Category Archives: Business

Orchard Supply Hardware And The Mediocrity of Millionaires

Today I learned that the Orchard Supply Hardware store near me is closing.

Some 4300 people* are losing their jobs. A chain of growing and seemingly profitable hardware stores, serving well their communities, is being liquidated.

OSH, as it’s known, has 99 stores in California, Oregon and Florida. If you don’t live in those states, you may wonder why this matters to you. But it does.

For this is not about globalization, or low-skilled immigrants stealing 4300 jobs. Instead it’s Wall Street; it’s about a few rich guys who need to make their numbers.

When I talk about Dreamland, I often say that our opiate epidemic grew from our destruction of community, in many ways, all across America. The demise of Orchard Supply Hardware, announced last week, is the kind of thing I’m talking about.

OSH was a place where the community came, where people bought things with which they built their homes and yards.

The store had a rare combination in hardware these days: great customer service and smaller stores. That meant you could actually find the things you needed. This earned it $600 million in sales last year. OSH, which is owned by Lowe’s, was expanding.

OSH is a chain but people I know feel like it’s their local hardware store. I didn’t buy hardware anywhere else. With all the crappy chain stores and chain restaurants we Americans have to tolerate stomping all over our country, here was one that people actually wanted to shop in, and felt close to.

It seemed that behind OSH was a creative idea: position it as an alternative in a world where customers are moving away from big box stores they have to drive for miles to get to. Smaller stores, easier to get to, alert and knowledgeable staff.

Sadly, Lowe’s backed off this inventive positioning of OSH in July when it hired Marvin Ellison as CEO.

Ellison was the CEO of JCPenney. There, he ran the company into its worst quarter ever. In his last quarter, the company lost $69 million and its stock hit an historic low. In his three years there, JCP shares dropped by more than half. For that record, he was compensated with $10.8 million in cash and stock in 2017, then hired this year to revitalize Lowe’s.

You may wonder: What about that record makes this guy worth hiring anywhere?

You may wonder: What company looking to rebound in this retail environment would hire anyone from JCPenney?

Another question that may occur to you is, why does Lowe’s feel in such a hurry to boost its stock price? Well one reason, apparently, is that a big chunk of Lowe’s stock has been purchased by Bill Ackman, an activist hedge-fund investor, who is hankering for change and wanted Ellison.

Why anyone would listen to Ackman’s advice on business is an interesting question. His hedge fund has lost half its value in the bull market of the last three years.

Ackman is the guy pushing things to go fast at Lowe’s. And he’s the reason the former CEO, a guy with some long-term vision, was booted.

Here’s why: Ackman’s hedge fund once had $20 billion, but as investors have pulled out amid its poor performance, the fund now has only $8 billion. Of that, he’s betting $1 billion on Lowe’s stock to rise, and quickly, to staunch the investor exodus. (For more, watch this CNBC interview.)

Thus, Forbes wrote, “The Lowe’s clock is ticking. And with Ackman as the timekeeper, Marvin Ellison is a man in a hurry.”

First idea: liquidate a growing and seemingly profitable chain of stores and its 4300 employees. Double down on big-box retailing just as consumers are rejecting it.

Mind you, this has nothing to do with improving the long-term viability of Lowe’s as a business.

But I guess if I’d lost as much money as Ackman has, I’d be in a hurry to earn it back, too.

Still, you know, Ackman and Ellison might take a moment. Common folks are paying the price: the employees, the contractors and communities that rely on those stores.

In corporate America — as we’ve swooned over it, exalted it, praised its wealthy leaders for making themselves lots of money — the clear hunch I have is that, really, a lot of the fellows at the top are not that good. It’s mediocrity on parade a lot of the time, insulated from results, from any whiff of merit pay, and from the consequences of their failures, particularly as they are felt in towns across America.

I spoke to a guy at my OSH store who said he had worked for the company for 20 years. Here’s how he was told the news: On the afternoon of Tuesday last, company officials suddenly shut the store, escorted the remaining customers out, assembled the staff, and let them know their jobs were ending; the store was closing Oct. 20.

“Today you’re Orchard Supply Hardware. Tomorrow you belong to liquidators,” he said they were told.

Within a couple days, “Everything Must Go” signs were all over the store.

You may wonder: How is that okay?

