Wednesday, December 5, 2007

Businesses meet challenges head-on

Retailers praise snowfall, maintain high hopes for holidays


By DANA DUGAN
Express Staff Writer

Julie Waitz wanders through the toy section at Chateau Drug in Ketchum, looking for materials for her kindergarten class. Photo by Willy Cook

The refrain in the Wood River Valley is loud and clear. It has finally snowed and there is a collective sigh of relief.

Most businesses have seasonal highs and lows but in a resort community there are certain issues—such as snow and water, which attract tourists—necessary to its continued economic health.

For the Wood River Valley, and Ketchum and Sun Valley in particular, most business owners agree that autumn was a challenge. The massive Castle Rock Fire that started in mid-August near Ketchum effectively quashed the expected late-summer business boom that generally can be counted upon each year. But within the past week, spirits have lifted.

"We're happy it's snowing. This is good," said Sun Valley Ketchum Chamber & Visitors Center Executive Director Carol Waller. "Occupancy rates were down this fall but Thanksgiving was a week early. The snow will substantially help our early business. The local option tax stats weren't off that much for September and October. Not as much as I expected."

Receipts from the taxes—which are assessed on retail sales, liquor sales and lodging in Ketchum and Sun Valley—are often used to assess the strength of local business.

In September 2007, LOT receipts in Sun Valley were just under $147,000, which was a 44 percent increase from 2006, attributable to several conferences. In Ketchum, in September 2006, LOT receipts were $193,957, but in September this year fell to just over $165,000.

"That's including the canceled Wagon Days weekend," Waller said. "We put a lot into post-fire marketing regionally. We got a $10,000 grant from the state, on top of the $5,000 we were expecting to spend. I like to think some of it had an affect."

Major events were held the last three weekends in September, including the Sun Valley Spiritual Film Festival and the Ernest Hemingway Festival, helping to keep numbers from dropping too severely. The Kick Ash Bash—to celebrate the end of the fire—raised approximately $173,000 through donations and the Steve Miller, Carole King and Bruce Willis concert.

While hoping for an early ski season to boost the economy after the fire, ski-industry-related businesses instead took a hit due to a dry November. At the Elephant's Perch outdoor sports store in Ketchum, owner Kate Rosso said the store was affected by first the Castle Rock Fire and then the drought.

"We're down maybe 10 percent from last year when we had snow earlier," she said. "But, basically, business is strong. Women's clothing sales are up. It's the ski categories that are down, like the rentals. Thanksgiving weekend was really strong, and with snow now it will be huge.

"Overall, except for last two weeks in August, we were up. In September, local events held every weekend and the concert at the end of the month really helped and brought people in. We made up ground from the two-thirds down that we were immediately after fire."

Demo Days at Dollar Mountain this past weekend was "really good," Rosso said. "So, overall, I'd say it's looking good. December will be the proof of the pudding."

Like August, the holidays in December make up a good portion of local businesses' annual bottom line. Because of the number of second-home owners and visitors in the area, certain aspects can boost one single business.

"The season is very, very interesting," said Nancy Humphrey of the Undertakers, which decorates holiday trees mainly for second-home owners and visitors. "We've been putting up trees since Nov. 2. It is wild. Basically, we don't have any openings and we work every day of the week. I have always felt that I am somewhat of a bellwether. It's been a good season so far."

Stores that deal in necessities have different issues. Jane's Paper Place in Hailey and Ketchum changed hands three years ago. Owner Doug Brown said the business was hit hard this year, as was Ketchum stalwart Chateau Drug.

"Our business is real diversified. We appeal to the second-home owner and tourist as well as locals," Brown said. "The stores have been really hurt by the fire. People left and didn't come back. Now we're seeing even locals buying less. It could be aftermath of the fire, or it could be the economy in general. One thing I think people realize is that what happens in the north valley absolutely impacts the south valley. A lot of people were in denial about that. I think we have a new awareness about how we're joined at the hip.

"But between Aug. 18 and Nov. 23, it was pretty tough. Things are tight in the valley. People are watching their dollars. It could be nationwide with the economy and the psychology of seeing the negative stuff on TV. Consumer confidence is down quite a bit. We lost six figures in probably 30 days after the fire."

Chateau's new owner, Ken Sangha—who bought the store in February 2007—thinks the problems began even before the fire.

"This year was a tough year," he said. "It was a bad snow year last year and that trickled down into the spring. The airport closing down (in May) was a big deal. They closed Fourth Street for construction. Then the fire happened. After the fire, (Chateau) was at the bottom like everyone else and then stabilized a little bit. November picked up toward Thanksgiving. We had one of our best days yet. Any business that survived this year I think is a good business. People are supporting us a lot, coming in and saying we provide a good service."

At Chateau Drug, holiday decorations, gifts and wrapping paper jostle for space, granting the store a festive and upbeat feel.

"Adaptation is the name of the game," Sangha said. "The whole country is down and real estate is drying up. Realtors aren't selling houses, so they have no commissions. It trickles down. You can't shut your eyes and say everything is fine. You have to be pragmatic. You make changes according to that. ... This is the worst year the valley has seen."

It's not just shops that felt the pinch, however. Luxury items such as dinners out and buying fine wines suffer, too.

Frazer Ford, of J.W. Thornton Wine Imports in Ketchum, has seen the business fluctuate over the years. But this year, something else happened.

"These past months we've done most of our business in Boise," he said, looking around the crowded warehouse. "Chandler's and Red Feather Lounge order big time. Our business is actually fine because we do statewide. If it were just here, I'd say goodbye. The outer communities are good.

"We are buying a lot of product and hoping it will improve over the holidays. But until we get better airport service and hotels, it's not going to grow here."

One thing that seems not to have changed too much is unemployment.

Jan Roeser, the regional economist for Idaho Department of Labor in Twin Falls, said Blaine and Camas counties have a 2.1 percent seasonally adjusted unemployment rate.

"That jump you've incurred can mostly be attributed to construction and landscaping layoffs," she said. "Blaine County is doing a lot better. But it's a little roller coaster over there. The fire created some havoc in September."

The year 2007 will be remembered, no doubt, for the calamities wrought by Mother Nature and the national economy. But nature has a way of giving back, too.

"We're all delighted the snow is falling," Brown said. "There's hope for a good season. Shopping local is vital to all the shop owners. We always try to be optimistic."




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