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Without any tourists, local retailers closing for good

Study: Maui County businesses are hardest hit by the shutdown of tourism

By Kehaulani Cerizo 6 min read

Some owners in the latest wave of Maui small business closures said federal relief wasn't enough to buoy them through the pandemic's economic woes -- especially when there was no end in sight.

"It's not only wiped out all our hopes and dreams, it's also left us in debt," Paia Mercantile owner Michelle Earl said Friday.

Despite receiving loans from the Paycheck Protection Program, Micro Business Loan Program and Economic Injury Disaster Loan program, Earl said high rent and low revenue, along with reopening delays, were forcing her and her wife to shutter six Maui retail stores this month.

Retailers Horses R Us, Brown-Kobayashi and Adriene Jay Boutique also have announced closures. They will be added to a growing list of Maui businesses shuttering doors for good amid the pandemic.

Maui County businesses are the most adversely affected during the pandemic, according to a recent survey by University of Hawaii Economic Research Organization and the Chamber of Commerce Hawaii. The study released last week surveyed 464 Hawaii businesses as a follow-up to an April survey.

The number of businesses reporting that they would not survive COVID-19 rose from 6 percent to 17 percent with the delays in the reopening of tourism, according to the study. Also, 75 percent of businesses needed to make staff cuts and other reductions, and roughly a third anticipated making deeper cuts in the months to come. 

Horses R Us, a riding equipment and apparel retailer in Kahului, will close at the end of this month after two decades. Owner Jennifer Brittin-Fulton said Friday that she is not the only frustrated businessperson in the state. 

"There's no end in sight," she said. "Our leaders don't seem to have a plan. They will say something, and then they will change it."

Brittin-Fulton said customers come in and say they're sad she's closing.

"I say, 'Why don't you open a store,' '' she said. "I'm not getting any younger, and my other business is my bread and butter. I employ about 700 people and it's important we keep producing jobs to keep people working."

Brittin-Fulton also owns 30-year-old Employers Options, which does payroll services for small businesses on Maui.

Boots and shirts are still for sale at Horses R Us.

Brown-Kobayashi, an antiques, gifts and interior design store in Wailuku, announced it is selling inventory ahead of its closure, possibly as soon as October. Marc Kobayashi said the store has been in business for more than 20 years on Market Street. He said the COVID-19 pandemic helped cement the decision to shutter.

Adriene Jay Boutique in the Queen Ka'ahumanu Center will shut its doors at the end of this month. It announced discounts on all merchandise ahead of the closure.

Other local small businesses that closed due to the pandemic include Da Kitchen in Kihei and Kahului; Details Boutique and Valley Isle Seafood in Kahului; Afterglow Yoga in Kihei and Lahaina; and Sea La Vie and Sailboards Maui in Paia.

Paia Mercantile's flagship store in Paia dates back nearly 20 years. Michelle and Joni Earl grew the business over 15 years and opened additional boutiques in Paia and Kihei. Their sixth spot opened in Lahaina in November. 

The Lahaina and Paia stores had been so busy around the end of the year that the couple ordered $150,000 worth of product, Michelle Earl said. 

"It was hard to keep the shelves stocked," she said.

After nonessential businesses were ordered to shut down in March, though, the extra inventory became a problem. Some vendors accepted items back; others needed payment. 

They qualified for loans that "quickly dried up" after paying vendors and employees, along with other expenses.

They opened two Paia stores briefly in June to find that expenses were too high for such low revenue. 

Michelle Earl said the couple held out hope for the state's scheduled reopening to tourism with the pretravel COVID-19 testing program, originally slated to begin Aug. 1. To prepare, she had ordered hand sanitizer from a local company, trained employees and stocked windows.

When the state announced the program would be delayed, and with mounting rent, the couple decided last month to close their stores for good. 

"Our employees are devastated," Michelle Earl said. "Some employees have been with us since day one."

Michelle and Joni Earl are hoping to sell some of their inventory this month and will return to California next month to "hunker down" with family.

"I'm sure you hear many, many stories of businesses closing. However, Paia Mercantile in Paia has been around for approximately 20 years. It is an icon and an attraction in Paia," Michelle Earl said. "This is a very, very heart wrenching time for so many businesses with so little relief."

The Chamber of Commerce Hawaii noted other key points of the UHERO survey:

• With their strong reliance on tourism, businesses on the Neighbor Islands remain more economically depressed than on Oahu -- with Maui County the most adversely affected.

• Businesses had reduced their full-time staff by 28 percent and part-time staff by 35 percent between January and April. Since then, there has been only a slight recovery in each category (2 percentage points and 6 percentage points, respectively). 

• The lowest paying full-time jobs (those paying less than $30,000 annually) were more protected than those of middle-income workers earning between $30,000 and $100,000 per year.

• Still, nearly all of the job losses have been among the lowest salary jobs, which dropped an additional 16 percent between April and July.

• Industries with the highest percentage of revenue from tourists have been impacted the most, including accommodations (96 percent tourism revenue), arts and entertainment (83 percent tourism revenue), food services (47 percent tourism revenue) and retail trade (54 percent tourism revenue).

• More than 70 percent of the businesses received a Paycheck Protection Program loan, with little variation between counties. Kauai had the fewest at 65 percent and Hawaii island had the most at 77 percent.

• PPP and other loans helped businesses retain or rehire 60,000 part-time and 165,000 full-time employees.

• If tourism had reopened on Aug. 1, 46 percent of businesses stated that no additional cuts would have been needed. That total drops to 30 percent if the quarantine remains in place until Oct. 1, as currently projected.

The survey was a partnership with the Chamber of Commerce Hawaii, Kauai Chamber of Commerce, Kona-Kohala Chamber of Commerce, Hawaii Island Chamber of Commerce, Maui Chamber of Commerce, Japanese Chamber of Commerce Honolulu, Hawaii Farm Bureau, Hawaii Restaurant Association and Retail Merchants of Hawaii. It included a total of 464 responses from business owners across the state in late July.

* Staff Writer Matthew Thayer contributed to this report. Kehaulani Cerizo can be reached at kcerizo@mauinews.com.

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