Covid-19 Industry Impact: Shop Edition
It’s mid-May, the United States has no plan for testing or tracing the Covid-19 virus, business are slowly re-opening around the world, and in the meantime inline skating has experienced an unexpected and unprecedented 300% growth surge in the past seven weeks. But the impact of the coronavirus on various aspects of the blading market place are not equal. Shops are experiencing high demand. Manufacturers faced delayed shipping and supply lines, while trying to meet surging demand. Skateparks around the world, public or private, are often closed. To further understand how our peers within the blading community are dealing with these historic conditions, ONE contributing writer John Adams helped prepare a list of questions we sent to blade businesses everywhere. In this round we hear from three international shops owners about how they are getting by in the Covid-19 times: Bill Vertucci from Australia’s SkaterHQ, Jake Eley from England’s LocoSkates, and Ivo Vetger from The Netherland’s This Is Soul.
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Do you have a storefront?
Skater HQ: Luckily, we closed our shopfronts in November and December. Since then we had a month of fires over half of the east coast, then Floods in December!
This Is Soul: Yes.
Is most of your business walk in or online?
Skater HQ: Was 30% online.
Loco: Online.. 80%. More in some months.
This Is Soul: It has always been fifty-fifty, but now with this increase in sales it is still fifty-fifty.
How have the shelter-in-place orders impacted your business?
Skater HQ: Driven 100% of the business online.
Loco: We chose to close about one week before the regulations came in. The “Stay at home” regulations in the UK have effected us in that we lost the revenue from the approximately 20% walk-in trade. Luckily, online sales have been very strong and have more than made up for it. I think it’s because all the customers who would have usually bought skates from cheap sports shops or smaller independent walk-in shops are now being funneled to just a handful of dedicated blading web-stores, like us.
This Is Soul: I don’t know what a shelter-in-place order is. But for us business is weird now, I had to scale up the organization in a way i wouldn’t have imagine myself ever doing. Thinking about tasks that normally are done by one person without thinking now suddenly have to be well-defined and be done by multiple people with there being communications about it as well. It is such a different way of doing things now.
Have you had difficulty receiving product?
Skater HQ: Only a bit. The inline business had plenty of stock in the system.
Loco: Yes, but not as bad as we thought it might have been. Product in blading is always under-supplied, Coronavirus or not. The main issue is that during this time demand is up because people are not working and the supply chain is gradually drying up. Particular problem areas for us are recreational inline skates. Thanks to Powerslide, we can keep taking advantage of a good sales period because they are one company who commit to producing a lot of products at a time. (They make USD, Kizer, Undercover, Ennui, Gawds and, of course, Powerslide skates). But I could see the supply chain becoming a much larger problem the longer this goes on.
This Is Soul: Powerslide is practically sold out, so is Rollerblade. There are just a few brands left that are still having stock. It’s close to impossible to be picky right now regarding purchasing new inventory. I now buy skates models that I didn’t buy before because of looks or whatever. I also normally only buy the sizes that have the biggest liner for the shell, because having a smaller liner then the shell allows doesn’t make any sense. But right now, if that is all there is, I kind of have to buy those sizes as well.
How many employees did you have before the pandemic response began?
Skater HQ: Twelve
Loco: Four plus me.
This Is Soul: For the shop it was one shop manager plus me in the background doing a couple of hours a week. Now it is four people.
Have you been forced to cut back hours or employees in response to the crisis?
Skater HQ: Yes, we’re down to five.
Loco: We furloughed two staff (at 100% pay) at the beginning of the shutdow. Harry, because he had Covid symptoms (still untested, antibody tests are not currently available in the UK). They are both back working now though as we are busier than we first predicted. Harry has still been working from home. Max, who takes all our nice photos, is working the warehouse some days and home when he can! Staff have been receiving Coronavirus bonuses for their dedication… We call it a “Coronus.”
This Is Soul: No, I have been forced to do the opposite. But for the skate school, there are a lot of teachers now that are unable to teach.
How was business trending prior to the pandemic?
Skater HQ: Slowly upward but now more steeply upward.
Loco: Pretty steady, just good enough to pay the bills. We installed a new international checkout with all these cool new features pretty much the day the lockdown happened, so it’ll be really hard to analyze whether any extra sales are being converted as a result of that, or if they are solely coronavirus related.
This Is Soul: In 2019 we had our best year yet. Thisissoul has been growing like 10-20 precent every year, steadily.
Has your business been eligible for any of the government relief programs in response to the pandemic? Which ones?
