In a last-ditch effort to save the business his mother created 35 years ago, Nick Kassman tried to borrow against the equity in his home.
The bank rejected his requests. Maybe it was for the best, Kassman now says. At least he still has a house.
Later this year, Kassman will shut the doors to Chevy Chase Bridal, the last remnant of his mother’s clothing boutique that has been a staple of Washington fashion since 1977. Like many small-business owners, he said he found it difficult to stay afloat during the weak economic recovery.
“A little business like mine, it just got smushed like a bug and there was nothing we could do,” said Kassman, whose mother, Harriet, died earlier this year at the age of 90. “Business fell off a cliff, and there was no way to pay our bills.”
Kassman had used up much of his own retirement fund to keep the shop going in recent years after area banks had turned down his requests for loans. He had borrowed money from friends and family and tried to entice wealthy investors into buying a stake in the store.
“But most people aren’t interested in buying a business that doesn’t show a profit,” he said. “So a few weeks back, I finally said, ‘I can’t keep putting money into this anymore.’ I had tried everything I could and kept coming up empty.”
The irony, Kassman said, is that business has been relatively good this year. Sales are on track to be 10 percent higher than they were last year. Even so, he has yet to make a profit, and said long-term revenue wouldn’t be high enough to pay the bills.
“We’ve got good people. I’ve got a good location here. I’ve got a very pretty store with beautiful merchandise,” Kassman said. “The only thing I don’t have is cash — and unfortunately you need cash flow to continue to operate.”
Three years ago, Harriet Kassman was in a similar situation. Her namesake boutique in Mazza Gallerie, a high-end clothing shop favored by politicians, ambassadors’ wives and Washington socialites, wasn’t faring well. Sales of designer gowns had plummeted during the recession.
Harriet Kassman did what she could — closed the shop on Sundays, ran fewer advertisements — but it wasn’t enough to save the business. After 32 years, she closed the boutique in September 2009.
“She refused to ever admit that we were going to have to close — even when we closed,” Nick Kassman said. “My mother was one of these people who was like, ‘I am not giving up. I refuse to give up.’ If she had realized what was going on or admitted to what was going on, maybe she could have [closed her shop] sooner and protected herself better.”
Kassman, who had been working for his mother since 1981, viewed the closing as a cautionary tale. Knowing when to quit was important, he decided.
But first, he wanted to give retail another shot.
Even as overall sales at Harriet Kassman’s boutique slid during the economic downturn, the bridal portion of the shop had fared pretty well.
“After we closed in 2009, I needed a job, so I decided to go back into the bridal business,” Kassman said. “I felt like it was the part of the business that seemed to still be doing well.”
Aside from a brief stint as a disaster assistance staffer at the Federal Emergency Management Agency, Kassman had spent his entire professional life running his mother’s store.
He wasn’t ready to give up on the shop. So in December, three months after Harriet’s boutique closed, Kassman resurrected the bridal portion of her business using his own savings and named it Chevy Chase Bridal.
Things got off to a rocky start.
“I think three days after we started, it snowed 18 inches,” he said. “We were closed almost all of February that year just because there was so much snow that I couldn’t even, you know, get out of my own driveway.”
There were other difficulties, too. More and more brides were traveling to New York City to shop at places like Kleinfeld’s, the setting of the popular television show “Say Yes to the Dress.” Online wedding boutiques began popping up, adding yet another layer of competition.
Mostly though, Kassman said it was the lack of available funds at area banks that ultimately forced him to call it quits. Bank after bank turned down his requests for loans, citing credit issues dating back to the closing of his mother’s shop.
“And of course I didn’t have a whole lot of income to show,” he said. “Somewhere along the line, it becomes a risk thing. And no one wants to take a risk on a guy like me who’s got a fairly good record except that the financial meltdown crushed me in this last go-round.”
Sometimes Kassman wonders if there’s anything he could have done to turn things around. Maybe he would have fared better if he had specialized in higher-priced haute couture like his mother did.
“My mother used to say, ‘It’s a lot easier to sell one dress for $8,000 than it is to sell four dresses for $1,500,’” Kassman said. “There’s something to be said for selling high-end things, and she was of that belief. I tried to come away from that a little bit. But I don’t know if ... ,” he said, letting his thought trail off.
For now, Kassman has hired a liquidation firm to help him sell off remaining inventory. Prices at the store, which carries gowns by the likes of Badgley Mischka and Romona Keveza, have been slashed by up to 80 percent.
Kassman isn’t sure what he’ll do next. Maybe he’ll take a few months off or try real estate, he said.
“It’s not the end of the world,” he said. “I don’t look at myself as a failure — I really don’t. I tried very hard. I would’ve liked to have been more successful, but it is what it is.”