Recession boomers: Thriving in tough times

Business is booming at George's Shoe and Skate Repair in St. Paul.

"I think during a recession, people are more apt to repair than to replace," said owner Jerry George, who recently hired two additional workers just to keep up. "And it's not just shoes. It's skates and luggage and purses. Oh, my Lord, I can't tell you how many purses we have repaired. It's endless," George said.

The nimble-fingered world of shoe repair represents an unusual enterprise -- one that booms when others bust. As the recession engenders desperation, financial losses and layoffs by the thousands, a lucky few are thriving. Question the repairman, car mechanic, repo-man, defense attorney, thrift and pawn shop owners or any debt or foreclosure guru, and it's clear that business is up.

Penny-pinchers, shocked retirees and the newly or about-to-be laid-off workers are looking for deals and ways to make their haggard goods last longer. Those realities drive cash into unlikely crannies of the economy.

When times are tough, "You get scared. I made up my mind that I would watch my wallet," said Mille Schapiro, handing over an old pair of Capezio dance shoes to be stretched. "If he can stretch them, that saves me 100 percent [of the cost] of buying new shoes, because these are paid for," she said.

Her shoes join 200 other pairs plus a dozen purses that were brought in to the shop in just three days.Pre-recession, there were half as many orders, George said.

A few miles away, the repair bays and parking lot are full with customers' cars at the Amigo Service Center in south Minneapolis. "We have been very busy," said owner Todd Duvick, whose family started the shop in 1977. "For a month and half we have been busier than we have ever been. It is definitely that people are hanging on to their cars longer," he said. "They have decided to fix and maintain rather than go out and buy a new one. Business is up 10 to 15 percent."

Customer Chris Bremer explained why. Her black, 1995 Honda Acura recently started making a "horrible" and dangerous noise -- a $645 wheel control-arm problem.

"That's on top of the $1,400 we just spent this fall," said Bremer, who has used Duvick's shop for eight years. "I sure thought about going on CarSoup.com [to buy another car] ... but in this economy, we're being more careful and frugal."

Such decisions have Duvick and other mechanics adding workers.

People seek cheaper goods

Business also is jumping in certain retail sectors.

Despite store closings, layoffs and soft revenues at Circuit City, Best Buy, Cost Plus World Market and Target, carts were full and lines snaked down the isles of the Dollar Tree Store on University Avenue in St. Paul on a recent Friday evening. Down the street at a Goodwill thrift store, dozens of customers rummaged through bins, shelves and racks for bargains. Nearby, McDonald's did brisk business as customers ordered dollar menu items. Worldwide, same-store sales at McDonald's jumped 7.2 percent last quarter.

Oriane Casale, the state's assistant director of Labor Market Information, said there have always been niche industries that benefit when times are tough. "Debt collectors and pawn shops are groups that immediately jump to mind," Casale said. People tend to repair things more in a downturn, she added, and they scrimp more on food.

Last year, Minnesota's slaughterhouses added 100 jobs as families spent less on restaurants and more on home-cooked meals. Casale said consumers spent "less on beef and more on the turkey, chicken and [the Spam that] Minnesota is known for."

When money's tight, "you simply have a different set of needs," said Jerry Brown, who supervises the state's Current Employment Statistics Program. "People are retrenching. So those services and products that are associated with retrenching and being more cautious are going to do better right now."

Crime brings in business

While recessions draw out bargain hunters, they can also summon the underside of an economy and help businesses focused on crime prevention.

Just ask Dan Kinsella, chief financial officer of the computer security firm Shavlik Technologies. Hackers helped boost security software sales 30 percent last year. "We are seeing an overall increase on the attacks in security within corporations," he said. "We believe it's tied to the recession."

Some attorneys see other crimes rising as the economy sags. Defense attorney Johann Scrimshire and his partners sue law-breaking debt collectors and represent a rising number of abuse victims and clients arrested for selling drugs or driving drunk. Although defense fees can add up to $10,000 for the average troubled Joe, the cases keep coming, Scrimshire said. The firm recently added a paralegal just to keep up.

"We have maybe 40 to 50 percent more intakes," Scrimshire said. "It's really sad, because when the economy is bad, that is when more women get beat up and when more people start stalking other people. It's a bad situation. I do a lot of work with various battered women in the state."

Scrimshire said the firm often gets clients on the verge of bankruptcy who are being hounded by bill collectors. "I'd say a third of them have either lost their jobs, are just getting a new job, or [are] taking a step down in pay because of the economy," he said.

Even some debt collectors are facing hard times, said a partner, attorney Mark Vavreck. Some grow desperate enough to break the law by putting liens on Social Security checks, threatening to confiscate elderly people's homes or harassing workers on the job.

"I am definitely seeing that the threats are going up," Vavreck said, noting that 12 new clients hired him just last week. "That is a lot," he said. "In the next two months I will file more lawsuits than I filed for all of last year."

The hard times can also be seen in bankruptcy filings, which surpassed 1 million last year. "That's huge," said St. Louis Park attorney Chad Bolinske.

His two-man law firm is bustling. "Our business is up probably 30 percent over what it was the previous year. And I am guessing you will see another 20 to 30 percent increase this year," Bolinske said. "I think that will be the case until the housing market stabilizes."

Don Mashak, owner of 1st National Repossession Inc., took a reporter's call the other night while he looked for the Twin Cities home of a car owner who had failed to make some loan payments.

Historically, about 3 percent of car loans get repossessed when owners fail to live up to their debt obligations, said Mashak, a who's been repossessing cars for about 20 years. Today, he said, "the repo business is booming."

Dee DePass • 612-673-7725