Skater HQ: No, we have not suffered enough.
Loco: Yes. The UK government did an amazing job of supporting businesses. We received a very helpful grant and we received a business rates holiday of one year which is also very helpful financially. It’s worth mentioning that for us, I see these payments as help for the future… business might be fine now, but when the economy crashes off the back of this then THAT’S when they will come in useful. We are definitely burying our nuts.
Worth mentioning that I also have a second shop with my girlfriend (not a skate shop) and we depend on walk-in trade. It’s been a much bigger problem for that shop, and those grants only go so far to cover your overheads and the knock-on effect of millions of people being out of work. Whether we make a loss or not will depend on how long the lockdown goes on for, and how much it effects the economy in the years to follow, but there is a ton of uncertainty and reason to feel unsettled.
This Is Soul: None of those we were available to us because they were reserved for businesses that are experiencing severe hardship, which is not us. For my skate instructors the situation is more complicated. The shop is still open so they don’t qualify for assistance, even though they aren’t teaching or earning. That sucks.
Have you had any difficulty accessing any of the relief funding from the government (e.g. the Paycheck Protection Program)?
Skater HQ: No.
Loco: Again, the UK government has been exceptional in the funding they have provided for employees and small businesses. It’s been easy and simple. I chose not to take advantage of some of the schemes like low interest instant loans and VAT deferment… they were just going to cause extra administrative tasks.
This Is Soul: As mentioned we did not qualify.
How have you adjusted your business to meet these unexpected challenges?
Skater HQ: Now 100% online and offering hands-free pick up. Hopefully opening the custom fitting center for appointment only soon. (But no idea when.)
Loco: There’s been a lot of role-switching here at the shop. We have moved our everyday workstations areas as far away from everyone else in the building as possible. Harry works at home and Max works at home when he can. I have weekends off for the first time in 15 years, which is nice.
This Is Soul: We had to stock up on inventory because sizes were running out of our popular items. So right now the store is no longer functioning as a showroom, now it’s a warehouse. We have a counter where customers can pay inside if they must, but the rest is done outside. We are also not allowed to have more then one customer at a time in the store so we couldn’t accommodate them if we wanted, because there are at any certain point two or three people outside on the benches trying on skates. With a peak of six people at the same time so far, this is really unheard of.
Any further comments on the community response to the pandemic?
Skater HQ: Skating is going crazy. Rollerblading is cool again, now is the time to push the sport!
Loco: I’ve struggled with some guilt when considering we are still operating and at a decent level… even (unintentionally) capitalizing on the pandemic, but the truth is that the economy is also extremely important to the welfare of people. There’s one statistic that suggests that for every 1% the unemployment rate goes up, 40,000 people die. Poverty causes loss of life in less direct and less measurable ways than a virus. Additionally, when the economy of the UK, USA or any economically developed country suffers, then the aid which those countries have budgeted to provide to the less economically developed countries lessens. People in less economically developed countries WILL suffer significantly as a result of a dip in the world economy.
Point is; if we can help by contributing (in a very small way) to the economy, but in a controlled and safe way, then that’s a responsibility I’d like to uphold.
This Is Soul: I have a concern about the manufacturers. I am curious what they will do following this increase of attention and participation in their business. In my mind they have three options: diversify, quantify, cultify.
Adding more and more products to their assortment, flooding the market with options that the consumers don’t need, creating an even harder choice for customers in the end. The opposite of what Steve Jobs did when he returned to Apple. If this is their strategy, forcing shops to buy new product inventory, then when the sport goes down just 15% or so, shops will have to put all that on sale because they didn’t sell it. Then they sell it at a loss. That’s not a good way to get more retailers to invest in our sport. If there is more product but the customers stop coming, this house of cards will fall again just like it did around 2000.
They can produce more of the models they have to make it drive down production costs, increase profit margins, and get rich.
They keep the products they have but invest their new money in marketing. Marketing with the intention to show more people “this is who we are.” Maybe that’s creating a clothing line, or paying riders, sponsoring events, making good and inspiring content… growing the culture and keeping people in it. Let people not just skate on the weekend as a side thing, but letting people identify as a skater.
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Thanks for the article ONE! It’s good and fun to read blading economic articles, even if it’s about the coronavirus economy. If things get so bad that armed revolutions happen, and I survive during the war, I’ll do my best to go into the US Federal Reserve, get all of the money, and give it to blading companies and blading shops.
Great article on the background processes at shops in this weird time, as well as insight on how the companies should adopt to this new demand, thank you for this!