Widespread Unemployment, Business Failures, Expected in Wake of Coronavirus Closures

Yoga studios, gyms, restaurants and hair salons have been mandated to close — with other “nonessential” businesses closing on Monday — employees are financially-strapped and owners wondering how long their businesses can survive without customers.

In the wake of closures that began Monday, CT Examiner took the pulse of a number of business owners and employees in the region, asking about the viability of their businesses and industries in face of many unknowns.

Fragile restaurant margins

“How many customers are going to call and say, ‘I’ll have the $39 osso bucco, give me six of those,” said Jordi Viladas, a chef in Old Saybrook who was laid off on Monday after Lamont’s mandate was announced. 

Viladas, who has owned restaurants in Seattle, said he was skeptical of the financial viability of many small, independent restaurants to survive the closures. 

“It’s a question of duration and if this goes on we’re going to see a staggering part of the food service industry that cannot reopen,” he said. “They just won’t be able to reopen because these are not well-capitalized, well-run mom-and-pop operations.”

Small business loans are available but can also add to the debt burden when the restaurants reopen and many small restaurants have a profit margin as low as four or five percent, he said. 

“I see a changed restaurant scene. I think we’re looking at an industry where the smaller single-unit operators are the ones in huge peril whether they know it or not because you can only draw so much salary until there’s nothing left in the bank,” he said. “People are clueless about what it takes to keep their favorite eatery open and if we don’t change their perspectives when the marketplace shrinks, that will be the only time people will realize how fragile the industry is.” 

Collateral damage

In New London, Jay Jodoin, who co-owns Whaling City Athletic Club with Kent Ward, said both he and Ward were aware of the signs of the coronavirus early on and closed before the Gov. Ned Lamont’s mandate on March 16. 

“We started to watch this trend from China and we saw the President start to close things down,” Jodoin said. “We said it doesn’t seem like it’s the flu or SARS. We couldn’t have on our conscience one person dying so we closed about 3 weeks ago.”

The club hosts programs for children, teens, adults and senior citizens, including Championship Rounds, an adaptive boxing class for people who have been diagnosed with Parkinson’s, Multiple Sclerosis, motion disorders or who have had a stroke. 

“We sponsor youth boxing, wrestling, indoor teams, girls softball teams — they’re all under one roof and the way they coexist is incredible to watch unfold. The young kids that we get in and the older people in Championship Rounds, they both benefit,” said Ward. 

Young people can exercise at home or go outside for a run during the gym closure, but older clients with movement disorders who are confined to their homes could lose gains in muscle control that they learned in class, Ward said. Even more important is the social aspect of gathering and interaction among the gym staff, volunteers, coaches and members. 

“It’s trying to gain what they lost back. This is the collateral damage of the gym closing,” said Ward. “There’s as much medicine in the camaraderie as there is in anything else that we’re doing.” 

The club has about 250 members and all memberships have been frozen until activities can resume, said Jodoin. He said he hoped people who were employed would support unemployed workers. 

“For people that aren’t sick or that haven’t lost their job, they should realize this industry and the restaurant and bar industry, we’re all taking one on the chin, taking one for the team. Please be in this with us,” he said. 

Jodoin said he has a full-time job at Yale and Ward is a retired ironworker. The two have built up some capital, which will pay the bills for a few months, he said. 

“But if this goes on two or three months, our gym won’t be there,” he said. “This gym started in my garage nine years ago. Not everyone is cut from the same cloth. We’re fighters, we’re athletes, we will come back.” 

Early awareness

Mimi Brainard, owner of Root Studio in Essex, said she became aware of the coronavirus early on and, in early March, asked her yoga clients to be diligent about washing their hands, but soon realized that wasn’t enough. On March 15, she announced she was temporarily “pausing” the studio. 

“The mounting situation concerning COVID-19 as it approaches our area is evident. Up till now I have been trying to balance my caution with the virus with my desire to support the community and still support your physical and mental health. But in the best interest of our community at large, especially the most vulnerable, I have decided to pause all group classes in the Studio til the end of March, at which time I will reassess,” she wrote customers.

Brainard, who has been practicing and teaching yoga for more than 30 years, said stopping all classes was very difficult but she was pleasantly surprised at the outpouring of emails from the community thanking her for making the decision. 

“They were applauding me for being one of the first studios or businesses to address COVID-19 or to even start to say to people, ‘Please wash your hands,’” she said. 

She said her greatest concern was the unemployment of her teachers, many of whom live paycheck to paycheck. She said it was difficult to monetize online classes and it was important to find a way to pay teachers for classes while the studio was closed. 

