Flexibility needed for displaced businesses

TAMLYN STEWART
Last updated 05:00 09/07/2012
Tamlyn Stewart

Retailers Adele and Andrew Wheeley say small businesses need flexible commercial leases to survive a quake-hit market.

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Small businesses struggling to survive in post-quake Christchurch say they need flexible arrangements around commercial space, and that is hard to find.

Whare owners Adele and Andrew Wheeley lost two stores in the February earthquake. Their Lichfield St store is still inside the inner-city cordon.

Andrew picked up work in the building industry while Adele ran the gift and homewares store from their converted garage.

When Snowride owner Richard Naylor offered Whare rent-free space in his Lincoln Rd store for four months during his off-season, Adele ran a pop-up shop inside the snow gear store, and Andrew ran the garage shop.

Now Whare has returned to just the garage shop – and Snowride is sharing its space with another quake-displaced business, Cheapskates.

That is the kind of flexibility and adaptability that small businesses have had to demonstrate to survive a tough post-quake market in the city, Adele Wheeley said.

"For business models like ours, whose markets have been impacted so severely, we need low overheads and flexible arrangements to survive.

"There must be so many small businesses in this situation and yet the premises that are becoming available are as expensive or considerably more expensive than they were before the earthquakes.

"So the market that we had wouldn't be able to sustain us with those sorts of overheads and arrangements. The leases are really constricting."

A fellow retailer had recently been offered a central location lease for $600 per square metre per annum and a 10-year commitment, which was "extraordinary", Wheeley said.

And the market is much tougher now, she said.

"People are getting insurance money and not replacing things.

"They are going on holidays and buying booze."

Turnover was 60 per cent lower than pre-quake levels. So for now the garage was the best option for the business, as the low overheads meant money was "trickling out" to creditors.

Since February the business had paid off nearly 80 per cent of what it was left owing to creditors because of the closure of its shops, and would be debt-free by the end of the year, Wheeley said.

Committed former customers still visited the garage shop and were buying gifts – often farewell gifts – rather than homewares.

They were buying smaller gifts and things that wouldn't break in an aftershock, Wheeley said.

Andrew is studying a diploma in project management at CPIT with the aim of earning an income outside of the business.

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- © Fairfax NZ News

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