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Relief in sight? Industry reacts to stimulus package | FURNTR
Relief in sight? Industry reacts to stimulus package

Retailers, vendors like the deal’s support for individuals, businesses

HIGH POINT — The $2 trillion stimulus package approved last week by the U.S. Senate to offset the impacts of COVID-19 on American citizens and the economy was roundly welcomed by furniture companies and organizations on the retail and supply side.

Almost all who commented said the bill, which was awaiting approval at press time by the House of Representatives, gives needed support to beleaguered consumers — many on furlough or laid off — on one hand and assistance to the business community, especially small and medium-size operations on the other.

Here’s a run-down of what furnitureland had to say:

In a statement from the Home Furnishings Assn., CEO Sharron Bradley and President Jesus Capo of Miami, Fla.-based El Dorado Furniture, said the 1,400-retail member organization welcomes the relief package.

“Our members are glad for immediate help in paying for employees’ medical and family leave,” the statement said. “They are happy their employees can receive expanded unemployment benefits if it’s necessary to put them on furlough. The direct payments to most Americans will also help our employees and our customers meet their basic needs.”

HFA added that many of its members will rely on the small business lending program and hope it will be administered rapidly.

“It is essential to replace lost revenue as quickly as possible,” HFA said. It is also imperative that loan funds used for payroll, mortgage payments or rent, and utilities will be forgiven. This crisis should not leave businesses with a burden of debt once they’re able to reopen.”

HFA added that it’s pleased the bill includes the Qualified Improvement Property technical fix, which it had asked Congress to address. “This will allow full expensing of improvements that many of our members have made to their showrooms and other facilities, retroactive to 2018.”

The delay of the payroll tax is another important feature, and the employee retention tax credit may benefit some.

The most important part of the bill is the support provided to the average American with one-time direct payments of $1,200 and an expansion in unemployment benefits by $600 a week for four months, said Mark Weber, COO of Southern Motion, which also owns Fusion Furniture.

“The furniture industry and the U.S. economy as a whole is driven by consumers; making sure American consumers are able to survive this public health crisis and return to normal daily life is critical,” he said. “As Americans across the country have been mandated to shelter in place, self-quarantine, work remotely and other isolation trends, we believe the industry and our retailers will benefit with strong retail traffic once this pandemic begins to subside.”

Weber also noted that the package will help 2,000 Southern Motion/Fusion employees idled by COVID-19 bridge the gap.

“In addition, we are interested in seeing the details on corporate aid available to companies like Southern Motion Inc. and Fusion Furniture Inc. that would allow us greater flexibility in supporting our partners, suppliers, and customers through this difficult time,” he added.

“The devil is in the details but obviously a positive development,” said Andy Counts, CEO of the American Home Furnishings Alliance.

“The vast majority of the industry is classified as a small business, so the $350 billion in available funds should have a tremendous impact and keep doors open. Direct payments to consumers should also have a positive impact on consumer confidence.

“Let me add that the 500-employee cut off for small business is something that should be revisited in this crisis. We are highly labor intensive, and many companies that you would consider small eclipse this number. We will be working to see if the government has any flexibility on this issue.”

Jim Ristow, CEO of Brandsource buying group umbrella AVB Inc. said anything that can help member’s operations is good news.

“The macro figures in the stimulus package are large, and we need to fully understand the nature of the assistance and how quickly it can be made available to the members on a local level,” he said.

“We already have an online platform in place … which we will use to disseminate the details of the package as it relates to our dealers and to facilitate their aid.”

Not everyone was pleased with the bill. Lee Aaronson, CEO of Top 100 company Lacks Valley Stores in Texas, sees very little in the bill’s highlights that will help businesses like his. He said it misses the mark by not regulating the mandatory shutdowns with a pause on rent and interest payments that could force many businesses to collapse.

There’s a tax incentive for keeping workers on the payroll that could help, but Aaronson said he doesn’t believe the small business loans apply to a business like his with more than 500 employees at 11 stores.

“The bill d support for large businesses and small businesses. But midsize businesses like ours, which provide a huge portion of the employment base, were not considered,” he said. “Those businesses with loans which had to shut down are most likely in default.”

Lacks family entities own much of their real estate, he said, adding Lacks’ other landlords charging for essentially the maintenance and operating costs. But not all businesses are in this situation, and he saw nothing yet in the bill that would require a moratorium on rents or interest payments.

“Capital keeps earning money, while everything else is shut down,” he said. “In the short term, capital providers will gain, but in the long run everyone will lose, throwing us into a depression.”

“It is gigantic, and it should prove very helpful to small businesses like us and our retailers,” said Gat Caperton, CEO of Gat Creek Furniture.

“It is a huge number, and it will be good for our business and our employees, too. It is a big investment. Not everybody benefits from it, but people that work at our facility and our customers will get a good benefit from this.”

Caperton said his operation could be shut down between two to three weeks.

“As soon as retail opens back up, we will try to be open at the same time,” Caperton said. “For us, that will be the real driver. We want to be able to service our customers.”

“I am extremely encouraged that compromises d a bill that should have a positive impact on our citizens with quick cash, help small and larger businesses that could never have planned for this virus, and give the states and localities badly needed assistance,” said industry analyst Jerry Epperson.

“It also gives funds to our health givers and our first responders. It is unprecedented but needed ASAP. The home furnishings sector should be grateful for this needed support.”

Doug Bassett, president of case goods manufacturer Vaughan-Bassett Furniture, said that he believes the stimulus is a “necessary and much needed effort to provide liquidity to both individuals and companies.”

“It is just that the focus needs to be on individuals,” he said. “The more that can be done for the individual American the better.”

It was hard for him to predict, however, how much of the funds will filter down to furniture sales in the near future.

“For people the main focus is going to be providing a roof over one’s head and also food and medication,” he said. “While it is possible that a very small portion of this may filter all the way down into furniture sales, I believe the focus will be on necessities.”

The stimulus package should help retailers “big and small and the associates they employ,” according to a statement from National Retail Federation President and CEO Matthew Shay.

“Companies that were investing, growing and contributing to a vibrant economy just a few weeks ago have been thrust into survival mode through no fault of their own,” he said. “They need a bridge to get through this turbulent time and back to the business of job creation and economic prosperity for their workers and the customers they serve.”7

The small business funding element of the stimulus package, which      could make up to $350 billion available for loans to small businesses, is particularly welcome news to the bedding industry, said Ryan Trainer, president of the International Sleep Products Assn. before the bill had officially passed.

Such funding “should provide some much needed liquidity and financial assistance to many in the bedding industry,” he said.

Furniture Today Staff//Staff Editors•March 30, 2020

News Author : Erbay ŞAHİN

458 viewed times. / 30-03-2020 added.

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