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Small Business Spotlight
Whistle Stop Hobby & Toy co-owners and siblings Rick Claggett and Julie Everitt can find the silver lining in the COVID-19 pandemic.
The hobby and toy shop, established in 1969 in Harrison Township by their parents, Richard and Carol Claggett, has always done great business thanks to its strong local following. But it saw a major boost over the last year and a half.
With scores of individuals and families confined to their homes, Whistle Stop Hobby & Toy became a go-to for model trains, puzzles, board games and other items that could keep a person busy.
Photo Credit Nic Antaya for Crain's Detroit Business
Rick Claggett, who operates Whistle Stop Hobby & Toy in St. Clair Shores with two of his sisters, said of the family business: "People come here to be happy. If everybody’s happy, I’m happy.”
"Our (revenue increase) has been considerable," said Claggett, who declined to disclose specific financial figures. "Luckily, we specialize in things people do at home. People discovered hobbies they used to love. For a lot of people, the main concern was keeping kids busy. A lot of parents and grandparents kicked in to get things to do."
Many small businesses have folded or come close to it during the pandemic. Others have found new ways to bring in revenue over the past 16 months through clever marketing and new ways of doing business, as well as by offering new products and creating new revenue streams that are here to stay.
That includes a new service offered by the proprietors of Eastern Market Brewing Co.
Eastern Market Brewing Co. has had a busy couple of years. The company acquired Axle Brewing Co. in 2019, and rebranded its taproom The Ferndale Project in 2020, opening shortly before the pandemic began. In an effort to remain viable, bring in revenue and keep its employees on the payroll, The Peddler was born.
What started as a beer delivery service out of The Ferndale Project space grew to include other local food businesses and craft goods. It's now run out of the 17,000-square-foot space that previously housed Roak Brewing Co.
EMBC co-founder Dayne Bartscht, a 2019 Crain's 40 under 40 honoree, said the establishment of The Peddler played a role in the business being able to keep all its employees on during the early stages of the pandemic, when nonessential businesses like breweries were forced to close. That helped the company immensely, as Eastern Market Brewing Co. increased its workforce from 15 to 45 when it opened The Ferndale Project. By the end of the year, the company employed nearly 100 people, Bartscht said.
"We had no revenue in April or May while we were getting The Peddler up and running," said Bartscht, whose venture offers delivery within a 15-mile radius of Eastern Market Brewing Co. and The Ferndale Project for $1. The Peddler also delivers to other counties once a week. Overhead is low, with the only cost to EMBC being the driver's labor, vehicle maintenance and gas.
"From a qualitative standpoint, it's given us quite the boost. We went from wondering if we would have to close our businesses to doubling the size of our team. A lot of that is driven by the innovation of our team," Bartscht said.
EMBC already owned two trucks; four more trucks were purchased for $10,000 to $20,000 apiece. A nominal fee is paid annually for logistics software, which helps optimize delivery routes.
The Eastern Market Brewing Co. staff was busy at the outset of the pandemic. Bartscht challenged the team to come up with a new business idea each day for 10 days. All of them have been implemented in some way, including Dooped, a vegan doughtnut operation. EMBC also acquired coffee company Ashe Supply Co., which operates out of Ferndale.
Earlier this year, EMBC signed a five-year lease to take over Roak's brewing equipment and space near downtown Royal Oak, including pizza ovens. EMBC moved its new Detroit-style pizza business, Assembly Pizza, from Ferndale to the Roak space and The Peddler will offer delivery through online orders.
"I'd say we had a pretty good year thanks to our creativity," said Bartscht, who declined to disclose 2020 revenue. Eastern Market Brewing Co. in 2019 topped $1 million in revenue. "(The Royal Oak space) has the potential to become a third brewery for us."
Customer Service Is Key
At Whistle Stop Hobby & Toy, demand for the store's products brought Claggett and Everitt into work when many other businesses were forced to close.
The co-owners, who run the business with their sister Wendy Bacon, made their way to the 10,000-square-foot space three days a week to fill online orders.
"They were coming in like crazy," said Claggett, a 54-year-old Royal Oak resident who has worked at the store in some capacity since he was 16. "Ninety-five percent of the online orders were from current customers. That was the only way they could get anything."
Photo Credit Nic Antaya for Crain's Detroit Business
Katie Belemonti of Roseville and her son, Ethan Belemonti, 9, shop for a LEGO set at Whistle Stop Hobby & Toy
Shortly thereafter, the toy store began to offer curbside pickup. Everitt said staffers would take orders via phone and email with a 24-hour window to fill the orders. A personal shopper component has been implemented, too, which is available at no cost to customers.
"I have worked one-on-one with a lot of customers," said Everitt, a 48-year-old Clinton Township resident. "I've done some personal shopping. That's an area that has increased (during the pandemic). We're (customers') eyes in the store. I love that. Being that we're a small business, it's nice to give our customers that added touch. That's what small business is about: going the extra mile."
Growth has been evident for Whistle Stop Hobby & Toy.
Its staff of 25 is the largest in the company's 50-year history, built up to manage personal shopping orders and provide coverage if an employee is out sick.
