The coronavirus (COVID-19) pandemic is rapidly evolving. At the moment, schools, restaurants, and retail stores are closing, events are canceled, and states are issuing stay-at-home orders to slow the spread of COVID-19. While working from home is becoming a new normal, for most in the wood flooring industry, that isn’t an option.
According to Travis Fritzel, owner of Perennial Hardwood in Fort Collins, Colo., his company was still receiving deposits for new projects as of mid-March, but he expects his company’s schedule will have to be fluid for several months.
“We have not had anyone postpone; however, new leads have dropped between 50-75 percent of our normal average,” Fritzel says. “We cater to a mid to high-end residential market, so no new construction and remodel delays have affected us.”
“Currently, I am focused on making sure myself, employees, and Perennial Hardwood are in a stable position to ride out several months of little or possibly no work,” Fritzel adds. “We have stocked up on two months of supplies from our wholesalers. In these uncertain times, maintaining strong communication with our clients has been paramount in our daily operation.”
Mike Somodean, owner of M.S.C.S. Inc. in Roswell, Ga., is being cautious and has had to pause some projects. “Since we are mainly focused on lived-in residential, we are definitely feeling a slow-down in new leads and requests for bids,” Somodean explains. “While we still have work booked for several weeks, we expect at least part of that to be postponed until people get at least some sort of certainty about the situation.”
At C&R Flooring in Westwood, Mass., Chris Zizza says they are speaking daily with customers and moving things around while facing obstacles such as the city of Boston shutting down construction projects.
“They gave about seven days to wind down and get out of there, realizing you could be in the middle of a project. How do you plan for that and how long is that going to last? I had a crew that was supposed to start on a project, and the owners of the building said there will be no work allowed until further notice,” Zizza says.
AHF Products, one of the industry’s largest hardwood flooring manufacturers, is based in Mountville, Pa. Right now, they are practicing social distancing, hygiene practices, and work from-home options where possible.
“As the states continue to take actions, we expect there will be some impact on order rates, but the magnitude is still unknown,” Wendy Booker, Vice President, Marketing and Product Development for AHF Products, says.
The same goes for distributors like Derr Flooring Co., headquartered in Willow Grove, Pa., where the company’s pro shops and warehouses in the state have had to close for the time being. Showrooms also are closed, the outside sales team is working from home and not allowed to visit customers, and the customer service team is working remotely.
“Almost all of our retail customers are closed, so we definitely have seen a downturn in our business,” says Rick Holden, COO of Derr Flooring Co. “Quoting activity for future projects also has dropped considerably. Our contractor base continues to complete existing jobs, but there is not much booked past early April.”
PREDICTING OUTCOMES
In the March 2020 quarterly United States Market Monitor Report, Santo Torcivia, President of Market Insights LLC, notes that COVID-19 is a major threat to the U.S. economy. However , he states that the U.S. economy has been on a positive, but moderating, growth path and predicts it will absorb the shock of this threat and rebound and gain its forward momentum, if strong and decisive efforts are directed at restarting the U.S. economy quickly.
“All viruses are serious matters that require sober assessment, and there is much to learn about the nature and veracity of the Coronavirus,” Torcivia writes in the report summary. “Context is important to soberly assess the situation, and how the consumer is influenced and ultimately reacts will largely determine the direction of the economy this year.”
While it’s tough to know how long the severity of the situation will last, as of late March, companies were hoping that all of 2020 would not be lost.
“Overall, we still believe that we can have a strong second half if the threat of the disease passes in the next 30-45 days,” Holden says.
“As things settle down, we expect retailers to seek out options to recoup lost profit dollars in their business,” Booker explains. “We know consumers walk into retailers truly wanting wood floors. We also know that wood floors provide much greater bottom-line dollars to retailers for when they are sold. So it’s a true win-win for flooring retailers to focus on wood.”
HIDDEN OPPORTUNITIES
What opportunities are there that the wood flooring industry may be able to take advantage of for the time being, or once things stabilize? Zizza suggests looking into places that usually never close, such as school gyms or restaurants.
“If you do commercial work, restaurants never close. You’re usually doing it on the 2:00 a.m. to 5:00 a.m. shift for six nights in a row, but now they’re closed,” Zizza explains. “You might want to think about businesses that have a hard time closing and have hardwood floors in them. They could be a ripe prospect right now for getting their floors done while nobody’s in the building.”
There is also the thought that as people spend more time at home in the current state of affairs, they may take a long, hard look at their flooring.
“The monetary value wood floors add to a home – as well as its natural warmth – speaks to the benefits that wood floors provide, especially now as more and more of us are hunkered down at home for personal and professional reasons,” Booker says. “It reminds us of the importance of the home environment to make us feel safe and secure, and brings out our nesting instincts. It also brings a new focus to the importance of wood’s attributes: sustainability, durability, and the ability to stand the test of time. We need these attributes more than ever.”
IN THE MEANTIME
Given the shortage of personal protective equipment in hospitals across the United States, some distributors and installers are helping their communities by donating N95 masks to healthcare professionals. Somodean did this with N95 masks he either already had or was able to purchase. And, as he waits to see how the COVID-19 situation unfolds, he will spend time with family and prepare so that when things pick back up, he can hit the ground running.
“My hopes are that the workforce will be maintained, and ideally, most businesses will use this slow period to maybe train staff on certain aspects that are overlooked when schedule pressure doesn’t allow it,” Somodean says. “It might also be a good time for businesses to establish or fine-tune their marketing, perform equipment maintenance, stock up on inventory, and other similar efforts.”
New marketing campaigns are also something Fritzel suggests taking advantage of right now. Otherwise, he plans to be with family and look at ways to decrease overhead by making spline, medallions, and stair noses in their shop.
“Th e main opportunity I see is to stay vigilant and motivated as I plan on increasing Perennial Hardwood’s market share in this downtime, regardless if it means a decrease in overall work,” Fritzel says. “No one knows when, but this will pass eventually and should be seen as an opportunity to set in place new ways you can distinguish yourself from your competitors.”
Zizza is working on a business plan and had some of his team make samples so they are ready the next time a client requests them.
“Six weeks ago it was so busy; everything was jamming and great. You’re thinking about passing on jobs, and all of the sudden you don’t want to pass on anything. Th ink about the headache job you didn’t want to take; maybe you need to take it,” Zizza advises. “Right now, it’s about gett ing as many projects into your calendar and moving forward with that because you have to stay busy. It will run its course, but while it’s running its course, the key phrase is cash fl ow. ”
As the situation changes by the minute, the NWFA and Hardwood Floors want to serve as a resource to the wood flooring community during this unprecedented time. Visit hardwoodfloorsmag.com for daily updates on coronavirus-related industry news, event cancellations, and resources you may find helpful.
Libby White Johnston is the Publisher of Hardwood Floors magazine. She can be reached at libby.johnston@nwfa.org.