More Island businesses are feeling the impact of financial trouble at one of the Island's biggest and most ambitious private enterprises, the Black Dog Tavern Inc., which is still trying to recover from a $2 million drop in revenues last year.

Two weeks ago, the Black Dog ended its contract with Marianne's Screenprinting, hiring a mainland firm to produce and print its popular T-shirts and other items emblazoned with the famous black lab logo.

More signs of fallout came last month with word that cookbook author Susan Branch had closed down her bustling design studio in Vineyard Haven, in part because her partner, Joe Hall, was one of five executives purged from the top levels of the Black Dog staff.

Ms. Branch's decision to move her operation to California leaves four employees out of work. And Marianne Neill is wondering how her screenprinting business will rebound. "They were a huge part of our business," she said this week.

From the beginning, Black Dog T-shirts and their spin-off litter of sweatshirts, tank tops and aprons were all Island-made - printed and produced right in Vineyard Haven by Marianne's Screenprinting.

It was part of the homespun charm, fostered by Black Dog catalogue snapshots of Islanders wearing duds with the black lab silhouette. But after 21 years as a native product, the famous Black Dog T-shirt is going to become strictly an import model, printed in Pennsylvania.

Ms. Neill got word two weeks ago that she was losing her biggest client. "They completely cut it off at this point. They're having them printed off-Island," she said.

Marianne's Screenprinting is just the latest victim in a round of cutbacks initiated by new management at the Black Dog, where gross revenue was down about 20 per cent in 2001.

Last month, Robert Douglas Jr., the new general manager whose father opened the tavern back in 1971, spoke to the Gazette about his efforts to stem the losses. Those efforts included shutting down the flagship, waterfront restaurant for the first three months of the year, ending table service at the State Road café and closing the catalogue storefront next to SBS, which sent a retail goods outlet across the street to the café space.

Mr. Douglas could not be reached for comment this week.

Amid all the cost-cutting, another longtime Island vendor, the Vineyard Haven advertising firm Kolodny & Rentschler, was also cut loose. The Main street firm had produced ads for the Black Dog for 23 years and had designed the catalogues since 1986.

The impact of financial trouble at the Black Dog has hurt more than their subcontractors. Within the company, the year-round payroll is down to 64, less than half what it's been in recent years. The Black Dog has also weathered massive turnover at its top levels, with five of its most seasoned executives either fired or walking out in the last year. Two have already brought legal action against their former employer.

One of them was Mr. Hall, the former general manager. The general manager for 22 years, he left the job last spring and filed a stinging lawsuit five months later that seeks more than $1 million in damages and accuses the Douglas family of taking more than their share of the profits.

His stormy departure from the Black Dog indirectly led to Ms. Branch's decision to close her Vineyard Haven studio, where four designers worked on a number of licensing deals that grew from Ms. Branch's string of successful cookbooks. Early last month, she gave notice to her employees.

Attributing her decision in part to the turmoil at the Black Dog, Ms. Branch said that with the end of Mr. Hall's career at the Black Dog, there isn't much for him to do on the Island. "He needs space and time to move into something new," she said.

But she also said that running a business on Martha's Vineyard posed serious constraints. "There are no resources. When people quit, there was no one to replace them," she said.

Ironically, Ms. Branch recently hired a former Black Dog marketing director, Elaine Sullivan, to manage her California operation. It was Ms. Sullivan who helped the Black Dog capitalize on its simple logo of the black labrador. Now, Ms. Branch, whose Heart of the Home cookbook was published in 1986, has already begun to do much the same thing, licensing her images and words for use on everything from napkins to wrapping paper and teacups.

Meanwhile, back on the Island, Ms. Neill is trying to assess the damage done by losing the Black Dog contract. She said she employs about 14 people in the summer and drops down to five or six in the fall. "We're going to have to cut back seriously," she said.

At a high point, two years ago, they were printing about 200,000 pieces a year, not only T-shirts but also tote bags and clothes for infants. Last year was the first sign of trouble. "They cut back orders about 30 per cent last year," she said.

Now, Ms. Neill said, she will just have to find new business both on and off the Island.

"I don't have any regrets. We grew along with the Black Dog, expanded and bought automated equipment," she said. "We never expected it to take off the way it did."