Canada’s Carpet Studio leverages benefits of diversification, location
By Reginald Tucker
(This is the second installment of FCNews‘ ongoing ‘Survival in the age of COVID-19‘ retail case study series.)
The novel coronavirus pandemic has forced many specialty floor covering retailers across North America to temporarily halt their operations in order to allow government-mandated stay-in-place orders to flatten the proverbial curve. The objective, experts say, is to reduce the infection, hospitalization and mortality rates while ramping up testing and tracing efforts to get a better handle on the virus. However, and somewhat surprisingly, not all dealers have found it necessary to completely shut down over the course of this outbreak.
The Carpet Studio, based in Edmonton, Alberta (Canada), is one of those dealers who has remained open for business since the outbreak took hold there. Based in a rural area of the country where the population is not dense and foot traffic is normally manageable, this retailer was able to continue serving its customers in a challenging business environment while keeping its employees and customers safe.
“We’ve been lucky up here in our area because we haven’t had the dramatic outbreak that you’re seeing in other areas of the country and the U.S.,” said Marty Van Keulen, owner of The Carpet Studio. “We’re in a decent sized city here—about 1 million people. In our trading area, it’s mostly young people. We’ve only had about 500 COVID-19 cases, and approximately two-thirds have recovered. Calgary, which is three hours south of my store, has about six or seven times the amount of cases we have. The main difference is population density and the fact that they have more senior-living residences there.”
Keep ’em separated
Van Keulen has been able to maintain a safe environment for salespeople and installers due to the large space the retailer occupies (roughly 17,000 square feet) vs. the minimal amount of people working on the premises.
“Many of the floor covering showrooms in the area are operating on an appointment-only basis, but we have kept our [doors] open because we didn’t have the high volume of traffic that would prevent us from adhering to social-distancing guidelines,” he explained. “We have about seven or eight people in the office and showroom, so it’s easy enough to keep our distance. We also keep our showroom and warehouses clean, and we don’t allow installers to get out of their trucks when loading up materials for a job.”
Another aspect that has benefitted The Carpet Studio during these challenging times is the fact the company is fairly well diversified in terms of its customer base. Many of the retailer’s competitors rely on heavy foot traffic by virtue of their proximity to major highways and large retail anchor locations, but that’s not the case with Van Keulen’s store.
“Most of our business has come from different avenues—half of which is commercial,” he explained. “One-quarter of our business is insurance related, i.e., selling to contractors that do restoration work for damaged properties. The remainder is property management as well as shop-at-home work for seven different Costco stores. We’ve always been fairly diversified, so that part definitely helps.”
That is not to say things have been easy for Van Keulen. In the past two years, he closed two of his four locations. More recently, he had to lay off 30% of his staff, with many of his salespeople working remotely. But help is on the way. Van Keulen cited a program whereby the Canadian government has subsidized businesses that can demonstrate a certain threshold when it comes to lost sales volume and economic injury directly related to the impact of the novel coronavirus. For many dealers and customer-facing businesses, it has been tremendously helpful given the woes the country was already facing due to the ailing energy sector—a cornerstone of the Canadian economy.
“Even before the pandemic hit, Edmonton’s economy was in a precarious state due to the depressed oil and gas industry,” Van Keulen said. “We’ve really been struggling up here trying to get some pipelines built. Thankfully, we’ve had fairly decent subsidies from the government, and we are well capitalized. At this point, I’m not worried about making payroll tomorrow.”
What does keep Van Keulen up at night, however, is the condition of the overall economy, which has been essentially shut down for the past six weeks. Unemployment in his area is forecast to rise to 25%—unseen in the province’s history. He also cited a sobering estimate that indicates 30% to 50% of businesses might not ever reopen again. Throughout all this, though, he remains optimistic that the strong ones will survive.
“We’re slowly starting to see some opening up,” he said. “Last week, we saw some dentists and doctors offices reopen, and next week we’re going to see more retail stores come back online. We are hoping for the best, and we plan to be around for the recovery.”