Surviving the Bust

local merchants await holiday shopping season

October 25, 2002

Dozens of live crickets are jumping in the inflated plastic bag like confused toddlers inside the medieval-castle bounce ride at the St. Philip's carnival fundraiser. "Yes, that's it for me today," a heavily pierced gentleman, shouldering a sleek white parrot with pale blue eyes, says about the crickets -- fresh food for a reptilian pet at home. Steve Tang rings up the $2 order and sends the customer, his parrot, and the crickets on their way.

Tang is the owner of Tropical Island Pet Shop, on 24th near Diamond, which sells fish and reptiles, as well as pet equipment and supplies. During the recent economic boom, Tang had a steady stream of regular customers, and even a few big spenders: one customer spent $1,000 to $2,000 per month, which translated to solid profits for Tang. But since 9/11, Tang has often seen regular customers lose their jobs and consequently their ability to patronize his pet shop -- including the big spender, who moved to Lake Tahoe to escape San Francisco's still-high housing costs.

To increase business, Tang has tried using advertising promotions, such as in SF Weekly and the monthly Val-Pak coupons, but finds that 9 out of 10 customers come in because of word-of-mouth referrals. "I'm definitely at the 'concerned' stage," he says glumly, but he hasn't given up hope yet: customers may choose to patronize his shop for its reasonable prices, especially because he matches or beats those of competitors.

Some upscale restaurants and liquor shops are also hurting because of the economic slowdown. "It's hard to have a restaurant open with no people in it," laments Diego Ragazzo, the Hollywood-handsome owner of Noi Food and Wine on 24th near Castro. Ragazzo is most proud of the restaurant's $15 veal saltimbocca dish, but hopes to encourage business with lower-priced pasta dishes and appetizers. He may also sponsor some more "half-off" evenings, which were successful in July and September.

Walid Masoud, owner of Urban Cellars, on 24th between Vicksburg and Church, feels similarly. "Let's put it this way," he says, "the year 2000 was a very good year. Last year dropped; this year dropped even more." Masoud noticed that the biggest drop in sales correlated with the Enron and WorldCom scandals in July -- and he thinks the economy may get even worse. "Typically, I'm an optimistic guy, but I honestly don't see it coming to an end yet." To bring in more customers, Masoud may resort to using the marquee, which currently features jokes and lighthearted homilies, to display store specials. But Masoud's sense of humor is important to him, so he'd revert the marquee back to fun one-liners once business improves.

Even if the economy in San Francisco continues to decline, however, the neighborhood won't necessarily go down with it. Noe Valley is a strong community with a solid economy of its own, and it's survived several past recessions. Many local merchants say that business isn't what it was two years ago, but they nevertheless earn enough to continue and, if they have to, find creative ways to cut costs. Noe Valley Merchants and Professional Association president Kathy Zucchi explains, "Noe Valley is an insular community. People who live here like to do business here. At the same time, there aren't as many dollars to go around; people are being cautious because of what's going on in the world." But Zucchi is an optimist, and believes that seeing the glass half full is a choice.

Like many local retailers, Marjory Panetti's view of the glass can waver. Her namesake store, Panetti's (24th near Sanchez), which sells an impressive array of gorgeous handmade gifts and contemporary crafts, has also had a drop in sales since the end of the dot-com boom, about two years ago. "It's definitely been down in the last year or two," she says. "Last year, 9/11 was the thing that crashed everything. It wasn't good before that, but, after 9/11, [the economic aftermath] really seemed to affect the sales."

Panetti has also witnessed an "exodus" from the neighborhood because of the lost jobs. In fact, she hired someone who'd been "downsized from nice dot-com job." The new employee told Panetti that everyone she knew was out of a job, including all her friends. "Some of these people were my customers," Panetti observes.

But Panetti is quick to acknowledge one of her biggest sources of support: Noe Valley itself. "People who own homes, permanent residents, are wonderfully loyal and supportive. There has been quite a bit of movement out of the neighborhood, but, of course, others move in, because Noe Valley is so delightful -- but it takes time to get new customers acclimated to you, too. But, in general, retailers like myself are very happy to be in Noe Valley, and not in the Haight, or some other areas that are tourist attractions. We don't depend on that."

Panetti is cautiously counting on this year's holiday sales: "We can look forward to a little better holiday season, but it'd definitely be down from previous years." To bring in holiday shoppers, Panetti is stocking her gift shop with items she believes resonate with the tone of the times. "People have less disposable income, and they're going to each others' houses instead of spending a lot of money," she says, and so she is "concentrating on things that make wonderful hostess gifts, to make the home more appealing, more party-like," like a specialty ice bucket for champagne, complete with holders for long-stemmed glasses, which can be used as a "central gathering spot" for a holiday party. Panetti is also wooing holiday shoppers with a selection of candles, boxed cards, angel figurines, and Presidential Hanukkah menorahs.

Other local merchants have weathered economic ups and downs over the years by offering unique, difficult- or impossible-to-find merchandise at reasonable prices, like the historical, international, and series mystery books of The San Francisco Mystery Bookstore (24th near Diamond), which has been in business for 27 years.

