Leading Gift Companies Discuss The Impact Of Covid-19 On Their Businesses

A group of leading gift companies, across key categories, joined GiftsandHome.net last week (Wednesday May 6) to share their views about how they are dealing with business during the coronavirus pandemic. 

In the latest virtual ‘round table’, hosted by Sue Marks, editor of GiftsandHome.net, Andrew Nettleton, managing director of Ashleigh & Burwood, Jeremy Corner, managing director of Blue Eyed Sun (who is also chairman of The Giftware Association), Sam Wahid, managing director of Gift Republic, Piers Croke, sales director of Gisela Graham, Rod O’Mahony, director of Transomnia and Hannah Dale, founder and creative director of Wrendale Designs, shared experiences in terms of how their respective companies have reacted and adapted to the lockdown.

With all companies having furloughed the majority of their staff, and others mostly working from home, or going into the business when necessary, health and safety measures for going back to work are now a key focus.

“We are operating a skeleton crew at the office and warehouses to service those retailers who are trading to say that we are still open for business,” explained Ashleigh & Burwood’s Andrew Nettleton.  “When this is over, we hope it will help us to get up and running more quickly. On the social media side, we’ve kept everybody on, as that is a part of the business that is very easy to do remotely. It’s the main way we can go on telling people about the brand.”

Above: Andrew Nettleton, managing director, Ashleigh & Burwood.
Above: Andrew Nettleton, managing director, Ashleigh & Burwood.

At Transomnia, director Rod O’Mahony explained: “We started to implement enhanced cleaning and social distancing on March 16, a week before the official lockdown, which worked in our favour, as five members of our staff had probable coronavirus in their households and of those, three or four went onto develop mild symptoms themselves. Fortunately, they’ve all recovered and no-one else in the company contracted it. We’re now working on compiling new health and safety procedures and guidelines in readiness for when everybody gets back to work.”

As Hannah Dale, founder and creative director at Wrendale Designs, put it: “After getting over the initial shock we had to deal with the situation. The major concern for us was cash flow. Our year ends in October, and we had grown by 60% in the first quarter, so we were gearing up for a really strong year. Having just taken on a second warehouse site to help us with the extra capacity, we had a lot of stock on order, so the major concern was that all the customers who owed us money were going to be able to pay, as we had money that we owed on the stock that was on order. We therefore paused everything that we possibly could, with our first priority being to stay in business. Fortunately, orders from online retailers started to come through, so we went into the warehouse and started packing orders ourselves, and then gradually started to bring people back.”

She continued: “We also brought in a third party HR company who gave us documentation and training courses, which our warehouse staff did to ensure responsible social distancing. We’re still on a reduced staff, but those who are coming back are doing so in a much more hygienic way. Another positive is that one of our licensing partners, Wax Lyrical, are going ahead with a new launch, so we’ll be actively supporting that on social media. It’s been about adapting what we’re doing in a temporary way, and also, looking to the future, accepting that this is going to be a longer term situation.”

Above: Hannah Dale, founder and creative director of Wrendale Designs.
Above: Hannah Dale, founder and creative director of Wrendale Designs.

At Gift Republic, Sam Wahid confirmed that, at the beginning of lockdown, the directors split the teams in the company’s warehouse and built two areas to ensure social distancing. “But then everything dropped off, so we furloughed 60% of the staff. Then everything started picking up again, so we put the whole team back on Monday May 4. We have put in social distancing and hygiene procedures, splitting shifts in the warehouse and also lunches and breaks,” explained Sam Wahid.

Gisela Graham’s Piers Croke highlighted that on the design side, there is still a lot of activity going on, albeit with people working from home. “At the same time, we are also re-building our website which can be done by software people, also working from home, and we also have a skeleton staff who meet up two to three days a week. Currently things are trickling on, with those that are trading online needing goods. As primarily a seasonal business, we don’t have serious orders to despatch at the moment, but we’re hoping that we can open up in a major way at the end of August.”

As for products that have been trending during the lockdown period, there was plenty of positivity. “Before lockdown, there were two items that we’d had in stock for quite a while – an emergency loo roll and a Mandana art colouring in puzzle. Since the lockdown however, they have both sold out very quickly. We have also done really well with puzzles, games and trivia poducts,” confirmed Sam Wahid.

Transomnia, which sells a lot of text based signs, both quirkily humorous and heartwarming – has seen those with home and family themes flying out. “A consignment came in last week and two or three of the signs have sold out already,” said Rod O’Mahony. “Small online retailers who would normally order a pack of six or 12 are ordering 96 or 144 at a time.It’s been phenomenal.”

