Sandy One Year Later: A Story of Small-Business Regeneration
Speaking of the Rockaways, Madelaine Chocolate Company, a family-owned and run chocolate manufacturer in Far Rockaway, Queens, just opened its doors on Tuesday. As the largest employer in the Rockaways before the storm, with 450 employees, 14 molding lines and eight production kitchens in operation, Madelaine Chocolate was and is essential to the area's economy.
But even for a company as large as Madelaine, with many more resources available to help it re-open, the process was just as excruciating.
"A year ago I wasn't sure if we would be here today," CEO Jorge Farber told TheStreet in an interview earlier this month. He estimated the company's storm damages at around $50 million between equipment, inventory, repairs and working capital."What we've learned is we're very resilient," Farber says. "This was a test you either came out with hands up over your head or you fight it." "We still have a lot to do in rehabilitating our equipment and some of the properties to bring employees on," Farber says. "We're learning to look one step at a time, a machine at a time, bringing a couple of employees back a day at a time and that's how you get up the next day." After being closed for nearly a year, the company has hired back just a quarter of its employees, but Farber hopes he will be able to bring all of the staff back eventually. Right now five of the 14 production lines are in operation. The company is targeting 2013 sales at half of what it was bringing in before the storm. "I'd love to get everybody back. I don't know how long it will take. The question is of resources to be able to rebuild. It was a huge financial loss as well," Farber adds. "All of our inventory was devastated. The equipment was destroyed. Hundreds and hundreds and thousands of dollars just to clean the place and put the lights on, which happened five weeks after the storm." The storm came just as Madelaine's peak holiday season got underway, which starts with Halloween and ends with Easter. "On October 29th we were overflowing with product that was going to be shipped the next day. November is our biggest shipping month. Consequently many of our customers were without product to put on their shelves," he says. Yet Farber is thankful that the company's customers did return. "It's a great incentive for us. The orders are in but it's very challenging because we need to get the product out," he says. In order to manage expectations only a handful of product lines are being made - staples like chocolate turkeys, Christmas Santas, snowmen, hearts for Valentine's Day and roses, among others. "We cut down some of those items that are not in much demand and items where the machinery to make them is a little bit more challenging" to restore, he says. Still, for as large (and as popular) as Madelaine Chocolate is, Farber notes that the approximately $13 million SBA loan it received - backed by real estate collateral and personal guarantees -- was just dispersed roughly five weeks ago. Thankfully the company was able to get private financing and a grant through National Grid of $250,000 to begin the process of rebuilding. "We did what needed to be done," Farber says. "We want to make this a success. I believe we made the right decision."
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