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SoDel Concepts, including Northeast Seafood Kitchen in Ocean View, moved its operations quickly toward takeout as the COVID-19 pandemic began. | PHOTO COURTESY OF SODEL CONCEPTS[/caption]
At 2 p.m. Monday, March 16, 2020 – the afternoon before St. Patrick’s Day celebrations – a shockwave reverberated across Delaware, one that was felt especially within the state’s business community.
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Gov. John Carney announced his closure on non-essential businesses on March 16, 2020. Three years later, the pandemic has changed the way that many owners think about their businesses. | PHOTO COURTESY OF GOVERNOR'S OFFICE[/caption]
Responding to the arrival of the worldwide COVID-19 outbreak in Delaware just five days earlier, Gov. John Carney laid out the legal guidelines of a general lockdown of non-essential activities that would be followed by further restrictions on businesses. The announcement heralded in a period like none anyone had previously experienced and engendered a feeling that what had defined “normal” no longer applied.
“We recognized right away we would have to shift all business operations, except for manufacturing, to remote work,” recalled Karin Kolbus, an occupational health specialist at W. L. Gore & Associates.
As founder and CEO of the Platinum Dining Group, Carl Georigi said he knew right away that his company would need access to capital. He began to contact its banks and lenders to renegotiate terms.
A fellow restaurateur, Mike Dickinson, vice president of SoDel Concepts, had similar thoughts, saying, “We had to decide in the first 48 hours whether we could survive.”
County Bank CEO David Gillan said, “We immediately put together a COVID team that would continue to meet every day, asking, ‘What is the best way to serve customers, but using electronic delivery of services?’”
“To be truthful, I only remember the actual date vaguely,” admitted Richard Julian, owner and CEO of Eastern States Group, a building and development company. “We were considered to be an essential business, so we were able to continue work on our building projects.”
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Frank Pagliaro | PHOTO COURTESY OF FRANKSWINE[/caption]
Another owner of a different type of essential business, however, remembers the day vividly.
“My wife and I had just returned from our honeymoon,” said Frank Pagliaro, president of FranksWine near Wilmington’s Trolley Square.
They were sitting at the bar having a late lunch at a local restaurant when the owner rushed in to inform them of the impending lockdown.
“He was visibly upset,” Pagliaro recalled, fully aware of the financial danger that his business was facing.
For Pagliaro, however, the governor’s announcement had signaled a totally different message. Now, as the third anniversary of that unprecedented day passed by largely unnoted, businesses of all types are still feeling the effects of what happened three years ago – and not all were negative.
Some saw it coming
“As W.L. Gore is an international company, we had already been exposed to responses being made to COVID in other countries, starting with restrictions in China during January, and then it happened in Germany and then in the U.S.,” Kolbus said, noting that Gore foresaw the pandemic coming to the U.S. and was already getting measures into place just in case.
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W. L. Gore & Associates was among the first Delaware companies to recognize the COVID threat after it disrupted overseas supply chains in late 2019. | PHOTO COURTESY OF GORE[/caption]
As Gore boasts a famously “flat,” non-hierarchical organization, Kolbus’ role in helping it manage pandemic logistics may not be adequately reflected by her title. With a doctorate in public health, Kolbus was familiar with how to work within (Centers for Disease Control and Prevention) guidelines nationally in addition to those mandated by Carney locally in Delaware, the company’s headquarters.
“Our IT team was already in a good place with [Microsoft] Teams technology,” she said, so everyone not connected with manufacturing would work together remotely.
Manufacturing was another matter, requiring monitoring of those entering a facility and conducting contract tracing for those who became ill.
“There would be an incident report filed immediately for every employee who became ill,” Kolbus said. “We would then reach out to that associate regarding their possible contacts with other employees, who we then needed to contact. When the employee had recovered and before they could return, they would get guidance from our call center on how to proceed.”
At first, taking temperatures for associates entering a workplace was done manually, but two months later the company had invested in electronic face recognition and temperature screening devices. Every group got involved, including human resources for training and for benefits and leave policies, facilities and cleaning teams for building hygiene, procurement to source masks and other health items and communications to keep everyone informed, Kolbus said.
