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The Honolulu Advertiser
Posted on: Thursday, November 15, 2001

Hale'iwa business wipeout worst in town's memory

By Will Hoover
Advertiser North Shore Writer

The mood at Sunset Hawai'i Clothing Company in Hale'iwa last week was even gloomier than the overcast weather outside.

Heavily dependent on tourism, Gloria Gerber closed her Sunset Hawai'i Clothing Company last weekl.

Gregory Yamamoto • The Honolulu Advertiser

"It's hard," said owner Gloria Gerber, fighting back tears as she delicately packed up T-shirts, women's wear and gift inventory and prepared to lock the doors for the last time. "We've been here for 11 years. I could hang on, but what's the point? ... I have no more employees. I'm working without pay. This place doesn't make the rent."

Hale'iwa, heavily dependent on tourism, has been nailed by tough times before. But nothing — not war in the Persian Gulf, a lousy economy through the 1990s, a rock slide that shut down the highway into town last year — equals the economic wipeout the small surfing community has experienced since Sept. 11.

The flow of Mainland and Asian visitors has nosedived. Several stores have gone out of business, and others are worried about hanging on. The area's largest employer, Waimea Falls Park, has laid off 60 percent of its work force.

As one local merchant put it, "Sept. 11 has adversely affected everybody and every business out here."

Besides Gerber's clothing shop, the North Shore Art Gallery and the Crazy Shirts outlet have pulled the plug. Cindy's Gifts and Jewelry shop is having a "Close Out Sale" until the lease runs out in five months.

"Things went from bad to worse," said owner Cindy Gary.

Cindy Gary, who owns Cindy's Gift & Jewelry Shop, plans to stay in business only until her lease runs out in April.

Gregory Yamamoto • The Honolulu Advertiser

Waimea Falls Park was in a bankruptcy proceeding even before Sept. 11. But as a result of the attacks, said general manager Ray Greene, he laid off 55 of 91 employees on Sept. 19. Park attendance and receipts are both down 25 percent, Greene said.

Stunned shop owners say they don't know what to do. On its last day of business, a half-off sale was not enough to coax more than a handful of customers into Gerber's store.

"We probably haven't seen anything like this before — at least not in the 40 years I've been here," said Antya Miller, president of the Hale'iwa Main Street business association. "Any business that was having trouble before Sept. 11 will certainly have a tough time now. I have a feeling other businesses could be going under.

"But it's a mixed picture," Miller added. "Places that serve locals are all right. The barber shop is doing fine. One gas station is doing as well or better than ever."

Merchants who have been around long enough fondly recall the halcyon days of the 1980s and early '90s. For Gerber, whose business was 75 percent tourists, those memories are brief. Her shop did well in its first four months, she said. Then came the Gulf War and the beginning of an economic slump that lasted nearly a decade.

"We had a couple of pretty good years in '97 and '98, and then that dropped off. We had the rock slide in 2000, which closed the road, and that shut off the North Shore. I couldn't wait for that year to get over.

"And 2001 was even worse."

Shops that cater primarily to tourists have seen their business drop by about a third, said Miller. Even the perennial tour-bus stop, Matsumoto Shave Ice, has felt the pinch.

"And we're one of the lucky ones," said proprietor Stanley Matsumoto. "We're an attraction. I'd say our sales are down 15 to 20 percent. We're seen fewer tour buses with fewer people. And the buses are smaller. This is worse than Desert Storm."

Like other Hale'iwa operators, Matsumoto is relying more on the local trade, normally half of his customer base. Much rides on hopes of luring island residents northward.

Hale'iwa Main Street has produced thousands of brochures to be placed at Honolulu International Airport and shopping centers around O'ahu, highlighting Hale'iwa's colorful past, small-town charm, world-famous beaches, attractions, shops and eating establishments.

"There's really not much that can be done unless more people show up," said Miller. "We're trying to get the locals to rediscover Hale'iwa. Take a vacation here. Spend a few nights at Turtle Bay."

There are signs of hope. As the big-wave season opens, Waimea Falls Park has hired back eight laid-off employees, and will bring back more if things improve.

There's an attempt to remain optimistic. Gerber's remaining inventory is being moved into a section of Flavor Mania, the old-fashioned ice cream shop owned and operated for nine years by her husband, Terry. The couple hopes the double business will attract spenders.

"The surf season always brings in additional business," said Terry Gerber, adding that his own business has been hanging by a thread since Sept. 11. "I think if we can make it through the next six months, we'll survive.

"Otherwise, you're looking at Gerbers' last stand."

Reach Will Hoover at whoover@honoluluadvertiser.com or 525-8038.