What Price Glory?
In Philadelphia, the owner of a renowned bagel shop decides to close down rather than raise his prices.
Good Morning!
Here are today’s highlights:
A small-town tailor, working exclusively online, sells shirts that start at $675.
At the Cafe of Mistaken Orders, you probably won’t mind if your server gets something wrong.
Is TikTok helping or killing this popular ice cream-and-wine shop?
The full impact of the impending child-care cliff will be felt by millions of parents and countless businesses but not immediately: “It takes a while to bleed out.”
MICROBUSINESS
One of America’s best tailors lives in Maine in the middle of nowhere: “Tony Parrotti’s company name says it all. He goes by Tony. And he makes shirts. Therefore, he runs Tony Shirtmakers. As the saying goes, it does what it says on the tin. Despite his meek-as-a-country-mouse moniker, Tony, 34, is something extraordinary in the American apparel industry: a young, small-town tailor who is not just staying afloat, but finding great, year-plus-long-waitlist success from his in-house studio in Damariscotta, Maine.”
“To his clients, Tony’s sly custom shirts—heavy linen westerns with mother-of-pearl snaps, chartreuse green oxfords with sly hidden plackets, thick canvas shirt jackets in slate gray—are the contemporary equivalent of a bespoke suit.”
“Starting at $675, they’re something to invest in, wait several impatient months to receive, and wear weekly, if not daily. ‘I wanted to stick to one garment because I just wanted to get very, very, very good at it,’ said Tony. ‘I personally don’t think that you can do that with all garments.’”
“He takes the bulk of his orders online—a process perfected during the pandemic—allowing him to reach customers from as far as Thailand, Australia and Berlin through virtual fittings. He offers consultations over Zoom and asks clients to send photos of them measuring and wearing a favorite shirt, which he builds upon to create an exact custom fit.”
“In recent months, Tony’s taken a toe dip into creating trousers, dense overcoats, and even an off-white twill wedding suit. On his website, he also occasionally releases ready-to-wear shirts, which begin at $555. A recent crop of Palm Beach-ready camp shirts in fabrics like clay seersucker and periwinkle linen sold swiftly.” READ MORE
PRICING
A renowned bagel shop owner in Philadelphia has decided to pack it in rather than raise his prices: “South Philly’s Korshak Bagels announced it will close permanently after two and a half years of business. The last day for the shop, at 10th and Morris Streets, will be Sunday. Owner Phil Korshak posted a video to Instagram Monday morning to share the sad news. He holds up a series of signs (‘Hi,’ ‘I have some hard things, true things to say’) before cutting to a letter addressed to ‘Dearest South Philly.’ ‘The shop simply can’t function economically. And provide a living wage. And work/life balance. And reasonable prices,’ the letter read. ‘The staff would prefer to continue; but the changes to the process in exchange for efficiency are not changes I think are going to be successful or are on brand for Korshak Bagels. Much of this involves automation of dough. Some of it involves moving to a computer kiosk interface. While I am honored by the staff’s sharing of their vision, it is not a vision I share.’”
“The closure may be unexpected given Korshak’s popularity; not only does it regularly draw crowds, but its bagels have earned accolades from Craig LaBan as well as the likes of The New York Times and Bon Appétit.”
“‘Long in the coming,’ Korshak said by phone Monday morning. The shop required around 10 employees working at any given time to function, he explained. ‘Three people who are going to make all the dough, two people who are going to boil it and bake it, to roughly five people running [front of house],’ he said.”
“At $3 a bagel, Korshak struggled to make ends meet, have any work-life balance, and also maintain his standards, including paying a living wage (the starting wage there is now $16) and allowing employees to accrue paid time off, he said.”
“He acknowledged that he could raise prices to $5 a bagel, ‘but I want to pose the question about whether presenting something that is necessarily a boutique item is good and appropriate. My answer, resoundingly, is no, it is not.” READ MORE
GIVING BACK
Welcome to Tokyo’s Cafe of Mistaken Orders: “The 85-year-old server was eager to kick off his shift, welcoming customers into the restaurant with a hearty greeting: ‘Irasshaimase!’ or ‘Welcome!’ But when it came time to take their orders, things got a little complicated. He walked up to a table but forgot his clipboard of order forms. He gingerly delivered a piece of cake to the wrong table. One customer waited 16 minutes for a cup of water after being seated. But no one complained or made a fuss about it. Each time, patrons embraced his mix-ups and chuckled along with him. That’s the way it goes at the Orange Day Sengawa, also known as the Cafe of Mistaken Orders.”
