Coronavirus survey: About half of small businesses may fail

Staff Writer

May 16, 2020 9:32 AM PT

Carlos Marroquin dropped wearily onto a wooden bench in the center of the tiny Newhall soccer shop to which he has poured 15 years of his life and all of his resources.

“I’ve never felt as a scared as I do right now,” he said, unsmiling eyes peeking out from above a cloth face covering. “I pray to survive. I don’t know if I will.”

Marroquin’s shop, Planet Soccer, weathered the 2008 recession, nearby wildfires and a recent roof collapse caused by heavy rains. But all that pales in comparison to the hit his store, and most small businesses, have taken during the shutdown ordered two months ago by Gov. Gavin Newsom in response to the spread of COVID-19.

The store was allowed to open, under certain restrictions, last week, but with business down more than 90%, that may prove to be a stay of execution rather than a full reprieve.

Thirty-five miles away, in the Mid-City part of Los Angeles, Chiara Arroyo and Celene Navarrette have similar worries. They have already cut half the tiny staff at LA Librería, their Spanish-language children’s bookstore, and used a loan to pay the rent.

“We don’t know about the future and how we will be able to sustain our business,” Arroyo said. “It’s kind of hard.”

If the economic turmoil caused by the pandemic lasts past Memorial Day, which seems certain, about half of all small businesses could be in danger of failing, an April survey by the National Federation of Independent Business found. More than 6 in 10 could fold if the damage lasts until Labor Day.

Carlos Marroquin, 53, owner of Planet Soccer in Newhall, practices social distancing while talking to customer Benton Watkins, 13, of Santa Clarita as he tries on a new pair of soccer cleats inside the recently reopened store. Both are wearing protective face masks.

“The real question is about solvency,” said Brian T. Kench, dean of the college of business at the University of New Haven in Connecticut. “As the duration of the crisis continues, we are moving away from sort of the happy talk of quick V-shaped recovery into something that’s a little more U-shaped or L-shaped, where the duration lasts much longer.

“That leads to more and more businesses that are just trying to hold on.”

And while each closed restaurant or boutique is a body blow to its neighborhood, some of those punches will hurt more than others. In the case of shops like Planet Soccer and LA Librería — and so many others that fit a unique niche — closure would leave an unfillable hole in the community.

“They’re very important, especially because they’re the only Spanish[-language] bookstore in the area” for children,” Anna Avalos, senior librarian for multilingual collections at the Los Angeles Public Library said of LA Librería. “Everybody else is in New York, Miami. LA Librería is the only bookstore that we have that the community can go and purchase books from.”

Avalos stocks shelves at 73 public libraries partly with children’s material bought from LA Librería. And while those same books could be purchased online, what can’t be found on the web is the expertise of the bookstore’s two owners.

“I work with them because I know that they’re going to be knowledgeable and they’re going to know the quality of the books they’re sending to me,” Avalos said. “They’re mothers like me who are trying to get the best items for our children. And because they have that knowledge, they’re able to provide that.”

It was hard-won knowledge. Arroyo, who was born in Spain and has a master’s in journalism and bachelor’s in philosophy and literature, and Navarrette, a Mexican who teaches information technology at Cal State Dominguez Hills, met when they were assigned to the book-fair committee at their children’s bilingual elementary school. Appalled by the poor translations and the stereotypical roles of the characters in the books they found, Arroyo said, “We decided to take action and say ‘OK, let’s try to improve that.’”

That was in 2012, and the first batch of books they collected sold out so quickly that they opened a store in 2015. Today, half their customers don’t speak Spanish but come to LA Librería for advice on how to help their children become bilingual.

“LA Librería is more than a bookstore. We’ve become a hub for many families,” Arroyo said of the 800-square-foot storefront along a weathered commercial stretch of Washington Boulevard. “People will come from Tijuana because we have books that they won’t find in Mexico. People will come from Fresno because we have a workshop and the trip will be worth it for them.

“It is a destination store now.”

It is also a closed store now, with books available for curbside pickup only. And if it doesn’t reopen this summer, said Avalos the librarian, “there’s going to be a big hole in the community.”

Back in Newhall, Marroquin, a former youth national team player in his native Guatemala who said he has two short stays with professional soccer clubs in Europe, is more than $9,000 behind on his rent in a rapidly gentrifying neighborhood. Catching up will be tough; Marroquin has already gotten rid of every employee he’s not related to, but since partially reopening a week ago, business is just 10% of normal.

“The fundamental issue will all these small businesses is the revenue has dried up,” said Kench, the business school dean.

For Marroquin, 53, that revenue came from local club and
American Youth Soccer Organization players or the five high school soccer teams his store outfits. With schools closed and club practices canceled by COVID-19, the stream of traffic through the store has slowed to a trickle.

“Nobody is playing soccer right now,” said Marroquin, who speaks in a hurried manner, the words tumbling out in both English and Spanish, when he’s excited. “Nobody’s practicing.”

But like LA Librería, Planet Soccer is selling more than merchandise, which would make its demise more painful.

“This is a soccer store. We don’t sell only for selling,” said Marroquin, who opened the shop in 2005. “We are 100% sure that people have the right shoes, the right soccer ball, the right jersey. It’s not like you went to another place, you pick out whatever you want and you leave. You’re asking for advice.”

That has paid off in loyalty, if not profits.

“Everyone knows Carlos in the community. All the soccer moms,” said Noelle Watkins, who came in with her 13-year-old son and got a discount on her purchase because the boy plays in a local league.

Outside the store, the women’s semipro team Marroquin sponsors is uncertain whether it will play this season. The Santa Clarita Blue Heat sent two players to the Women’s World Cup in France last summer. Two years before that, one of its stars, Venezuela’s Deyna Castellanos, finished third in voting for the FIFA player of the year award.

So if Marroquin has to close the doors to his 1,281-square-foot store permanently, the Santa Clarita Valley will lose not only its oldest soccer shop but its top-ranked soccer team as well. Sure, the big-box stores will keep selling soccer shoes. But those other holes will be hard to fill.

“That’s the big difference between a small business and big corporations,” said Marroquin, who has no plans to quit just yet.

“I’ll be here every day,” he promises, “no matter what.”