Fostering a sense of community is another strategy that keeps customers loyal to Noe Valley businesses: the Mystery Bookstore hosts book signings, reading groups, and other events for mystery book lovers. Current owner Diane Kudisch runs a "T.G.I.A.F." ("Thank God It's Almost Friday") promotion every Thursday (buy two paperbacks and get a third half-off), and will sell hardbacks for 20% off after Thanksgiving. In addition, Kudisch invites readers to meet local authors and eat holiday food at the Open House on Saturday, December 14, starting at 1:00 P.M.

Some businesses continue to exist, and even thrive, because they bank on the "Lipstick Sales Factor"; that is, they sell a lot of little things instead of relying on big-ticket sales. For example, the clothing store Ambiance (24th near Noe), which manager Pamela Gamble calls "Sweaters R Us," sells youthful and trendy outfits and trinkets, sometimes for as little as $10 or $15. Gamble suggests that bargain hunters check the weekly markdowns and once-a-month 20%-off weekends and join the mailing list to receive regular discount coupons. Similarly, Astrid's Rabat, on 24th at Sanchez, always has a sale on rotating stock, and currently features quality boots and fall shoe styles at better-than-Union-Square prices.

A number of Noe Valley merchants hope that consumers do their holiday shopping here instead of at the big department stores downtown; in fact, local stores try to cater to holiday shoppers by offering an appealing selection of one-of-a-kind gifts. The Ark (24th and Vicksburg), for example, stocks high-quality wooden toys and hand puppets, and offers popular commercial toys as well (Thomas the Tank toys are on sale in November and December). Fragrance aficionados can find a colorful variety of sweet-smelling stocking stuffers at a 20%-off sale November 1st through 3rd at Common Scents, on 24th near Sanchez. Shoppers seeking something both special and edible can confer with Jack Epstein, owner of Chocolate Covered on 24th near Noe. Epstein can make a custom-made tin, featuring a photographic print surrounded by fine Japanese paper, for $40 plus a one-time $10 image charge -- and then he'll fill it with a specified combination of gourmet treats.

Merchants that don't focus on seasonal gifts generate steady business all year, like Peek-a-bootique (Castro near 24th), which won this year's "Best of the Bay" award from the San Francisco Bay Guardian for its constantly revolving inventory of second-hand children's clothes. Owner Paul Morgan attributes the store's success to its uniqueness and location, right next to a major stop for the 24 Divisadero bus. "People who would otherwise not set foot in Noe Valley see this store from the bus, and they come in," he explains.

Service-oriented businesses, like Noe Valley Music (24th near Sanchez), and Video Wave of Noe Valley (Castro, between Jersey and 25th), rely on loyal customers and neighborhood support. Noe Valley Music hasn't been selling as many expensive guitars as it had been, but musicians frequent the shop all year for its 40%-off strings and "super service." And Alexander Gardener, who owns the popular Video Wave of Noe Valley, offers free popcorn and encourages lively conversation among patrons browsing the video and DVD collection: "It's like a coffee shop without the coffee," he says.

If economists are looking for a beacon of hope, they can find one right here in Noe Valley. A few local businesses are not just bringing in a steady stream of customers: they're barely meeting the high demand for their popular services.

Dan Gamaldi, who runs the venerable Cradle of the Sun stained-glass shop, at 24th and Vicksburg, says that the six-month waiting list for his popular classes has dropped to a still-impressive three- or four-month waiting list. (He's increased the class offerings to five days per week to meet the demand.) Gamaldi says his classes, which he's been teaching for over 20 years, have always been popular. "People like doing stained glass," he explains. "There's a lot of camaraderie in the classes, and the classes get people out of house, where they don't have to deal with the kids, and into a friendly class environment. It forces them to do stained glass instead of sitting at home, watching TV." Gamaldi also says he has "great music going" during the classes; he thinks of himself as an amateur deejay, burning songs from his impressive music collection of blues, rock, and other genres onto CDs and playing them during class. In addition, his store sells commissioned and finished pieces, tools and supplies, and instructional books and videos. Gamaldi's own instructional video has been released this month, in time for gift shopping for aspiring stained glass artists.

Another thriving enterprise is Castro Computer Services, on Castro near 24th. Owner Raj Walia reports that business is actually better because of the downturn, because computer users are getting their computers repaired instead of buying new ones.

And, like other solid Noe Valley businesses, Walia offers friendly and reliable customer service. With "Athena," a giant blue-and-gold macaw, sitting on his shoulder and knocking off his spectacles, he answers questions from customers strolling in from the street and dispenses advice about Internet service providers, digital cameras, and scanners. And, although Athena has nothing to say about it, Walia will be giving away free 2003 calendars, starting December 1st.

[Note: This article is the original version. The Noe Valley Voice published, in its November 2002 issue, a rewritten version.]

Copyright 2002 Mariva H. Aviram. All rights reserved.