Above: Among Transomnia’s best selling signs over the past six weeks. Sales are currently running at more than double previous levels.
Above: Among Transomnia’s best selling signs over the past six weeks. Sales are currently running at more than double previous levels.

Hannah Dale revealed that mindfulness products, such as journals, and motivational gifts, are riding high, as are garden themed items and licensed cross stitch kits. “Sales of cross stitch kits have gone crazy!” she enthused. “The sales spikes we’ve seen have been for positive things that people can send to others as a pick me up, as well as practical things that people can use while they have time on their hands.”

Above: Crackers About Cheese, among the best selling cross stitch kits from Wrendale Designs.
Above: Crackers About Cheese, among the best selling cross stitch kits from Wrendale Designs.

At Blue Eyed Sun, a greeting card with a group of owls sitting on a branch has also seen sales soar. “Our online retailers love it, so much so that we are currently reprinting it. I think with so many people self-isolating, it reflects togetherness.”

Above: One of Blue Eyed Sun’s most popular greeting cards at the moment.
Above: One of Blue Eyed Sun’s most popular greeting cards at the moment.

With regard to the supply chain, although suppliers were extremely anxious about getting product out of China at the beginning of the year it’s now become a reverse situation. “We were very concerned when our 200 suppliers told us that they hadn’t gone back to work, and that the factories weren’t opening,” reflected Gisela Graham’s Piers Croke. “However, two to three weeks ago, they announced that they were short of work and that they could deliver on time, or early. Our problem now is to try to persuade them to hold off for at least a month, instead of shipping to us as normal in May, as we doubt that our customers are going to be ready to receive goods until the Autumn.”

A further concern this year has been that air freight out of China is eight to nine times higher than the usual cost.

As to whether there will be a consumer backlash to buying goods that have been made in China, the general feeling was that it won’t be a problem going forward. “Most gift products in the UK aren’t identified visually as being from China,” pointed out Transomnia’s Rod O’Mahony. Added Blue Eyed Sun’s Jeremy Corner: “People are going to want to get products at the price that they are currently paying. And the stark reality is that manufacturing in Europe against China is more costly,” with Sam Wahid adding that even though the company puts the country of origin on everything they have never received a complaint and believes that if there is a backlash, it will be short lived.

Above: Sam Wahid, managing director of Gift Republic.
Above: Sam Wahid, managing director of Gift Republic.

As for the consumer’s interest in sustainable products, Rod O’Mahony says he thinks the fallout will accentuate the trend. “The current situation has made everyone much more aware of the fragility of our globalisation. During the lockdowns, there has been a massive drop in pollution in cities across the world, and I think that will turn out have a positive impact.” However, Hannah Dale said that while the company remains plastic free in everything it does, realistically, she thinks that in the short term, with many people negatively affected financially, environmental considerations may become a secondary priority for a while.

As for new product development, Hannah confirmed that the company is trying to get ahead with samples to be ready to push the button. “We have everything there but we are not going ahead with any clarity in production terms until we know when the shops will be re-opening in whatever capacity. Our thoughts are about how to support retailers when that happens. That will be the biggest challenge.”

For Gisela Graham, this period would normally be a ‘high’ in terms of the company’s designing season. “We have two deadlines, the first being Home & Gift in Harrogate, where we launch our Spring and Easter ranges,” commented Piers Croke. “The designing has more or less taken place, with the prototypes coming in, which has all been by correspondence and technology. Our second deadline is for our Christmas designs, where we have a very large, ambitious programme with at least ten design concepts which have to be put together. Everything has had to go back and forth between five of us who are involved in the decision making. Because we come into the office two or three times a week, we do see the prototypes, and the couriers are working well. So fingers crossed, we will have our Easter and Spring range ready for the end of July, and our Christmas range ready in January when the major trade shows start.”

Above: Piers Croke, director, Gisela Graham.
Above: Piers Croke, director, Gisela Graham.

At Transomnia, Rod O’Mahony said that product development and planning is proceeding as normal. “Samples have been slower to get over, and the increased air freight rates have made it rather expensive, but it’s still happening,” says Rod. “The tricky bit is knowing when and how much to start ordering.”

At Gift Republic, Sam Wahid added: “We are also being bullish re product development and are carrying on as normal. In fact, we have a new product coming out today (Monday May 11)a ‘100 Things To Do After Quarantine’ scratch poster –  and a lot of online retailers are taking it. It’s really taken off. As for Christmas, we are doing a monthly rather than a bulk buy, buying little and often from the Far East.”

