Alexandria Businesses Suffer, Strive through Recession

Photo by John Arundel/Local Kicks The list of businesses that have recently closed after the economic upheaval of last year continues to grow: Bella Designs is one ofa handful of prominent losses in recent months.

A stroll down King Street these days reveals the ugly signs of a severe recession that has hit close to home: Empty retail spaces shuttered up and available for lease to anyone who has the intestinal fortitude to open a business during this trying time in our nation’s economy.  
 
The list of businesses that have recently closed after the economic upheaval of last year continues to grow:  Olsson's Bookstore, the Discovery Channel Store, Bella Designs and 100 King and Le Gaulois restaurants last fall,  Bookbinder's in May and Greetings and Salutations last week -- to name just a handful of prominent losses in recent months.  
 

Photo by John Arundel/Local Kicks The back patio at Le Gaulois restaurant on King Street now sits empty. The renowned French restaurant in Old Town closed last October, shortly after it was purchased by a DC attorney.

How bad is it, and will it get worse?

For an educated take on things, on Monday we turned to Bill Reagan, the director of the Alexandria Small Business Development Center, which is part of a statewide network funded in part by the U.S. Small Business Administration and is hosted by the Alexandria Chamber of Commerce.  
 
"Most of our businesses are managing their way through the recession," Reagan said. "But consumers are apprehensive and cautious.  We as consumers are changing our buying habits. For example, we are foregoing whimsical purchases and taking more time between hair appointments, or doing it ourselves."
 
In discretionary business areas there have been some failures, Reagan acknowledged. "However, most businesses are changing their strategies, tightening their operations, and looking ahead to the Christmas shopping season," he said.  "We are seeing promising signs in the economy and feel the worst is over.”

Stephanie Landrum of the Alexandria Economic Development Partnership said that the Small Business Administration estimates that only one of every seven business closings are actual failures, and that most businesses close for any number of other reasons, such as retirement.  
 

Photo by John Arundel/Local Kicks "We have benefitted greatly from the introduction of National Harbor, which brings visitors to Alexandria," said the ACVA's Stephanie Brown. "In the last 12 months we have sold more hotel rooms than the year before, although at a lower price."

“Retail vacancy is stable from a statistical point of view," Landrum said.  "For each business that closes, another takes its place."
 
She gave as examples the new knitting store on Fayette Street, the new artisanal cheese shop on King Street, La Fromagerie, and a girls children's boutique, the Posh Princess Palace which opened at 1127 King Street. "We have also seen interest from prospective businesses for the sites at 100 and 320 King Street," she said.
 
Landrum added that "Most closings that we have seen were not strictly due to the economy but due to other factors as well."

Stephanie Brown of the city- and retailer-funded Alexandria Convention and Visitors Association also shed some positive light on the city's tourist-based economy.
 
"In this region we have been better off than many other areas," Brown said. "We are lucky to be in a tourist location.  We have seen exciting new hotels open and double digit growth in hotel revenue in 2008.  We felt the impact of the recession especially at the end of the year with the AIG scandal.  TARP companies felt they should not hold meetings, which were seen as lavish at any cost. "
 

Photo by John Arundel/Local Kicks Some restaurants, like Vaso's Kitchen, say they're thriving by offering lower-priced menu items and more personalized service to longtime diners.

But, Brown added, in the last 12 months "We have sold more hotel rooms than the year before, although at a lower price. "
 
"We have benefitted greatly from the introduction of National Harbor, which brings visitors to Alexandria.  Our June figures look pretty good.  Hotel occupancy and demand are good, demand is 13 percent higher than it was last June.  Hotel revenue was 5.4 percent higher than last June.  We struggled a bit in May, and DC’s rates plumetted with government rates giving us  lot of competition."
 
Brown said she is hearing "mixed reviews" on the retail front. "Some are doing well and seeing an increase, but that is not true for everyone.  Alexandria is well positioned because of our proximity to the nation’s capital, but we have demand generators such as the trolley and water taxi and new hotels.”
 
Email the writer at kirstenobadal@hotmail.com