“This 12-seat cafe in Sengawa, a suburb in western Tokyo, hires elderly people with dementia to work as servers once a month. A former owner of the cafe has a parent with dementia, and the new owner agreed to let them rent out the space each month as a ‘dementia cafe.’ The organizers now work with the local government to get connected to dementia patients in the area.”
“It’s a safe space where they can interact with new people, be productive and feel needed — key to slowing down the progression of dementia, a neurodegenerative disease that has no cure. ‘It’s so much fun here. I feel like I’m getting younger just being here,’ said Toshio Morita, the server, who began showing symptoms of dementia two years ago.”
“The morning of his shift, Morita asked his wife every 10 minutes when they were scheduled to leave in case they might be late, his wife said. He kept forgetting their departure time, but his enthusiasm was uninterrupted. He doesn’t remember directions to the cafe, so his wife brings him there and has a piece of cake while he works.”
“‘He’s always so excited about coming here and says that once a month isn’t enough,’ said Masako, 80, his wife.” READ MORE
POLICY
It’s not just the potential for a government shutdown. We’re also 10 days from the child-care cliff when pandemic-era funding runs out: “The funding amounted to a $24 billion Band-Aid patched over an industry that's long struggled. When the bandage comes off, the state of child care in the U.S. is likely to be even worse than it was before 2020. ‘There's going to be a real crisis here,’ said Cathy Creighton, director of Cornell's School of Industrial and Labor Relations Buffalo Co-Lab, who's studying the impact of the additional funding for providers.”
“As many as 70,000 centers, looking after 3.2 million children, may close after the funding runs out, according to one widely cited estimate from the Century Foundation.”
“The cliff is approaching just as women, particularly mothers, are hitting their stride in the U.S. labor market — with workforce participation at new highs and the employment gap between men and women at record lows.”
“If the dire forecasts prove true, millions of parents — particularly mothers — are going to be left with some hard choices. Their child care provider could shut down or raise prices past affordable levels, which is widely expected — and many parents could exit the job market entirely.”
“The impact of the fall off the cliff will take time to develop. ‘It takes a while to bleed out,’ said Creighton.” READ MORE
HUMAN RESOURCES
Amazon will hire 250,000 for the holiday season, Target 100,000: “Amazon noted more jobs are available because the company has opened over 50 new fulfillment centers, delivery stations and same-day delivery sites in the U.S. this year. The e-commerce giant also wrote in a blog post that it will invest $1.3 billion this year toward pay hikes for warehouse and transportation employees, raising the average pay for those roles from $19 to over $20.50 per hour.” READ MORE
RETAIL
Retailers are fighting shoplifters with fog: “Confronted with rising concerns over smash-and-grab robberies, some US retailers are installing a literal cloud security system in their stores. While police response times vary widely, one system made by a company called Density could put thievery on pause until they arrive. The security device emits a dry, dense fog that can fill a store in a matter of seconds, rendering visibility effectively to zero and disorienting would-be criminals. ‘The Density Security Fogger is effective at stopping roughly 97 percent of burglary loss, versus the usual security alarm system alone, which is about 17 percent effective,’ said Mike Egel, president of DensityUSA, in a recent statement.”
“The system was so effective at curbing cigarette theft from U.K. convenience stores, the company said, that thieves began targeting stores without the tech. When those stores installed foggers, the thieves broke into warehouses, which were then fitted with the devices.”
“Large retailers including Target and Dick's Sporting Goods have blamed a rise in retail theft for taking a larger bite out of profits, as well as jeopardizing the safety of workers and customers. Industry groups estimate inventory shrink costs companies more than $100 billion, with external theft contributing about 37 percent of that figure.” READ MORE
ENTREPRENEURSHIP
We do need better entrepreneurial education, but I’m not sure this is it: “Augment.org opened its virtual doors in March to students willing to pay $1,750 for an online curriculum that consists of six modules, or courses, on topics mostly related to opening a business. The courses comprise hundreds of 15-minute lessons meant to be completed over a few months. The centerpieces of the curriculum are presentations—they’re definitely not lectures—by well-known founders, such as Jimmy Wales of Wikipedia and Chris Barton of the song identification app Shazam, lushly filmed in the style of MasterClass. Some 300 people have enrolled so far, and about 50 have earned their certificate of completion.”
