COVID-19: Punishing Toll on Casual Furnishings Businesses

According to the fourth and final COVID-19 Impact & Implementation Survey of International Casual Furnishings Association (ICFA) members by research firm Industry Insights, companies across the industry continue to struggle with the pandemic’s ongoing effects. Domestic and international trade shows and travel have been cancelled, product launches have been cancelled or postponed, and most significantly, stores and offices have been temporarily shuttered, not only due to COVID-19 restrictions, but in some cities, because of demonstrations and looting.

In previous iterations of the survey, many retailers have expressed frustrations with shut-down orders, especially while big box stores like Lowe’s and Home Depot were deemed essential businesses and as such allowed to operate. In fact, in this latest round, fielded in early June, 71.4 percent of dealers surveyed reported that their businesses were not deemed “essential” in their local jurisdictions.

Even now that restrictions are lifting across the country, and some retailers reported record months of sales in May due to pent-up demand, dealers are finding themselves hamstrung. This time there are realities of strained credit and cash flow, as well as vendor delays. In fact, though 81.8 percent of the ICFA member retailers surveyed are once again almost completely operational, more than 85 percent reported delays in getting products from suppliers, with 41 percent reporting delays of one to three weeks, and 58 percent reporting delays of three weeks or more. Said one, “Demand has been very high, and we have run out of stock. Prior to the virus we had enough inventory to get us through August. We were out of our most popular items in May.” Another noted, “By the time my retail stores open they will be facing lead times of seven weeks, almost missing the summer business.”

Adding to the challenges has been a growing infection rate among employees, with 13.6 percent of retailers having had a confirmed case among employees, and 17.7 percent of manufacturers reporting cases. (These numbers have climbed from only one percent of organizations reporting infections in the first survey in the series fielded on March 18.) Half of all respondents – both manufacturers and retailers – reported difficulties in luring furloughed and laid-off employees back to work and, not surprisingly, safety is a concern with nearly 60 percent of retailers reporting managing overall safety requirements/regulations and employee safety among their chief concerns along with economic uncertainty (63 percent).

Of the retailers surveyed, just over 40 percent reported at least mild concerns about their company’s long-term viability, with another 27 percent characterizing their concerns as “moderate.” Said one, for example, “Overall, our outdoor furniture sales are down 54 percent year over year to date. We are only operating with one of our three stores at this time.”

Reps too are suffering. “COVID-19 has had significant economic impact on my business,” related one. “My customers, specialty outdoor retailers, were either shut down or severely restricted in their sales due to the initial shutdown. And, one of my main manufacturers was mandated to shut down for 9 weeks.” Responded another, “The required COVID-19 closings of many retailers and most suppliers will significantly impact this year’s sales commissions. Whether these retailers and suppliers survive will determine if there are any long-term effects.”

Questions linger about seeing a return to normalcy anytime soon, with the timeline pushed yet again for when organizations expect their daily operations to return to a pre-COVID-19 state. In the first survey earlier this spring, respondents felt that things would return to normal by early June. In the second survey in late April, the expected date moved to late September. As of this survey, most respondents (21.5 percent) target early December.

“With stay-at-home and social distancing measures being deemed ‘somewhat necessary,’ by 35 percent of the respondents, and ‘very necessary’ by 36.7 percent, the consensus among our members is that caution is still warranted,” says Jackie Hirschhaut, ICFA executive director.

This research was conducted by Industry Insights on behalf of the International Casual Furnishings Association among 80 respondents, including retailers, manufacturers, suppliers and sales representatives, between Monday, June 1, and Sunday, June 7.

For more information, contact Jackie Hirschhaut at (336) 881-1016 or jackie@icfanet.org.