MONTREAL – BMTC Group reported a record high sales and earnings for the first quarter of its new fiscal year and then cautioned shareholders its financial performance for balance of the year will be complicated by several factors, including the Canadian Border Services Agency’s (CBSA) recent decision to impost anti-dumping duties on imports of motion furniture and leather stationary upholstery from the People’s Republic of China.

For the three months ending April 30, 2021, the company had sales of $177.2 million, a 76% increase from the $100.4 million for the corresponding period last year.

BMTC Group shifted its fiscal year end from December 31 to January 31 in 2018. Its current fiscal year will end on January 31, 2022.

Net earnings for the period were $10.5 million or 31 cents per share, reversing the loss of $12.4 million or 36 cents per share recorded for the corresponding period a year ago.

“The company recorded one of the highest revenues in its history,” management told shareholders in its quarterly report. “This is partly due to improvements in marketing and strategic measures, our extensive store network and the strength of our digital platforms, which have enabled the company to increase its market share.

“On the other hand, management is aware that this increase is also partly due to the fact that it has benefited from a transfer of consumer spending related to the restrictions imposed by the various levels of government due to the COVID-19 pandemic, more precisely the restrictions related to travel, the closure of restaurants and all of entertainment in the cultural and sporting world.”

Earnings were bolstered by two external factors. The company’s current share re-purchase program added one cent per share while the Canadian Emergency Wage Subsidy added $1.2 million or four cents per share.

BMTC also announced that its Brault & Martineau store located on the boulevard Le Corbusier in the Montreal suburb of Laval will close in December 2021. The company has signed a partnership agreement that will see a real estate development firm construct several residential rental towers on the site. Construction is expected to begin next January.

Management noted the current store network should be able to cover this part of the city and should not have any negative impact on overall sales.

“The company is faced today with two major problems,” BMTC president and chief executive officer Marie-Berthe Des Groseillers said in her note to shareholders.

The first is the CBSA tariff on motion furniture and leather stationary upholstery imported from the PRC and Vietnam. She noted they were levied on May 5, 2021 “while not allowing any grace periods for orders in production or for products already in transit to Canada, which can take up to three or four months to reach out ports.

Des Groseillers noted most of these goods have already been sold to customers. “It is not possible for the company to add these new tariffs to the price tags of these products since it increases by more than four times the price initially paid by our customers. The company will therefore incur significant losses on the sale of these products in order to honor existing contracts with our customers.”

While the retailer was able to cancel some of the orders subject to the tariff with some of its suppliers, some of those had already been sold to a customer, producing the second problem. “If the company is unable to replace it with a similar product at a reasonable price, those sales will need to be canceled,” she said adding, “as a result, the company could be subject to a slew of customers cancelling orders.”

However, Des Groseillers acknowledged complaints about unfairly priced product from the PRC and Vietnam has been long simmering, but the tariff levels imposed were somewhat of a surprise.

“Everyone in the industry was expecting tariffs in the range of 10% to 20%, similar to what the U.S. recently implemented,” she said, not the 17% to 296% range the CBSA laid down. “The tariffs imposed so far are preliminary, which means they can be raised, lowered or removed altogether when the government finishes its investigation into the matter later this summer.”

At the end of April, the publicly held BMTC Group operated some 32 under three banners, all in Quebec including Brault & Martineau and Economax – in the Greater Montreal Area – and Ameublesments Tanguay, which is centred in Quebec City. 

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BRIGHTON, Ontario – COVID-19 has been a life altering event. This is now old news but almost everyone agrees it has contained a multitude of teachable moments. So, HGO approached eight influential independent furniture, mattress and appliance retailers and asked them to share what they’ve learned. They all seem to agree that either despite or because of it, this tragedy has made better human beings and better business people.

Each week for the next four, one of these responses will be highlighted in this space. To read the entire report, check out the Spring 2021 edition of the HGO Merchandiser by clicking here.

I want to thank each of these energetic and thoughtful industry leaders for taking the time to consider the questions and respond fully. Aside from some minor editing to ensure clarity, their answers are presented as submitted.

Scott Reid, President/Owner
Reid's Furniture; Thunder Bay, Ontario

What have you learned from the pandemic, both as a businessperson and as a human being?

I have learned just how fragile things can be. One minute you are cruising at 30,000 feet feeling you can do no wrong, and the next you’re sitting alone behind a locked door watching customers line-up and being told you cannot let them in. Very frustrating!

I have learned the world is not fair! The big boxes can be open, the internet keeps shipping, and we are closed. Also, very frustrating!

I am, however, thankful I ended up in the furniture business. I listen to friends with hair salons and restaurants talking about this being potentially career ending as I sit here ‘inconvenienced’ while I enjoy one of the most profitable years I can remember. I keep telling myself there is a light at the end of the crazy tunnel. We just happen to be at a bend and can’t see it.

On a personal level, I have learned to really appreciate the quieter pace to life. With two young boys at home, we are not running from rink to rink, we are not eating on the go to get to our next appointment, we are simply doing what we are told, which is to ‘stay home’. With that, we are enjoying movie nights, games nights, long dog walks, and early bedtimes. All things considered I don’t hate being home.  In fact, we are renovating, cleaning and redecorating – just like our customers that are at home doing the same thing.

How has it changed your business, your approach to business and how you see its future?

I have spent my entire working life ‘controlling my inventory’ – always giving preference to suppliers that can ship quickly. During this pandemic, quick ship is anything but. Like most of my retail friends we have been loading up. The pipe is full, the product is coming.

The warehouse is ready to burst with incoming freight. The lock down is hampering our ability to get things out, so we are managing the cash and looking for any ‘spare’ space to store things. With price increases coming every day and lead times getting longer, the math tells me I need to order more, but the death stares from my warehouse manager tell me I shouldn’t.

