Overcoming Devastation: Weathering Change

Hurricane

Image Source: NY Daily News

Three bar/club owners talk about how their business made it through difficult periods

When Milton “Waxie” Gordon passed away on Super Bowl Sunday 2010, his business partner Chris Dauria wasn’t sure how he – never mind their business – would carry on.

Waxie may have been 75 but he was the face and the personality of Johnny’s Hideaway (an Atlanta nightclub), while Dauria was the “nuts and bolts guy” behind the scenes.

Immediately following his death Dauria tried to fill his shoes. “His death left a big gap in the place so I tried to do a table touch when I could but I feel it came across as stilted. It doesn’t come naturally to me.”

Life throws changes such as death and divorce, as well as accidents like fire and natural disasters like Hurricane Sandy in a bar or nightclub operators’ way, but how do they carry on and make their business even stronger?

The most important lesson Dauria learned was that one person shouldn’t be the face of a business. He now has a couple of very personable hosts who man the door, and his bartenders are known by name.

But right after Waxie’s death, he didn’t realize that and even considered for a while whether he should keep the business going, and even if he did, how successful it would be without him.

“I knew he’d want me to keep the business running,” Dauria says, “and I could hear him telling me that.” There were also the customers to consider, and Dauria knew many people enjoyed Johnny’s Hideaway and would miss it if it closed.

William McCormack’s problem came from outside his bar. The owner of McCormack's Irish Pub in Richmond, Va., faced a double whammy of problems in the space of 6 years.

First, in 2003, a flood submerged his basement and topped out at about a foot of water on the first floor. All of his equipment was in the basement, so McCormack was forced to close for a couple of months.

In a case of irony, the flood came about because a test of the floodgates failed and Richmond received 14 inches of rain in two-and-a-half hours. Because McCormack’s business was behind the floodgates and purportedly safe, he had no flood insurance.

The result of this was a bill of $81,000 and McCormack, who’d been planning to buy the building the pub was in, instead used his down payment for repairs. (He bought the building 5 years later, in 2008, for twice as much as the original price.)

But the flood wasn’t the biggest of his problems. In 2009, the year after he purchased the building, a series of violent events – including shootings – was reported from a nightclub half a block from the pub.

“The violence devastated this area more than the flood,” says McCormack, “and I’ve lost 90% of my sales over the last 5 years because of that place.”

McCormack’s sales plummeted from $700,000 in 2008 to $85,000 in 2010. By last year the figures had rebounded slightly to $140,000, but they’re still a far cry from what they were, and from what he needs to make a profit.

Because of this, McCormack hoped to close but was locked into a mortgage he couldn’t get out of. Instead of crumbling, he simply became stronger, and has since built 2 other venues to support the pub, which loses about $4,000 per month.

He opened the first, a bar-restaurant, in 2009, and the second, in 2014, both in completely different areas of Richmond – the second one in an outlying county.

“You don’t have a choice but to keep going,” McCormack says. “It’s not like a job and you can just walk away. You either give up or you make the decision to push forward.” As a result, he’s not taken a night off since 2008 and hasn’t had a vacation since the flood in 2003. “I’ve had to take every penny to build the new restaurants and have no income for myself.”

It’s not just about soldiering on, McCormack says. “It’s also about pride and determination,” he says. “I love this place. I built it when I was very young.”

It was a natural disaster that derailed Marilyn Schlossbach’s plans for a new bar in 2012. Hurricane Sandy blew into the East Coast and both delayed the opening of the Asbury Park Yacht Club by 7 months and shut down her adjoining restaurant-bar, Langosta Lounge, for the same amount of time.

“We had just finished construction and the storm hit. We were ready to open but all the work we’d done got destroyed,” she says.

The next 7 months were spent in re-construction and the cost was high: $500,000 to repair the Yacht Club and lounge. The biggest damage was physical – replacing doors and windows as well as electricals such as HVAC and heating system. She’ll be paying off the loans she took out after the hurricane for another 10 years, she says.

“The bigger picture was our staff,” Schlossbach says. “Our management staff and chefs all left because they couldn’t wait for us to reopen. And we had no insurance so we had no rebuild money and no business insurance to pay people while we were down. When you’re in devastation the stress is crazy. But you get up every day and at least pretend everything’s going to get better. There are a lot of people I affect with my mood because I’m the leader of the company.”

But the even graver problem was the toll this took on Schlossbach’s mental health.

“It was one of the toughest things I’ve ever done and I had twin 5-month girls at the time the storm hit.” Along with her business woes, she and her family were displaced “so we really had to scramble,” she explains. “My husband, brother and I were out of work – we had no unemployment and no income, no home and had 2 little babies.”

In desperation, Schlossbach used fundraising website GoFundMe, and an organization called Waves for Water, which is primarily a water distribution company, gave her a grant.

“Just the fact of people supporting us was a bigger part of this than the finance troubles,” she says. “I made a lot of positive relationships after the storm that I didn’t have before. I got to know my staff and customers in a way I wouldn’t have known them otherwise. It gave me a newfound love of humanity.”

And in that vein, since then she’s also joined some networking groups, so she has both support and help in making decisions. “I’m engaging in things that will make me stronger as a business owner,” she explains.

Schlossbach learned a lot about herself and her business as a result of Hurricane Sandy.

“One thing we have tried to do since then is not put all our eggs in one basket,” she says. She’s now working on launching some food products (farm to table products like cheese, hot sauce and hummus) and beverages (wines and tequila), as well as opening another restaurant and bar in an area that’s not threatened by the environment.

“All in we lost about $3 million,” Schlosbach says, “and you can’t recover from that.”