we’re servicing the heck out of our customers.
“We’ve hired a new employee who is extremely knowledgeable about nutrition and will be a great addition, and we will stay current with prices.”
Rainbow Acres gets a lot of products that are on sale, special deals, price reductions from suppliers, and the service it provides “is much better than discount stores,” he said.
Massimo’s now has a wine license and “we’re going full steam ahead, with out-of-the-box thinking,” buying trade show items and bringing out new products such as the organic dog food, healthy drinks for kids and car coolers that plug in to keep drinks cold.
“We expect a profit of three-quarter million to one million this year, up from last year,” he said. “We keep giving back to the community and that’s one of the main reasons we are so successful.”
Pollack is also on the Natural Products Association board, and he discussed diabetes and allergies that are “responding well to wheat and gluten-free products.”
Hjorth has over 40 years of experience with her Mare Co. Sails business geared toward sails and canvas, and she said the business has a 30 percent volume increase over last year.
Eighty percent of the business is related to sails and canvas for boats and 20 percent is for custom prototypes for residents fixing up homes, she said.
“All of this recession talk is pushing people into refurbishing what they have, and in summer the business is really good,” Hjorth said.
“Price schedules will remain the same and we will not lose any employees, and inventory purchases have to keep pace with the industry, since all these products are made of oil,” she said.
Demographics drive the boating market and the baby boomers are active now, but the Generation X individuals have huge buying power, like technology and Internet moguls, and they will be the next sustaining force, Hjorth said.
“Negative media coverage of the ‘recession’ is not new, and the next cycle will be inflation, you just have to stay on top,” she said.
Balian, a U.S. Navy veteran, said he’s been in the charter boat business for 18 years, has business and management degrees and is the sole proprietor of Paradise Bound Yacht Charters.
“The recession is a bunch of bull — it has happened before and it takes resiliency,” said Balian.
He said he takes good care of his customers and provides a unique service to which customers keep returning, and that having a good product sells itself.
His business was up 14 percent in 2007 from 2006, and he said he has no employee costs or benefits.
The price of fuel, slip fees, maintenance and insurance will be passed on to customers, but the entertainment business remains steady, and “the forecast is not to huddle down but to make it go.”
Maintenance is the big issue because it involves safety and U.S. Coast Guard regulations.
Balian said his customers aren’t Marina residents but visitors and hotel guests, so his business can go up or down depending on hotel reservations.
King of Villa Marina Apartments and Marina said real estate in the Marina is different because the lessees pay ground rent to Los Angeles County, as well as a portion of the boat slip fees.
“More apartments were leased this quarter, and the housing market situation is related, since people do need a place to live,” he said.
He said that 60 percent of people on the Westside rent, and the average rent increased by six percent last year, and four percent in this year.
King said the Villa Marina Apartments and Marina have cut back on print advertising since many people use the Internet, or drive by looking for vacancies.
Marina del Rey is “location-driven” for residents and larger boat slips are needed, he said, adding that the Villa Marina parcel was the first to reconfigure boat slips 20 years ago, and “did away” with slips 32 feet and under, King said.