Christy McDonald talks with the owner of the Peacock Room and multiple other small retail businesses Rachel Lutz about what it’s really like navigating the pandemic.
Lutz points out that the relief for small businesses isn’t what it’s cracked up to be. She also urges everyone to think about what it would be like without the small companies, boutiques, and cafes that are a big part of a community’s identity aside from what the loss of small businesses could mean for local property values.
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Christy McDonald It was seven weeks ago that we heard of the first cases of Covid-19 here in Michigan, and really, wow, what a seven weeks it’s been. All of our lives have changed. Some of us are out of work. We at least know people who are out of work or whose businesses have had to shut down. And when I think about small business owners and in a lot of the stories and the people that we get to meet on One Detroit, I come back to Rachel Lutz, who is a friend and also someone that you’ve met on the show a number of times because she owns four retail locations in the city of Detroit and she’s always the first person to also try to boost up other small business owners across the city. So I wanted to check in with Rachel and Rachel Lutz is here with me now. Hi, Rachel.
Rachel Lutz, Owner, The Peacock Room Hi. That was a very kind introduction. Thank you.
Christy McDonald It was, it’s really good to see you. How are you doing?
Rachel Lutz, Owner, The Peacock Room I’m doing okay, like the best I can under the circumstances. A fellow small business owner called me the other day and started to say, how are you doing? And before he could even finish. We just both started laughing hysterically. So if we’re not laughing, we’re crying. Like there’s a lot going on, but a lot of us are really trying our best to keep our spirits up. I think in the beginning, a lot of us were just in shock and as we’ve kind of moved through that, I think, you know, we we’re–some of us are seeing a path forward.
Christy McDonald Yeah. And I think that is the loaded question of how you’re doing or how is it going to go? Is the next part of it. So you own two locations of the Peacock Room. One is in the Fisher Building; one is in The Park Shelton. And then also Yama is in the Fisher Building and Freeda is in the Park Shelton. So you have these locations, you hire staff who are close to you and then I guess, Rachel, take us through what the process was that everything had a turn on a dime for you.
Rachel Lutz, Owner, The Peacock Room Well, I think, as you know, things went from week to week to taking it day by day to hour by hour and then minute by minute and it was just heartbreaking to finally make the decision of having to lay off my entire staff full time of 12 women, but additional part time and seasonal help. It really was devastating on a personal level and as a practical matter, too, I am now the only sole employee of running four stores. And in the process, you know, I had to be, you know, fulfilling a few orders coming in. I had to apply for these grants and loans. And in the meantime, I don’t just miss my staff operationally like they’re my family. To send the layoff letter, I basically, I literally stayed up until five o’clock one morning because I just couldn’t hit send and I’d promised them I would send it that night. And I thought, well, maybe if I technically do this for dawn, it still counts. And finally, before I just had no time left, that’s when I just sent the layoff letter. It was it was awful but I did it with the intention of bringing everyone back as soon as we’re able to reopen. Didn’t know what the future looks like, but I knew what that moment looked like and it was pretty bleak.
Christy McDonald You also form really personal connections with your with your customers. You stay in contact with them. And a lot of them are repeat customers because of the unique experience that you provide to them as a small business owner and as someone who truly loves their product. And you’re not unlike so many other entrepreneurs who have had a dream, opened up the space and cultivated the people who come in your doors
Rachel Lutz, Owner, The Peacock Room Yeah, I miss them a lot. I’m not speaking as a business owner. I’m speaking as just someone who loved seeing these moments of connection happen. You know, we did pop-ups of the Detroit Opera House and at the Fisher Theater and seeing people in those happy moments when they’re out in a theater date together or, you know, they come in for their wedding dress or a mother of the bride dress. We get to hear about how excited they are to have a celebration with their family. We really miss those connections in those moments and those are the ones that I can’t wait to get back to.
Christy McDonald So if you stop them for a minute and say, all right, now, how am I going to pause and now apply you said for all of these different grants or loans or see what you can do to connect the dots. Can you explain that process for people who don’t own a small business and who don’t maybe really, truly understand what you guys are going through?
