Laine’s Bake Shop, a bakery and coffee shop in Pullman, was founded with the best of intentions. Owner Rachel Bernier-Green launched it as a social enterprise company—a business founded not only to make a profit, but to make a positive impact in the community.
But making a profit is a necessary piece of the puzzle. On Saturday, February 22, ‘Laine’s announced on their blog that they’re closing their location in Pullman’s One Eleven Food Hall after being open less than a year. The blog post identified two reasons: struggles to make the space profitable, complicated by “many challenges behind the scenes,” as well as a desire to use the resources required by their retail location to advance the business’s social mission.
Those difficulties making a profit certainly seemed real when I visited on February 28, one day before the Pullman location closed for good. Although I stopped in before 9am on a weekday—the pre-work coffee rush for such shops—there was only one other person in the store. I had a latte and muffin, both excellent, which made it even more puzzling why there weren’t more customers.
‘Laine’s isn’t the first business to leave the food hall. Exquisite To Go, a catering company, also left their space in the food hall a few months ago. Bernier-Green said there was a “lot of overlap” in the reasons both businesses left—food service is a difficult business, and profit margins are thin, making it difficult for even the best-run businesses to survive.
But this turnover doesn’t necessarily mean the food hall, which opened last May, is struggling. Ciere Boatright, vice president of real estate and inclusion for community development corporation Chicago Neighborhood Initiatives (CNI), which developed the food hall, said that turnover is actually part of the design. One unique feature of the food hall, she said, was that tenants can have “very short-term leases.” Restaurant owners are able to sign a one-year lease, which allows them to test the market without assuming the significant financial risk of a longer-term lease. In other words, if businesses like ‘Laine’s or Exquisite can’t seem to turn a profit in the space, they’re able to get out fairly quickly without suffering further losses.
This is part of a handful of measures CNI has taken to minimize risk and make the food hall more appealing to small businesses. CNI initially wanted a restaurant in the space, Boatright explained, but many small businesses didn’t want to take on the risk of opening a full location in Pullman, a neighborhood without many established restaurants. After hearing this feedback, CNI decided to build the space as a food hall, allowing small businesses to “test the market with limited risk,” said Boatright. She also mentioned that CNI works with a hospitality consulting firm called Calibrate Coaching to provide their tenants with operational support, as well as providing businesses with marketing support at CNI’s expense.
Fortunately for Pullman residents, there are more restauranteurs willing to give it a shot. Boatright said they’ve received “a lot of interest” in the space, and a post on One Eleven’s Facebook page says a new vendor will be coming on April 1st.
Many of the biggest problems for the Pullman location actually happened several miles away, in Morgan Park, said Bernier-Green. Significant infrastructure issues at the bakery’s production facility there eventually escalated to a roof cave-in, forcing ‘Laine’s to move their entire kitchen more than thirteen miles across the city to The Hatchery, a food business incubator in East Garfield Park. In a blog post, she estimated that the cost of the move and the income lost from canceled or delayed orders set the business back by more than $20,000. (For those interested in helping out, Bernier-Green has launched a fundraising campaign to cover equipment repairs, material purchases, and overtime expenses, and has entered a FedEx small business grant competition.)
Faced with these pressures, Bernier-Green decided the right move would be to focus on ‘Laine’s wholesale baking operation. Contrary to the struggles of their retail location, she said, this side of the business is growing. While some of the employees at the Pullman location have been offered jobs with other businesses, Bernier-Green said that several are needed to join the production side.
The decision is in line with ‘Laine’s’ social enterprise mission, said Bernier-Green—“we can [also] provide better jobs through growing that side of the business.” Part of ‘Laine’s mission is promoting the economic development of communities on the South and West Sides. That requires more than just paying employees well; “a stable job,” she said, “isn’t always enough to lift someone out of poverty.”
In order to help employees develop wealth, ‘Laine’s offers an employee stock ownership plan (or ESOP) so that workers are compensated not just through wages, but also through stock in the business—making them not just employees, but part-owners of the company. Bernier-Green acknowledges that fairer wages are important, but by going beyond that and providing “a path to ownership,” she hopes that employees will be able to develop generational wealth that they can use to “leverage themselves and their families out of poverty.”
Closing the Pullman location doesn’t mean ‘Laine’s won’t still be around. On the South Side, their baked goods can be found at South Shore Brew, Two Mile Coffee Bar in Beverly, and Ja’ Grill in Hyde Park, as well as Whole Foods locations in Hyde Park and Englewood. With their new space in The Hatchery, plans for a production facility and retail store in Woodlawn are off for now, but Bernier-Green said she’s hoping to expand their partnerships with restaurants and cafes. She’s also planning a series of pop-up stores in the future, which will be announced through their newsletter. And Woodlawn residents won’t be deprived for too long—while she wouldn’t say exactly what, Bernier-Green teased “something in store” for Woodlawn, which she promised to announce soon.
Sam Joyce is a managing editor and the nature editor with the Weekly. He last contributed several interviews with candidates for the Metropolitan Water Reclamation District.