Here’s Ellison: Lowe’s is “developing plans to aggressively rationalize store inventory, reducing lower-performing inventory while investing in increased depth of high-velocity items. Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe’s Business Outlook.”

So they’re going to stock stuff that sells well. Brilliant idea.

But why does that mean OSH must close? Why not sell it to someone who actually gives a damn about Americans and their communities, and who has the creativity and energy to run such a company?

(NOTE: A Lowe’s spokeswoman emailed me this morning (8/29) with this response to the columns, saying that OSH was not profitable:

We are working hard to make this transition as smooth as possible for our associates and our customers.  We will be retaining our associates through the store closure process and are encouraging them to apply for open roles at Lowe’s stores, where they will receive priority status. Associates will receive job placement assistance, and we will be providing eligibility for severance. 86 percent of Orchard locations are located within 10 miles of a Lowe’s store.

The decision to exit Orchard was based on the need to focus growing our core home improvement business and deploy our capital to more profitable projects. Orchard’s 2017 earnings before interest and taxes (EBIT) was a -$65 million on sales of approximately $605 million.*)

Instead, Marvin Ellison, escaping JCPenney, decided within less than two months to close 99 stores and lay off 4300 people.

All because? Well apparently Bill Ackman has lost a lot of money in bad investments.

As I’ve traveled the country, I’ve learned that the cost of losing Main Street has been incalculable – yet we bow to the free market as if we have no choice. That’s what’s happening here.

The good news? Lowe’s stock price has gone up a few bucks – so I guess we can all breathe easier.

This move will harm Lowe’s in the long run. I know sales are going online, but hardware will always be different. Customers need that contact with sales staff who know their stuff. Even contractors say that. (See a video about contractors’ opinions on OSH closing.)

OSH formed in 1931. Many years later it was bought by Sears, whose glory days were well behind it, looking to spruce up its home-improvement position. Owned finally by a hedge fund, Sears apparently did what Sears is now known for as a hedge-fund property – it muddled through. (Read an LA Times story here.)

Finally, it spun the company off, but not before saddling it with enormous debt. Naturally, that debt crushed OSH into bankruptcy within two years. This is how Business Insider described it:

“In 2005, Sears Holdings – by then run by hedge-fund guy Eddie Lampert – announced that it would extract a special dividend of $450 million out of OSH, and that OSH would borrow the money to pay this dividend.

“In January 2012, in typical private-equity manner, the now heavily indebted OSH was spun off to the public; 18 months later, in June 2013, OSH, buckling under this debt that Sears Holdings had put on it, filed for bankruptcy.”

In bankruptcy, OSH was bought in 2013 by Lowe’s, which, under then-CEO Robert Niblock, did some great things. Above all, it remodeled OSH stores. Funny what happens when you invest as if for the long run. The staff now seemed motivated. The store came to life; so apparently did the chain. In Pasadena, it became one of the city’s biggest sales-tax generators

Until that day in July when OSH’s parent company hired a guy from JCPenney at the behest of a hedge-fund owner losing money in a bull market.

You may wonder at it all.

If so, here’s a petition to make yourselves felt. Please share it, and this article, if you like it.

  • (Correction: I originally noted the number of OSH employees as 5400. A Lowe’s spokeswoman informs me that the correct number is 4300 and I’ve made that correction throughout.)

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Juan’s Story – The high cost of cheap prices

We came upon this taxi driver who started telling us of how, in order to build his family a house, he went to Texas to cut rock for housing facades, using a legal visa provided by his employer. Did this for three years, six days a week, 12 hours a day minimum.

Hope you like this video, which I did last week in Mexico.

Let me know what you think, either here on in the Youtube comment box. Please share it if you like it.

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The Normalcy of Addiction

I’m in Little Rock for the Arkansas Literary Festival, a very nice book festival held downtown.Dreamland-HCBig

So here’s what happened yesterday. Flew in, met my fellow panelists, learned that Southwest lost my bag, went to the hotel, took a quick nap, went to a festival reception, met someone with an opiate addict in the family (the family member is a woman in her 60s or so).

Little Rock is no different from every other part of the country I’ve visited recently.

Researching our national addiction to pain pills and heroin to write my book, Dreamland, I’ve been struck by the normalcy of addiction nowadays. Everywhere, strike up a conversation, you find someone with a family member or friend or co-worker addicted to opiates.

