New York’s Paragon Sports Fights to Keep Going After Mass Layoff
(Bloomberg) -- At 113 years old, Paragon Sports had already weathered one pandemic before Covid-19. Now, the venerable New York retailer has laid off most of its staff as it fights to survive.
Paragon Sports cut more than 200 employees in April, accounting for 70% of its staff, and most of the reduction is permanent, Chief Executive Officer Zach Blank said in an interview. The company almost parted ways with a further 44 in January, but additional loans from the federal Paycheck Protection Program helped retain those workers.
Generations of sporty New Yorkers have flocked to the red-brick emporium at 18th Street and Broadway. The family-owned retailer is emblematic of the pain the pandemic has inflicted upon even some of the most storied New York businesses.
Blank said the company is “fighting every day” to make sure it doesn’t need to restructure. “We are not out of the woods,” he said. “We are taking things week-to-week.”
The plunge in foot traffic has dealt a major blow to the retailer, which saw most of its sales coming from the three-level store near Union Square in Manhattan. E-commerce sales have increased during the pandemic, but the uptick isn’t enough to compensate for the lack of in-store sales. Still, the in-store experience will remain the company’s primary sales channel, Blank said.
The retailer also counts on tourists, all but absent in the past year. Not that New Yorkers are crowding through the door, either, even after restrictions lifted. The store was fully closed for two months before reopening its bike shop in mid-May.
“Customers from all over the world visit Paragon Sports,” Blank said. “With nearly a 100% lack of tourism to New York City, it definitely has hurt sales.”
A visit to Paragon Sports late on a recent Monday afternoon found the store largely empty, along with much of its surrounding neighborhood, normally crawling with traffic, students and tourists.
While New Yorkers, like other Americans, have looked to ease the pain of the pandemic with more outdoor activity, organized team sports have been curtailed, though Blank said youth baseball and soccer players are once again coming in.
Some other parts of the business are recovering, too. Paragon Sports saw a boost in sales of tennis gear because of the sport’s socially distanced nature. Its in-line skate and bike business had “exploded” last spring as more people sought alternative ways to commute, Blank said. A recent store-wide sale also helped decrease its inventory and generate more cash.
“We are rebuilding from the ground up,” Blank said. “We know there will always be a place for Paragon in Union Square.”
©2021 Bloomberg L.P.