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SCC posts record high sales and earnings for 2021 first quarter

11 May 2021
By the Numbers, Mattresses, Retail

TORONTO – Sales from its various e-commerce platforms drove first quarter revenues for Sleep Country Canada Holdings (SCC) to a new record high, the publicly held bedding specialist told shareholders this week. The results are more than outstanding when it’s considered the chain’s brick-and-mortar stores were closed for an average of 30 of 91 business days making up the opening three months of 2021.

Revenue for the three months ending March 31, 2021 were $183.0 million, 20.7% higher than the $151.6 million rung-up for the same period of 2020. Same store sales improved 19.6% despite being closed for roughly 33% of its normal operating days.

The company also noted e-commerce represented 29.3% of revenue for the first quarter – approximately $53.6 million. That’s more than double the estimate of $24.1 million for the same period last year. Both of SCC’s brick-and-mortar banners – Sleep Country and Dormez-vous – have their own e-commerce platforms and the retailer is also the owner and operated of Endy, believed to be the country’s largest online mattress merchant.

Sleep Country Canada Holdings reported record sales and earnings for the first three month of 2021 while serving some 175,000 customers and receiving 30 million impressions during a brand activation campaign. Mattress sales for the first quarter were $145.2 million, up 19.0% from the $122.0 million for the comparable period. Accessories accounted for $37.8 million, an uptick of 27.7% over the $29.6 million sold last year.

During the first quarter, SCC opened two new stores both under the Sleep Country banner – one in Fort Saskatchewan, Alberta and the other in Collingwood, Ontario. This brought its total store count to 283 across the country.

Net income for the first quarter was $8.7 million or 24 cents per basic share, compared to $5.0 million or 14 cents per basic share – a rocket-fueled leap of 74.1% on a per share basis.

“This quarter again demonstrated the power and efficacy of our strategy in delivering sustained, profitable growth and serving Canadians’ sleep needs, as illustrated by our impressive increases in revenue and net income,” SCC chief executive officer Dave Friesema said in a statement.

In his report to shareholders, Freisema said that during the first quarter the company served over 175,000 customers and received some 30 million social impressions during a brand activation campaign as part of this year’s World Sleep Day. 

Related Story: Company veteran Schaefer named president of Sleep Country

Related Story: SCC completes Endy acquisition with performance pay

 

Duty imposed on motion and leather imports from PRC

6 May 2021
By the Numbers, Furniture, Manufacturing

OTTAWA – Imports of motion and leather upholstery from Vietnam and the People’s Republic of China (PRC) will now be subject to duties ranging from 101.5% to 295.9% respectively after the Canadian International Trade Tribunal (CITT) issued a preliminary determination that those products were being illegally dumped into the Canadian market.

The new tariff regime was imposed effective May 5, 2021 and could be levied against imports from those two countries that were valued at some $675 million last year.

In a statement, the CITT said it found a “reasonable indication” that the dumping of these categories of upholstery by producers in the PRC and Vietnam have or is threatening to damage this country’s domestic furniture manufacturers. The agency will continue its investigation and is expected to issue a final determination on September 3, 2021.

Anti-dumping duties of between 101% and 295% have been imposed on shipments of motion and leather furniture imported into Canada from the People’s Republic of China and Vietnam. The Canadian Border Services Agency (CBSA) launched an investigation this past December based on a complaint filed by five Canadian upholstery makers, including Palliser Furniture and its sister company EQ3 of Winnipeg as well as Elran Furniture, Jaymar and Fornirama, all based in Montreal. The agency is expected to publish a ‘statement of reasons’ for upholding the complaint and recommending the duties sometime over the next two weeks.

Made under the Special Imports Measures Act (SIMA), the complaint the Canadian manufacturers are seeking protection “from large volumes of unfairly dumped and subsidized goods from China and Vietnam.”

Under SIMA, importers are required to declare their company’s liability for provisional duties and taxes on any subject goods imported into Canada. They also must inform their customs broker if they are importing goods subject to those provisional duties, then declare them and pay the duties. Importers needing more information or needing a self-assessment should click here.

While the maximum duty on goods from the PRC is 295.9%, some 28 or so producers from that country will be subject to somewhat smaller levies. For example, product from Natuzzi China will be subject to a tariff of 207.49%. Similarly, seven producers from Vietnam will be subject to tariffs less than the maximum rate of 101.5%. Click here to see the complete list of these companies.

Related Story: CBSA to investigate leather furniture dumping

Related Story: RCC to fight anti-dumping tariffs on leather and motion furniture

 

All roads lead to the internet: Yost tells members in address

3 May 2021
Events, Retail

SASKATOON – To date, Mega Group hasn’t lost a single member because of the economic fall-out from the global COVID-19 pandemic, president and chief executive officer Kim Yost told the members of the co-operatively owned buying group during their recently ended virtual conference.

“In those early weeks of dealing with the COVID-19 challenge and crisis we created a four-phase strategy; survive, recover, sustain, and then ultimately grow,” he told them in his presentation. “One of the biggest declarations that came out of our COVID-19 mission statement was this: No member would be left behind.

“And I’m pleased to say to you that not only through 2020 but here today in 2021, we at Mega have not lost one member because of COVID-19,” Yost reported.

