Oahu retailers struggling to climb out of slump from COVID-19 closures

Although many shopping malls and retailers reopened their doors Friday, the abrupt closures due to the coronavirus pandemic have taken a toll.

Many — from individual boutique shops to chain stores inside malls and larger department stores — have all been dealt a severe blow with the closures, and might never recover. Most have experienced a drop in revenue of over 75%, according to University of Hawaii Economic Research Organization Executive Director Carl Bonham earlier this week during a briefing to the state House Select Committee on COVID-19.

Tina Yamaki, president of the Retail Merchants of Hawaii, said for some, the drop in revenue has actually been 90% or more.

“Some haven’t even reopened,” Yamaki said. “There are so many stores right now that are not open, and part of it is some may have multiple locations, but there’s no sense opening up in a resort area if there are no visitors. There are a lot of stores that are not going to open until tourism comes back.”

Others are not prepared, she said, with necessary personal protective equipment, and others are waiting for corporate parents to make that call.

Yamaki said on Friday, when Hawaii’s leaders gave Oahu malls and retail shops the green light to reopen, a few may have done well, but some had few to no customers at all. Others may have done 20% of what they normally would have before pandemic-related closures.

“Some of them are barely hanging on,” she said. “Some are hoping they can survive until tourism comes back or the economy gets better. A lot of them haven’t paid lease rent in the last two months and the next payment is coming up as we get into June.”

What retailers need the most help with is lease rent, she said, the greatest portion of expenses. But retailers also have to pay utilities, taxes, and operational costs with no income for the past two months. Some landowners are offering rent deferrals, but some are not.

“There’s an added cost to opening up, because now you need all this personal protective equipment, and hand sanitizer and cleaners,” she said.

For a tourism-dependent chain like ABC Stores, reopening to tourists in the next month is crucial, according to president Paul Kosasa.

Only about a third of ABC Stores’ approximately 60 stores in Hawaii are currently open, said Kosasa, mostly to accommodate Waikiki residents. Stores inside shuttered hotels remain closed.

“We’re not making money,” he said. “We’re losing money. It’s just community service, so to speak.”

Shoppers are no longer buying souvenirs, but mostly beverages, food items, face masks, hand sanitizer and sanitizing wipes, which are in high demand.

Kosasa said that in the business’ 70-year history, this “has been the worst” he has ever seen it for retailers as well as all visitor-related industries.

Kosasa said he had to furlough the majority of his employees, with only a few left to run the shops remaining open.

Whether ABC Stores survives depends on whether visitors start returning in June, he said, and other factors, including the lifting of the 14-day quarantine.

He agrees there should be protocols, whether it be testing visitors before they depart for Hawaii or other means to ensure safety. Allowing interisland visitors to travel freely would be a start to helping businesses climb out of the slump, gradually.

“If this doesn’t last too long, then we’ll be fine and we’ll eventually recover,” he said. “But unless we come up with solutions and gradually bring visitors back, you’re going to have this massive unemployment.”

Naish Hawaii, a longtime family-run surf shop in Kailua, is calling it quits after 40 year in business.

Owner Carol Naish said she had been struggling with the rent for some time, but the sudden closure due to COVID-19 sealed the deal. The store has begun liquidation sales, and she expects to close for good some time in the next few weeks.

At one time, the business had a school offering lessons and three shops total, including one in Waikiki as well as at the Kailua Beach Center, but is now just down to the Hamakua Drive location. The uncertainty has been tough, she said.

“The rent just kept going up, but the income didn’t,” she said. “We were already thinking that it was time to give up before the coronavirus. That just speeded it up.”

Tanna Dang reopened Eden in Love, a boutique selling clothes and accessories, on Friday.

In March, Dang dealt with the shutdown of her shop in Las Vegas first, and then about a week later, the one in Honolulu. Both have since reopened, and she is remaining optimistic.

“We didn’t know what to expect,” she said.

At opening time at 10 a.m. Friday, she was anxious, but customers called in to ask whether the store was open. She said that by noon she had hit maximum capacity for the number of customers in the store.

One challenge she has had to deal with is not being able to offer fitting rooms to customers, as they are supposed to remain closed under government orders.

Fortunately, Dang said she was able to obtain the Paycheck Protection Program loan and bring back most employees to open her stores. She said 85% of her customer base was local, and she expects that to help.

During the closures, the pandemic also forced her to shift her attention to online sales, which will now make up a larger part of the business.

Through pop-up online sales, email blasts to customers and putting additional inventory on the website, she was able to compensate for some of the loss during the brick-and-mortar closures. Social media is also important, she said, playing the role of a “hype squad” to get people to your website.

Also, Eden in Love began selling fabric face masks, which continue to be in high demand. Dang said the pandemic has forced her to rethink her business strategy, and she is looking at it as a restart.

“It’s a mental shift,” she said. “You can choose to be a victim or find opportunities of what COVID-19 has presented to us. That to me is the only way to get out of this. I think that the coronavirus was an opportunity for everyone to reset gracefully. … We’re learning every single day, and I learned a lot about resilience and patience.”