“Yoga teachers give so much to heal and inspire and buoy others and now is a time for them (us) to feel compensated for what we do. That many of us will do what we do as gifts to our Communities is a given. To expect that that will go on indefinitely is unjust,” she wrote in an email. 

She said she was optimistic about the future of the community she and teacher Meredith Dow have created in Essex. 

“I’m grateful to that community the two of us have built,” she said. “I don’t feel at risk of losing them because we’re going to feed them and nourish them with the content that we can put out there. We’ll get through this together.” 

Ripple effects

“I was following the news, I had a suspicion it was coming,” said Karen Cochran, who was until Monday a server at a restaurant in Old Saybrook where she worked double shifts three days plus one additional evening shift per week. 

Shutting down businesses to “flatten the curve” made sense to Cochran, but she objected to large companies being allowed to stay open when small businesses were ordered to close. 

“I get it, but on the other hand, you have big contractors, and they’re going gangbusters. General Dynamics is reporting to work. It’s government contracted work, it’s just weird that they can report to work.” 

She said she knows she will have a position at the restaurant when it reopens, but she questioned how long restaurants can survive on takeout and curbside delivery and whether the temporary closures would shut down many establishments for good. 

“I filed for unemployment and I’m hoping that I’m going to get unemployment, but who knows what’s going to happen. I just don’t know how any restaurant is going to be able to exist,” she said. 

The problem has ripple effects since her son who is a chef is now out of work, as is her daughter who is a barber. Her husband, a valet at Mohegan Sun, has also lost his position. She said she has her health insurance through her husband’s job. 

“There’s a whole host of other things that people are holding up,” she said. “Right now I’m flying by the seat of my pants. I don’t know what’s going to happen. I hope it’s not a long stretch of time. We’re in uncharted territory.” 

Essential workers

People were still coming in until we got a note on the door [on Thursday],” said Dee Ziobron, a hair stylist at Gigi’s Salon in Old Saybrook. “They should have let us have time to close, a few days notice at least.”

Ziobron said she rents a chair at the salon and buys her own products. She’s been styling hair for 33 years. 

“It’s just the two of us, we’re tiny,” she said. “I’m self-employed and now I’m out of a job and have no income.” 

Like Cochran, Ziobron objected to the “essential” designation of some workers versus others. She also objected to restaurants being open for takeout while hair salons were closed. 

“Why is Dairy Queen in Old Saybrook open? You don’t need ice cream. It’s crazy,” she said. “I’m out of a job. I’m essential. People are still working and they do want to look good. Restaurants get to have people going in and out, but we can’t do someone’s hair.”

She also said she thought it was unfair that the government was offering loans, albeit low interest ones, after shutting down her place of business. 

“I’m going to have to get a small business loan. I own my own home, I have bills,” she said, adding that she is a single mother with an immuno-compromised 16-year-old daughter.

“That’s why I’m really diligent,” she said. “This is our livelihood. They should have given us a few days notice just to figure this out. And, people are asking when we’ll be open.

Get on your yoga mat

Courtney Brooks, owner of Saybrook Soul Sweat, said the state mandate yoga to close her studio took her by surprise. 

“I wasn’t expecting it. I was at a yoga retreat in Costa Rica and we came back to chaos,” she said. “I thought we would have to limit the number of people in the class. I did not anticipate full closure.”

Since Monday’s closure, she has been offering one live yoga class per day through Facebook live even though she cannot charge for the classes. 

“It’s completely free and clients can do it from home. That’s gone pretty well, we’ve had about 2,000 users and it’s really good to be able to help people out at this time, but Facebook Live does not provide income,” she said. 

Like Brainard, Brooks said it was difficult to monetize online classes other than investing in expensive software packages. She said she was concerned about the livelihood of her staff.

“We have about 10 instructors and two people on staff and this is their only source of income,” she said. “We hope we’ll reopen in a week. If it goes on longer, it’s kind of up in the air.” 

Brooks opened her business about three years ago and said she could potentially survive for four or five months.

“I’m pretty lucky. I’ve only opened three years ago and for the first two years I lived at home with my parents, so I could probably go through a few months and burn through my savings,” she said. “But we haven’t really gotten that far. I’m just hoping to reopen.” 

She said standards for hygiene at her yoga studio were very high and the spaces were always cleaned before and after classes. 

“That sets us apart and when we do reopen we plan to keep doing the same thing,” she said. “I think people will need yoga and will need to get on their mats.”