| Business
Not as Usual |
| The national economic downturn continues to haunt and hurt
Herndon. Most of us think of the failures of the "dot-com"
companies in the Dulles Corridor as the results of over-expanded
expectations of e-trade and other electronic functions of
the Internet. |
| For years it was an overflowing well. Then the water ran
out. |
| But damage to the Herndon economy was not limited to the
dot-coms. Retail also has suffered, some of the damage coming
from the Sept. 11 terrorist attacks on the U.S., some coming
from other fronts. |
| For instance, Frugal Fannie's, with a popular store in Herndon,
is pulling the plug on all its Washington area stores. It
will keep open its stores in New England. The Boston-based
retailer said it experienced sales decreases as high as 50
percent in the Washington area. |
| "Frugal Fannie's has been able to survive tough economies
before, but not an economy destroyed by terrorist attacks
on top of a recession and an unseasonably balmy fall. Together,
these factors have created a retailing nightmare," Frugal
Fannie's President and CEO Orrin Doxer said in a written statement.
(Read related story the Business
Section) |
| Debi Conn, manager of the Herndon store, said the company
opened its Herndon operation eight years ago and currently
has about 30 employees on its payroll. She said the store
fell into a major slowdown about mid-summer, which only worsened
after Sept. 11. |
| Also, K-Mart, with a store in the Herndon Center, filed
for bankruptcy protection this week, citing a downturn in
the retail market and stiff competition from both Wal-Mart,
which undersells K-Mart's products, and Target, which offers
high-quality, trendy merchandise in modern stores. Competition
spelled trouble for an already troubled store. |
| K-Mart's $17 billion bankruptcy filing is the largest in
U.S. retail history. It plans to close 350 of its 2,100 stores
and lay off some of its 240,000 employees. How the Herndon
store will be affected is not clear, but to my mind it would
be a prime candidate for closure. |
| I still remember with great fondness the ancestor of K-Mart,
the S.S. Kresge stores, which dominated downtown Main streets
across America. They offered gold fish in a plastic bag, and
you could watch employees making donuts and fried cakes every
morning, and then buy one for a nickel. |
| I would watch the machine squeeze out a circle of dough
into a river of hot oil. I would then follow the dough half-
way down as it was flipped over and eventually ended up either
in the sugar and cinnamon pile or the plain pile. |
| Today the fried cakes have been replaced with Martha Stewart
and her Everyday Line of merchandise, which accounted for
$1.5 billion of K-Mart's $40 billion in revenue in 2001. |
| Maybe they should go back to donuts and fried cakes. |
| But experts say that K-Mart has a good chance of coming
out of bankruptcy. For one thing, K-Mart will get great cooperation
from its vendors because vendors fear Wal-Mart tactics if
K-Mart should fail. Wal-Mart, experts say, would rule the
waves. |
| Beyond the big stores of Frugal Fannie's and K-Mart, several
stores in Herndon also have felt the ravages of Sept. 11 and
a bad economy. The Black-Eyed Pea restaurant on Elden Street
closed its doors recently, and several stores in downtown
Herndon, The Pines Shopping Center and Rack Room and Clothestime
in the Worldgate Centre, lie empty. |
| But even though the tough times are evident, the Herndon
Planning Commission still demanded that the developer of the
old and ugly Citgo gas station offer proffers to rent the
first floor of the proposed Herndon Commerce Center to retail. |
| Bankers know the story: They will not lend money to the
developer if retail is proffered. |
| So what does this all mean? It's the economy, stupid (as
someone once said), and Herndon policy makers, business people,
chambers of commerce, and consumers must lead the charge to
protect, improve and secure a lasting business climate. |
| Herndon traditionally has had a solid business platform
from which to operate. We must rebuild on that foundation. |
| And that's Our Town this week. |
