After more than a year of hardship for small and medium-sized companies, today’s relaxation of Covid-19 restrictions is a milestone — and hopefully a turning point — for the owners of hairdressers, gyms, shops, pubs and restaurants. As they enjoy reunions with team members and customers, they also can begin the long process of recouping their pandemic losses.
We asked leaders of small and medium-sized businesses how they’ve been gearing up for reopening today and to share the challenges and opportunities that may lie ahead.
Laura Ott, 42, is director of Hair Ott, a family business based in Portsmouth that has three hair salons and one training academy. Its turnover was £2.5 million in 2019 and the company employs 80 staff.
“The lockdowns definitely got tougher as time has gone on. In the very first one, there was a sense of ‘we’re all in this together’, but the most recent lockdown has been so difficult because of the financial pressure. One of our landlords waived any rent that was due, whereas another has been harassing us the whole time about when they’re going to get the rent paid. We’ve closed that site because it was on a business park and even though we still had our regulars it’s quite demoralising for the team because there’s just no one around. At another of our salons, an opportunity came up to extend our unit so we’ve done that, going from 14 workstations to 22, and moved the staff across.
“Financial forecasting has really gone out of the window. We’re living week-by-week and we know exactly how much we need to take each week to get by and keep the salons open.
“To not be surrounded by clients and staff has been very unnerving. As soon as it was announced that the April 12 reopening was happening, the phone has not stopped ringing. We are going to be very busy over the next few weeks and don’t have any availability in the book until May 17.”
Tom West, 37, is director of Jolly Good Pubs, which owns three pubs on the Essex-Suffolk border and employs 60 people. Before Covid, the group turned over £2.5 million.
Advertisement
“We are reopening two of our three sites today — the Red Lion in Manningtree and the Marlborough in Dedham. The third, the Nelson in Ipswich, will stay closed until we can open indoors. It’s a warm, winter pub where you sit indoors and if we open now we will lose more money than if it had stayed shut.
“During the closures we invested £250,000 on making some changes to our venues. We’ve refurbished some old barns so that we now have a pizzeria at the Red Lion and rebuilt and refurbished the bedrooms at the Marlborough for bed and breakfast.
“We took out £312,000 in government loans across the businesses and I’m grateful for what we’ve had, but we are still losing £150,000 a month. We will have to start paying the loans back soon and if the support around VAT and business rates remains in place we can afford it. If they start saying we’re going to get business rates up and running and we’re going to return VAT to where it should be permanently, then that becomes a problem.
“The stability of our finances is now in the hands of our consumers, but also in the hands of the government as to whether we can trade at a profitable level or whether we are just going to be covering our costs.”
Charlotte Gatward is the eighth-generation family member of Gatwards of Hitchin, the oldest family-run jewellers in Britain. In 2019, its turnover was about £1.5 million. There are eight staff.
“We’ve been in business for over 260 years and we had never closed our doors prior to Covid, not during the Spanish flu pandemic or the two world wars. The first lockdown, we were in a state of shock and disbelief. The second hit us harder in some ways because November is such an important month in terms of sales and to have to close is devastating.
Advertisement
“We hope there is some pent-up demand [for jewellery]. Hitchin is a commuter town and fewer people will have spent money on travelling to London or on eating out or going to the pub. We’ve had a couple of people buy jewellery for their partners because they’ve had a lockdown birthday and they’ve missed out on holidays. The summer months traditionally are quiet for a jeweller because people usually go on holiday and that’s what they spend their money on and then it picks up again in September and October in the lead-up to Christmas. But this isn’t a normal year, so we’ll have to wait and see.”
Roger Wade, 55, is founder and chief executive of Boxpark, which has three pop-up shopping centres. Boxpark’s turnover was £12.5 million in 2019 and the company has 204 employees.
“We went from having our record year in terms of turnover and profit in 2019 to just breaking even in 2020, so we have been desperately trying to get our places prepared and making sure we are maximising the amount of outdoor space we’ve got. My staff are chomping at the bit to get back to work because they’re bored of being at home.
“Because we took the decision to give free rent during the period of lockdown, it means we’ve lost very few tenants. Coming out of lockdown, we’re at 95 per cent capacity, whereas a lot of major retail developers have got huge vacancy problems. We’re in a strong position: we kept 99 per cent of our staff, we kept 95 per cent of our traders and we haven’t borrowed lots of money. But we’ve got to start now making back the money that we’ve lost.
“Like the majority of UK hospitality, we don’t support the vaccine passport. Our customers tend to be young, aged between 18 and 35. Are we really going to say to young people who’ve got perfectly good immune systems that for the rest of your life in order to get into pubs you’re going to have to show a vaccine passport? It’s ridiculous.”
Henry Wild, 50, is director of a family business that owns two holiday parks. Skelwith Fold, a 140-acre luxury park in the Lake District, usually turns over £5 million a year, and the smaller Moss Wood, in Lancashire, has annual revenues of £800,000.
“Pre-Covid, we used to run at around a 40 per cent occupancy rate at Skelwith, but that changed very rapidly towards the end of last year when we came out of the first lockdown and occupancy jumped to 80 per cent. I’m expecting that sort of occupancy to continue.
Advertisement
“Under the current government guidance, we can’t open any shared facilities, which makes things slightly easier from our point of view. But as things ease further, we’ll be back into the opening of shared facilities and also the cleaning of shared facilities. The more people you have on the park, the more cleaning you have to do.
“When everybody goes on holiday, they forget about the rules and the wheels come off. It’s important for us to keep up with the spirit of what the government wants and make sure we get to the end of the season having not been shut down because we’ve had a significant number of [Covid] cases.”
Gym operator will hit the ground running
Humphrey Cobbold, 56, is chief executive of PureGym, the UK’s biggest gym operator with 284 sites across England, Scotland, Wales and Northern Ireland. The company’s turnover in 2019 was £255 million.
“I’ve been in business for the better part of 35 years and without a doubt the last year has been the toughest in that time. Running a business that has no revenue for eight months out of twelve, dealing with all the financial, commercial and people issues, and relationships with suppliers, you feel like you’re in a constant battle.
“We’ve had some support from the government: £38.6 million to date and we will also receive another £15.6 million. We reduced our costs as far as we possibly could, but we were still losing half a million pounds every day that we were closed.
Advertisement
“We believe that there’s huge demand for gyms to reopen. A lot of people don’t live in accommodation that makes it particularly convenient to jump around in front of the sofa to Joe Wicks . . . and there are lots of older people who like the controlled environment of a gym and will prefer walking on a treadmill to risking a slip or fall in a park.
“Our team couldn’t wait to get back. They’ve hit the ground running and will be doing everything they can to make people happy, healthy and comfortable with the safety of the surroundings.
“We are opening ten new gyms today, too, and more are coming. We hope to open 25 this year and double that next year. We will be lossmaking for the first two or three months because our costs will come back fully and we’ll probably reopen with 60 per cent or 65 per cent of our revenue.
“Luckily we’ve got good financial reserves, but it does feel a bit like climbing out of a deep hole coming out of this and you just hope the walls don’t crumble as you start to reach the top.”
