Every American has been impacted one way or another by the lockdown due to COVID-19, floor covering retailers and contractors included. We invited Howard Brodsky, co-founder, chairman, and co-CEO of CCA Global Partners, to sit down with us and share his thoughts on this subject and its long-term effects if any. The following are excerpts from that conversation.

TF: The coronavirus lockdown has impacted every American, every business and just about every business function in the United States. I suspect most retailers in the country are anxious to get back to work.

Brodsky: We are and have been doing business, and I have probably not worked harder in my life than I have for the past couple of months. I think it has probably been the most hectic, the most challenging and also the most rewarding time.

TF: We saw the economy clicking along pretty well before COVID-19 hit and I have read major economies, including the U.S., are expected to lose GDP at a rate of 2.4% because of the lockdown. What is your take on how and when the economy will return?

Brodsky: I think there is a great deal of uneasiness about the how and when as it relates to the comeback. Obviously, the government has put trillions in the hands of businesses and families to help them deal with this situation, which is more than at any other time in our history. And more money I suspect is going to be added. The country has never been shut down before in our lives. Things have literally stopped for most businesses. I think when things do come back, there will be a new normal. A great number of people will not be employed when the economy reopens. Many companies will not re-hire them right away and some businesses have gone out of business. So, I think we will see a new normal, and I think nobody can be quite sure what it's going to look like.

TF: A big question appears to be with the actions consumers will take once the economy does reopens. To a major extent they are the individuals who will decide on the timing and the extent of the comeback. What is your take? 

Brodsky: I think the actions consumers take will depend on what segment of the world they are in. Certainly if you're in the travel industry, you probably have not slept a wink in weeks, and I suspect they will not sleep for many more weeks. For travel, hospitality and restaurants, I think they will be living with the new normal for a long time. I think it’s going to be very tough to be profitable for a long, long, long time. The home sector I think will be more fortunate, that is because people have been staying at home and as a result are probably more inclined to put money into their homes than before the crisis because they've been looking at them for two months. My wife may be a good indicator here. She could support a part of an economy on her own with the number of projects she has on her to-do-list in our home. But, I think the reality is that this represents an opportunity in the home sector. 

TF: What about consumers and their propensity to go back into stores? Do you think they will be reluctant to visit retail stores? 

Brodsky: I think it depends on the store. First, this could be the end of malls, literally. I think consumers are going to stay out of malls at least in the short-term, and it’s difficult to define short-term, but it could be the next six months, a year, year and a half or even more. They are going to stay out of high-density areas. The major anchors and department stores are very vulnerable in malls. JCPenney may file bankruptcy. Neiman Marcus has already filed as has J Crew. I think local retail stores have an opportunity because consumers obviously want to go back into a safe place that they can trust. But I think the local retail environment has an opportunity here. 

TF: I have talked with several retailers during this lockdown and I have been impressed by the number of innovative people out there in the industry. What are your thoughts on retail innovation that has been seen during the lockdown? 

Brodsky: We’ve been closely aligned with all of our members. We probably have had more webinars and Zoom meetings and WebEx meetings with our members than ever before. We have regional network groups in each area of the country and have had over 1,500 members attend those meetings and webinars and have also had national meetings as well. So, we have obviously been given a lot of ideas and have been sharing a great many of those idea. I think the power of a cooperative has never been more important and it has produced many creative ways to get back in business. As you know, different areas of the country have seen different conditions. Some members have literally been shut down, and as a result, we have different transition plans for these members. Our approach is that no matter where they are, we have a plan defining the opportunities, what they can do to compete, and we offer them a game plan. 

TF: Technology has really advanced dramatically during the lockdown, not only with webinars and Zoom meetings, but I have talked to a retailer that is now offering virtual showroom tours.

Brodsky: The lockdown has shown a greater need for being on the advanced end of technology with every part of the business, from room visualizers and virtual meetings to appointments in the home for in-store. I think technology is going to drive a bigger presence than we have ever seen before. And I think that's where scale becomes especially important. What I would say is that a retailer without scale is going to have a hard time competing in the new normal.

TF: Every retailer I have talked with during the lockdown has stopped advertising. Do you expect once the economy opens and retailers are free to conduct business it will become extremely competitive?

Brodsky: Well, I think it is going to be competitive. You must be back in the marketplace now and strategically be very wise where you spend your money, to ensure you are reaching the consumer at the right point in time and the right place. If you are planning to take market share, and I think this represents an opportunity to do that, you must be back in the market. And I think you are going to see retailers aggressively get back in the market.

TF: What are your thoughts on the damage this shutdown has done to the floor covering retail community? 

“You will see independence in general have a smaller share of our total industry. I feel there is no question about that.”

– Howard Brodsky

Brodsky: I think many independent retailers will be going out of business. This could be worse than when the recession hit because the impact was quicker and unexpected. Suddenly, the government shut businesses down. I think you are going to see a lot of unaffiliated independents close their doors. We have been very fortunate during the recession and we think now a great deal of the actions we have taken means that most of our stores not only remain in business, but will actually have a stronger base once we come out of this. However, I think you will see independence in general have a smaller share of our total industry. I feel there is no question about that.

TF: Manufacturers have offered extended terms during the lockdown. Any change in the relationship because of the lockdown?

Brodsky: We have a particularly good relationship with our manufacturers. Our critical relationship obviously is with our retailer because a healthy retail is going to be a good customer for a manufacturer. Discussing the Payroll Protection Plan, we were able to have 90% of our members apply within the first 24 hours. We got 85% approval and we had over $140 million go to our member within the first 14 days. That is what I would call working. We are a cooperative and because we have the scale, we're able to put our resources together to serve our members.