When Ted Wilson opened Gargoyle’s Gift Shop in the summer of 2018, he, like every other entrepreneur going into business, had the highest of hopes. The unique shop’s inventory was heavy on pop culture merchandise like graphic novels, games, puzzles and scads of comic book-themed merchandise, not to mention Telluride’s biggest selection of hot sauces. The shop, Wilson said two years ago, was “a celebration of all the cool things in life.”
Wilson, who is also the founder and director of October’s Telluride Horror Show and who specifically opened the shop as a tie-in to the fest, regretfully closed his doors to business this week, his nascent enterprise possibly the first local casualty of the COVID-19 pandemic.
The failure rate for a new business is notoriously high. According to the Small Business Association, while 80 percent of small businesses survive the first year after opening, from there the number plummets, with only about half making the five-year mark. Only one in three make it to 10 years in business.
The reasons for failure are numerous and include factors such as no market need, pricing, competition, the wrong team and not enough capital, according to Forbes magazine. But no amount of business savvy — and Wilson has plenty — could predict something like a pandemic.
When the state ordered all of Colorado’s ski resorts closed, the ripple effect on the economy, particularly in the state’s resort towns, was felt almost immediately. For Telluride’s retailers and restaurateurs, and others in the hospitality business, the final three weeks of the season’s revenues were cut off. And with offseason looming — already a historically slow time of year for business — the challenges of running a business in Telluride became acute.
Wilson found himself in an unenviable position.
“It boiled down to having to make a 24-hour decision,” he said.
His choice was to either pay May’s full rent or terminate his lease. After looking at his numbers, he pulled the plug. His balance sheet told no lies — he would not be able to weather the storm. Wilson made this analogy.
“There’s a lot of talk about herd immunity,” he said. “Well, if business was a herd, I was a baby and was easily taken down.”
Like many small business owners in the country, Wilson availed himself of the SBA’s Payment Protection Plan loan program. Those loans are forgiven, he explained, contingent on using 70 percent of money received for payroll.
“If you use it for other expenses, you have to pay it back with interest,” he said. Paying other expenses like rent or inventory costs would have sent Wilson into debt. Wilson was Gargoyle’s sole, full-time employee.
With his PPP loan, he said he’ll “hobble through” until the end of May as the money “doesn’t even come close to covering expenses.” He further described his circumstances as “horrible timing. Gargoyle’s was not even two years old.”
Business insurance does not cover a pandemic. Wilson said he submitted a claim, but “was quickly denied.”
“The problem here is that no one anticipated a pandemic,” he said. “It’s now part of our lives, but no one was prepared for this.”
Wilson’s troubles may deepen further. He’s eyeing the future in regards to the Horror Show, a maturing horror film festival that is now in its 11th year. His festival may join the ranks of the summer festivals that have been canceled due to the risks of gathering large groups of people in close proximity. While current public health orders issued by the state and San Miguel County prohibit gatherings of 10 or more, the uncertainty of the pandemic’s staying power may dictate the extension of those orders. Without the festival, Wilson’s means of making a living will be reduced to zero.
And even if the pandemic has receded to the point where events like festivals are permitted, he said his clientele — a younger, middle class demographic — may not have the means to attend. The pandemic’s effects on tourism were immediately noticeable.
“(In a crisis) tourism is the first to go and the last to come back,” he said. He laughs ruefully at his decision “to have a gift shop and a festival in a tourist town.”
His moods, he said, have swung wildly since he was forced to close, but despite becoming victim to the pandemic’s ravages on the global economy, Wilson stressed his support of the public health orders that ordered non-essential businesses to close.
“Even though I’m losing my store … it’s gonna hurt … I’m 100 percent behind the public health orders,” he said. “It’s no one’s fault. It’s a disaster. We still have to battle this virus.”