Industries find they're not 'recession-proof'

No matter what you call it, many businesses are feeling the squeeze from their bottom lines. Some businesses are doing well despite the challenges while so-called "recession-proof" industries aren't the safe haven they once were.

Diminishing returns

Casinos and sales of alcohol and tobacco typically don't decline as do other retail industries. However, local casinos have experienced sluggish times since last winter.

Ed Feigenbaum, editor of Indiana Gaming Insight, said it's a perplexing situation to those in the gaming industry.

"(Casinos are) typically less sensitive to economic cycles and resistant to economic weakness," Feigenbaum said. "Apparently that's no longer the case. Apparently we're in deeper economic straits than previously thought."

He said it's not just a choice between a baseball game and going to a casino.

"People just don't have money, so they are staying home," Feigenbaum said. "Or they don't have a job, period, with the plant closures around the state and region."

Revenues are down at Michigan City's Blue Chip Casino, in particular, anywhere from $5 million to $8 million in each of the last three months.

Boyd Gaming spokesman David Strow said Blue Chip started experiencing a noticeable decline when Four Winds Casino opened in New Buffalo, Mich., only 15 miles away.

"There have been a lot of factors -- Four Winds, the disruption caused by our construction project. And there are economic issues, but I would be loathe to say economy is sole cause," Strow said.

Kevin Kline, Horseshoe vice president and assistant general manager, said business is going well for first quarter.

"We've certainly seen softness in the retail level -- customers who come here perhaps less often and their gaming budgets are smaller," Kline said.

Both Horseshoe and Blue Chip are expanding their casinos to offer more amenities that they hope will attract more gamblers.

Strow said the opening of a new hotel and convention center at Blue Chip in December will help the long-term success of the casino. Kline said a $500 million-plus expansion includes new restaurants, a theater and more gaming space. It is set to open in late summer.

Ups and downs

Karma Tobacco & Cigar Lounge in Merrillville has seen steadily declining sales since last year

"It's been very slow -- almost 25 percent down," owner Dhiren Shah said. "November was slow, but March was the slowest out of all. At the end of March sales were about 30 percent down."

Shah said he has cut down on employees' hours, but he wasn't forced to cut any jobs.

Salons and barber shops are finding that patrons can afford to wait longer between trims

Dave Johnson, owner of Jim & Carl's Barber Shop, said he has noticed some shaggier heads coming into the shop.

"It's just like everybody else," Johnson said. "People are putting things off a little longer. It hasn't made a big difference in terms of business."

Johnson said product costs aren't too bad, since barber shops don't have as many hair products to replace as salons do.

"We're seeing (increases) in equipment a little bit, but mainly utilities -- but again that has to do with the cold," Johnson said.

Joanne Lane, co-owner of Texture Pointe salon in Highland, hasn't seen much of a dropoff.

"The majority of our business is people who are pretty committed to hair color. We are one of those places that have actually been steady, if not improved," Lane said.

She said prices typically spike on hair care products around the first of the year, so they have felt the price increases as they replenish inventory.

Lane said the salon is considering increasing the price of services, but they haven't taken that action yet.

Fulfilling a need

Resale shops and pawn shops are among bright spots amid the gloomy economic climate.

Pawn shops have seen a bevy of business in recent weeks -- not only for people selling items but for short-term loans.

Merrillville Loan owner David Zacharias said most people who come in his business are looking for small loans that last them until payday.

"Loans have increased dramatically. They are closely tied to gas prices," Zacharias said.

He said most loans are in amounts under $100.

"Sales have been soft, but it's like a balance wheel. Sales have slowed, but we've been picked up by the other side of business where we loan money," he said.

Many of his clients are on fixed incomes and are limiting the number of trips they take due to the price of gas.

Michele Farmer, manager of the Portage Resale Shop, said the shop is seeing more business and more donations.

"It's hard to judge at this point -- we relocated in October -- whether people are finding us or they're looking for lower prices," Farmer said. "I'm not sure people realize that we carry items for $2 to $4 that you would find at J.C. Penney for $25."

The shop's proceeds are donated to charities like Gabriel's Horn homeless shelter and Portage Food Pantry, which are seeing higher demand.

"With gas prices so high, a lot of people are picking and choosing," Farmer said. "Do I buy food? Do I buy medicine? It's horrible."