In the last two years, virtually everyone has been affected by the recession. U.S. workers have suffered layoffs, cutbacks, hiring freezes, salary freezes, and wage cuts. Rising health-care costs and loss of benefits have put an additional financial squeeze on many families.
With some experts suggesting the recession is starting to end, we wanted to look at some local bright spots: people who are succeeding despite — or even because of — the recession.
These cases don't center on the federal stimulus package or multimillion-dollar bonuses; they're just real people making the hard times work for them.
By all accounts, the 2009 Staxtacular — the Soulsville Foundation's annual fund-raiser — was a success. The economy wasn't great, but the event made more money than expected.
"We crunched the numbers, and I felt great," says Kerry Hayes, the foundation's former development manager and marketing manager for education. "I felt like I had a lot of job security."
It wasn't a feeling destined to last.
The next week, on Hayes' birthday, his boss at Soulsville told him the board had eliminated Hayes' position. Hayes says he was so shocked that it took him a few moments to realize that his job had been the one eliminated.
"Then I snapped out of it. I got on the phone immediately and started telling people," he says. "I realized I needed to run this like a PR campaign for myself and get in front of the message."
Within a day, all of Hayes' friends knew what had happened and had a copy of his resume.
"It was healthy for me," he says. "It gave me something to do, but it also let me feel like I was in control of this very uncontrollable situation."
It also worked. Hayes was only out of work for two weeks before landing a new job at Carpenter/Sullivan/Sossaman, also called CS2.
"CS2 was our agency for Soulsville, so I knew those guys," Hayes says. "They were one of my first calls."
The agency had landed a contract with the Salvation Army's Kroc Center. As part of that project, they needed someone familiar with nonprofits who could set up meetings with the local community, schools, organizations, and churches, giving Hayes what he calls "a crash course in the city."
"I never thought of myself as an ad agency guy prior to falling into that job, but it was a great fit," he says.
It also helped prepare him for the job he has today: Memphis mayor A C Wharton's special assistant for research and innovation.
Hayes had helped on Wharton's city mayoral campaign, and after Wharton won the election, he got the opportunity to work for the city.
"My dream job is to do stuff that helps the city," Hayes says.
But Hayes also got another unexpected benefit when he was laid off from Soulsville: the chance to appreciate the people he knows.
"When I looked through my Rolodex, I realized I have a lot of cool friends," he says. "How often do you stop and think, How awesome are my friends?" — Mary Cashiola
In the Spirit
Conventional wisdom holds that "sin" items — pornography and liquor, for example — are recession-proof. But reality's grip on that maxim, it seems, is a bit looser.
Video and online porn sales are down, and wine and spirit sales, while not down, are flat.
"Word in the industry is that flat is the new up," says Gary Burhop, owner of Great Wines and Spirits in Regalia at Ridgeway Center in East Memphis.
And while flat sales are not ideal, they are better than nothing at all. After working in public affairs, Burhop, at age 50, opened Great Wines in 2000 around Thanksgiving. A year later, as holiday events were being planned, 9/11 happened, and everything was canceled. "The start-up period was rocky indeed," Burhop says, "but we managed to survive."
In December 2007, Burhop got his first taste of the current recession. "We noticed a lack of enthusiastic gift-giving," he says. "Our business mirrored what the government reported was the beginning of the recession."
Customers are still buying wine and liquor, but they're "trading down." Their dollars generally are going not for one high-price bottle of wine but for more bottles at lower prices. (Burhop does note that his devoted single-malt consumers are still going for the good stuff, recession be damned.)
The upshot of the recession is that Burhop has been more actively marketing the shop through newsletters and teaming up with restaurants to host wine dinners to draw in new customers. He also has a bargaining position with distributors he didn't have before, given that wine and liquor sales are particularly down in restaurants. He now has access to previously hard-to-get wines such as Romanée Conti and California cult wines like Bond.
In addition, Burhop says that many established wineries are offering new labels at value prices to move product. "People are always curious if expensive wines are the best. I answer, 'Yes, usually, or it should be,'" he says, noting that there are many cheaper, good wines. "Up to a point, wine can't get any better." — Susan Ellis
Any Way You Slice It
When Fresh Slices opened in Midtown six years ago, it was a family-operated business.
But it didn't stay that way for long.
