Boss Furniture is looking to boost sales to the region in an effort to reduce the losses it has to deal with in the local market caused by the economic fallout from the novel coronavirus.
Omar Azan, CEO of the Kingston-based manufacturer of polyurethane, bedding and sofas, said a greater push is being made to export to markets in the Caribbean as a strategy to help keep his three factories open.
“We have…export orders and we are thankful for it, because that is what has been filling the gaps with the slowdown in our local economy [which] has challenged a lot of companies…and we have been able to…supply to the region, not at the margins we want to, but at least we are able to keep people working and at least keep the company going until we can get back on our feet and get over this pandemic that is taking place,” Azan remarked in a recent interview with the Jamaica Observer.
Before COVID, exports made up 15 per cent to 18 per cent of Boss’s sales. Azan said, however, with the COVID-induced economic slowdown, exports to the region now account for 12 per cent of the company’s sales. “In terms of volume…it’s not really more right now because of COVID, because every country is down. But I would say prior to COVID, we would have been doing more,” he added.
“What COVID has caused is higher cost of raw materials, a slowdown in business, a devalued currency…but with exports, you’re earning foreign exchange which helps you, so I am trying to put as much in exports as I can to try and curtail the gap in the market right now, because there’s really a bad slowdown.”
Just last week, the company sent a container of furniture to Suriname. Days before, containers were sent to Antigua and Dominica. This week, another container of furniture left Jamaica for St Lucia. The company exports to most countries in Caricom, particularly those in the Organisation of Eastern Caribbean States.
Azan told the Caribbean Business Report that the pandemic has caused Boss Furniture’s sales to dip 30 per cent, as consumers struggle to balance the daily demand for neccesities and their competing desire to purchase furniture.
“Look here, if our salaries not going up…and light bill gone up, bread gone up, sardines gone up, chicken up, everything gone up. Remember, is the same one pocket coming in to buy your furniture, your sardine, whatever it is you buy. So people are either cutting back, or they trying to find other income to make it up, or they drawing from their savings to make it up or they using their credit card to make it up.
“Our top-selling bed, which used to be a $40,000 bed — everybody loved that bed — what you find is their pockets are squeezing to even get a $20,000 bed now. We have to find ways of making it less expensive for someone to afford to buy a bed,” he said.
The increasing price of raw materials has not helped either. The cost of “chemicals up 240 per cent — not 20 per cent not 24 per cent — its up 240 per cent! Fabric up 18 per cent, plus you have to add the cost of shipping from China.
“Shipping, which we used to pay US$4,200 for, is now over US $9,000 and US$11,000….and the containers future, they can’t even tell you [what prices will be in a few months]. They say they are looking at US$14,000 or US$15,000 for September and probably US$18,000 for November/December,” he added, as he pointed out that inland freight and even the costs of screws and thread have increased.
“I buy all my lumber from Tank-Weld…there are shortages, you can’t get what you want, the sizes that you want, and the prices that we have been buying at have pretty much doubled,” he continued.
Despite the challenges, however, Azan said the company is looking past the pandemic. It is now setting up a customer showroom and design centre to lure buyers in.
“We have really gone big time into social media marketing. Our market [is made up of] retailers, hoteliers, interior decorators, jails, [hospital] institutions such as UHWI (University Hospital of the West Indies), and the export market. So what we are doing out of all of this, we’ve realised we need to have a showroom and design centre so that when things pick up…hotel owners and managers and decorators can come in and design products for their hotels and condos. They can pick the fabric, the design…and sit in a nice environment and design what they want to buy and not just something they see in a catalogue. We want to be able to curtail a lot of the imports and create more local jobs through that design centre.”
The design centre is scheduled to be completed next week and open in mid-August. It is located just across the road from Boss Furniture’s Church Street, Kingston, headquarters.
For Azan, the money to acquire and renovate the building is a lot, but he said it’s an investment he had to make. “We can’t continue with the same old…we have to try something different,” he said.