‘We're not sure we'll make it': Coronavirus-related slowdown is taking a toll on many local businesses

An employee at Costco in Huntington Beach disinfects shopping carts on Monday as the coronavirus outbreak began to hit some area businesses hard.

By Hillary Davis

, Lilly Nguyen, Andrew Turner and Matt Szabo

March 17, 2020 12:12 PM PT

Jim Walker has a stress-inducing calculus.

Walker, who owns the Bungalow restaurant in Corona del Mar, said business was fine until last Monday. Then it tanked by more than half and he’s now operating at a loss amid a coronavirus-driven bust.

His lunch customers are working from home. His dinner crowd trends older, and while his Long Beach establishment, Domenico’s Pizza, is able to offer takeout, the Bungalow’s upscale American fare doesn’t lend itself to that.

“People typically don’t order a filet mignon to go,” he said.

Hypothetically, he said Monday, he will need to make an additional $200,000 in revenue after business returns to normal to cover his losses.

He’s not sure that will be possible. Or when things will return to normal.

As social distancing deepens in an effort to stem the worldwide outbreak of the virus that causes the respiratory illness COVID-19, restaurants like Walker’s are seeing precipitous drops in business, made worse by Sunday’s directive by Gov. Gavin Newsom for restaurateurs to cut their occupancy by half at least through March.

It’s unlike anything Walker, 75, says he has ever seen in the restaurant industry. He fears many restaurants will go out of business permanently. His own survivability depends on how long the restrictions last, he said.

In addition to the Bungalow and Domenico’s, Walker owns Cedar Creek Inn in Brea.

He’s spreading out hours to keep his employees working, considering cutting Sunday dinners and is following the guidelines of half-full dining rooms. He’s taking it day by day.

Restaurateurs face a bleak decision — stay open without making enough revenue to pay rent, or close down and pay rent on a shuttered building using savings.

“Which poison do you want to take?” said Walker, who added that the Bungalow’s landlord has been noncommittal about rent concessions. “We’re trying desperately to keep our staff employed as best we can.”

Mario Marovic can identify. He owns 11 restaurants around Orange County, including six in Newport Beach.

The state also suggested that bars, like some that Marovic runs, close entirely.

He said he’s consulted with county health officials, city officials and his attorneys. He’s staying open, with reduced capacity.

And he’s going out to eat with his family at drive-through and sit-down restaurants alike.

“We’re on the front lines,” he said Monday as customers texted him to say they appreciated being able to dine in for lunch at Dory’s Deli by the Newport Pier.

He’s practicing what he hopes others will.

Marovic said he’s confident in his establishments’ attention to cleanliness. At Blackie’s by the Sea on the Balboa Peninsula, which sells food but is essentially a bar, he has switched to disposable utensils and is allowing employees to stay home even if they’re healthy but don’t feel comfortable going to work. He will support them, he said.

He noted, though, that he can help only with their base income. Their real money comes from tips, which he can’t replicate.

“They’ve gotta pay the rent, they’ve gotta pay the bills,” he said. “We’ve got single parents that wait tables and tend bar.”

General anxiety and calls by the state for senior citizens — considered the most vulnerable to serious effects of COVID-19 — to stay home are cutting into retail sales as well.

At Fashion Island, the babble of the Newport Beach mall’s fountains and a stiff breeze were louder than any customer chatter in its themed courtyards.

Some of the chic boutiques were open but empty of shoppers Monday. Others were dark, with signs taped to their doors announcing closures, some of them indefinite.

Macy’s Inc., which has a Macy’s location at Fashion Island, is closing all of its stores through the rest of March, effective at the end of the day Tuesday. Those include Bloomingdale’s at Fashion Island and a Bloomingdale’s Outlet in Costa Mesa.

All Fashion Island stores that stay open are under new weekday mall hours of 11 a.m. to 7 p.m.

The Starbucks at the Bella Terra mall in Huntington Beach has closed its dine-in areas as a response to the coronavirus outbreak.

Starbucks was closed, with a handwritten note attached to its announcement: “We will miss you all and look forward to serving you again soon,” signed with a heart by “your Fashion Island team.”

Lululemon also was closed, along with Kendra Scott, AG, the General Store Littles, Peloton and Joie.

“As the years have gone by, trials have come our way, and as a culture, it has been our nature to persevere in the face of adversity,” read a sign on the Joie door. “We look forward to welcoming you back soon.”

Bath & Body Works was doing brisk business selling hand sanitizers, with a limit of five per customer at the normal price of about $2 for a pocket-size bottle.

But the store was selling little else, such as its staple body sprays and lotions, manager Jessica Morales said.