“We never shut down any operations, and we were able to keep up with customer commitments. All our support systems worked,” she said. “Without a doubt, our networking and non-hierarchical culture made things easier.”
To takeout or not takeout?
While Georigi at Platinum and Dickinson at SoDel both manage businesses with multiple dining facilities, they made radically different decisions in the early days of the lockdown. Figuring people have to eat, restaurant takeout was permitted under the new regulations, but restaurant dining was not. SoDel decided to embrace takeout services, while Platinum thought differently.
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Carl Georigi | PHOTO COURTESY OF PLATINUM DINING GROUP[/caption]
“I made the decision not to open for takeout,” Georigi said. “Lots of others did and lost money.”
For downstate SoDel, however, the pandemic provided a takeout beta test.
“In the fall of 2019, we had rolled out online ordering for three of our restaurants,” Dickinson said. “We had seen the need for this coming down the pike, especially in our off-season, as a way to create continued access for local customers. By Thursday, March 19, all of our restaurants were serving takeout.”
As with many businesses, both companies had layoffs, then experienced the desperate need to rehire employees as a few months later customers were allowed to return for sit-down dining. In the meantime, there were sanitation mandates and protective barriers needed to be installed for employees in restaurants doing takeout.
“We bought in 200 of our people every week, and by the end of April we were back to more than 800 people,” Dickinson said. “We wanted to keep the muscle memory within the restaurants so we could hit the ground running whenever we reopened. We put down chairs, turned on the music even though no customers were allowed inside.”
“We reopened all our places on the same day: June 1, 2020,” Georigi recalled. “We had stayed in contact with our 38 to 40 full-time chefs and managers. We worked to keep our culture alive and offered jobs to all employees, although some were just not ready yet. We ran short-staffed and at reduced capacities. We didn’t get back to full capacity until June 2020.”
SoDel kept growing despite the disruption, Dickinson said.
“In February 2020, we were making plans to build for Ocean View Brewing, and we decided to keep on working on it. It opened on St. Patrick’s Day 2022 – about normal timing for a ground-up build,” he said.
Dragged into the 21st century
“The pandemic forced us kicking and screaming into the 21st century,” County Bank’s Gillan said. “We made major investments into electronics, bought laptops and improved our [internal] connectivity so we could do everything online.”
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David Gillan | PHOTO COURTESY OF COUNTY BANK[/caption]
Without face-to-face contact, the bank’s business transactions quickly shifted to being all virtual, with loans and other documents being completed with electronic signatures.
“Administratively, we split into two teams at headquarters,” County Bank President and COO Tarrie Miller added. “One team would work all week, then the other team would take over the next.”
Similarly, two teams worked in tandem at each branch office, limited at first to drive-thru. “We paid the staff, there were no layoffs and no furloughs,” Miller said.
Gillan also believes more credit should be given to the federal government’s role during the crisis, especially in southern Delaware where County Bank is located.
“The mainstay of our local economy is hospitality – restaurants and hotels,” Gillan said. “The government’s regulatory changes and PPP [Paycheck Protection Program] at the end of March 2020 made a huge difference to the local economy. The regulatory changes allowed up to modify loans, defer payments and not have to classify some loans as ‘troubled debt.’
“There might have been hiccups and problems with PPP, but it saved the local economy. We made 506 PPP loans totaling $44 million during the pandemic. Local governments also stepped in, allowing restaurants to increase their outside dining,” he said.
The bottom line was that “during this period, the bank actually grew in terms of loans and assets,” Gillan said.
Riding a hot housing market
“I was amazed at how fast industries adapted to the pandemic,” said Julian, of Eastern States. “Fortunately, early on most people were happy just to have a job, so we didn’t have any staffing problems. We got everyone at the office laptops to take home, as they had been mostly using PCs at work, since at first we couldn’t work face-to-face. One of the things I learned from the experience is that we were having too many meetings before.”
