Calgary business owner experiences second downturn since 2008
Helen Nguyen, owner of Coco And Violet, opened her women’s contemporary line boutique in August 2008, right in the midst of a recession. Now in the middle of an even worse decline due to the downturn in the oil and gas industry, she is doing what she can to keep her store viable. Financial experts are predicting slow growth in Alberta, and if prices remain depressed, local clothing boutiques could be impacted.
“When the first recession hit, it was super tough because I had no established clientele yet,” said Nguyen. “We were just building, and people didn’t really know about us.”
This is not the first time local small business owners in Calgary have suffered through an economic trough.
Court Ellingson, vice president of research and strategy with Calgary Economic Development, said, “Calgary’s economic climate was difficult in 2015. We haven’t seen this type of climate since 2008, 2009 but it’s an environment that has forced the city to find opportunities to diversify and find innovative ways to be more efficient with how they operate.”
In the 2008 recession, Nguyen brought in cheaper clothing and tried to make purchasing clothing less stressful. She quickly realized people who could afford to buy something were still willing to pay for higher quality items.
“Instead of buying three pieces they would only buy one,” said Nguyen.
Coco And Violet
When Nguyen opened her store in 2008, her space her was twice the size of her current shop located on 4th Street S.W.
“Having a larger space was very appealing, but from a business perspective, obviously, when there is space that is not used [the extra] rent is costly. So to save [money] with the current economy is great,” said Nguyen.
She now splits her space with Modern Menswear, a men’s boutique store. Nguyen said the shared space does bring in more clientele.
Since 2008, Nguyen developed a strong clientele list. This is one of the biggest reasons this possible slow growth will not impact her as much as it did in 2008, she said.
High-end brands ranging between $200 and $400 like Equipment, ALC, and Rebecca Taylor are sold at Coco And Violet, along with the exclusive brand Mason by Michelle Mason.
“When you get to know me and we build a relationship, that allows me to pick out what is best from each collection and season for my clients,” said Nguyen.
Recovery to a leveled economy
The downturn in Calgary is largely a result of low oil prices, said Ellingson. Difficult decisions, like the recent 2015 layoffs, will continue until business have levelled out to a ‘right-size’ and the economy turns around, he added.
“The only way we’ll see a recovery in oil prices is if global demand increases,” said Ellingson. “Right now, nobody really knows when that will happen as there are a lot of factors at play.”
Calgary Economic Development does not work directly with local businesses, but it does have information for businesses interested diversifying in this economy.
“Building a resilient, diversified city through all economic climates is key but it’s a collaborative approach.”
Business renewal and new business licenses
Ray DePaul, the director of the Institute of Innovation and Entrepreneurship at Mount Royal University said, “The chains have the financial backing to survive a rough period. It will be hardest on the independent companies, the little guy, who may not have a big bank account to draw on in bad times.”
According to the City of Calgary that between October 2014 and October 2015, there has been a drop of 81 renewed business licenses.
“What is most concerning is that over the last couple of years, we are seeing a decline in both the number of business that renew their license as well as the number of total businesses. The number of people starting businesses is not keeping up with the number of businesses that are shutting their door,” said DePaul.
This could arise as an issue for local boutique owners. However, those that have gone through a recession are prepared for what might hit Alberta.
Thumbnail courtesy of Savaya Shinkaruk
The editor responsible for this article is Kelsey Solway, email@example.com