At See’s Candies, clerk Dylan Clark said Monday was an average day as the crew members in their iconic white outfits sold bonbons and Easter chocolates.

“It’s a comfort food, and it does keep,” Clark noted.

David Michalski of Mission Viejo stopped by Whole Foods Market to pick up chicken for soup. He found none.

He works in marketing for conventions, one of many hard-hit sectors. He’s trying to stay positive, though.

“I’m not in denial, but I can’t not say hi to people,” he said as he walked to the parking garage, where a sign at the gate said 670 spaces were available.

Marovic and Walker said they had heard nothing from the government Monday about helping workers or employers pick up the slack from the sudden slump.

But U.S. Rep. Harley Rouda (D-Laguna Beach) said small businesses affected by the pandemic are eligible for the Small Business Administration’s Economic Injury Disaster Loan program. Through the program, each eligible business can receive up to $2 million in working-capital loans to help overcome temporary loss of revenue.

“I was proud to vote for a bipartisan package to ensure that our local small businesses will be able to access $7 billion in low-interest loans,” Rouda said in a statement.

Gelson’s, a high-end supermarket chain with locations in Newport Beach and Laguna Beach, said it will offer seniors-only shopping at all of its stores from 7 to 8 a.m. daily starting Wednesday for those 65 and older. Regular hours will begin at 8 a.m.

Huntington Beach

Jesse Gonzalez, 30, an assistant manager at Buffalo Wild Wings at the Bella Terra mall in Huntington Beach, said he didn’t react immediately to news of the coronavirus’s outbreak weeks ago, but a recent trip to a grocery store changed that for him.

“I wasn’t panicking or none of that,” Gonzalez said. “I just happened to need to go to a grocery store, and sure enough, there were [limits for] only two cases of water per household, only four cans of food per household.

“People were running around. I couldn’t even find a shopping cart. ... It was pretty crazy. It started kind of hitting me after that.”

The ability for those working in the restaurant industry to make ends meet is being affected by the COVID-19 pandemic.

“I just don’t know how it’s going to play out, with us having to pay bills, rent and everything,” Gonzalez said of the pandemic’s effect on the restaurant industry and himself. “This is my only job. It’s kind of tough. I do have a son as well ... they closed down school for two weeks ... so it’s kind of tough trying to find a babysitter.”

At Buca di Beppo, where capacity has been cut by 50%, manager Jennifer Reyes, 32, said staff hours also are being downsized. The Italian restaurant is providing orders to go and catering.

The restaurant was asking customers to pay via debit or credit card when possible as a precaution against spreading germs through cash.

Reyes said she is trying to keep other staff members updated on the coronavirus situation while doing the best she can to stay positive.

Yogurtland had taken several precautions against the spread of the disease, including providing gloves for customers using the self-serve section.

A sign in Costco in Huntington Beach tells customers Monday that the store is out of water and paper products as people stockpile those and other items as a response to the coronavirus outbreak.

Costco had a sign at the entrance reading, “Sold out of paper and water. Sorry for the inconvenience.” Two workers stood at the entrance handing out wipes to disinfect shopping carts.

The Staples store at the mall was open but was cleared out of paper towels, toilet paper and facial tissue.

“We haven’t seen a decrease in sales,” said a Staples manager who requested anonymity. People are still shopping for typical office supplies such as ink and copier paper.

Business was less brisk at Rocky Mountain Chocolate Factory, which has closed early a couple of times in the past week.

“For us to close early is pretty drastic,” said employee Kai Dababneh, 21, a Huntington Beach resident. “It’s a ghost town. No one’s here.”

Dababneh said the candy shop’s business has decreased as the Century movie theater next door has cut hours to 1 to 8 p.m.

“Most of our customers that come in stop here either before or after coming into the theater,” Dababneh said. “It’s extremely slow. Friday and Saturday nights are usually our busiest nights, and Saturday was like a ... Monday night.”

Bella Terra’s Starbucks has closed its dine-in areas. Across the street on South Edinger Avenue, a Starbucks drive-through remained open, but not the dine-in area.

Sara Van Dyke, 26, went to the Whole Foods Market at Bella Terra on Monday to grab some juice with a friend. As a runner, she still is getting outside to exercise daily, though finding food is sometimes a less consistent proposition now.

“All of the restaurants I’ve been to have been open, but I also haven’t tried to go out to eat much in the last few days,” said Van Dyke, of Huntington Beach. “We’ve eaten food at home a lot. … Trader Joe’s had almost nothing on Saturday. I was like, ‘Thank God we have most of our food.’ ”

Ruth Gigoux of Huntington Beach was standing outside the cinema box office waiting to buy a ticket for “I Still Believe.” She said she had gone to the theater because the senior centers in Corona del Mar and Huntington Beach — where she liked to play dominoes with friends — have closed because of coronavirus concerns.