It’s far more prevalent than crack use was, I believe, and certainly infinitely more deadly.

I remember starting the research, flying to Dallas a couple years ago. On the plane was an elderly couple from rural Oklahoma. We got to talking and before long, they were telling me of their oldest son, addicted to OxyContin.

Not long after that, in a tavern on New Year’s Day in Covington, KY, I met a family, celebrating a young girl’s birthday. Before long, we’re talking about two people in that extended family dead from heroin overdoses.

There are many reasons why this is so.

First: the massive over-prescribing of pain pills nationwide. We often debate whether supply or demand drives drug plagues. This one is supply driven. Pain pills eventually lead to heroin addiction – as the pills are molecularly similar to heroin and much cheaper; in some areas, like those serviced by the Xalisco Boys I write about in Dreamland, heroin is easier and more convenient to obtain the pills.

But this is also driven by silence. There’s no violence to fuel public ire. Meanwhile, though, parents are loathe to talk about their children’s addiction. When they die, they camouflage it in some palatable cause of death. Some parents are going public. But far too few given the huge numbers.

The result is silence, and stories you never hear until you’re sitting next to someone on a plane, or chatting with them at a cocktail party.

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Filed under Books, Business, Drugs, Storytelling, The Heroin Heartland

DREAMLAND … in two weeks

Two weeks from today, my third book, Dreamland: The True Tale of America’s Opiate Epidemic (Bloomsbury Press), is officially Dreamland-HCBigreleased.

The story of this epidemic involves shoelaces, rebar, Levi’s 501s, cellphones, football, Walmart, American prosperity, with marketing, with Mexican poverty and social competition, and with the biggest swimming pool in the US and what happened when that was destroyed.

It’s about the marketing of prescription pills as a solution to pain of all kinds, and about a small town in Mexico where young men have devised a system for retailing heroin across America like it was pizza.

The tale took me from Appalachia to suburbs in Southern California, into one of the biggest drug-abuse stories of our time – and one of the quietest, and whitest as well.

Until April 21, you can buy the book presale, at a discount, at Amazon here … or at Barnes & Noble here.

It’s been a long haul, and I thank the many people I met and spoke to along the way as I put together this American saga.

Hope you like it.

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As a legend passes, a Walmart in Compton?

A legendary Compton indoor swap meet is closing this week, and vendors say they believe it will be replaced by a Walmart.

Snapseed Compton Fashion Center Dresses BWThe Compton Fashion Center, 2100 N. Long Beach Blvd., closes Thursday after 32 years, during which time it revolutionized immigrant business formation in Southern California.

In a tersely worded December 1 letter to vendors, some of whom had been in the CFC since it opened, the owner, Soo Lee, told them they had 30 days to get out.  That deadline was later extended another two weeks – leaving this Thursday as the day when the lights go out.

Shortly before Christmas, the center put up large signs announcing a “Close Out Sale” – and thanking customers for years of patronage – that vendors had not agreed to. Vendors say this left them with little time or opportunity reduce inventory and find a new location.

Of several CFC merchants I spoke with, all said they believe the space will be occupied by a Walmart, though the owner, Soo Lee, has said nothing about his plans for the enormous space. So this may be rumor as much as anything.

Walmart did not confirm a new store at the Compton swap meet. But the company didn’t quite deny one in the future, either. Here’s the statement a spokeswoman emailed me:

“While we are always looking for ways to better serve our Compton customers, we don’t have any new projects to announce.”

Okay. Still leaves the question of what will go into the center that was making the owner push the vendors out so abruptly after so many years in business.

Walmart last summer put a store in the new azalea Shopping Center in South Gate, four milIMG_1919es away, and traffic was so heavy the store wasn’t able to keep its shelves stocked for the first few weeks, according to a shopping center spokeswoman.

Of course, Walmart has also had problems locating inner-city stores in Southern California. Inglewood famously turned away the giant retailer, fearing it would lay waste to numerous mom-and-pop merchants.

“If Walmart comes, all the merchants on Long Beach Boulevard and around here will be wiped out,” said Kirk Kim, owner of Cycadelic Records, which has rented space near a swap meet entrance since CFC opened.

