Home Is Where the Heart Is

Here are some insights from entrepreneurs who are defying the recession by catering to a nation's need for security, order, and love

By Karen E. Klein

It was no news to small business owners when officials declared that the U.S. economy was officially in a recession. Many entrepreneurs felt the downturn long before September 11, and have seen their revenues continue to slide ever since. But the climate of fear and uncertainty that dampening the holiday season has not meant bad news for everyone. Small companies that cater to "home and hearth" niches report that business is up dramatically -- perhaps due to consumers' desire to concentrate on family and friends when times are tough.

One of those who have seen business rise substantially is Leslie Gainer, owner of Fermentations (www.fermentations.com), a wine, gourmet food, and home accessory boutique in Cambria, a central California tourist town. Her October numbers were up 24% against the same month in 2000, she says, adding that she expects to finish the year with a solid 20% gain on last year.

"It became very apparent in September that people who had planned to travel abroad were changing their plans and deciding to vacation in the U.S., so we had a lot of visitors in the area," Gainer says. "People who came into the shop told us they had a renewed desire to spend time with those close to them -- and that's exactly what our business is about: socializing, entertaining with special wines and gourmet foods, and making time to savor each other."

Because Fermentations offers products in a wide range of prices -- from $2 chocolate truffles to specialty wines and kitchen accessories that carry three-figure price tags -- customers have an easy time finding something to take home with them, Gainer says. Most shoppers tell her they plan to do more home entertaining this year. "They can spend $20 on some gourmet appetizers and put together an experience to share with their friends," she says. "Food is something we all need, and treating ourselves to something special for $5 or $10 is very popular right now. It's been an amazing year for us."

ADS DOWN, CUSTOMERS UP.

  Another small, food-oriented business that has seen a revenue uptick since September is Susan's Healthy Gourmet (www.healthygourmetmeals.com), an Irvine (Calif.)-based company that delivers healthy, low-calorie, made-to-order meals for people who are dieting, don't want to cook, or have health concerns that require special menus. Although the holidays are typically slow, President Susan Johnson says orders are holding steady. Nor has she had to lay off workers -- despite the fact that she cancelled the advertising campaign she normally launches at this time of year prior to a seasonal upswing she can count in January.

"We ran with our regular September advertising but did not get a good response, so, in October, we pulled $30,000 worth of advertising that we had planned," she says. "The number of new customers went down, but our regular customers stayed with us and we're still getting a lot of referrals. People want to eat at home, and they want comfort food like turkey, stuffed chicken, sausage sandwiches -- but they want it low-fat and healthful, like we offer it."

Because the company advertises heavily during the fall, when regular orders are typically down, the fourth quarter usually is a money-loser for Healthy Gourmet. Not so this year, Johnson says. "This time of year we historically have done 4,000 to 4,500 meals a week. This year we're up to above 6,000 meals a week -- and we're not advertising!"

NEW WORLD ORDER.

  She will advertise aggressively once again as of Dec. 30, Johnson says, in order to snag customers who have made dieting their New Year's resolution. But she's made the decision not to hike prices by a typical 5% to 10%, as in previous years. "We don't think people will be able to handle it, so we're not planning to raise the prices. We have more customers at this price point, and, as a small business person, I'd rather do more business and make work for more people than raise prices and lose customers," she says.

Professional organizer Sheila McCurdy has almost more business these days than she can handle, so much that she has been pushed into a six-day week. The reason: Interest in her home- and office-organizing service has skyrocketed since Sept. 11. "I used to average about two or three new clients a month. Since the end of September, I've been getting about 15 new clients a month," she says. "They used to call up and tell me they wanted to get rid of their junk, or they were frustrated with the mess. Now, one after another is saying they want to get back in control of their lives and get their affairs in order."

Fall is typically slow for McCurdy's 8-year-old service, Clutter Stop (www.clutterstop.com), which is based in Upland, Calif. This year, however, she's booked through the second week in February. Things are so busy, she even has a client scheduled on Christmas Eve. Marvels McCurdy: "I have never, ever, ever had anybody on a holiday before."

HOT IN THE COLD.

  Another entrepreneur whose has seen business increase is Jennifer Downey, the owner of a Cleveland-based chain of seven retail shops called Ambiance, the Store for Lovers! (www.ambiance.com) The company, which sells lingerie and sexual aids -- but no pornography -- has seen revenues increase nearly 10% this quarter. In September alone, sales rose 13.7%.

"I feel the increase is due to the fact that people are holding their loved ones closer," Downey says. "They realize that life can change in an instant and they want to show their significant other that they love and cherish them. Other reasons may be that they want to forget the horror of what happened, and they're staying home. Anyway, she adds: "At this time of year when it's cold, people cuddle more."

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