Fort Collins retailers worry second coronavirus wave could swallow their future

The list of large and small retailers falling on hard times throughout the coronavirus pandemic continues to grow weekly in Fort Collins.

Pier 1, JCPenney, 24 Hour Fitness, White Balcony, Fort Collins Candy Store Emporium and even a Starbucks are among a dozen Fort Collins storefronts that have shuttered or will empty out in coming months.

There’s no road map that can accurately predict which short-term changes in consumer spending might become permanent; no history that portends who will survive the economic hardships of the coronavirus era or what pain could be ahead if a second wave hits.

Just how many area businesses will fall victim to the economic upheaval may depend on consumer behavior, retailers’ ability and willingness to adapt to new shopping habits, job growth and the precarious path of COVID-19.

“There’s so much uncertainty,” said CSU economist Martin Shields. “How do businesses survive when they don’t have the usual foot traffic because of social distancing? What if shoppers don’t come back?”

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While Amazon and grocery stores have flourished during the pandemic, other retailers have reduced hours and capacity, leading to wait times that didn’t exist only months ago. What patience will people have with the protocols, Shields asked. “Can stores survive when they impose social distancing requirements, coming in with masks. Are people willing to do that?”

There’s little scientific data that provides insight on what retail will look like in a post-pandemic world, but Shields said “until there’s a vaccine or treatment it’s hard to imagine things returning to normal.”  

Two things economists know, he said: Older people — those most at risk of severe COVID disease — typically have higher incomes and more disposable income than the younger generation. They’re also more risk averse, which likely makes them more reluctant to return to brick-and-mortar stores. 

Fort Collins sales tax licenses, a good indicator of business activity, fell more than 60% from April through June 22 compared to 2019. And national research group Coresight Research recently forecast between 20,000 and 25,000 stores could close nationwide this year, with 55% to 60% of those coming at malls.

Coresight’s forecast is up from the 15,000 closures it predicted before the pandemic. 

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‘Wizard of Oz’ house ‘fell on our head’

While there are no guarantees of survival, small, local retailers with some financial cushion, a loyal clientele and the ability to adapt are better positioned than those hanging by a thread before the pandemic, said Howard Wasserman, owner of Curiosities, which has been part of Old Town Fort Collins for nearly 25 years. 

“It was like the house from the ‘Wizard of Oz’ fell on our head,” Wasserman said of the pandemic and shutdown.

Like others, Curiosities reopened May 1 with a boost from the federal Paycheck Protection Program — which required it to bring back full-time staff at pre-pandemic levels — and plans for expanding its business model. 

The store is adapting to customer habits, including online shopping for in-store pickup or delivery. “For small retail, it’s all about trying to do as much for our customers as they do for us,” he said. 

While much of Curiosities’ allure is in its eclectic and quirky ambiance, “when you have a once-in-a-hundred-year event like this you have to make adjustments,” Wasserman said. 

Clothes Pony co-owner Becca Bramhall has yet to unlock her doors in Old Town. Instead, a sign on the door asks customers to knock or call for an appointment. She and sister, Jenny Bramhall, allow a maximum of 10 customers in the store at a time as they work toward increasing capacity and unlocking the doors.

In addition to appointments, they’re allowing customers to shop by phone. And, like Curiosities, the store “is much closer to online shopping.” 

Bramhall expects another spike in COVID-19 that she fears will lead to another shutdown of Colorado’s businesses. Adding online shopping will be “crucial for our survival,” she said. 

Since reopening, the store has been sustained by regulars who want to ensure its future. It’s a common refrain among downtown retailers who have gotten by with a little help from their friends. 

 “If we’re careful with our finances, hopefully we will be able to navigate this,” Wasserman said. “We have great customers who support us …  that’s the benefit of a small town. Of all places to be, being in Fort Collins with its good sense of community, I feel lucky for that.”  

Will shopping in Fort Collins ever be the same?

While most of Northern Colorado’s economy is starting to reopen, retail is far from business as usual.

Bask Salon, 153 W. Mountain Ave., initially reopened with only four of its 14 stylists and four clients allowed in the building at one time. Today, through a variance issued through Larimer County, it is operating at about two-thirds capacity, said owner Kelly Schroyer. 

The salon is allowed 20 people inside at one time, including nine stylists, nine customers, the owner and a receptionist, Schroyer said. 

“May was pretty sorry in this place,” she said. “We have 14 stylist stations and were only allowed four. Now we are able to have nine, which is significantly better, but still not good.”

Bask built walls between each shampoo station to achieve social distancing and eliminated doublebooking (cutting or starting a color on a client’s hair while waiting for another color to process) to comply with county guidelines. 

“I totally understand why they are not wanting us to do that, but it’s just another layer of the girls’ business that has been taken away,” Schroyer said. 

To compensate, Bask extended its hours to give stylists as much work as possible under the guidelines.

Individual stations were already 8 feet apart and separated by pony walls. “No one is on top of each other,” Schroyer said. “We feel we could be open 100%” and still be safe, but that is not allowed under state and county guidelines.