Rachel Lutz, Owner, The Peacock Room They’re lucky not to even be familiar with it because it is a mountain of paperwork. I think a lot that we’re hearing as well. You’ll be fine. You’re getting the small business bailout out and there really isn’t one. There are several loan programs that you can apply for and some grants. But, you know, the PPP, for example, we watched forty five percent of that funding go to four percent of the recipients. How demoralizing is that as a small business to finally get thrown a life preserver and then have it yanked away and given to somebody on a yacht? That’s what it felt like. And the second round of funding is also just as, just as, it feels just as elusive. I am hopeful in the second round that we might qualify, but even that is protection for our payroll and rent. It’s a bailout for landlords in a way it doesn’t take into account the hundred thousand dollars of inventory that I have bought for theater season, wedding season, Derby season, promise season that just evaporated into thin air. So the money that even if we do get it, we’re restricted on what we can spend it on or it becomes a loan instead of a forgivable loan. But the questionnaires that we have to answer, how many employees do you have? Well, do you mean full time? Part time? seasonal? How many employees do you expect to bring back? I have no idea how I’m supposed to answer that question as a retail shop owner. That’s non-essential. So all these questions it’s almost like we’re expected to have a crystal ball ourselves and we don’t. So these these applications are just thank God I have a bookkeeper and an accountant and a manager that’s helping me through this because the small, small businesses, especially the ones who are more analog, they’re not as web-friendly. I think that those are really a lot of the businesses there, especially going to get left out of this.
Christy McDonald And I think that’s the one thing that, you know, I follow you on social media and we’ve gotten to know each other over the years that I really admire is you constantly boost other small businesses who say, hey, have you heard about this place? It feels like that there is a really good tight-knit community of, oh, you’re starting something. How can I help you out or what advice can I give you? Talk to me a little bit about what other small business owners are doing who maybe don’t have the bookkeeper, who maybe don’t have even other resources. What? What is everyone telling each other in the area right now?
Rachel Lutz, Owner, The Peacock Room So one of the amazing privileges of owning a business in the city of Detroit is the spirit of collaboration. I know that we don’t often see ourselves as competitors. We see each other as collaborators. So I think that a lot of us are reaching out to our neighbors. There’s a hair salon opening in my neighborhood. I called her and was like, hey, are you applying for this program? And she’s like, no, I’m feeling discouraged. I’m like, well, get on it. You have a chance of getting it. Let’s do this. So you see a lot of us wrapping our arms around each other from six feet away of coarse and with a mask on. We’re all grabbing our arms around each other. I founded a private Facebook group just to quickly do it as a crisis communications group called City of Detroit Business Owners Covid-19 Rapids Alert page, and that’s an internal group where we can we can vent, we can collaborate, we can let each other be aware of all these programs and keep track of all these grants and loans and other resources that are available to help each other. So if anything, we’re just trying to reach out to those who might not have the resources and share what we have. And that’s, I think how we’re all kind of getting through this is that encouragement of each other.
Christy McDonald So tell me about a path forward. What do you see and especially for retail, especially for your type of retail, which is very personal and experience oriented and we see that, you know, people are able to have Amazon drop something on their front porch and they don’t then have to deal with the physical distancing. What are you seeing for retail in your business specifically?
Rachel Lutz, Owner, The Peacock Room Well, speaking of Amazon, you’re going to get a very different answer from a small business owner or retail shop owner than you would from like Amazon, whose CEO is probably just having Zoom meetings in his office and not working in his own warehouse where a lot of his own workers are revolting because they don’t feel safe. So a lot of small businesses, we are literally on the front lines with our employees in the same spaces that they are in their spaces. So for a business like me, I’m going to take a safety approach and a health approach that is my own standard of health and safety. You know, I’m not going to dictate to my employees to come in if they don’t feel secure. Thankfully, we have a short term, medium term and a long term plan. The short term plan, we know it’s by appointment only for now. It’s a virtual appointment. We don’t even allow anyone into the store. Sorry, Christy.