Compton Fashion Center opened in the space of what had been a Sears in 1983. It was the first large Korean-owned indoor swap meet in Southern California.

With that, in a region then becoming a magnet for immigrants from across the world, the indoor swap meet idea took off. Swap meets became a safe place for immigrants, speaking little English and without much capital, to wedge into a cranny of the American Dream.

Compton Fashion Center, in particular, drew people from all over with, in its heyday, 300 vendors selling jewelry, Photo Jan 12, 1 18 21 PMmakeup, music, cellphones, groceries and clothe.

“The holy grail of the hood,” one Yelp customer called it.

At Cycadelic Records in the 1980s, Kirk Kim’s father, the late Wan Joon Kim, and mother, Boo Ja  — Korean immigrants who spoke little English – became the first to sell and promote the gangster rap then emerging from Compton garages. The couple, known as Pops and Mama, sold the first records by NWA frontman Eazy E, and dozens of other rappers that grew to chronicle the city’s crack-and-gang nightmare, as West Coast gangster rap became an international phenomenon. His shop and the center have been in numerous rap music videos.

But a lot has changed since then. National retailers have discovered the hood. Whether the indoor swap meet is slowly fading away is an open question.

Kirk Kirk believe the CFC owners have been keeping vendors out with an eye to attracting to a big-box retailer. Whatever the case, he said, foot traffic has dropped along with the number of vendors.

Last week, the center was slowly emptying. Stalls sat abandoned. Owners were boxing product and sweeping the floors.

“It’s sad. These folks are like my family,” he said. “I see these people more than I see my sister.”

Photos: Kirk Kim; t-shirts and dresses in booths at Compton Fashion Center.

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Fashion District drug money laundering

L.A., and the Fashion District in particular, is the “epicenter” of narcodollar money laundering, mostly by Mexican drug cartels, said authorities at a press conference today.

They came together from the FBI, DEA, IRS and US Attorney’s office to announce a bunch of arrests in the Fashion District early Wednesday and describe a scheme through which dollars are laundered into pesos.download

In one location, they came upon boxes of cash that they expected would total $35 million when they were done counting, which they weren’t by midday. They seized another $19 million in bank accounts and $10 million at a house in Bel-Air – $65 million in all.

Among all that’s interesting in this topic is the fact that virtually all of this takes place within the immigrant economic ecosystem in L.A., which has long fascinated me as it basically involves almost no native-born Americans. In this case, mostly Chinese sewing-company owners were doing business with Mexican drug traffickers.

Apparently these exchanges with Fashion District businesses on behalf of drug traffickers has become a popular way of laundering money ever since 2010 when Mexico put strict controls on the quantities of dollars that could be deposited in its banking system without being reported.

Used to be traffickers would just pack stack of dollars into a car and drive home. Now putting that money somewhere isn’t as easy. Hence this new Black Market Peso Exchange scheme.

Basically, it works thus: traffickers in the US with ill-gotten bucks find a peso broker – someone whose job it is to search out companies already selling goods into Mexico. A trafficker delivers large quantities of these dollars to Fashion District companies to pay for massive deliveries of clothes down to Mexican clothing importers who are in the scam.

“The cash never crosses the border, but the goods do,” said Robert Dugdale, chief of the U.S. Attorney’s criminal division in L.A. The Fashion District firm sends the clothes to a clothing importer in Mexico. The clothes are sold for pesos and the pesos are given to the cartel traffickers, after the broker takes a cut for himself.

A lot of this appears to depend on Fashion District clothing companies with owners who are willing to say nothing when some guy shows up with a duffel bag of cash, using only a nickname as ID.

Homeland Security had previously sent out notices to 160 companies in the district, telling them of U.S. legal reporting requirements for cash. The selection of which companies were notified “was not random,” said Claude Arnold, special agent in charge of Homeland Security Investigations here.

Apparently this scheme has sent floods of cash through the Fashion District. Be interesting to see after all this what happens to some of these companies.

One Fashion District company – Q.T. Fashions on 12th Street – allegedly laundered $140,000 in ransom money for the kidnapping of a cartel courier, a U.S. citizen, whose load of cocaine was confiscated by law enforcement. To get repaid, members of the Sinaloa Cartel kidnapped him, took him down to Mexico, tortured him and got the family to take the ransom money to QT Fashions, which allegedly got the cash down to Mexico. The hostage was eventually freed.

