Retail Stars Are Coping Four Years Since Pandemic Impact

December 27, 2023  by HFBusiness Staff in Business Strategy, Industry   

According to an article in the Wall Street Journal, the retailers that were “buoyed by bored, homebound, cash-rich consumers and cheap financing” bear the beginning of the pandemic, including Peloton, Carvana, Chewy and furnishings retailer, Wayfair.

These companies enjoyed the advantage of selling pandemic ‘necessities,’ like stationary bikes, used cars, pet food online and furniture.

Each business has had to take their own path to stem the tides of “coping with the comedown…(from) belt tightening and, in some cases, financial engineering.”

“Online furniture marketplace Wayfair has said it plans to cut more than $1 billion of costs, a large part of which was from laying off 10% of its employees. It also improved its own logistics network—through better delivery speed and competitive pricing—to get its suppliers to use it more.”

“That, along with vendor-funded promotions, has helped support Wayfair’s gross margins, according to Seth Basham, equity analyst at Wedbush Securities. Wall Street expects the company to turn free cash flow positive on an annual basis starting next year.”

Of all of these companies, Chewy has been the least effected by dramatic downsizing. The company is actually projected on a growth path, however, there is still a slow down due to pet adoptions falling and market value having “shrunk by about 80% from its peak ats investors fret about its flatlining active customer count.”

Several things to be considered, according to the article include whether “the pandemic ha(s) merely pulled forward demand or artificially created demand for their product.” Also, if the demand was pulled forward, “is it worth thinking about what the replenishment cycle is?” This is noted by Simeon Siegel, equity analyst at BMO Capital Markets.

Pet toys and leashes by Chewy need to be replaced far more frequently than a couch from Wayfair or an exercise bike from Peloton.

One more consideration for e-commerce only companies is that brick and mortar stores are also getting better at e-commerce. There are all thoughts to ponder as we head into a brand new year, post-pandemic. Happy 2024!

ANDMORE℠ is hosting some 23 buying groups for education and networking this Winter at its Atlanta Market (January 16-22, 2024, at AmericasMart Atlanta) and Las Vegas Market (January 28 – February 1, 2024, at World Market Center Las Vegas), with four new industry partnership initiatives launching for 2024, in addition to recurring onsite activities for member-based organizations. 

“ANDMORE is excited to welcome several new and returning industry partner organizations to the Atlanta and Las Vegas Markets for another season of industry connections and community,” said Karen Olson, ANDMORE executive vice president, chief marketing officer. “These partner-hosted activities offer members and non-members alike face-to-face connection with influential industry organizations and buying groups, making Market week the perfect opportunity to meet, learn and network all in one location.”