June 5, 2008 Issue                                       

©2007 The Chestnut Hill Local

Hill businesses not all down on economy
by Kristin Pazulski

Lei Winson, who will close her Iris boutique after four years on the Avenue, said business in Chestnut Hill is down but it’s not the only reason she’s closing. (Photo by Erin Vertreace)

Walking into the boutique Iris of Chestnut Hill and passing its numerous “50-75% off closing sale” signs, a customer might suspect that the store is another victim of our struggling economy.

Gas prices, a weak American dollar and the housing crisis are all demoralizing the American consumer and business owners. But the proprietors of those unique, independently-owned businesses on the Hill don’t seem that worried.

While Hill businesses are not doing exceptionally well — people are certainly shopping less, according to most Hill store owners interviewed by the Local — most business owners attribute any slowdown in business to other factors.

Lei Winson is shutting down Iris after four years on the Hill. While it might be expected that that she would be sad, talking to her in her nearly cleaned-out store revealed that she is in high spirits about the closing.

“I’m fine,” she said last week. “I’m ready to move on.”

Winson had moved Iris up the Hill from 8135 to 8428 Germantown Ave. last summer in hopes that foot traffic would bring more business. But business has not picked up, more a result of the lack of foot traffic than just the economy, she explained.

In January, Winson and her sister began creating and wholesaling infant and toddler clothes out of Doylestown, and that endeavor is doing well.

The economy was part of her decision to close Iris, but her wholesaling business, called ColourWorks, is doing better than the store, she said.

“Besides it being slow, ColourWorks has been taking up so much of my time that I don’t have two seconds for anything else,” she said.

So giving up Iris is not a hardship, even though she is disappointed at the idea of leaving all her loyal customers.

“I will miss them a lot,” she said.

While Winson prepares to move on, other shop owners are buckling down for the long haul.

John Adams of Community Audio said business is certainly slower — and the economy is in the worst shape he has ever seen — but he is hoping that the election and a new government will change things.

“Anytime you have people running scared in general, of course, that makes them less ‘buyerish,’” Adams said.

Adams’ biggest problem is not a lack of customers but the value of the American dollar.

“I have a lot of things that I import,” said the owner of the electronics and entertainment store at 8020 Germantown Ave. “We’re sending the American dollar over and they [other countries] don’t want them. I hope the election will help that. This is bad.”

He said the benefit for Community Audio is that while people are cutting down, they are more likely to cut out things like vacation rather than a piece of equipment they would use regularly.

“It’s hard to guess what people are doing, but they are cutting, and it seems they might defer an around-the-world vacation,” he said, before electronics.

But Aliki Weston of Carlson Wagonlit Travel, the travel agency at 8431 Germantown Ave., said that business has not really slowed.

Weston said the agency has lost some of its business with smaller trips, such as the three-day all-inclusive trips, but the larger trips that really support the company are doing the same as always.

“I think we are doing OK,” Weston said. “We haven’t really lost the smaller clients, but we won’t see them as often. But they don’t affect our bottom line as much.”

Weston has noticed, though, that the value of the dollar to the Euro is deterring clients from taking long trips to Europe.

“It’s expensive, it’s very expensive,” she said.

Most of the Hill’s stores that the Local spoke with that depend on consumers spending money on leisure products, such as CDs and cameras, are not seeing a loss in business — at least not a loss that business owners would attribute solely to the economy.

“I haven’t seen a marked difference,” said Brian Reisman, owner of Hideaway Music at the top of the Hill.

He said any slowness in business is more because Chestnut Hill is having trouble getting foot traffic to the Avenue during the week, not specifically because of the economy.

Frank Garber, manager of the Chestnut Hill Camera Shop, said PennDOT’s Germantown Avenue construction at the Chestnut Hill/Mt. Airy border is more of a deterrent to his customers than the economy.

“We are still selling cameras,” he said. “But a lot of our Mt. Airy customers complain about the construction.”

Barry Eichner of 3000 BC actually said he suspects business is up partially because of the economy’s struggles.

“If people are skimping, it’s on driving,” he said, adding that because people are not going on vacation, they are choosing to find less expensive retreats at home, like going to the spa.

Chestnut Hill Sports is seeing a drop in business, said George Chiodo, its co-owner.

“It’s definitely slower,” he said, referring to the month of May. “March and April [which bring a change of season and therefore a change of sports] were OK, but I think people are buying when they need to but are not buying the extras.”

He said the increased delivery charges — due to gas prices — have not raised the prices of the sports store’s merchandise yet, but he expects it will soon.

“For the most part we are absorbing it,” he said, “but we might have to [raise prices] later.”

Joe Ianieri, a salesperson at Magarity Ford, said people are starting to realize that gas prices and economy troubles are not a passing problem, and it is reflected in car sales.

“People are realizing that this is permanent, it seems, so in the last month or so people are eager to get something that is better on gas,” he said, citing the example of a man who traded in his Hummer for a Ford Escape.

Customers are requesting hybrids and four-cylinder cars, he said, although he added that for highway drivers a non-hybrid is often more cost effective than hybrids when calculating the gas used and the extra cost of the hybrid, which, he said, can range from about $3,000 to 5,000 more than a regular car.

While trading in “gas guzzlers” for more fuel-efficient vehicles has increased, Ianieri said people are not trading in cars in exchange for bicycles and public transportation.

“A lot of people complain about gas, but they still won’t give up their cars,” he said.

But if it was up to John Salib, the owner of the Shell gas station at 8019 Germantown Avenue, he would say people must be driving less.

“We have lost a lot of customers,” he said, adding that business is down by 40 to 50 percent.

Salib said the high price is making it hard for him because the profit margin is tighter, and he has to balance profit and per gallon cost with the loss in customers.

“We get less profit when we go higher because we don’t have a lot of room to move,” he said.

The downturn in consumer spending does not seem to be hurting most businesses on the Avenue yet, but Community Audio’s Adams said if things do not change with the economy, things might change on the Avenue and elsewhere.

“Maybe people are not all suffering yet,” he said, “but if we keep going down this path, were going to suffer not just in consumer buying.”

Contact staff writer Kristin Pazulski at 215-248-8819 or Kristin@chestnuthilllocal.com.