“The governor came on and told everyone, ‘Self-quarantine and stay home,’ but it’s hard to stay home when you’re alone and have nothing to do,” Gigoux said.

Laguna Beach

While cars still rumbled down the narrow streets of downtown Laguna Beach and residents sporadically ambled down the sidewalks, Monday afternoon was marked by the gloom of rain clouds and the increasing concern about the COVID-19 coronavirus.

“Business has definitely been impacted. There’s fewer people in town and it’s getting fewer by the day,” said Sam Deen, who owns Laguna Iguana, a gift shop that sells handicrafts from the Americas.

Nahaleh Doroudian, sales manager for Laguna Iguana, said it seemed tourists were the ones looking in stores, rather than locals.

Deen and Doroudian said they had customers from Tennessee who were cutting their vacation short out of concern that domestic flights would be canceled.

Deen said he noticed no one was shaking hands with anyone and that people appeared to be keeping their distance from others.

“People that are coming in this store ... everyone is peaceful, happy and we’re not scared,” Doroudian said. “If I was scared, I would tell [Deen], ‘Hey, you know what? I really can’t come in today.’ ”

“If you look throughout history,” Deen said, “this happens all the time every few years. I guess the only precautions that need to be taken are up in the higher powers of the government, you know? How much money they put aside for the CDC and for pandemics and for emergencies. As us, we just do what we can do.”

Passersby view sandcastle artist Chris Crosson's toilet paper tower titled "Roll With It" on Balboa Island in Newport Beach on Monday — a lighthearted take on the coronavirus-related rush on toilet paper at stores.

Tanya Low, who owns CJ Rose Fashion Boutique, said Monday afternoon that she had had no customers since opening earlier in the day.

“My husband and I were talking yesterday. We’re not sure we’ll make it through this. We’re voted the best women’s clothing store in Laguna Beach and, honestly, in retail, especially in a beach community, we’re going through January and February, which is our ‘make it through’ months,” Low said. “Coming into March, where we’re supposed to be able to cover the bills that we saved up for, that’s just not going to happen. I think there’s so many small businesses that don’t make it. I hope we’re not one of them.”

Low said her mother owns Little Freebirds, a children’s boutique in Laguna Beach, and that she’s concerned about her parents’ well-being since retail is their primary income. Low’s family has a second income through her husband’s job.

“If this maybe happened in October after summer, but for it to happen now when everybody is at zero going into a new year ...,” Low said. “Even last year wasn’t an amazing year. Everybody was hopeful, and this definitely is not the hope. But it is what it is.”

James Taylor, owner and chef at the Grove on Forest Avenue, said he saw his single worst day Sunday since opening four years ago.

“Typically on a Sunday, we do over $2,000. This Sunday, I didn’t even break $500,” Taylor said. “That’s significant.”

Chairs are stacked against the wall in the cafe and some tables have been put in storage to comply with recommendations for distancing.

Taylor said tourists who typically come in the fall — usually Europeans and Canadians — didn’t come last year and that every business in Laguna Beach has suffered as a result.

“For four years in business, I’ve been able to better the month from the previous year every year until September, October, November. I didn’t even match the year I did before,” Taylor said.

He said business had started to recover in January and February, but since Newsom’s announcement Sunday for bars to close and restaurants to limit their capacities, “it’s dire times.”

“I’ve been joking with my customers — ‘It’s restaurant apocalypse week,’ ” Taylor said.

Yasuhiko Sato, manager and chef at Hapi Sushi, said business has been “pretty bad.”

“We’re usually open until 9 [p.m.], but this time, we’re open till 7,” Sato said. “[Hour changes] just started about a week ago. ... I don’t see too many people walking around. It’s been so quiet.”

Mary Bunnett, an esthetician at Roots, the Beauty Underground, an organic cosmetics shop, said, “Up until probably today actually, it really has seemed business as usual, and now I am noticing more conscientiousness — we have hand sanitizer up front ... and at our stations because we’re finally getting the message, ‘I can’t touch anything and everything.’ ”

Madison Lies, also an esthetician at Roots, said
the shop was “cleaned out” of hand sanitizer Monday and had placed three orders for shipments in the past two weeks.

Daily Pilot City Editor Rob Vardon contributed to this report.

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Updates

12:12 p.m. March 17, 2020: This article was originally published at 7:56 p.m. March 16 and has been updated with new information.