Photos: Stashes of cash; Source: US Attorney’s office

 

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Cal Worthington, a legend passes. Se habla Espanol

I grew up listening to, and memorizing the commercials of, “Cal Worthington and his dog Spot.”

Cal is now dead. At 92.

Worthington, of course, was anathema to animal-rights folks, as he paraded seals, lions, tigers, hippos, etc, all named Spot before viewers of late-afternoon Westerns on Channel 11 or 9 or 5, urging them to “Go See Cal” with that Beverly Hillbilly banjo going loco behind him.

Cal Worthington was the last, or longest-lived (or both) of the Southern-accented used car dealers who came with the first waves of white migration from the South and Midwest to LA.

You might remember Ralph Williams: “Hi friends, Ralph Williams, Ralph Williams Ford.” He was another.

There were more. Just can’t remember them right now. One guy was not like them. Bob Spreen. Remember him, with the mellow tone? “Bob Spreen Cadillac. Where the freeways meet in Downey.” Like he was from, like, Indiana or some place, but definitely not from Oklahoma.

At first, these Southern car dealers never mentioned Spanish, then as years passed they couldn’t avoid it and began tagging each commercial with a roughhewn “Se Habla Espanol.” Then they just faded away.

Now the South Gate Boulevard of Cars is dotted with used car lots owned by Arabs and Cubans, and staffed by Mexicans selling to other Mexicans.

And now Cal is dead. How can we go on?

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LOS ANGELES: Hell Restaurant

IMG_3062I was in Compton earlier today and came upon this restaurant on Long Beach Boulevard.

El Infierno Restaurant (English: Hell Restaurant), known for its excellent menudo, was named thus by its owner, a fellow named Andres, who comes from Apatzingan in the state of Michoacan, Mexico.

Apatzingan, you may know, is in a ferociously hot part of Mexico known as the Tierra Caliente, and known for its wild ways. Frankly, I was always afraid to visit and never did.

Andres said he named it for the heat of his native region, though Apatzingan lately has become a virtual war zone, as cartels fight each other and the military.

Anyway, El Infierno Restaurant has had some tumultuous times itself.

When it was in its original spot, in a strip mall elsewhere in Compton, it was burned down during the riots of 1992. Andres rebuilt. Then earlier this year, his restaurant was shot up and then someone crashed a car into it, gutting it with fire (see photo, right).IMG_3056

Andres blamed gang members who wanted to sell drugs and didn’t like his surveillance cameras (there to protect his business). A neighboring business owner said he didn’t treat customers well and some got mad. That seems hard to believe, but whatever the case, Andres moved to the newer, bigger, better location on Long Beach, which he shares with a cleaners. (See photo above)

(Reminds me of the time when, from a bus, I spotted a taqueria in Los Mochis, Sinaloa — Tacos Hitler — no lie).

The stories you hear in L.A. if you stop and ask….

Great menudo, too.

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LOS ANGELES: A Recycling Plant in South Gate

I was out in South Gate recently visiting Carlos Herrera, who owns Interior Removal Specialist, a company that takes out the interior of offices that are about to be remodeled.

His mother, a Mexican immigrant, started in the junk collection business years ago, as a way she stumbled on to raise her children alone. In time, she had trucks and drivers. Carlos has continued on in her footsteps.

This place is amazing — piles of drywall, rows of desks and office chairs. Next door is a plant that recycles most of the tin cans used in LA County, most of which will end up in China, I assume.

I’m always fascinated by recycling. So much stuff that once was used — all at the other end of the economy, the one we almost never see.

It’s why I like places like South Gate and Vernon. Their ruggedness makes them photogenic and their stories make them mermerizing.

Here are some photos.

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LOS ANGLES: A guy with a great idea, 99 Cent Store founder dies

Dave Gold, the founder of one of my favorite stores anywhere, has died of a heart attack at age 80, in the middle-class home he lived in for decades, despite his millionaire net worth.

His 99 Cents Stores, which he began right here in Los Angeles, spread to finally include some 300 outlets.

More than that, it opened a concept that immigrants have copied ever since: the __-Cents store — could be 98, 97, 1.29, whatever. They’re all over L.A.

All of it was made possible by globalization, particularly the entry of China into world manufacturing.

