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New Orleans merchants struggle to rebound

Merchants in New Orleans' French Quarter, along with a six-mile row stores and restaurants in the city’s Uptown section, are spending a long, hot summer dealing with a drop-off in tourism and lost sales.
Greg Dombourian
Greg Dombourian of Dombourian's Oriental Rugs is among New Orleans merchants who are coping with a drop-off in tourism, a shortage of workers and a housing crunch. Bill Haber / AP
/ Source: The Associated Press

It’s easy for Arthur Harris, owner of a French Quarter antique store, to sum up the damage from Hurricane Katrina — and none of it, at least directly, came from wind and floods.

“The only damage we suffered was the end of people coming to town,” said Harris, owner of Harris Antiques on the narrow boulevard of Royal Street, regarded in many collectible quarters as equal to New York or Paris for antique lovers with large bank accounts and voracious appetites for the old.

Other merchants in the Quarter, along with a six-mile row of more than 150 specialty stores and restaurants on Magazine Street in the city’s Uptown section, are spending a long, hot summer dealing with a drop-off in tourism and lost sales. A severe shortage of workers and a housing crunch have been particularly hard on small businesses, and many simply have folded or not reopened since the storm.

Government loans for small businesses have been of little help for the merchants, and most have simply chosen to ride out the hard times. Greg Dombourian, the third-generation owner of a rug store on Magazine, said maneuvering through the red tape to apply for a Small Business Administration disaster loan was too much.

“The fine print said you pay all your bills on time, you’ll get one point (of interest) less,” said Dombourian, a board member of the Magazine Street Merchants Association. “I can get a bank loan in 24 hours if I need it.”

The state economic development department estimates 81,000 businesses in Louisiana were damaged by hurricanes Katrina and Rita last year. Though more than half reopened their doors by the end of 2005, it’s been a struggle for the rest to start up again or remain in business.

More than 18,000 businesses have closed permanently since the storms.

Some might consider those hundreds of smaller merchants in the French Quarter and on Magazine Street lucky because those areas largely missed the flooding that covered 80 percent of the Big Easy. But because they also rely heavily on visitors, the traditional downturn in tourism during the steamy summer months is hitting bottom lines hard.

In the Quarter, few tourists mill about during the day, a testimony to the hot summer and the post-Katrina reluctance of many out-of-towners to visit. Along Magazine Street, parking places often can be readily had, a sharp contrast from the pre-Christmas season when the avenue is typically packed with shoppers.

At the French Antique Shop on Royal, co-owner Nicole Freelander said sales are down about 75 percent from a year ago.

“We rely on out-of-town business,” she said. “They really have not been back. We have some very loyal customers who come in, but they don’t take up the slack.”

At Shadyside Pottery, a custom pottery maker and art gallery on Magazine, owner Charlie Bohn said his customer makeup is about 60 percent local, 40 percent tourist. His post-storm business is down about 30 percent.

“Most of my regular customers, say 80 percent of my regular customers who live in the area, are back,” Bohn said.

Without exception, merchants are looking forward to 2007, when the city’s $9.6 billion convention business is expected to pick up sharply following the loss of the fall and spring seasons. Only one more big meeting is scheduled this year at the city’s giant convention center.

“We’ve seen a few new customers, but we don’t expect to see an influx of people until next year,” Harris said. “We’re expecting ’07 will be a decent year because most of the conventions will be back, and we’re hoping we’ll all get on our feet again.”

Freelander said she saw a hopeful boost when the American Library Association, with 18,000 delegates, held its annual meeting in New Orleans in late June. “We made a few sales,” she said. “We’re not complaining.”

Thankfully, not everyone is suffering from the summertime blues.

One of the larger Royal Street dealers, M.S. Rau Antiques, is off to its best year ever — and president Bill Rau says he doesn’t have a clue as to why.

“I can’t figure it out. It’s not from walk-ins,” Rau said. “I believe we’ve got some of the sympathy vote. If they have a choice of buying in New York, buying in Paris or buying in New Orleans, we might be getting a shot we haven’t gotten before.”

Uptown’s Dombourian Oriental Rugs, catering to a more-local clientele, had to close for five weeks following Katrina. Dombourian said although his building sustained wind damage, most of the wait was for electricity to be restored.

Dombourian said sales have been brisk, especially after his experts had to tell people “there was nothing we could do for their rugs after sitting in water for five or six weeks.”

Some customers who settled quickly with insurance companies were eager to refurbish, but many others have not. Some, he said, “are waiting to see if we have any major damaging storms like August and September.”

The Internet is helping at least some of the merchants.

Freelander called her store’s Internet site “very helpful,” but walk-in customers are still her mainstay. “We’re fortunate because Royal Street is an internationally known area for antiques,” she said.

But Harris said the sort of customer who frequents his store — featuring merchandise ranging in price from a couple of thousand dollars to $100,000 or more — likely is not going to make a decision simply based on an Internet view.

“For the most part, people want to see these items,” he said.

Rau said his company’s Internet site was not a major part of its business plan before the storm, but now is being used to get pictures and catalogues to customers. Rau has a professional photographer who shoots pictures of antiques for potential clients.

“We’re capable of doing business when people aren’t here,” he said.

Dombourian said a few businesses along the strip closed after the storm. Some, however, were thinking of doing so even before Katrina, and their buildings are now occupied, or soon will be occupied, by other specialty shops.

“We got a number of merchants who decided to put up some money to do some advertising and expose ourselves more widely,” Dombourian said. “It’s helping.”

Harris said the merchants, like most of the tourism industry, are trying to overcome the image that the entire city was destroyed.

“We’re all hoping people will realize the Central Business District, the French Quarter and the city are basically fine,” he said. “The outlying areas will take years to rebuild, but the business area of the city is basically fine.

Bohn, a New Orleans native, isn’t worried about the future.

“Hell, you can’t let New Orleans die,” he said. “The food’s too good.”