"We started to grow so quickly," says Tasha Logan, the restaurant's manager and the daughter of the restaurant's owner. "We hadn't expected how busy it was going to be. We had to start hiring other people."
Three years later, the family opened a second location in Cordova, and last year, they opened their third location on Stage Road.
Logan attributes the restaurant's success, especially amid an economic downturn, to its prices. Though their distributors have raised prices, Fresh Slices tries to keep prices consistent.
"We try to keep our prices moderate and serve a nice-sized portion of food," she says. "We want to be conscious of not raising prices because of the recession."
The menu is extensive, and entrées range from $6 to $20. The Midtown Fresh Slices also has the added benefit of being located in a residential neighborhood. Not only is it kid-friendly, but it's within walking distance for many residents. Even during the season's snow days, the restaurant was open and full of customers.
"The neighborhood has been good to us," she says. "We get some people in here two or three times a week.
"We feel really blessed," Logan continues. "We've seen a lot of restaurants close this year, and that's just not us." — Mary Cashiola
The Sweet Life
In her former career as a dental-business consultant, Gigi's Cupcakes owner Marilyn Weber spent three weeks out of every month flying to dentist offices across the country, offering consultation on how to make going to the dentist a more pleasant experience for patients.
But when the stock market took a turn for the worse, Weber knew her consulting job was on the line. She and two others were laid off last September.
"It wasn't a shock. Even our own clients were a little nervous about bringing consulting on board, because it was an expense to them. As the economy changes, people all pull back," Weber says.
Weber had a back-up plan. When she married her husband in July 2009, the couple ordered Gigi's Cupcakes from the regional chain's flagship store in Nashville for their wedding.
"We did lots of taste-testing, and we ended up with Gigi's. It was such a positive experience," Weber says.
Weber always loved to cook and bake, and shortly after her layoff, she made the decision to open the first Memphis location of Gigi's Cupcakes on Poplar in East Memphis. Known for their cupcakes' signature swirl of frosting — which is as large as the cake itself — Gigi's boasts 12 locations in Tennessee, Kentucky, Texas, and Alabama.
"I could have opened a shop on my own, but as a business consultant, I knew that it was best for me to follow those who've already done the things that I haven't experienced. Their experience will help me get over some stumbling blocks they'd already had," Weber says. "The idea behind the franchise is assistance with name recognition and branding."
Weber's decision to open Gigi's sent her to the chain's "cupcake college," where she learned to perfect the signature swirl.
Her small shop opened less than a month ago, but Weber and her team of bakers and decorators already are putting out nearly 900 cupcakes per day. On some days, a line forms outside the door before the 10 a.m. opening time.
Part of the proceeds from each $3 cupcake sale benefits Sweet Outpourings, a nonprofit organization Weber started to provide funds for local organizations that feed the hungry.
"I am exceptionally happy in this job. This feeds my soul," Weber says. "I like the fact that I'm not packing a suitcase every Sunday, but I'm not so happy to give up my frequent flyer miles. I won't be sitting in first class anymore — but I think I'll be happier." — Bianca Phillips
Toni Campbell Parker is a Memphis lawyer who has been specializing in bankruptcies, mainly commercial ones, for a couple of decades. She was aware that the housing industry was beginning to slump by late 2007, but her backruptcy clientele, derived mostly from "construction and real estate and related companies," didn't begin to zoom for another year.
"I started seeing it at the end of 2008 and the beginning of 2009, with people who thought they could hang on and thought the market would come back," she says. What happened was that many folks hung on too long and "used all their money, all their savings, all their IRA's in the hope of a turnaround."
And these, Parker points out, were "not just the people who are doing real estate development or building houses, but the plumbers and electricians and all those are affected — people who may have been working for a construction company or provided services."
All in all, Parker says, "I think I've had at least a 30 percent increase [in bankruptcies] the last 12 months or so, and I'd say 80 percent of that is from the development industry."
She pauses: "We're talking about people who lost everything as a result."
Everything, in Parker's case, mostly means Chapter 7. Like a Chapter 13 backruptcy, Chapter 7 allows most of a debt to be discharged fairly immediately and, to that end, empowers a bankruptcy trustee to dispose of the filer's non-exempt property. In Chapter 13, an individual forfeits no property but must file and keep to a repayment plan with creditors.