“Paris-based Augment joins a small but growing list of companies such as AltMBA and ThePower Business School aiming to broaden the appeal of the MBA. For whatever reason, only 4 percent of students graduating from full-time U.S. MBA programs in 2022 planned to start a company.”
“By contrast about half of Augment’s students, Wellner says, are actively planning or have opened their own business. And even most of those with jobs, he says, are interested in one day starting a company.”
“Although Augment promises instruction in ‘the fundamentals of an MBA,’ the content isn’t particularly sophisticated. The presentations gloss over complicated subjects, and case studies and quizzes accompanying the videos don’t dive any deeper into the material. Even so, for at least some students, that’s a feature, not a bug.” READ MORE
SOCIAL MEDIA
Folderol, a wine bar and ice cream parlor, has had to hire a bouncer to control the TikTok crowds it attracts: “In late April, a daily line began to form outside Folderol’s red storefront as the business grew in popularity, thanks in large part to TikTok. As the spring bloomed into a summer that saw a record number of tourists traveling to Europe, the lines became longer. Throughout June and July, tourists and content creators flocked to Folderol, waiting for hours on its otherwise quiet 11th arrondissement street so that they, too, could recreate what they had seen online: fashionable folk sitting on Parisian curbs, eating ice cream from steel coupes, smoking cigarettes, and swigging wine.”
“The couple opened Folderol in December 2020, one door down from their intimate Michelin-star-winning restaurant, Le Rigmarole. As new parents, they were inspired to start a family friendly business. ‘We wanted it to be a place where parents and kids could go and have fun,’ Ms. Yang said about their hopes for Folderol.”
“One TikTok user wrote: ‘I live really close to this place and it’s totally impossible to go now. The line is huge and full of teenagers/TikTokers at all times.’ Another commented: ‘I went and it felt like a photo shoot set. Like I’m sure it was amazing before but now it’s all the fashion girlies going there for content.’”
In late May, Ms. Yang and Mr. Compagnon began instituting a series of measures, which they call ‘roadblocks,’ in an attempt to regain control of Folderol. First, they decreased the number of wine glasses they had available to put a cap on the number of customers they could serve at once. Then they hired a bouncer to help their staff with crowd control.”
“Next, they put up signs to the right of Folderol’s front door that read, in English: ‘No TikTok’ and ‘Be here to have fun, not to take pictures.’” READ MORE
INTERNATIONAL
The U.S. is preparing measures to help small business owners in Cuba: “The move, expected as soon as this week, is seen as a long-promised but limited step to ease restrictions to help Cuba's budding entrepreneurs cope with fallout from the communist-ruled island's crippled economy. The announcement is aimed at making it easier for Americans to directly assist Cuban small business owners by providing guidelines for loans to them through the U.S. financial system, the source said.”
“‘We believe the private sector is Cuba's best hope for generating economic development and employment to improve the standards of living for the Cuban people and reduce the current high-levels of migration,’ a State Department official said.”
“There is no sign, however, that this move could be part of a more dramatic easing of U.S. sanctions and other restrictions on Cuba, beyond the modest steps that Biden has already taken since coming to office January 2021.” READ MORE
THE 21 HATS PODCAST
I Would Have Been a Sub of a Sub of a Sub: This week, Shawn Busse, Paul Downs, and Liz Picarazzi talk about spotting the clients who are more trouble than they’re worth. Liz, for example, is tired of dealing with bureaucracy and being at the bottom of the food chain. In one instance, she was so turned off that she actually recommended a competitor for a job she no longer wanted. Paul has a simple test: If it’s easy work for a bad client, okay, fine. But if it’s hard work for a bad client, “Just don’t do it.” Of course, there are times in the life cycle of most businesses when that’s easier said than done, when you have to accept almost any work offered. Those are the tough ones.
Plus: is it time for business owners to take artificial intelligence seriously? And should owners care that a well known economics firm is predicting a depression in 2030?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren