Cambridge Local First

‘Tip of the iceberg:’ Cambridge’s small businesses shutter at alarming rate

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By Veer Mudambi / Cambridge@wickedlocal.com

Aug 5, 2020 at 4:45 PM; Updated Aug 6, 2020 at 2:10 PM. See the article in full here.

With the rollout of Phase Three reopening, the staff at Christopher’s in Porter Square had begun preparations to return to indoor dining: replacing air filters, separating tables, offering new training for staff. But plans suddenly ground to a halt when the situation became perfectly clear. “People are not ready to eat indoors yet and we are not ready to expose our staff,” said Holly Heslop, co-owner.

Outdoor dining was not a reasonable option. Social distancing requirements allowed for only three tables, Heslop said, so it made no sense to open and staff the restaurant.

Consequently, plans to reopen Christopher’s, which has been around for almost 40 years, are currently on hold. As a result, the owners have been forced to lay off staff, some of whom have worked there for 38 years.

“It’s crushing,” Heslop said. “Everything we know is turned on its head.”

This a common situation faced by many businesses in Cambridge and beyond, said Theodora Skeadas, executive director of Cambridge Local First (CLF), a non-profit independent business alliance. Come winter and colder months, without a corresponding rise in business, many establishments that are barely staying afloat now will run out of savings as loans come due.

Almost 20 CLF member businesses have permanently closed, which Skeadas sees as a sign of things to come. Local favorites, long-thought fixtures, are no exception, such as Café Pamplona (62 years), Flat Top Johnny’s (27 years) and The Field (25 years), which all recently announced their permanent closure.

Café Pamplona, which filed for bankruptcy last month, first opened in 1958. The owner specifically cited the lack of summer events such as commencement, Boston Calling and Fourth of July as the reason the cafe could not financially survive.

“This could just be the tip of the iceberg,” said Skeadas. “Frankly, we need to sound the alarm.”

Small businesses at highest risk

In times of crisis, an average of 40% of local businesses will close since most only have funds on hand to keep them going a few months at best, Skeadas said. As non-essential services were shut down in March, by this point many will have burned through those savings. The double whammy for these small local businesses is that they have less of a resource cushion to offset the drop in revenue and the smaller the enterprise, the more it is likely to experience a precipitous income drop, making them very sensitive to crisis situations.

“It’s a struggle,” said Joshua Gerber, owner of 1369 Coffee House in Inman and Central squares, with a nervous laugh. “The form of business that we’re doing right now is not at all what we’re used to.”

Once neighborhood hangout spots, the two 1369 Coffee Houses are now doing delivery and take-out only.

Restaurants run on razor-thin profit margins, with significant expenses relative to their revenue. Delivery requires them to rely heavily on third-party delivery apps, such as GrubHub or Postmates, which charge fees that further subtract from the bottom line.

As for retail business owners, many have also expressed frustration that restaurants take up a larger portion of the conversation, Skeadas said. While data suggests they are doing better than restaurants, a small percentage of them are still closed. They are all on edge, she expects, and several have shared with her that their sales are significantly down.

Generally speaking, nationwide trends point to waning consumer confidence, and while temporary closures have dropped, the number of businesses that have permanently shuttered is rising.

Missing college students contributes to crisis

The reopening status of colleges is another factor that affects commerce in Cambridge, since students make up almost a quarter of the population. The local hospitality industry relies heavily on visiting families and CLF has been monitoring that situation closely, as well as updating their members with announcements from colleges.

For the Irving House Bed & Breakfast, which has been housing visiting scholars, conference attendees and other travelers since 1945, the situation has been particularly devastating.

Irving House reached out to Harvard, MIT and Lesley with offers of dormitory housing for students as a way to socially distance the populations, but has not heard back. While they received federal support such as Paycheck Protection Program (PPP) loans, their concerns are an unyielding combination of money not coming in but money needing to go out as well, in the form of returning customer deposits. Rachael Solem, owner of Irving House, indicated that employees get more help from the government than employers, but she has been able to keep some staff on for cleaning.

At Irving House, only about 75% of the rooms are being booked and those are kept empty for two days to be aired out between guests. In addition, rooms with shared bathrooms can’t be booked. As a way of adapting to changing needs, they are considering adding kitchenettes to some rooms so guests may manage without going to restaurants.

The absence of the student community is a setback for other businesses as well. Heslop communicated how tough it was to hear that various colleges and schools in the area would probably continue remote teaching and learning in the fall semester. Heslop also co-owns Cambridge Common near Harvard Square along with Charles Christopher. Cambridge Common is in a better situation than Christopher’s, thanks to a permit from the city that allowed the conversion of a parking lot into a backyard patio. The space fits 36 tables outside with social distancing and “has been a lifesaver and a huge morale booster,” said Heslop.

Skeadas is in close contact with other independent business alliances (IBAs) around the country, and reports that they are all in similar if not worse situations. She believes Cambridge residents are a little more informed about the importance of shopping locally and try to support independent businesses, however.

“We’re fortunate in that we have a residency that is more informed than the average American on the importance of shopping locally and supporting small businesses than many other cities,” she said. “There’s a concerted effort to support our businesses.”

CLF has confirmed the following closures as of Wednesday, August 12:

  • Abigail’s Restaurant
  • Alley
  • Ann Taylor (Harvard Square location; their location at Cambridgeside is still open)
  • The Automatic
  • Barismo Cafe (Third Street location; their location at )
  • Bo Concept (Cambridge location; their location at Newbury St. is still open)
  • Brit Bakery (Concord Avenue)
  • Café Pamplona
  • City Girl Cafe
  • Cuchi Cuchi
  • David’s Tea
  • The Field
  • Flat Top Johnny’s
  • Fresh Pond Ballet
  • GNC
  • Goorin Bros. Hat Shop
  • Harding House
  • The Hempest
  • Hertz Car Rental
  • Inman Oasis
  • Legal Seafoods (Harvard Square location)
  • Lush
  • Mr. Bartley’s Burger Cottage
  • Parsnip
  • Pavement Coffehouse
  • Restaurant Dante
  • The Table at Season to Taste
  • Wellbridge Athletic Club
  • Wit’s End

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