"I don't file as many Chapter 13's as a lot of attorneys," Parker says. And much of her Chapter 7 filing is on behalf of debtors who either took out large loans or guaranteed them for others.
Another type of bankruptcy, Chapter 11, is what Parker calls a "workout," allowing a debtor, individual or company, to restructure obligations so as to resolve them. Those have picked up somewhat in the last year, she says, but to nothing like the same degree as Chapter 7 bankruptcies.
How long will this state of affairs last? "I'd say another year or two," Parker estimates.
In the meantime, will she herself end up paying Uncle Sam more in the way of personal income taxes? "Yeah, it'll probably bump a little," Parker says matter-of-factly.
— Jackson Baker
Paul Fermi spent 10 years as a general contractor and the 12 years before that as an engineer.
Then, in 2008, at the beginning of the recession, he opened a re-sale store. He'd never worked retail before but says he has an entrepreneurial spirit.
"The construction and housing market was down. I had two small children of my own," he says. "I decided, let's go for it."
After doing some research, Fermi opened a franchise of Once Upon a Child, a Minneapolis-based children's resale store, in Cordova two years ago. And on a recent sunny Friday afternoon, with almost-new strollers lining the storefront, a cadre of moms browsed through the well-organized aisles of boys' and girls' clothing.
Each day, about 60 customers come in to sell items, and Fermi says he hears stories of economic hardship all the time. "Their kids can't wear the clothes any more, and they need the money," he says.
The store buys all types of clothing regardless of the season and pays for gently used items in cash.
Parents also can find a bargain at Once Upon a Child. About 10 percent of the store's products are new, including hair accessories, blankets, and pacifiers. The rest — clothing, baby swings, high chairs — are sold to consumers for about 25 percent of the original retail price.
"We offer a product for a price that, otherwise, may not be affordable for many of our parents," Fermi says. "We're told time and time again that the store is a blessing."
Fermi thinks a store like his would thrive under any economic conditions, especially in a community as economically diverse as Cordova.
"We need both high- and low-income families for us to survive," he says.
In March, Fermi will open a second franchise in Southaven, twice the size of his first store. The first two months that store is open, however, they'll be buying merchandise.
"It's a cash-hungry business," Fermi says. "We buy and sell product every single day."
Fermi says the secret to the store's success is the value and convenience they offer consumers.
"Not very many people can compete with Walmart," he says. "When it's all new products, there's no way to compete." — Mary Cashiola
After getting laid off, Sonya Williams says she found her calling.
Williams had been a fund-raiser and meeting planner for the better part of her adult life. She loved her job, but last September, she was let go.
"We had a group that had a meeting out of town with our funders. The funders told them they had to cut two positions — and one of them was mine," she says.
It wasn't a harsh lay-off; Williams got a decent amount of severance pay and time off.
"They did what they could under the circumstances. I didn't feel like I was jacked," Williams says.
Even so, she says, she was shocked and discombobulated. After spending a few days updating her resume and "having a mild meltdown," Williams needed to clear her head. She jumped in the car and left town for a few days, leaving her husband and son behind.
She soon found her way.
"It was the drive. I was alone in my car, thinking, What am I going to do?" Williams says.
She decided to enroll in an eight-month program at the Massage Institute of Memphis, something she never would have done before.
"You spend four years in an institution of higher learning and all the money you've got at the time ... I didn't want to waste my degree, for lack of a better term," she says.
Williams always had been interested in massage, but she says she never would have quit her fund-raising job to go back to school. It was too scary. With the economy in the tank, she had nothing to lose.
Williams also found an unfamiliar calm in being let go.
"I have always been one of those people who have to be in control of everything. Not having a plan and not knowing always scared the hell out of me," she says. "I've been able to let that go. I'm not concerned about that right now."
She'll graduate from her massage program in May and considers massage her calling.
"It was one of the best things that ever happened to me. If I hadn't gotten laid off, I would still be doing the same thing," she says. "It's a blessing to know that I am helping people to help their bodies to heal."
Her friends have benefited, too, as Williams needs to practice her technique.
"I do a lot of laundry these days — sheets, towels. But it makes me really happy. I've always loved my job, but I don't think I've been this happy in my entire life." — Mary Cashiola