He noted furniture, mattress and appliances retailers gained a significant share of wallet with the government-imposed ban on international travel. “Our consumers were staying home, creating things like staycations and focusing on their kitchens and home renovations,” he said, adding, “This share of wallet in our favour helped fuel a big part of our success throughout the calendar year of 2020.”

Now that the drive to vaccinate the Canadian population has begun, the time has come to start planning for the post-pandemic market, one where the consumer will be traveling again and other previously dormant competitive pressures will return.

“The supply chain will continue to be our greatest challenge in continuing to manufacture sales,” Yost said, noting replenishment lead times from suppliers have been lengthening across all product categories in recent months. “We at Mega are working with or key suppliers to overcome these challenges. We just launched our new Mega Selling Guide with the objective of giving our members an up-to-date directory of our key suppliers.”

Kim Yost, president and CEO of Mega Group, the Saskatoon-based co-operatively owned buying group.He also said Mega is preparing a response should the Canadian International Trade Tribunal impose anti-dumping tariffs on motion and leather upholstery imported from Vietnam and the People’s Republic of China. “Details are still to come out but we at Mega are getting ready for this major disruption,” he said.

The group will launch several initiatives as 2021 unfolds including the launch of several new communication tools designed to keep information flowing from the group to both members and vendors.

Among these is a new series of regional meeting for members to be held each quarter; a new monthly newsletter; and quarterly performance group meetings.

Yost said the group’s most important project in 2021 will be the roll out of the Alta 360 web platform, that was first develop and implement by the U.S. buying group, AVB Brandsource. Part of what Mega calls the Alta Advantage, designed to improve its members’ web presence while providing greater point-of-sale integration, enhanced digital marketing, e-commerce capabilities and real-time lead generation. Currently, some 100 members have converted to platform.

The group will also unveil a new web site in the near future.

“All roads lead to the internet,” Yost told his members, adding there is plenty for independent furniture, mattress and appliance retailers to be optimistic about in the months and years ahead. “There is some optimism with the roll-out of vaccines and the constant reminder to adhere to safety protocols, both personally and professionally. All those things are contributing to the end of this virus and we can see the light at the end of the tunnel.” 

Related Story: Kozan retires as Mega elects Shelly Gale and others to board

Related Story: Mega launches Selling Guide

PrimeTime stressed all things digital to CNW members

3 May 2021
Events, Retail

MONTREAL – Members of Cantrex Nationwide (CNW) recently took part in the second virtual PrimeTime, the conference and trade event organised by its parent company, Nationwide Marketing Group.

In a statement, CNW said more than 2,500 attendees from across Canada and the United Starts logged into the virtual PrimeTime platform for at least some portion of the three-day virtual event, which was held from March 16 to 18. Detail on how attendees there were from Canada were not provided.

During the event, CNW senior management took the opportunity to provide members with an overview of the global and Canadian economic outlook, to highlight several of the major trends shaping their retail environment and give an update on the state of the organization and its various categories – which ranges from electronics and appliances to furniture, floor coverings, photography and mattresses.

The welcome lobby to this past spring’s Cantex PrimeTime, which was held in collaboration with the event held by its parent, Nationwide Marketing Group.“Cantrex independent retailers have consistently shown how agile they are in reacting to the measures put in place during the pandemic as consumer spending spiked for household, entertainment and outdoor products in addition to a marked shift to a ‘buy local’ mindset,” the group said in a statement.

Members attended free webinars throughout the year on strategies to increase their online presence and a successful ‘think local, shop local, buy local’ awareness campaign on social media was initiated by Cantrex to support independent retailers during the 2020 holiday season.

“It is almost certain that the investment made in digital marketing will continue to pay off for retailers as a strong awareness will benefit both online and physical locations in both the short and long term,” they continued.

“Cantrex will continue its focus on growing their members online presence in 2021 and ensure they have a strong omnichannel solution in place to create an integrated customer experience,” the group added.

During the PrimeTime event, Patrick Tam of Google and NMG vice president of marketing Rob White hosted a session on how understanding and winning over the digital shopper has a huge impact on the independent retailer’s growth potential.

Bridget Brennan, a leading expert on the women’s growth market, provided insights on the increasingly important market of women shoppers and shared strategies and best practices retailers can use to increase their competitive edge, several of which retailers could put in place almost immediately.

“On the supply chain side, Cantrex continues to work relentlessly with its major vendor partners to ensure a smooth and timely flow of inventory to fulfill both back orders and new orders in member stores,” the organization said. “Cantrex will continue to enhance and expand its exclusive programs in 2021 giving members the competitive advantage in their markets.”

While virtual events have allowed retailers, vendors and other industry professional connected, CNW senior management acknowledged many throughout the industry are anxious to return to in-person events when its possible to meet again. NMG is expected to return to an in-person format for its next PrimeTime event in Nashville, Tennessee, scheduled for August 15 to 18, 2021.

CNW will return to the in-person format in 2022 and will hold a vital event for its members this fall. Details about Cantrex PrimeTime will be available over the coming months.

Related Story: CNW to host virtual appliance service leader conference

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Home Goods Online.ca and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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