"Everything has been strategic," Claggett said.
What hasn't been strategic is the makeup of the staff. Everitt said they had to bring on 15- and 16-year-olds because of struggles in finding help. Some college students were brought on, but they took other jobs this summer, she said. Whistle Stop also employs some retirees, according to Everitt.
Working together
Collaboration is key, according to Detroit Sewn President and CEO Karen Buscemi. The Pontiac-based cut-and-sew operation was focused on making clothing, but during the pandemic it began producing sustainable personal protection equipment along with its apparel and home goods.
Detroit Sewn at the outset of the pandemic booked a deal to produce 50,000 cotton masks for Livonia-based Trinity Health. That allowed the company to add jobs and additional shifts.
Detroit Sewn partnered with other companies, allowing it to increase production.
Photo Credit Detroit Sewn
Detroit Sewn staffers work on manufacturing PPE during the pandemic. The company saw a huge boost in adding PPE production to its list of services.
"One of the most important things we learned was to not be afraid to collaborate with others in the same industry," Buscemi said. "A lot of people see someone who does the same thing as competition. If you protect yourself with (nondisclosure agreements) and things like that, and you can come together, you can help everybody. A big thing was those collaborations allowed other businesses to keep their staff working when they would have otherwise been shut down."
Changes to stay open
To keep his staff working, Happy Howie's all-natural dog treats President David Collado implemented several changes.
Collado, whose Detroit-based business was featured in a Capital One ad late last year, changed his employees' work schedules to reduce time spent together in the lunchroom. He also installed no-touch doors and air purification systems, and utilized COVID-19 safety kits. Happy Howie's received a $15,000 grant from the state of Michigan aimed at assisting companies in the food and agricultural industry in adopting COVID safety measures.
Photo Credit Archetype
Happy Howie's all-natural dog treats, based in Detroit, got a major boost during the pandemic, as scores of people took in pets. The company's e-commerce took off during the quarantine period, according to company co-owner David Collado, which led to the brand establishing an e-commerce manager position for the first time.
More than 11 million U.S. households got a new pet during the first eight months of the pandemic, according to a report published by Today's Veterinary Business. That led to an influx of business for Happy Howie's, which has its products in 4,000 stores nationwide, according to Collado.
Revenue increased by 10 percent in 2020, Collado said. From June 2020 through June 2021, the business topped $2.6 million in revenue, according to Collado. To help meet an increase in demand, he purchased a new machine that allowed Happy Howie's to automate one of its key production processes. Collado cashed out $20,000 in Capital One rewards to put down a deposit on the machine.
Changes that stick
Nearly 11 months after Michigan gyms were allowed to reopen, Jabs Gym owner and former professional boxer Willie Fortune continues to offer virtual courses, too.
Jabs Gym, with locations in Eastern Market and Birmingham, began to offer outdoor training classes shortly after the start of the pandemic for groups of up to 10 people. Online courses came soon after, as Fortune could host a class for up to 200 participants through Zoom.
The classes, which feature shadow boxing and boxing-inspired yoga, initially were offered for free. Fortune, who also offers kickboxing, high-intensity interval training and cross-training courses, eventually charged $15 for each online class. In offering the outdoor and online courses, Fortune was able to keep staff employed, and last year pulled in $10,000 to $12,000 between the two offerings.
"I wanted to keep everybody employed. We were able to maintain our monthly overhead and give some work to trainers and desk staff," Fortune said. "I don't think we would have made it through the pandemic without the online courses.
Photo Credit Marx Layne & Company
Former pro boxer Willie Fortune, owner of Jabs Gym locations in Detroit and Birmingham, shifted to offering online courses during the pandemic that would at times have 200 participants. The pivot allowed Fortune to keep all his employees on staff and has helped establish a model Fortune will continue to use.
"Going through the pandemic changed my mind frame. We're now offering pay-as-you-go memberships, walk-in classes, things we didn't offer previously. I'm happy we've been able to create another stream of income."
As Fortune is doing, Buscemi agrees that businesses that have implemented new offerings during the pandemic should make them permanent, if possible.
"Now you can look at your business as having two separate divisions," she said. "They have to be handled differently and you have to plan properly to ensure they both succeed. On a lot of levels, the pandemic has helped small businesses facilitate a lot of growth."
Ripe for opportunity
Working hard is a common thread for all of these business owners. They've put in long days and nights over the last year-plus and toiled to adapt to ensure their businesses remain viable.
Eastern Market Brewing Co.'s Bartscht sees the pandemic as a blessing in disguise.
"We all felt like, had we been around and in our roles for years, we may not have had and exhibited that natural creativity," he said. "It wasn't easy. We all worked seven days a week. We gave everyone the option to take time off to get their heads right, and only two of the 45 did, and they came back. It was pretty amazing to see everyone come together."
Claggett and Everitt said the will to keep their toy store alive played a major part in their business thriving despite the circumstances. Community support has been key, too, as customers made it clear they wanted to help the shop to survive.
"We had customers who didn't want to buy from Amazon. They wanted to buy from us," Claggett said. "I'll always look back on this time and think how interesting it's been. It's been a learning experience."
By: Jay Davis