The greeting card industry is, at present, furloughed. Every publisher, retailer and wholesaler Cardsharp has spoken to in the last few weeks have furloughed the vast majority of their staff, to the degree where directors have also had to furlough themselves. Many fulfilment houses and printers are also in partial close down to reflect both the lessening demand as well as the social distancing rules affecting the density of employees allowed safely in the factories.
Cardsharp assumed that what is happening in the greeting card industry is also the case in other business sectors. Yet Cardsharp was surprised to learn that nationally, only one in five UK employees, are currently furloughed. He estimates that in our industry the number must be nearer nine out of ten. It would appear, that in furlough terms at least, we have been hit exponentially worse than a lot of other industries.
Ultimately this reflects that what was one of our industry’s strengths in normal times has currently become a weakness. We as an industry have always boasted of our ability to boost footfall for bricks and mortar retailers. Greeting cards don’t naturally lend themselves to online purchases, reflected in the relatively small percentage of web consumer sales, compared with most sectors. With shops, barring food shops, newsagents, post offices and chemists, currently closed, and with no date for re-openings announced, to Cardsharp’s mind, the greeting card trade has been worse affected than most retail sectors, barring hospitality.
There are mixed signals emerging from the government at present over timing and the nature of any re-openings. The truth is probably just like the community at large, the cabinet is divided on the matter. And with Boris, through his incapacity, having been unable to take a lead, we are led to believe that there are hawks pushing for re-openings and doves insisting on a continued period of lockdown.
There is speculation that garden centres could be opening soon, with the argument that nurturing houseplants and tending gardens could help mental health during the lockdown. A strong argument, but what of greeting cards? The work of psychologist Dr Linda Shaw has categorically proven the mental health benefits of receiving greeting card in this area. Vital in these unprecedented times. And unlike shrubs and plants, you can experience this happiness uplift in the tiniest of flats, where surely occupants are more at risk of depression, than those in houses with outdoor areas for them to escape to.
But Cardsharp, who is not granted direct access to the cabinet and has no crystal ball, can’t predict when card shops and other retail outlets that sell cards will open.
In the meantime, most of us turn our attention to the more pressing problem of cashflow. Or perhaps we should say cash-non flow. Many businesses find themselves in the same boat, struggling to collect monies owed and hence struggling to pay suppliers. We should not cast stones indiscriminately, but from what Cardsharp can gather some organisations seem to be behaving less scrupulously than others. Suggestions that suppliers should share some of the financial burden, fall on pretty deaf ears, when it comes from the likes of Asda. Asda, owned by Walmart, up until it was overtaken over by Amazon, was the largest company in the world and made a pre-tax profit of nearly $23 million last year. And being a supermarket chain, it has benefitted from the lockdown and experienced record food sales, and a 12 month business rate holiday. Despite that it has indicated that suppliers of clothing items will not be paid in full and has cancelled orders that are already in production.
Some independent retailers, having been the beneficiary of a rate holiday and a government grant have been doing their best to keep a flow of payments through to publishers. Some larger chains, and accolades here to Paul Taylor of Cardzone, having really doing their level best to play fair with both landlords and suppliers, but it is no surprise that it is some of the companies that are owned or part owned by private equity companies, seem to behaving with the least probity.
Cardsharp can understand the delay of payment of invoices for April, and perhaps March, but there is no excuse for older payments to be withheld. Regular readers will know that Cardsharp is no fan of most P.E operators. Even when there is no profit to take from the businesses they control, much needed operational cash still seems to be prioritised into their pockets in the form of ‘management costs’, even though they already enjoy tax advantages as a result of their borrowings. To Cardsharp’s mind suppliers deserve to be treated with more respect and fairness.
And surely, Cardsharp reflects, company directors need to take responsibility for any their actions. That is why surely, they are directors in the first place. Cardsharp has lost count of the examples he has heard about correspondence from larger companies relating to a change in payment terms. These have either come from an operative in the accounts department or even unsigned. If it is a change in policy, then surely a director should take responsibility for it.
And Cardsharp concludes, the greeting card industry is a communication business. We pride ourselves on our sense of community and mutual respect for each other. In these difficult unprecedented times, this is when we really have to do our level best to maintain this honourable tradition.
