Home Furnishings Association member Bo Coconis has had a busy month at home and at work. First he and his wife welcomed Sutton Page into the world on April 14. A week later he found out this week that Coconis Furniture & Mattress 1st, his family’s furniture company in Central Ohio, received emergency funding through a federal loan program. Both are keeping him up at night. Sutton for obvious reasons, but the money for less obvious reasons. Coconis must decide whether to spend the money right away.
That’s not an easy decision. “The money’s sitting there but we don’t know what’s the best thing to do with it,” says Coconis. “It’s a mixed blessing, I guess. We’ve got the loan — now what?”
Coconis and other small-business owners are supposed to use the loans immediately to keep employees on their payrolls during the COVID-19 pandemic, but at the moment there is little for Coconis’ employees to do. His four furniture stores have been closed for more than a month with only sporadic sales through e-commerce or Facebook Live video sales from the warehouse.
While the HFA and other retailer associations are lobbying Congress for more flexible loan terms, Coconis and others wait for clarity.
Small businesses can have the loans forgiven, meaning they won’t have to pay them back, if they spend most of the money on retaining or rehiring employees. To qualify for forgiveness, retailers must spend at least 75 percent of the funds on payroll within eight weeks of receiving the loan. The rest must be spent on rent, mortgage interest or utilities, if the loan is to be forgiven. Otherwise, recipients need to start repaying the funds after a six-month grace period. For Coconis, that means if the loan is not forgiven, the company will start repaying the loan in November — $38,000 a month for 18 months.
Coconis’ biggest issue is the mandated timing of the spending. The eight-week clock on spending the money began as soon as the loan was deposited this week, but Coconis and other Ohio retailers aren’t even open for business in the traditional sense.
Ohio Gov. Mike DeWine says some businesses can begin reopening May 1 if they show they can follow health and safety standards, like having enough gear and sanitizer to protect employees and customers. Coconis says that’s not going to be a problem. Many of his higher-paid staff work on commission, and Coconis must meet their former level of pay or higher to qualify for loan forgiveness.
Hoping for relaxed rules
Even when businesses reopen in Ohio next week, Bo Coconis is worried most consumers will be slow to venture outside, which will eat into a sizable piece of his loan. At the least, Coconis wants the rules to change so that the companies can qualify for loan forgiveness if they wait to rehire workers until they are legally allowed to reopen. “A lot of retailers I’ve talked with are thinking the rules might be relaxed or changed moving forward,” says Coconis. “It’s tough to decide what to do because we just don’t know what to expect.”
Until that clarification comes, Coconis is busy doing what he does best: selling furniture. The company has beefed up its e-commerce site, and customers are warming to buying online. The company made two sales In the first four months the website was transactional. This past month, the company has averaged four to five sales per day.
Coconis isn’t limiting himself to e-commerce. Twice a week, he and his one-man camera crew go to the company’s warehouse in South Zanesville and sell merchandise through Facebook Live. The company invested heavily in outdoor furniture for this spring and has a lot of inventory to get rid of. That means Coconis is in front of the camera selling to a social media audience through what he calls “virtual warehouse sales.”
The virtual sales are bringing real results. The first week’s virtual sale brought in $12,000. Five days later, the second sale brought in about $6,000. The company is also opening its doors and inviting customers to visit the store for individual appointments. Coconis says the company is averaging about five appointments a day. “Clearly there’s a demand,” he says. “I just hope it’s a sign of what comes when people are allowed to shop again.”
Coconis says he’s cautiously optimistic about shoppers returning. Maybe not immediately, but at some point this summer. “People have spent the last month or more in their homes siting on old sofas, lying on old mattresses,” he says. “I want to think this period has given them time to think about what they might need for their house and that this summer might be even busier than we thought, but you really don’t know. Nobody does.”