What is the lesser of two evils? Am I better off being closed with too much inventory or open with nothing to sell? I don't know the right answer but can’t help think if retailers would just quit hoarding inventory, the factories wouldn’t be buried and things would operate like normal.

I have spent my entire working life growing. I measured growth by our sales and did things like expand hours, increase advertising, hire more people and open more stores. The pandemic forced me to cut advertising significantly, streamline the staff, reduce hours and focus on different things. Interestingly, profit went way up. If you treat every customer like she is your last, we have found more of them buy. When they buy, they are buying more stuff and more expensive stuff. We no longer have the dreaded night shift where we don’t see an ‘up’ – so now we are at home with our families enjoying a much better quality of life. The question I am asking myself is, “What do I have to do to make this the new normal?”

I only wish I knew what the future holds. If you talk to some, the world is coming to an end. If you talk to others, they are telling you we will continue to ‘drink from a fire hose’ and now is the time to expand. My gut tells me we should enjoy the ride, invest in inventory, hold onto cash and wait to see what the future brings. I fear we have only begun the ‘open and close’ yo-yo pattern of business.

What I do know is this pandemic has been hard on everyone for different reasons. Be kind, phone a friend, be a good person and help out where you can. 

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MONTREAL – BMTC Group, the largest full-line furniture retailer in Quebec and one of the four largest in Canada, has announced that all members of its board of directors were re-elected to their positions at its recent annual general meeting.

The board includes André Bérard, who serves as lead director and is a 20-year veteran of the board, Lucien Bouchard, Gabriel Castiglio, Anne-Marie Leclair, Yves Des Groseillers, Charles Des Groseillers, Marie-Berthe Des Groseillers and Tony Fionda.

Yves Des Groseilliers has been on the board since 1989 and currently serves as chairman. He is also BMTC’s largest shareholder, controlling some 21.3 million or 63% of the company’s outstanding shares.

Charles Des Groseillers, who has been a director since 2002, is vice president of A. Bélanger (Détail), an investment firm controlled by Yves Des Groseillers.

Marie-Berthe Des Groseillers, a board member since 2005, has been president and chief executive officer of BMTC for the past three years.

Bouchard, who has been on the board since 2004 us a partner in the Montreal law firm Davies, Ward, Phillips & Vineberg. He is best known as a former premier of Quebec as well as the Leader of the Opposition in the House of Commons and a minister in the government of former Prime Minister Brian Mulroney.

Gabriel Castiglio has been a BMTC director since 2015 and is executive vice president and chief legal officer of the Montreal-based investment firm Fiera Capital.

The newest director, Anne-Marie Leclair, who was named to the position in 2018 is also a partner and vice president of strategy and innovation for LG2, a Montreal-based marketing firm.

Tony Fioda was first elected in 2012 and is senior vice president of Remstar Capital, a media investment company based in Montreal.

The second largest shareholder BMTC is Fidelity Management & Research Company, an investment firm based in Boston, Massachusetts. It controls 6.3 million or just over 18% of the company’s outstanding shares.

MONTREAL – Online bedding specialist Polysleep has added what it describes as a custom, responsive store locator to its web site in support of the 100-plus mainly independent brick-and-mortar retailers who carry the brand across Canada.

“The last year has been a year of constant challenges for our customers, the industry and the local market. As a leading mattress brand, we decided to team up with Wecre8websites to develop a custom app that embedded our Shopify store, Google Places, Airbnb, and multiple third-party platforms offering an exceptional experience where customers can meet our partner’ services, try our products, and support the reactivation of the local economy,” Polysleep co-founder and chief executive officer Jeremiah Curvers said in a statement.

“Our customized Polysleep store locator will allow us to expand across Canada and the U.S. to partner with over 100 local independent stores and double the number of hotels and Airbnb partners in the next 24 months,” he added.

The privately held direct-to-consumer specialist believes with a strong presence across the country and customer experience at the forefront of its values, Polysleep understands customers are still using store locators despite the advent of services such as Google Maps and other business directory apps. Three in four customers who find local information in search results helpful are more likely to visit stores. And because certain clients want to interact and try before buying a new product, around 75% do online research before heading out to a physical store.

Because it uses data sourced in real-time from Google Places and Airbnb, the Polysleep store locator gives the customer the most accurate information publicly available, such as contact information and honest third-party reviews.

In addition to standard filtering, it also includes some advanced elements enabling users to quickly filter by business type and product availability, which allows them to find what they are looking for in less time.

“The store locator feature we put together for Polysleep is essentially a custom, responsive store locator. It was built in React, embedded within a Shopify store. This tech stack allows it to be incredibly fast to load and use and scalable as more data is going to be featured over time,” said Matthew Bovey, director of sales for Wecre8websites, the Montreal-based creative agency that designed the locator. “We made sure to include an intuitive dashboard for adding and editing stores in English and French when need be. We wanted this not just to be pleasant to use for customers but also easy to maintain.”

While Polysleep sells its assortment exclusively online, the company pays a commission to local independent retailers who join its affiliate program. The retailer doesn’t have to stock the product, eliminating many warehousing and storage issues.

“Polysleep has been a natural fit for Mikaza. We focus on innovative, Canadian-made brands for home decor, and Polysleep mattresses perfectly matched our bedroom designs and opened up a whole new product line for clients,” says Mihran Zaroukian, co-owner of Mikaza, a three-unit independent with stores in Montreal and Ottawa. “As a local and relatively new furniture store brand, Polysleep's latest store locator has helped us tremendously to put us on the map. Many Polysleep clients are also in the market for other home furnishings, so this has been a relevant traffic driver for us.” 

To learn more about Polysleep’s affiliate program, visit https://polysleep.ca/pages/wholesale. 

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