MERCHANTS TOUGHING IT OUT SMALL FIRMS IN VALLEY TAKE STEPS TO SURVIVE HARD TIMES.

Byline: Brent Hopkins Staff Writer

Felix Martinez, owner of The Bike Connection, sweeps his own floors.

When he's done, he'll clean his own bathroom, repair his own bikes, order his new supplies and juggle answering the phone and making sales. He used to have two staffers and a part-time mechanic, but since December, it's just him - and the mechanic's hours have been slashed.

When he bought the Sherman Oaks shop a year ago, he dreamed of being his own boss and enjoying an owner's freedom. But as a festering economy has led consumers to rein in their discretionary dollars, he and other small-business owners have had to tighten their already lean operations.

``The rent, the insurance, I got robbed - everything kills you,'' said Martinez, who saw business drop to an average of $750 per day. ``In December, they robbed the store. In January, they broke the window. You don't expect it. ... Nobody wants to spend money. They have it, but they don't spend it. I barely have enough to pay the bills and pay the rent.''

Martinez finds himself pressed with the same woes of independent businesses everywhere. It's hard enough to compete with chain stores in the first place, owners lament, but with a tight economy and war on consumers' minds, some find themselves stretched too thin. But rather than give up, they find ways to adapt and keep hanging on in an increasingly homogeneous retail landscape.

While Martinez was able to lay off workers and take on more responsibilities, salon owner Michael Ruth can't do that. His hairdressers have loyal customers with relationships dating back 25 years, so letting them go would endanger his client list. With rents rising on Ventura Boulevard, where his salon and wig shop has operated for the past seven years, and even loyal customers visiting with less frequency, he's had to change his hours to keep pace.

``There's no more 9 to 5,'' he said. ``We used to have set hours, and if someone wanted to come get their hair cut, we said, 'take a day off, come during the week.' But in this economy, you do business when it's available, not when you want to.''

Gagik Sekoian, owner of the Van Nuys-based Cigarette One, knows well how to adapt to change. A mechanical engineer by training in his native Russia, he took a job as a cab driver after relocating to America, saving his money and honing his English skills. He socked away enough to open the 1,000-square-foot convenience store, selling smokes, pipes, candy and soda. Recently, he added jewelry and fragrances, hoping to add additional sources of revenue.

``There's no choice,'' he said. ``I brought in the silver and the perfume - which is no good. I have to do something; I want to stay in the business. It helps a little; maybe one day, I get $20 or $30. It's not much, but it's better than making nothing.''

If the revenue from silver trinkets doesn't spur business enough to support his $2,000-per-month rent, he's leaning toward opening a traffic school in the back. Even on a high-visibility corner near Van Nuys and Victory boulevards, he still needs any source of revenue to cover his bills and provide for his two children.

His neighbors at the House of Music, a D.J.-equipment, instrument and compact disc vendor, see similarly slow sales. A nice bajo sexto, ready for a mariachi's strum, hangs on the wall, while Spanish-titled discs sit unbought.

``We're supposed to make 35 percent profit. Now with the sales (down), it's only 15 percent,'' said manager Hector Cruz, who still keeps the store tidy in spite of slow traffic. ``It's getting worse and worse. ... People only ask for what's the cheapest thing we have.''

Still, independent retailers are far from doomed, according to Mike Quartieri, a senior manager in Deloitte & Touche's Los Angeles office's Retail Services group. Though they may find times challenging, especially now, those able to cling to a specific shopper can stay afloat.

``The little person tries to carve out a niche in the community,'' Quartieri said. ``With that, they're able to target certain individuals and there's a great amount of loyalty that goes along with it. There will always be room for them, as long as they have that special niche. No one can out-Wal-Mart Wal-Mart, but there's other ways to compete with them. You serve your customers and tailor your products to what they want.''

Customers at Cavaretta's Italian Groceries in Canoga Park still want the same items they've bought for 45 years, said co-owner Paul Nunneri. They like their mortadella, capocolla and prosciuttini precisely sliced, their lasagna cheesy and their bread fresh-baked, and they want it with a smile. Though he knows his supermarket competitors have delis, too, he's managed to keep business going strong.

``We've always had the same philosophy: no substitute for quality, best price and good customer service,'' he said. ``We stick to that and everything falls into place. We keep things the same, so people keep coming back. They have a specific thing they need.''

But even the niche businesses struggle, especially those with high-ticket items in their window. At Micah McCloskey's Custom Cycles, the aisles look sparse. The owner, a genial man with a full beard, ponytail and searing blue flames tattooed up each forearm, has kept his inventory low to cut down on costs and hopes to get by on repair work. He began carrying a line of Iron Horse motorcycles, huge, flashy bikes that can quickly bolster the store's bottom line with their $27,500 price tags - if he can sell them.

``We have loyal customers, but when people can't afford to play with their hobbies, this is the first thing to go,'' McCloskey said. ``You've still got to eat, pay the rent, pay the electricity. A motorcycle isn't real high up on your priority list.''

And while nearly all complain, none want to give in to the market pressures. Though some find themselves surrounded with vacancy and going- out-of-business signs as their neighbors flame out, they remain resolute in their attempts to remain solvent.

``I just want to be a nice little neighborhood shop,'' Martinez said. ``I'll still be here. I'm not going out.''

CAPTION(S):

2 photos

Photo:

(1 -- color) Felix Martinez, owner of The Bike Connection, has had to tighten his already lean operation because of the bad economy.

(2 -- color) House of Music manager Hector Cruz says what few customers he sees want only the cheapest things in the store.

Hans Gutknecht/Staff Photographer