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‘It’s Fall! Here We Are!’ A Beloved Chocolate Shop Returns

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JERSEY CITY — Valerie Vlahakis, the owner of Lee Sims Chocolates, a mom-and-pop shop between a florist and a pharmacy on a scruffy block in Jersey City’s McGinley Square, eyed ghosts in her display window as she waited for patrons to return.

It was two days after Labor Day, but the 10-foot-wide storefront was already decorated for Halloween. After nearly six months of making do with online sales and curbside pickups during the pandemic, Ms. Vlahakis had unlocked the front door to welcome walk-ins.

No announcement was posted. It was a test. She wanted to see who noticed and rushed back for nonpareils and nougats. Inside, a skeleton staff scurried to fill empty shelves with winking pumpkin pops and hollow chocolate witches.

“Look at us!” said Ms. Vlahakis, a bespectacled septuagenarian. “It’s fall! Here we are!”

She paused.

“And we’re back!”

ImageThe family of Valerie Vlahakis has operated Lee Sims, on Bergen Avenue, since the 1940s.
Credit…Victor Llorente for The New York Times

What the shop lacks in width it makes up for in longevity: The family business goes back seven decades at the site. Each year, Ms. Vlahakis and eight employees melt, mold, box and peddle 150,000 pounds of chocolate. On Valentine’s Day, the demand is such that Lee Sims devotees line up outside, on Bergen Avenue, and a stout worker enforces a one-in, one-out policy.

One February, a customer alerted Ms. Vlahakis that Mayor Jerramiah Healy was waiting in line. “I said, ‘And?’” she said. “He was fine standing out there like everyone else.”

Now Ms. Vlahakis must quickly make the transition from reopening to ramping up for the busiest stretch of the chocolatier’s calendar. By the time it’s two weeks before Christmas, the store will be sending out 250 packages a day.

It wasn’t always clear that Lee Sims would survive this year. Typically viewed as quaint, the store’s tight quarters became a liability in March as the coronavirus coursed through New Jersey. Ms. Vlahakis felt Covid-19’s toll when she received an increase in bereavement gift orders online, and her workers, several of them single mothers who commute on public buses, were nervous. In a business built on efficiently moving chocolate bunnies into children’s baskets, they knew Easter always brought shoulder-to-shoulder shopping down the aisle.

Credit…Victor Llorente for The New York Times

To remind Ms. Vlahakis of her inherited responsibility, she keeps a sign that reads “DON’T SCREW IT UP” above her desk. In short order, she halted the two manufacturing lines in the off-site kitchen, laid off workers and sent a mass email directing the 3,000 customers in her database to the store’s website, which was previously an afterthought.

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To help finish the Easter and Passover rush, one employee worked with Ms. Vlahakis in a back room. Online orders came all the way from California and Alaska, where grandchildren of former Jersey City residents had moved over the years. Those sales, along with a successful bid for disaster relief, steadied the enterprise. Now it’s time to build up inventory again.

“It’s crazy,” Ms. Vlahakis said. “I’m tense about how things are going to be. I’ve got a broken hydraulic pump in the kitchen that is going to set us back. Life!”

Such is the challenge for retail shops as the economy looks to rebound from the pandemic’s costly lockdowns. After filing multiple relief applications, Ms. Vlahakis was ready to give up, but her accountant filed again without her knowledge and received an $8,000 grant from the Small Business Administration. That also made her eligible for a 30-year loan of $76,000 at 3.75 percent interest, which she accepted.

Both eased her ability to pay medical insurance for employees and bring them back. With that secured, conversations with sales representatives switched from health concerns to commerce.

“It has gone from ‘Is everyone OK?’ to ‘Are you ready to buy again?’” Ms. Vlahakis said.

Credit…Victor Llorente for The New York Times
Credit…Victor Llorente for The New York Times

Her grandfather George Sousane, who immigrated from Sparta in Greece, bought the shop with a partner in the 1940s, when it was a soda fountain and candy establishment. By 1955, her parents, Catherine and Nicholas, had taken over and shifted to chocolate only.

Nicholas Vlahakis, a retired Marine, stood 6-foot-4, smoked cigars and could tell you to the penny what was coming out of every square inch of the store. Catherine wore blazers and skirts, drew customers in with her polite demeanor and wrote down their favorite confections on index cards that she kept in a Rolodex.

They had fierce debates over what went in the window. He was an aggressive marketer, who, when designing the showcase just inside the front door, said, “I want five feet of chocolate in the customer’s face.”

