The New York Times - December 29, 1984
Isadore Barmash

In recent months, however, the area's business has slipped. In the words of some of its entrepreneurs, a sort of "dark cloud" has descended on the area: fear of catching acquired immune deficiency syndrome, known as AIDS, a disease that has been associated with homosexuals.

Though the evidence indicates that AIDS is communicable almost exclusively through sexual contact, non- homosexuals have shown a reluctance to come into the area to shop, Castro Street merchants said, while homosexuals seem to be shopping more elsewhere.

Considering New Strategies

The business erosion has caused some stores to consider closing and moving to other sections of the city. Others are changing their product lines to offset the shopper drop-off. And one of the largest stores has decided that as it expands to other areas, it will set aside some of its revenues to help fight the disease and other problems homosexuals face.

In a city where a recent study found that 40 percent of single males are homosexual, that segment of the population is an important one, especially for retailers. But for Castro Street, the largest business section in San Francisco catering to homosexuals, it is crucial.

"We don't consider Castro Street an upward, gay area anymore," observed Dennis Mitchell, owner of Buck's, one of the section's largest men's apparel stores. "Business isn't what it used to be because of AIDS, even though only about half of my customers are gays. Straight people don't want to try on clothes that gays have put on, and many straights just aren't coming here anymore. Stores are closing, and chain stores are taking over."

'Traffic on the Street Is Down'

Mr. Mitchell, formerly the owner of a store nearby that sold used clothes, opened Buck's four years ago and gradually changed it to a store, as he put it, "catering to everyone, not just gays." But two years ago, he said, when "my partner and lover" was taken ill with AIDS, "I attended him until he died and the store almost went out of business from lack of attention." Later he took hold again at the store, but business has been difficult, Mr. Mitchell said, "and I am seriously considering closing and moving elsewhere."

Ron Brown, one of the owners of Kitchen Privileges, a gift store on 18th Street one block off Castro, said: "Traffic on the street is down, and six months ago we decided that we had to change our direction. We shifted our merchandise from cookware to more contemporary giftware, such as stainless serving pieces, dinnerware and flatware." Even though there has been "a noticeable drop-off in shoppers in the area," Mr. Brown said, "my average sale is higher due to the change in our policy."

But he said that he thought the decline in shoppers was probably more a result of "a recession situation than of AIDS." He added, "The mailing list we keep of shoppers who buy in our store is just as large as it ever was."

Obelisk, which concentrates on home decorative gifts and is perhaps the largest retailer on Castro Street, intends to expand from its two-store operation into a chain and catalogue business "in gay communities throughout southern California," Mark Cristofer, operations manager, said.

Problems for Homosexuals

The problems on Castro Street reflect in microcosm what Mr. Cristofer, and Robert Bradshow, the owner of Obelisk, feel have hurt homosexuals nationwide.

"Too many gay-owned businesses hide the fact that they are," Mr. Cristofer said, "and big corporations tend to ignore or look down on us." He said that corporate contributions from "both gay and straight companies" toward the San Francisco AIDS Foundation, and similar organizations, have lagged.

"We plan to be different from other gay companies," he said, "by being an openly gay corporation serving gays, both male and female, and we will reinvest part of our revenues to help gay people."

The Obelisk store on Castro Street has 18 employees, he said, "who include 15 gays and 3 straight women." The company's second store, at Chestnut and Scott Streets, is in a non-homosexual area. "

Obelisk has installed an Apple IIe computer for budget reports, inventory control and merchandise ordering in an effort to put its expanded business "on a completely professional basis so that we can set up in other cities and communities," he said. The first new store will be opened in two years with plans for additional new units every year, according to Mr. Cristofer. Sales are about $500,000 this year, he added.

A thrift institution owned by homosexuals, the Atlas Savings and Loan Association, which has one of its three branches operating in the Castro Street area, has had "a little decline in our figures this year, but that is due to loan problems rather than the situation on Castro Street," Kim Cortright, marketing director, said. He added, "We don't feel our problems are any more severe than the rest of the thrifts."

He said that Atlas Savings and Loan was founded three years ago as "a gay bank, but we now have assets of over $100 million." He added: "Most of our shareholders are gays or lesbians as are about 90 percent of our depositors and customers. We were founded as a minority business, just as minority businesses are started for blacks or Hispanics."

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