October 2020

Every retailer will know where they were when Boris announced the closure of non- essential retail.

The next issue was creating a safe environment

for our service staff to install or repair equipment in customers’ homes. Again, the staff rose to that challenge and by prioritising jobs and customers we maintained a reasonable service level. Our biggest concern was the fear of the

unknown – how long would lockdown last, could we keep the supply chain open and would we have sufficient liquidity to see us through? In the last recession we saw trade credit insurers withdraw their umbrella of support the moment it started to rain so this was an obvious fear that drove us towards cash generation. As a result, we furloughed over half our staff

and ran stocks down. In the event, we were grateful for Government support which was timely, deep and effective. The moment trade credit insurers started to make noises, the Government offered to stand in their place and they quietened down. We have close links with Retra, which provided

advice throughout and gave us all confidence that we were doing the right thing.

Q: And how is business since reopening in June? RH: At the start of lockdown we prepared cashflow forecasts for all aspects of the business going forward to year-end. This was a valuable exercise as it made us visualise and plan for the transition from lockdown to a “new normal”. Never in our wildest dreams did we envisage such a strong transition – if we had we would not have run our stock down in the pursuit of cash. We re-opened 32 of our original 34 shops (two

closed down) over a five-week period, all of them running on reduced hours. Despite this significant reduction in hours, the

shops have held sales at last year’s levels while the web has continued to grow at over 80 per cent week-in, week-out. This is both a blessing and a curse as it seems that many customers have permanently switched to this channel, which lowers our competitors’ barriers to enter our more remote parts of the country.

Q: What was it like when you first re-opened the doors? RH: We had queues outside for probably the first time ever! We only re-opened 10 shops on the first day but they did twice the work of all 32 that day.

It seems obvious now that people would prioritise spending around their home. Our industry is enjoying its moment in the sun.

reasons why people will stay indoors, that sun will shine for us for some months to come. There was a time when we would collectively

Q: How do you think the electrical retail industry has been affected this year? RH: It seems obvious now that people who were confined to their home would prioritise spending around their home. This trend has been fuelled by money not spent on holidays, clothing or other leisure activities. Our industry is enjoying its moment in the sun and with winter adding to the

sell over 10 million TVs each year but this has nearly halved as people switched from second screens to personal mobile devices. That trend has gone fully into reverse as first Netflix, Amazon, Apple and now Disney enter the TV subscription model space with high budget content. We sold about 50 per cent more TVs both during lockdown and in the months following and with people maintaining their content subscriptions, I can see plenty of long-term upside for sales. I think our experience mirrors what is

happening elsewhere. We contribute to and monitor GfK weekly data and these positive trends are reflected across the board. Overall, I am pleased that our industry has

become a more central part in most people’s lives, giving us all a greater sense of purpose and some long-awaited profit.


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