Harrell’s Department Store has stood sentry over Wright Street in Burgaw, North Carolina, for the past 117 years. It has served the town’s 4,000 residents with everything they’ve needed, like baby shoes and horse collars in the original wooden building, or church hats and appliances in the two-story red brick building constructed in 1924.
Harrell’s has been the backdrop to several famous late-1990s and early-2000s movies, including “I Know What You Did Last Summer” and “Divine Secrets of the Ya-Ya Sisterhood.” It has survived changing fashions — it once sold long johns — world wars, the Great Depression and the 2008 financial crisis, and floods.
But it couldn’t survive the coronavirus. Vernon Harrell, the company’s fourth-generation owner, recently announced he was closing the business his great-grandfather started.
“It’s been very difficult,” said Harrell, 65, who started working in the store when he was 13. “I did not want to be the one who brought it to an end.”
The pandemic has devastated many of the country’s small-business owners; nearly a quarter of companies closed either temporarily or permanently in March and April, according to a study published by the National Bureau of Economic Research. But for firms that have been part of their communities for 100 years or more, there’s more at stake than livelihood — there’s legacy and, in some cases, generations of family ties.
Since March, the pandemic has claimed at least a half-dozen businesses in or near the century club. For example, the Boston Hotel Buckminster, which opened in 1897, closed its doors; Ritz Barbecue, which opened in a small shed in Allentown, Pennsylvania, in 1927, served its last ribs and ice cream last month; Hickory Grove Greenhouses, just north of Allentown, decided to close after 103 years; and Michigan Maple Block Co., a wood products company in northern Michigan, is shuttering its manufacturing plant and laying off 56 workers after 139 years.
“These firms can die a good death or a bad death; nothing lasts forever,” said Dennis Jaffe, a sociologist who works with family companies and recently published the book “Borrowed From Your Grandchildren: The Evolution of 100-Year Family Enterprises.” “It’s sad and there is grieving, but there is also a legacy.”
Harrell was struggling to keep the department store going even before the coronavirus hit. Changing consumer tastes and competition from big-box stores such as Home Depot were cutting into his revenue. He had already given up selling flooring materials and floor coverings — something Harrell’s had sold from the beginning — because he couldn’t be competitive. But he was also trying to modernize: Harrell started a website and put the store on social media, and he considered adding a bar to the store to give customers another reason to shop.
“If COVID hadn’t hit, I would have kept going even though I would have struggled,” Harrell said. “It was the loss of the income for the two months that really just crippled me.”
One challenge facing family businesses is that there often isn’t anyone who wants to take over — especially during an economic downturn. Harrell’s adult sons live six hours away in Asheville, North Carolina, and aren’t interested in re-imagining retail for a post-COVID world. Neither are his nieces and nephews.
“There isn’t the next generation with the passion to take the business through a crisis,” said Jennifer Pendergast, executive director of the Center for Family Enterprises at Northwestern University. “This is going to be hard for a while. Is there someone who wants to take that on?”
For business owners trying to chart the future — whether they’re the fifth generation or the second — Pendergast recommends that they find someone who can be their “truth teller,” who will look at the numbers and the emotions of continuing. If the math doesn’t work and the business isn’t viable, there’s no point in keeping it alive. But if it is, then she encourages owners to ask themselves if the work is still meaningful to the family.
“Obligation cannot be the reason to continue,” she said. “Long term, that is not sustainable.”
Amy Hyman feels that obligation daily as she tries to guide Lake Steam Baths in Denver into its 94th year in business.
Like Harrell, she never expected to find herself at the helm of a legacy business. She was happy with her job tending the bar where she met her husband, Hannon. The Russian and Turkish bathhouse was the domain of her mother-in-law, Gertie.
“She was 5-foot-nothing,” Hyman said. “This little Jewish lady running around telling everyone what to do. That’s my fondest memory of this place — not ever knowing that I would be her someday, in a sense.”
When Gertie died in 2006, Hannon took over — with some input from Hyman. Women had never been allowed in the baths. But Hyman persuaded Hannon to let her test a ladies’ night one Sunday a month so that women could enjoy the hot saunas and whirlpools, and get a massage.
She continued bartending and raising her daughter and son while Hannon ran the business. But when he died in 2015, at age 59, Hyman found herself in charge because no other family members were available.
“Never did I ever believe that I would be running the business by myself,” Hyman said. “My two kids were 14 and 10 when Hannon passed, and every year I kept saying, ‘I’m going to sell this place and live life.’ But I can’t. The community is amazing.”
She doubled down on the business that Hannon’s grandparents opened in 1927. She paid off the $400,000 mortgage on the 11,000-square-foot building and parking lot, and began upgrading, spending more than $40,000 on a new boiler, sauna oven and steam machine. She also added more ladies’ nights and expanded the food menu.
The results started showing last year: Hyman said she turned a profit and was on track for 2020 to be her best year. She was preparing to invest in another sauna oven and thinking about how to grow. She employed nine people and had expanded to 36 massage therapists to meet demand.
But the investments also taxed her cash reserves and left her vulnerable when Colorado’s governor, Jared Polis, closed businesses in late March to stop the spread of the coronavirus. Her revenue went to zero, and she had to lay off her staff.
“I just keep teetering constantly and just fighting myself: Keep the business, don’t keep the business,” Hyman said. “If I need to let it go, I know the Lake Steam community will forgive me and understand.”
-Amy Haimerl, The New York Times-