I love going to 99 Cents Stores. You can buy duct tape, radishes, cat food, Halloween candy, canned beans, and books that never sold by folks like Charles Osgood or some football player.

Every store has a million things that can be used for kids’ art projects. And you never have to ask anyone how much something costs, saving you time as well as money….

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LOS ANGELES: The Plaster Vendor, or how I spent my Sunday morning

TJ Plaster -- the Naked Woman

What’s nice about the Los Angeles of today is that you can go out a meet folks with worthwhile stories almost without trying.

I was in the area once called South Central L.A. (now South L.A.) and came upon a guy named Rogelio in a truck selling plaster statues to passers-by on Vermont Street: Snow White, bulldogs, snakes, Mickey Mouse, and this naked lady pictured here, among other things.

He buys them in Tijuana and brings them in.

I stopped to chat. He didn’t let me take his photo, but I shot other stuff.

He said sales of plaster was weak. “Enough to eat, but not well,” he said. “No meat.”

Rogelio is from Apatzingan, Michoacan. He was 16 in 1970 when he arrived in LA about 1 pm one day. He had a job by midnight.

Apatzingan is in Mexico’s Tierra Caliente, a particularly violent place, even before the latest nastiness. He went home a Plaster bulldog with furmonth ago to visit family. The police refer all problems to the local drug cartel — a pseudo-Catholic group of drug traffickers called the Knights Templar. Wonder how anyone would want to remain a cop under such conditions — or join the force at all.

At one corner, he said, there were two groups of headless bodies.

Still, he said he wants to return. This apparently has something to do with the fact that after 42 years in the country, he’s unable to find work that feeds anybody.

This, seems to me, is what LA is right now. If a Mexican immigrant has spent his time here learning new skills — English, welding, painting — he has a better chance of rolling with the economic bad times. But many people did not, assuming that the few skills they always had would be enough, as work had always been so plentiful that you could find a job in a few hours.

Those are the folks who are more likely to be leaving LA — some for other parts of the US, but mostly for Mexico, as it’s cheaper to be poor in Mexico, particularly if you have a place to live.

I told him about Craigslist as a place to put advertise his statues, and told him to give me a call if he needed help.

He said his daughter has a computer, but that maybe he’d call.

Hats

 

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LOS ANGELES: Dunkin Donuts coming to town…Cambodians unimpressed?

images-1

A new doughnut chain will be coming to Los Angeles. Dunkin’ Donuts has announced that it will open stores in 2015 here in L.A. and around California.

The question is whether it will fare better than other chains who’ve had difficulty competing with the vast Cambodian-immigrant doughnut-shop network that dates to the late 1970s and early 1980s.

I told the story of how it is so many independent doughnut shops in Southern California are owned by Cambodians (well, Chinese-Cambodians really), from a country where doughnuts do not exist, in a tale about Ted Ngoy, the ill-fated Cambodian Doughtnut King, whose ambition led to his great rise and spectacular fall from grace.

Doughnut shops allowed those Cambodians who owned them to work their way into America — forcing them to speak English, deal with city halls and business licenses and landlords — in a way that other (mostly Khmer) Cambodians often did not.

Cambodian doughnut shops almost led to the downfall of Winchell’s. It’s also possible that Cambodians may be tiring of doughnut work, which requires owners to get up at 2-3 a.m. and where the profit margins are slim. Still, everywhere I go, independent doughnut shops remain owned by Cambodians.

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MIGRANTS: A Oaxacan baker and the “The Radicalism of the American Revolution”

Juan Gutierrez, Oaxacan baker in Santa Monica

I’ve been reading The Radicalism of the American Revolution by historian Gordon Wood lately. The book talks about the ways in which colonists were breaking from dependence on each other and from Britain, from traditions of England, from old religions to a new, individualistic Great Awakening and new ways of thinking, making a living and doing business.

This break from the Old World and creation of the New has always intrigued me.

Thus I was fascinated to listen to the story of Juan Gutierrez, a Zapotec Indian from a village in Oaxaca, and the owner of Panaderia Antequera in Santa Monica, which was the first Oaxacan-owned business in the LA area when it opened in 1985 or so.

We spoke in his bakery (17th and Ocean Park) the other day.