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Building never slowed for Eastern States Group as Gov. John Carney classified builders as essential personnel. | | PHOTO COURTESY OF EASTERN STATES GROUP[/caption]
Eastern States is owner of Benchmark Builders, so it was able to ride the housing market that grew during the pandemic, partly as a result of many people preferring to work from home.
“By May 2020, the housing market became very hot, and it remained hot for two years,” Julian said. “For a while at first, we had to shut down our sales forces in our developments that were under construction. And, for a while at our building sites we were allowed to have only a couple of workers inside a house at a time.”
One fly in the building boom ointment, and one highly covered by the media, was sourcing building materials. “The problems with sourcing really didn’t hit until 2021,” Julian recounted, “but then the supply chain became a nightmare, especially with some electrical materials. COVID also taught us the shortfalls of just-in-time production.”
Additionally, a continuing concern with a hot economy is inflation and rising interest rates to combat it.
“Low-interest rates were great for home sales, so sales have cooled off the past nine months,” Julian said. “But we are beginning to see positive signs.”
Reflections in a shot glass
“We were deemed as an essential business, so we didn’t miss a day of being open,” Pagliaro said of his popular wine, spirits and beer business. “The next day after the governor’s order, Pennsylvania announced it was closing down its state liquor stores, so we got busy here really quickly. We immediately extended Sunday hours and opened on Mondays, when we normally were closed.”
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FranksWine was able to pivot and host outdoor tastings to keep sales through the pandemic. | | PHOTO COURTESY OF FRANKSWINE[/caption]
Pagliaro is known in the wine trade for his innovative practices, and as he prepared the store with protective shields, distancing signs and hand sanitizers, he also saw the potential bonanza in offering curbside service.
“We created a curbside concierge business, and for the first six weeks of the pandemic, about 65% of our business was handled curbside,” he recalled. “Of course, we kept all our employees, and from that first day I worked in the store 45 straight days, seven days a week. Every day was like Christmas week, our busiest time of year.”
Since indoor tastings would have violated capacity and distancing regulations, Pagliaro secured a variance to conduct tastings outside. He also made hand-purifiers from high-proof 151 brand rum, and recruited out-of-work bartenders to sell them as well as pandemic-themed T-shirts to customers.
“They would send out a message on social media, saying, ‘This is Todd your bartender, and I’ll be at Frank’s tonight.’ It provided money for them and charities, plus they had tip jars,” he said.
Business continued to flourish through the early days of shutdown, growing from six customers for Frank’s first outdoor tasting and 165 at the last one in May.
“We made $23,000 for out-of-work restaurant employees and about $200,000 for charities,” Pagliaro said.
Not that he didn’t pay a price for his entrepreneurial activities.
“I got COVID twice,” Pagliaro said, “First in August 2020 and a second time this past Christmas 2022.”
‘Is everything OK?’
Although there were obviously some local business failures over the past three years, not all of them were due strictly to the pandemic. And most businesses survived, in part due to government support and in discovering valuable business lessons in the process.
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Mike Dickinson | PHOTO COURTESY OF SODEL CONCEPTS[/caption]
“For us, it meant learning to do more with digital banking,” said County Bank’s Gillan. “Plus many of our customers who had resisted online banking decided it was time for them to switch.”
W. L. Gore’s Kolbus said, “We learned that we could be more agile and apply what we had learned to normal work processes.”
The two restaurateurs who had to contemplate the survival of their own businesses also came away with similar messages of compassion.
“One good thing that came out of this is that we opened new lines of communications with employees and customers,” said Dickinson of SoDel Concepts. “For example, we now have weekly emails with all employees.”
“We got two things out of the experience,” added Georigi of Platinum Dining Group. “The first is technical – we are now much more dependent on digital technology from digital menus to working with our curbside delivery. But more importantly, we became more involved in human mental wellness in the business. In June 2020, we began having monthly mental awareness meetings just to see how people are doing, checking in with each other. Today, if someone is suddenly underperforming, rather than addressing that issue immediately, we now first ask, ‘Is everything OK?’”
