COVID-19 Impact on Design Firms Dramatic
EVANSTON, IL — The COVID-19 pandemic, four months after its widespread outbreak, continues to have a dramatic impact on the kitchen and bath design trade, affecting the behavior of clients and prospects, altering the way companies operate, reducing revenue/profit projections and sparking widespread uncertainty and concern among dealers and designers.
That’s the key finding of the second in a series of surveys conducted by Kitchen & Bath Design News into the impact of the novel coronavirus on the kitchen and bath design industry. The nationwide poll, which surveyed some 200 dealers and designers, was conducted early in May, about two months after COVID-19’s outbreak and as public officials were gradually reopening the nation’s economy by relaxing previously imposed mitigation guidelines.
KBDN’s latest survey affirmed prior findings that kitchen/bath dealers and design firms, faced with unprecedented challenges tied to the coronavirus, have adopted a wide range of cost-cutting strategies aimed at blunting the impact of a public-health crisis that’s resulted in sharp revenue declines, showroom and factory closures, supply chain disruptions, employee layoffs and a rash of project cancellations due to financial uncertainties, social-distancing requirements and health-related concerns (see related Consumer Buying Trends and Editorial, Pages 10 & 5).
Specifically, more than 80% of those surveyed told KBDN that the novel coronavirus is currently having either a “significant” (57.9%) or a “moderate” (26.2%) impact on their business. Some 10% report the impact is marginal. By contrast, only 5.5% say their business has not materially been impacted (see Figure 1).
In a related finding, 89% of those surveyed reported that they’re “extremely concerned” about the impact of the pandemic on their design firm’s business over the next few months. By comparison, 69% say they’re “somewhat concerned” and only 5% say they’re “not at all concerned.”
Nearly 44% of the dealers and designers surveyed report they had laid off or furloughed employees as of early May. Another 10.5% said they planned to lay off employees in the weeks ahead, while 33.2% said they were unsure. Plans for rehiring laid-off employees were equally uncertain. For example, while 38% reported plans to rehire laid-off employees, more than 26% said that laid-off employees will likely not be rehired, and 36% said they were unsure.
The impact of the coronavirus is not expected to end any time soon, dealers and designers indicated. While some 31% of those surveyed said current business disruptions are expected to last only up to three months, nearly 41% say they anticipate disruptions to last 3-6 months, and more than 14% believe COVID-19-related disruptions will last one year or longer (see Figure 2).
- COVID-19 has had a major impact on the status of kitchen/bath remodeling projects that were in various stages of the pipeline. More than 43% of surveyed dealers and designers, for example, said homeowners – experiencing various states of health-related or economic uncertainty – had decided to temporarily halt work on one or more projects due to the impact of COVID-19. 19.5% reported that projects had been cancelled entirely. Nearly 37% said that work has been delayed (see Figure 3).
- Dealers and designers report a variety of reasons for projects being impacted. For example, 27.5% say that clients do not want design or construction personnel on jobsites, and nearly 20% say clients are concerned about jobs, personal finances and other uncertainties tied to COVID-19. Still others point to government policies and social-distancing mandates, product supply chain disruptions or the inability to access subcontractors or other labor needed (see Figure 4).
- Encouragingly, more than 69% of those surveyed said they’re developing strategies to cope with the COVID-19 pandemic, and believe that their kitchen/bath design firms will remain “viable and profitable” once the virus and mitigation strategies abate. In sharp contrast, an alarming 30% say they are unsure whether or not their businesses will survive.