Christy McDonald I’ll be back.
Rachel Lutz, Owner, The Peacock Room We’re doing virtual appointments. We’re still very service heavy as we always have been. We’re not going to be up ball on your business in a fitting room anytime soon. And by the time we are, we’ll have a plan in place to deal with that and the medium, and long-term plans aside from selling through social media and online is we do want to be a brick and mortar again in the neighborhoods that we serve. That is our number one passion and the passion of most retail stores in Michigan. So our medium and long term plan are really going to depend on what the governor advises and frankly, what the health community advises. I’m not going to be taking my directions from any politician at a city, state, federal level. I’m going to listen to the medical experts that are out there telling us how to manage this crisis. And I’m hoping that our that our elected officials will do the same
Christy McDonald Have your landlords been forgiving? Have there been? I mean, you know, working out with the space that you that you have rented?
Rachel Lutz, Owner, The Peacock Room One really important thing for the audience to know is that our rent is still do. It is still do unless we’ve worked out some miracle plan with a very generous and understanding, compassionate landlord. Our rent is still ticking. So our doors are closed. We have barely any revenue coming in. And that’s a huge concern. So we’ve thankfully gotten some help with our rent. But no, I mean, it hasn’t really changed the situation at all. That’s what some of these loans, loans and grants are available for. And some of our customers have stepped up to help us with that. But no know, it’s it’s still due. Whatever amount of money I’m worried about as a tenant, they’re worried about with extra decimal points attached. They are businesses, too. So it’s not like we can expect our landlords to all of a sudden, you know, just waive the rent with a magic wand. A lot of them have mortgages on these properties. And until we see federal loan relief for commercial landlords, it’s getting pushed onto us
Christy McDonald What do you think is missing from bigger conversations? We hear the politicians talk. We see action that’s happening or that’s not happening. Is there anything missing from a conversation from a small business owners’ perspective?
Rachel Lutz, Owner, The Peacock Room The urgency. The absolute urgency we are over a month into this. Personally, I have unemployment that hasn’t come through yet. I have no grants or loans that I’ve completed that I’ve been awarded and completed. It is now headed into, what, week five? week six of this? And it’s shocking that other countries are stepping up. They’re looking out for our landlords. They’re looking out for the small businesses. And here in the United States, what the SBA has offered is frankly completely inadequate. Even with the second round that you’re hearing about this. What is it? Three hundred plus billion dollars is still a drop in the bucket for what is needed even in Oakland County, Michigan, alone. I just heard Dave Coulter say that they have requests of 80 million dollars. 80 million dollars in one county in this country. I don’t understand how we can expect the second round to be adequate. So instead of ruling out these these new waves of assistance, they need something urgent and drastic and big. Otherwise, a lot of us are not going to make it
Christy McDonald And then that, I think is the main thing, that people will not be able to exist much longer. They’re just going to have to say, you know what, we are not re-opening. What? As we wrap up here, Rachel, what do you want people to know? What would you what would your call to action be or remind people?
Rachel Lutz, Owner, The Peacock Room My call to action is really think about all the small businesses in your neighborhood that if they weren’t there, what would that look like? Even if you want to look at it from a financial self-serving attitude. What would your property values look like in your neighborhood if you didn’t have all those really great cafes and stores and these beautiful downtown areas to wander because as if it wasn’t tough before, now it’s pretty tough. So, think about those businesses. Think about who you want to survive, that you really think contribute to the fabric of your neighborhood and support them. Like get certificates, call them on the phone, avoid doing that buy online button with a major, big box store. Call up your local hardware store and ask if they have what you need and if you can pick it up curbside. Your order won’t get lost in a warehouse somewhere in North Carolina for a week. So please support those businesses. Think about with compassion the small business owners and the employees who are also hurting right now. Reach out to them and just send them a kind note and just say I’m thinking about you.
Christy McDonald Okay, Rachel, let’s. It’s great to see you. And it’s always good to hear from you. And we hope to see you soon.
Rachel Lutz, Owner, The Peacock Room I hope so. Thank you so much for having me.