The husband and wife were strivers, and took pride in building the business. Catherine was the architect of their best-selling pyramids, stacking wrapped boxes filled with chocolates, cookies and nuts. And while she was likely to be found behind the scenes, Nicholas could be anywhere, including molding chocolate in an alcove beneath the stairs.

As their fortunes rose, they went from hand-dipping items to coating them with enrober machines, acquired storage space in neighboring basements and bought a three-story building a half-mile west for a bigger kitchen. Twice a year, they sent out brochures to increase their mail-order business. Each box of chocolates was emblazoned with the store’s logo — an artist’s palette with three paintbrushes — and the slogan “Candy Making as an Art.”

Credit…Victor Llorente for The New York Times

Ms. Vlahakis marveled at her parents’ efforts. Her father was “like a mole, all over the place,” but “my mother was something else,” she said. “People come in and reminisce about my father, and I’m like, damn, she was as important, if not more.”

Valerie was not groomed to take over the business. She and her sister, Alison, grew up in a Victorian house on Staten Island, where her extended family lived within a five-block radius. She planned to attend City College of New York and live with girlfriends in Manhattan, but her parents steered her to Bethany College, a small liberal arts school in West Virginia. The Greek Orthodox couple saw it as an opportunity for her to learn that the world was more than a collection of Jewish and Catholic enclaves.

Ms. Vlahakis studied history and political science, and later taught special education at Mark Twain Junior High in Coney Island before returning to the shop in the early 1990s after growing weary of the politics of the education world.

Alison had already taken the Lee Sims brand over the Bayonne Bridge to Staten Island, where she opened her own store, but their father was not thrilled with her sister’s return. She started by studying the business at the molecular level, tracking chocolate’s flow from the cooling tunnel to the cash register, through pumps and compressors. The family basked in the product’s freshness, and ranked it somewhere above grab-and-go bars and below Godiva.

Credit…Victor Llorente for The New York Times
Credit…Victor Llorente for The New York Times
Credit…Victor Llorente for The New York Times
Credit…Victor Llorente for The New York Times
Credit…Victor Llorente for The New York Times

“There’s no secret recipe,” Ms. Vlahakis said. “It’s physics and chemistry.”

Her parents retired to Florham Park, N.J. At 76, her mother died of breast cancer, and Ms. Vlahakis, then living in Manhattan, moved in with her father, who continued to visit the store just to sit and look around. He died at 83 in 2000.

Ms. Vlahakis still lives in Florham Park, and reports to the Jersey City kitchen in her smock, which is the color of milk chocolate, by 8 a.m. each workday. She has no plans to retire, and her sister continues to operate the Staten Island store with her daughter, Kerry. Workers who started under her father tell Ms. Vlahakis that they can still smell his cigar smoke in the kitchen, where two copies of his obituary are displayed.

“Like it’s haunted!” she said.

With the reopening, customers outnumber ghosts in the store again, and a chocolate carousel is spinning in the window. To protect herself and her staff at the counter, Ms. Vlahakis, who wears a mask and asks that customers do the same, installed plexiglass. Only three patrons can come in at a time, but a cross section of the diverse city parades through each day. One recent afternoon, an assistant prosecutor picked up five bags filled with boxes, a vagrant bought a bar with loose change and a St. Peter’s University student asked whether she could use Apple Pay. Ms. Vlahakis does not take Apple Pay, but joked that she could dip an apple in chocolate instead.

Susan Butler was buying for a reunion with high school friends. She informed Ms. Vlahakis that when she was pregnant with her daughter, her daily exercise was walking a few blocks to Lee Sims to pick up chocolate and then walking back.

“Oh, when was that?” Ms. Vlahakis said.

“Well, she’s 51 now!” Ms. Butler said.

During the lockdown, Ms. Butler worried that the shop would be closed forever. “It’s a landmark, a piece of home,” she said. “Most of the places we grew up with, like the bakery, are gone. It’s memories to us.”

Credit…Victor Llorente for The New York Times

Rob Giumarra, a 47-year-old actor who lives on a horse farm 50 miles north of Jersey City, first came three years ago with a girlfriend and, now three girlfriends removed, remains a patron. He asked for a quarter-pound of dark sea-salt caramels and a quarter-pound of truffles. As Ms. Vlahakis rang him up, Oreos dipped in dark chocolate caught his eye.

“Oh, ho, ho!” he said. “I didn’t know you had those. Next time.”

He paid and exited. Twenty-seven seconds later he returned.

“Uh, oh. What did you forget?” Ms. Vlahakis said.

“Nothing,” Mr. Giumarra said. “I need a quarter-pound of them Oreos. Too damn good.”

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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