Well and truly into week three of a crisis that has changed the world beyond recognition. WBC’s Managing Director, Andrew Wilson, writes a frank and open letter about his concerns and hopes for the future. While there’s uncertainty for business, there are also positive opportunities for change.
Without wishing to sound too political from the outset, back in December, my main concern was the impact a Jeremy Corbyn government might have on our business in 2020 and beyond. How long ago that feels. Since Brexit, there has been for me, a genuine sense of renewed optimism. A sense that, whatever your political persuasion, we were clearer on the direction and timetable in which we were headed. We saw some green shoots in January and early February, and I had high hopes for the year ahead.
Whilst I was aware of the Coronavirus in China and the Far-East, it had never really crossed my mind that it was heading our way. I hold my hands up and admit I dropped the ball in anticipating what has befallen us over the last few weeks. To say WBC was unprepared is an understatement! It offers only the smallest of comforts to know that for the large part, we weren’t the only ones.
Was it the calm before the storm?
In our 30 (soon to be 31) years, we have had to deal with a number of shocks to the system. The Financial Crash of 2008 probably had the most long-lasting impact. Bizarrely, the death of Princess Diana also had a huge impact on sales, leading to a poor Christmas trading period. Thankfully, it was short-lived. Brexit has been a long term drag on business. It has been difficult to come to terms with the exchange rate side of things. Weather events have caused their fair share of pain. I know some of you were badly affected by recent floods, so your year has gone from bad to worse.
Then there are deliveries. Yodel buckling under the weight of too much business. Couriers stopping our deliveries with no notice in the run-up to Christmas. All of these, are right on up there with the most stressful 48 hours I’ve had at WBC. Throw in a couple of wars and terrorist attacks and you start to think you have seen it all…….until now!
What doesn’t kill you…
No one needs to talk about the why’s and wherefores any more than we already have, so I am going to look for positives amongst the chaos. We are lucky enough to have a long-standing customer base in the speciality drinks and Fine Food sector. Fortunately for us, the marvellous British public has seemingly decided to eat and drink themselves through the next few months. A good proportion plan to sh*t themselves through it too, if sales of loo roll are anything to go by. So in the midst of the gloom, a number of our customers are as busy or busier than at the peak Christmas season, which is great news.
I was dismayed to see that drinks retailers were initially asked to close this week, but delighted to see that position changed and clarified. Even before that, we had seen a huge spike in demand for transit packaging and were struggling to cope with people working remotely, and a warehouse team at 50% capacity. Interestingly, as well as courier safe packs, we also saw a huge rise in demand for lighter weight store collection or own van local delivery style packaging too. It has been great to see so many merchants adapting to new ways of getting products to their customers. Long may it continue.
What has also surprised me is how stock and product is still arriving from the continent. Supplies do not look like they will run out anytime soon. That may be changing as the situation in Italy and Spain worsens, so our thoughts go out to them.
To close or not to close
Halfords got some flack for staying open and I am conscious that WBC is also still functioning. I thought I would share with you how we had arrived at this decision, in case any of you are going through a similar process even now.
Around three weeks ago we split our office and warehouse teams in two. One half worked from home to isolate. The other half carried on working normally. The idea was that our teams would rotate every two weeks. The situation changed rapidly, and we decided that anyone having to use public transport to work, should stay at home and isolate.
After Boris’ ‘stay at home’ announcement, we felt the only sensible thing to do was for everyone in the office to work remotely, and the warehouse manned by a team that walked or cycled. We toyed with the idea of shutting down completely. But whilst business was down 48%, protective packaging was booming. The trade clearly needed it, so it was important that we keep the taps turned on. We still review this decision every week. Touch wood, none of our 45 strong team has been physically affected yet, but we are not counting our blessings quite yet.
Paying suppliers on time helps.
In financial terms, we have always been reasonably conservative and financially strong, however the worst-case cashflows our finance director showed me last week, were very sobering.
Our bankers, Handelsbanken, have been very supportive but unfortunately are not part of the British Bank interest-free loan scheme. It looks unlikely we’ll be able to tap into that. We’ve explored the “furloughing” employee grant scheme and may well use this for around 14 staff members, whose daily tasks have diminished significantly. Otherwise, we are relying on reserves and also our customers to pay us on time.
We have always made a point of paying our suppliers on time, and we intend to carry on doing this. We are looking to postpone tax, vat, PAYE and rent payments as a precaution. I have little sympathy with our landlords, who got away with a 30% rent increase late last year which has been extremely painful. Hopefully another positive from all of this will be a much more realistic level of rents going forwards and a shift of power to the tenant. Or is that wishful thinking?
The community always saves the day
Another positive for me has been the upsurge in sense of community. At a time where a virus is forcing us all apart, I have seen a much greater sense of togetherness, albeit virtually.
Graham at The Wine Merchant Magazine has been a great sounding board and source of information for me. I have spoken to more people on the phone or (at a safe distance) than I usually would. We have had offers of help and have made offers of help. I have met neighbours on our road that I have never previously spoken to. Remarkably, I have learnt how to attend a ZOOM meeting, which alone deserves applause.
On a purely selfish level, it has been amazing to ride through London on my bike, taking in the empty roads. I am the last man standing at the office now, broadly in self-isolation in a home close to home. Oddly, I feel more relaxed here rather than fretting away outside the office.
I read a leader in the Times a couple of weeks ago. It suggested that this virus would change our working habits forever. Once people work from home, they’ll forever question the need to travel into an office every day. Call me old fashioned, but I think the exact opposite may be true. A company is called a company for a reason, it’s not a series of individuals or islands. Its strength lies as a collective. I hope you have good company wherever you are, and may it live to fight another day.
Fingers crossed, we’ll see you on the other side too!