The coronavirus pandemic and the ensuing shutdown of stores will have a direct impact on every furniture retailer’s bottom line this year. It will also affect how they manage their businesses moving into 2021.
At a recent Home Furnishings Association COVID-19 live webinar, HFA members Peter Theran and Bobby Watson spoke about how the pandemic has forever changed the way they manage their companies’ finances moving forward.
Looking back on the early days of the pandemic, Theran, president of Boston Interiors, said “cash was the only thing that mattered, and how much cash we had depended on whether we would come out the other end or not.”
Six months later, that cash-is-king mentality still holds true, said Theran. “I don’t want to be in that position again where (the lack of cash) puts at risk a fabulous business model,” he said.
Without giving specifics, Watson and Theron said their companies are sitting on a lot of cash for any disruptions down the road – whether a second pandemic-related shutdown or something unforeseen like an earthquake.
“The pandemic didn’t really teach me as much as it reminded me how important it is to have cash on hand for a rainy day,” said Watson, co-owner of Hoot Judkins in Redwood City, Calif. “I don’t want to be in that position again.”
Reining in expenses
To that end, both stores have taken second and third looks at their expenses. Money going out is not as free-flowing as it used to be. Indeed, in the early days of the pandemic when his store was closed, Watson remembers being in the dark – literally. He and his sister, co-owner Vicki Marchant, sat in the dark at the store without power or phones, trying to figure out how to save money.
Watson and Theran said one of the biggest line items their businesses have cut is marketing. Both men said they are spending about 60 percent in that area compared to before the pandemic struck. “Part of that is because we don’t need to advertise right now,” said Watson. “We’re doing very well selling every day, very consistently.”
Theran said a second shutdown – especially in Massachusetts – is unlikely given the strict mandates already in place in the state. But he said Boston Interiors is ready for whatever disruption might come its way. “I’m not too worried about what’s coming beyond a shutdown because we’ve spent the past summer and spring preparing for what might await.”
Theran and Watson spoke with HFA CEO Mark Schumacher during the latest live webinar. Retailers can hear the full webinar here as well as other archived webinars helping retailers compete in the new economy.