Canary in the File Cabinet

What's next for Cleveland's economy? Ask a used-furniture salesman.

Three years of recession left Edward Gertsburg's - warehouse jam-packed. - Walter  Novak
Three years of recession left Edward Gertsburg's warehouse jam-packed.
Without even trying, Edward Gertsburg placed himself at the heart of the Cleveland economy.

Co-owner of A&G Office Furniture Inc., Gertsburg stands in the middle of his crammed warehouse on Prospect Avenue one recent Tuesday, trying to hold a conversation amid an almost unbroken mass of used things. There are desks of scratched metal and polished wood, high-backed leather chairs, empty garbage cans, and stacks of file cabinets that reach the ceiling, all packed so tightly that Gertsburg can barely move. And if Cleveland businesses don't start buying used office furniture sometime soon, Gertsburg could lose it all.

So he sweats. And he fidgets. "Things are not as bad as they were," he says, rolling his fingers back and forth across a gray metal desk. "But it's still very difficult to survive right now."

The phone rings. Gertsburg leaps to his feet and runs into the office. It's one of the men he pays to pick up and deliver furniture, asking for advice. "Only buy the four that match," Gertsburg says, with a note of exasperation. "What? They don't have four matching chairs? Forget it, then. Don't buy anything."

When Gertsburg started this business in 1996, it was a challenge just to keep his warehouses stocked. The moment a small business closed, Gertsburg would send his movers out with a truck and a wad of cash to snap up whatever they could. He'd prowl estate sales and sheriff's auctions.

Then came a new century and a recession. Gertsburg nearly ran out of money, buying furniture from closing shops. Within a year, both of A&G's warehouses, with a combined 13,000 square feet, were filled. Gertsburg decided not to buy anything else until he could sell the furniture he already had. But companies were so desperate to close their doors, they begged him to take their furniture for free. "They just wanted me to clean out their offices so they wouldn't have to pay another month's rent," he says. "For two years, the vast majority of my calls were from companies wanting to give me their furniture. That's when you know things are bad."

Gertsburg took everything but the carpets. In one of his warehouses, he keeps four dusty bookshelves piled high with office supplies -- used highlighters and three-hole punches, even a green stapler from the 1940s. "When they say 'Take everything,' they mean it," Gertsburg says.

For the past three years, Gertsburg has lived one half of every businessman's dream: an unlimited supply of free inventory. But the other half, paying customers, never materialized. About two months ago, that started to change. The flood of phone calls from bosses desperate to give everything away slowed to a trickle. And about four weeks ago, the customers returned. What they ask for tells Gertsburg a lot about the local economy.

"If they buy a nice wooden desk and a leather chair, generally it's because they're hiring somebody who works in the front office, somebody who works with customers," Gertsburg says. "If they come in and buy a metal desk and ask for the cheapest chair I have, I know they're hiring somebody for the warehouse or somebody who doesn't deal with customers."

Gertsburg also knows which economic sectors are struggling and which are showing signs of life. As he has done for years, Gertsburg gets most of his inventory from the front offices of small factories, which continue to close. "Manufacturing industries in Cleveland have been hurting for a long time, and they're still laying people off," he says.

Most of Gertsburg's sales, meanwhile, go to mortgage salesmen, insurance agents, and car dealers. These white-collar companies can take advantage of low interest rates, and they seem to be the only small businesses in Cleveland that are expanding.

One of Gertsburg's fastest-growing clients is Lakeshore Chevrolet, which has hired between 20 and 25 salespeople in the last six months. "Things are good," explains Ben Lawrence, sales manager at Lakeshore. "It's a tough job to get into, with a lot of hours, so there's a lot of turnover. But we have hired a lot of people."

Most of Gertsburg's customers hire only one or two people at a time, however. That's not enough to turn the Cleveland economy around or even to empty Gertsburg's overstuffed warehouses. "We had a nice order last week. A mortgage company spent $6,000 on five or six desks. That's better than it's been," he says. Compared to the boom of the 1990s, however, it's chump change. "Before, a nice order would be $20,000, and companies bought 15 or 20 desks at a time."

The greatest minds of Wall Street and Washington are trying to figure out whether the economy is rebounding or backsliding. With his eyes on his warehouses and his ears on the phone to Cleveland business owners, Edward Gertsburg may know sooner than any of the experts. Companies about to hire call Gertsburg to see whether he has any used desks. Those preparing to downsize ask him to buy their furniture, even before they hand out the pink slips.

Right now, the Gertsburg economic forecast is cautiously optimistic. Look for continued job losses in manufacturing, he says, and limited growth in service industries. In the meantime, there's never been a better time to buy the used, wood-grain metal desk and matching swivel chair. Just ask Gertsburg -- he's already preparing for a turnaround. "Well, let's just say I recently hired another laborer to help me move furniture," he says, as he runs to take another phone call. "If you want to know what will happen next in the economy, this is a good place to be."