July 9, 2009
Sagging Sales, Even in a Beach Paradise
Financial Family Tree: Drop in Rum Cake Sales Affects Dive Industry, Swimwear
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Play CBS Video Video The Recession's Six Degrees In the CBS series "Financial Family Tree," Seth Doane reports how seemingly unrelated companies, such as a rum cake manufacturer to a dolphin theme park, affect each other's profits.
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A worker makes rum cakes at the Tortuga Rum Company in Grand Cayman. (CBS)
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"We used to bake 15,000 rum cakes a week - and now we're down to 10,000 a week," said Monique Hamaty-Simmonds, an owner of Tortuga Rum Company.
On a good year, Tortuga Rum Company on the island of Grand Cayman took in $20 to $25 million. This year, profits are down and owners Hamaty-Simmonds and her husband Marcus have had to lay off 40 people. That means they are spending more of their own time at work, and less with the family - something not overlooked by their kids.
"She says, 'I'm coming home late - you guys got to bed,'" said Jayda, 7.
The cakes are Cayman's biggest export. But on-island sales are important and dwindling, too. The gift shop at Dolphin Discovery carries the cakes, but had to cut back their order, from 30 cases a month to just 20, reports CBS News correspondent Seth Doane.
"People need to choose between sometimes between a photo with the dolphins, or a rum cake," said Carlos Moreno, with Dolphin Discovery, who said their sales of rum cakes are down 20 percent.
Behind the Scenes in the Cayman Islands
The numbers for the main attraction have taken an even bigger dive. It costs $100 to swim with the dolphins, and revenue is close to $100,000 per month less than what they planned.
"It's a luxury - it's not for everyone," Moreno said.
Luxuries at Dolphin Discovery are out. The pool is cleaned by hand, and last month, they had to close one day a week to cut overtime.
Moreno, the general manager, has made cuts in his life, too. Personal dive classes are on hold.
And that means a dip in dive bookings for folks like Nick Buckley. His business Deep Blue Divers is down at least $16,000 a month.
On the day Buckley talked to CBS News, a last-minute cancelation, citing the expense, kept the boat empty.
"We've got two or three boats over here that would usually have people on them," Buckley said.
Buckley says he can still afford to be friendly, but back at the shop, he can't afford to keep as much merchandise. He used to place clothing orders each quarter for $3,000. The last one was just $300.
The clothing supplier is Spencer Antle of West Palm Beach, Fla. With Buckley's orders down, Antle's sales take a hit.
"Nick can't afford to keep the stock that he used to," Antle said. "But, you know, we'll do whatever it takes to help him."
Antle's $3 million Island Company has doubled in value every year since he started six years ago. This year, growth's been flat.
"There's a definite downturn, but there's an upside to it too," Antle said.
With wholesale clothing piling up in his warehouse, Antle saw an opportunity to move some of his product by opening his own retail stores.
"To put your head in the sand and just wait and hope to God that nothing happens to you is not the way to go," Antle said.
For now, Antle's banking on the sand, opening a shop on Nantucket and hoping the wealthy island will offer shelter in an economic storm.
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All of that money could've been used to re-industrialized our economy and put people back to work instead throwing it down the rat-hole of 1.4 quadrillion in worthless toxic derivatives and credit-default swaps.
Obama is a loser, plain and simple.
LOSER LOSER LOSER!!!!!