Above: Launching today, Gift Republic’s ‘100 Things To Do After Quarantine’ scratch poster.
Above: Launching today, Gift Republic’s ‘100 Things To Do After Quarantine’ scratch poster.

Ashleigh & Burwood is also working to normal product development. “We’re looking forward to Spring/Summer and Autumn/Winter next year,” confirmed Andrew Nettleton. “The question will be whether we need to dial back the orders we placed with suppliers in January and February for Christmas products. A lot will depend on the staged re-opening of retail.”

Jeremy Corner said there is also the challenge of when to launch new products, now that Home & Gift, Harrogate, will not be taking place in July, with a question mark also hanging over the Autumn shows. “Do we launch with a big wave of new product in January and February? Or do we spread it out? We’ve cancelled our Christmas card launch because it felt risky to do it, pushing it back to next year in terms of new product coming through. Instead, we will help our retailers by doing special offers and deals this Christmas.”

Above: Jeremy Corner, managing director, Blue Eyed Sun and chairman of The Giftware Association.
Above: Jeremy Corner, managing director, Blue Eyed Sun and chairman of The Giftware Association.

The general feeling was that the Autumn shows are unlikely to take place, with Hannah Dale pointing out that Wrendale Designs has a brand new product category to launch which is exciting because it’s a different direction for the company. “It’s the furthest ahead we’ve got in product development and it would have been our lead at Home & Gift in Harrogate this July,” she stated. “So should we launch it anyway, as there will be some degree of shops opening between now and Christmas who will want new product to encourage customers, as they would in normal circumstances? Or should we put the launch back to January? That’s the dilemma.”

Above: Home & Gift, Harrogate, will not be taking place this July.
Above: Home & Gift, Harrogate, will not be taking place this July.

As for advice to retailers, the No 1 suggestion from companies was to get online with a transactional website. Confirmed Rod O’Mahony, “we have advised our customers that we can supply high res images and lifestyle shots, and a lot of our retailers have come back to us, including retailers who have never thought about a website before. In fact, we have a couple of customers who have got a trading website up and running in under a month.”

He continued; “Plus, when retailers do re-open it won’t be as normal. There will be rules and regulations, social distancing and maximum numbers in shops, so this is the time that they should be going into their shops and making plans as to how they can manage it, so that they are fully prepared when they do re-open.” 

Above: Rod O’Mahony, director, Transomnia.
Above: Rod O’Mahony, director, Transomnia.

Added Andrew Nettleton: “There’s also a lot that can be done on social media too. It’s a vitally important platform for retailers who don’t have an online presence.”

Hannah Dale says a concern is that once shops are allowed to re-open again, there won’t be as many shoppers out there. “With such reduced footfall and reduced support, retailers will have to think carefully about how they can manage that. The next 12 months will be about survival,” with Rod O’Mahony adding that he believes that the furlough scheme must be extended and made more flexible. “Otherwise it will be a half way house to redundancy for millions. Once retailers start opening again, inevitably there will be reduced footfall and reduced turnover, so they are unlikely to be able to fully employ all their staff.”

Jeremy Corner agreed that the way we transition now will be vital to the survival of retailers and suppliers, along with everyone else in the supply chain, endorsed by Piers Croke, who added that retailers are unlikely to trade seriously before August. “There doesn’t seem to be a government plan for that at the moment, so it’s a matter of great concern.”

Above: Chancellor Rishi Sunak may need to extend the furlough scheme.
Above: Chancellor Rishi Sunak may need to extend the furlough scheme.

Nevertheless, there are some positives to be found. With the majority of staff furloughed, it has been an opportunity for directors to go back to basics. “We’ve all rolled up our sleeves doing jobs we haven’t done for years, enabling us to re-evaluate some of our procedures,” commented Rod O’Mahony.

“I’m surprised at how well working from home has been and how the team has come together,” added Sam Wahid. “There is also a new social responsibility, an example being clapping for the NHS on Thursdays. Across the country, people are looking out for each other and that’s a big positive, as is a greater closeness between family and friends,” with Piers Croke adding that there has also been a closer emotional connection with staff through more regular phone contact.

Looking to the longer term, Jeremy Corner predicted: “I’m hopeful that this emotional connection will have a positive effective for the gift and greeting card industry over the coming 18 months.”

 

Top: Suppliers Zoomed in to discuss the impact that Covid-19 has had on their business.

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