Stylists rent their booths from Schroyer but set their own prices for clients. So far, Schroyer said none of the stylists has raised prices, and Bask hasn’t raised the price of booth rentals.

“The girls aren’t able to work as much, so it’s really not fair of us to charge them the same amount of rent we were charging before COVID because they are not in here as much,” she said.

Businesses seek path out of survival mode

Grease Monkey and Big O Tires remained open in Fort Collins throughout the pandemic as an essential service. But sales plummeted nearly 75% in March and April as people lost their jobs and customers hunkered down when COVID-19 became a real threat in Northern Colorado. 

Owners Ron and Jim Lautzenheiser cut payroll by 40% and permanently closed their underperforming Grease Monkey in Windsor and the Big O Tire in Estes Park when its lease expired. 

People weren’t driving as much, and they didn’t pay for unnecessary auto repairs in April and May, Ron Lautzenheiser said. “If something was broken they would fix it, but there was not a lot of tire business.”

Still, the slowdown cost 16 workers their jobs, he said. The Estes Park store is being sold and Grease Monkey in Windsor may reopen with new owners, he said. 

 “COVID forced us to do what we would have had to do anyway,” Lautzenheiser said.

The Lautzenheisers brought back staff at their four remaining stores in mid-May when they received Paycheck Protection Program funds and business started to rebound. “PPP saved our bacon,” Ron Lautzenheiser said. “It was an unbelievable help.” 

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Now, at the end of June, business is back up year over year. “We’re seeing a combination of pent-up demand coupled with people not buying new automobiles and people who want to get out badly,” he said. 

Survival, however, could be out of some retailers’ hands no matter how much they adapt, Shields said.

“We may have some segments that just go away,” he said. “If people fundamentally change their behavior …  if people just aren’t there for whatever reason, it might be difficult for some (retailers).”

Nuance Chocolate has remained open through the pandemic and has adapted as much as it can. 

When most stores shut down, owner Toby Gadd remained open for counter orders, which slowed as business in Old Town ground to a halt. Gadd turned to his online store that got little attention pre-pandemic because he didn’t have enough product to sell both in store and online.

“We ramped up our online store and replaced a good portion of lost sales (there),” he said. “We had an underused store that we could light up and sell online. Not everyone had that option.”

But then, temperatures heated up and, well, chocolate melts. Online sales dropped again given the high cost of shipping chocolate during warm weather, Gadd said. 

His seating area is too small to accommodate social distancing so it remains closed, and the patio is mostly used by people getting a cold drink. Coupled with difficulty of shipping chocolate in summer, sales are once again suffering due to lack of tourism in Fort Collins. And his Paycheck Protection Program money, which Gadd called very useful, will be gone next week. 

“At this point we have to figure out what’s going to happen next. We’ve done a lot of adapting. The good news is the economy is opening back up and … regulars are coming in more frequently,” Gadd said. “That gives me some hope.” 

Like Curiosities and Clothes Pony, Nuance’s regulars are keeping the store alive. “Without them we’d be in terrible shape. When they come in they buy more chocolate than they would have normally,” he said. “It’s really impressive.” 

Still, the future is uncertain, he said. When people will be allowed back in the store “is a long-term big question.”

Will shoppers return to malls? 

Recent consumer confidence polls are hard to come by, but Shields said the expectations are “that a large swath of the population won’t be anxious to be shopping until they feel like their health is secured,” with either a vaccine or a cure.

A late-April survey conducted by the International Council of Shopping Centers showed 73% of those polled said they would be comfortable going to a physical store within two months or sooner. However, only 52% said they’d be comfortable returning to a mall. 

Sales at Foothills shopping center in Midtown Fort Collins dropped substantially in April as most of the property remained closed. Taxable sales fell from $7.6 million in May 2019 to $1.2 million this May, according to the city sales tax office.

Taxable sales reported in May reflect purchases made in April, when almost all retailers and restaurants were closed or had limited operations. 

Mall general manager Patrick Bunyard said he’s optimistic about the return of the mall given a recent uptick in foot traffic and positive results he’s hearing from many stores and restaurants since reopening. 

The local economy and employment rate will play a large role in how businesses progress, he said.

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Although the area’s unemployment rate is high at 10.2% in May, it is lower than the national rate of 13.3%, “which is a good sign going forward,” he said.

Buckle manager Brooke Mynatt said she’s been pleasantly surprised by sales at her store in the mall since reopening a couple of weeks ago. 

The store has adapted to curbside pickup, preferred pay that provides personalized shopping without leaving your home, even home delivery with employees dropping packages off at customers’ homes. 

Even with limited hours, Mynatt said the store’s transactions have eclipsed last year’s mark with about 20% to 25% coming through the preferred pay option. The second week of June, the store had 75 more transactions than the same period last year. 

Fort Collins-area business closures

Stores that have closed or plan to close in coming weeks:

Fort Collins sales tax licenses issued

Source: City of Fort Collins Sales Tax Office

Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado. Contact her at patferrier@coloradoan.com. Please support her work and that of other Coloradoan journalists by purchasing a subscription today.