He and his wife began baking in their house, then found the small shop that was barely surviving and took it over. With the huge population of Oaxacan Indians on LA’s west side (the reasons for which are themselves fascinating, but which I’ll go into later), business has been great almost from the start, and this has encouraged other Oaxacan Indians to start their own.

Living and doing business here, far from the traditions and customs of his village, Gutierrez has had his own awakening, new ways of viewing what’s possible.

Running a business in Santa Monica, he was at the same time dealing with the 17th Century, in the form of demands by villagers back home that he return to do what’s known as his tequio or servicio. Indian villages in Mexico require members in good standing to perform a servicio, unpaid for three years.

This communal custom goes back hundreds of years and has been essential to the functioning of Indian villages. Those who don’t perform it can have their land, houses and property confiscated.

Now, though, many villagers live in the US, with responsibilities up here. Even if they have legal residency, it’s still expensive to go home; if they do not have papers, it’s even more so to return. Plus, they no longer are thinking like the young migrants they were when they arrived from the village as teenagers.

Mr. Gutierrez noted that the village depended on remittances from paisanos in the US, who had also donated money to the annual fiesta each year and funded improvements to city hall and the local school.

He offered to pay someone to do his servicio, saying he had a family and business up here and both needed his attention.

But the village authorities, in his view motivated by envy and believing him rich because he owned a business, insisted he come personally, to be a city councilman for three years.

So for three years he lived in the Old World and the New.

More later on what happened.

 

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MIGRANTS: Pizza Hut Tanda

I’ve just begun a story on the large number of Oaxacan business owners you find now in Los Angeles, particularly in Pico-Union, Hollywood and Koreatown.

I remember in the late 1990s coming to LA and not seeing any of this. But Oaxacans have lost a little of their fear of business. So now there are restaurants, markets, beauty salons, bakeries, a hardware store — all mentioning their Oaxaca connection and drawing on the vast Oaxacan population in those areas.

It’s an entire business community that started without anyone walking into a  bank for a loan.

I met Ramiro, who owns a butcher shop and market on Pico.

He told me years ago he worked at Pizza Hut, where all the Mexican employees formed a tanda — an informal savings/loan network, in which each member contributes money each month, then receives a large payout a year or two later. When it came his time to get the payout, he bought a house in Inglewood not because he wanted a house but really because he wanted a garage he could control. In the garage, he started a meat truck business.

That was 10 years ago. Now he’s got three butcher shops/markets.

 

 

 

 

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BUSINESS: El Payasito – `You get into what you have to get into to survive in this country’

In large parts of the LA economic ecosystem, immigrants alone participate.

The other day I happened on El Payasito, one of the great stores in LA. It sells all that anyone needs for a Mexican birthday party.

It’s owned by an Iranian immigrant named Sam, who wouldn’t give me his last name and didn’t want to be photographed.

He was a civil engineer in Iran and left after the Iranian Revolution. He owned an auto shop with a cousin for a while. Then saw that a much larger shop had burned on Pico Blvd, in Pico-Union, bought it and was renovating the place. He put a few things out for sale, and people snapped them up.

So instead of a auto shop, it became a kind of thrift store for a few years, selling remainders. Then a salesman for a party supply shop came by and begged him to let him open up two aisles of the store to his products. Sam did and they sold immediately. He opened more aisles, and sold out again.

He renamed the store El Payasito (Little Clown) and learned some Spanish and that’s how he’s spent the last 25 years: selling candy, cups, plates, toys, tortilla holders, candles, pots, pans and a lot more from his converted body shop on Pico. Dozens of pinatas — which he gets from Tijuana, and some from LA, and are the only thing in his store not from China, apparently — hang from his ceiling.

“The Latino market is just huge,” he told me. “When they make it they spend it.”

I’m fascinated by the immigrants who’ve made a living here selling Mexicans the most intimate parts of their culture: parties, food, clothes. I wrote a story years ago for the LA Times on just this. Had I known about El Payasito then, I would have included it.

Sam’s is worthy of a Chekhov short story. An immigrant engineer, fleeing political upheaval comes to a new land and ends up selling party supplies to Mexicans. Man, I love that story.

“You get into what you have to get into to survive in this country,” he said.

 

 

 

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Filed under Business, Los Angeles, Mexico, Migrants, Southern California