Facing Business Challenges Head On

by Autumn McGarr

Welcome to a new year, which feels a whole lot like the year before and the one before that, too! The pandemic is still roaring, but so, thankfully, is the kitchen and bath business. Designers, manufacturers, builders, contractors and trades are busier than ever. Homeowners have had ample time to see how their kitchens, bathrooms and other key spaces have come up short in the last two years and many have decided to improve them or add on to their homes. 

Here, a range of professionals weigh in on the challenges facing them as they navigate the current business environment: 

  • Houston-based designer Christopher Evans of ChristopherCharles Interiors; 
  • Los Angeles area designer and Cozy • Stylish • Chic showroom owner Jeanne Chung;
  • Winnipeg-based Macanta Design Build firm Principal Desmond Sweeney; 
  • Decorative Plumbing & Hardware Association Marketing Director Kymberly Glazer;
  • Poggenpohl U.S. President Marcia Speer;
  • ThermaSol’s Business Development Director Patrick Weidl.

Top Trends

According to an informal survey created for the Kitchen & Bath Industry Group on Facebook in November 2021, the top five challenges for the 151 professionals who responded were supply chain related (inflation, shortages, damaged shipments), contractor and trades availability, hiring, and client communications.  

Which of these issues have hit your organization? How are you coping with them? Did you, like two of the pros bulleted above, open a new showroom during the pandemic? That takes a medal-worthy level of acumen and fearlessness. 

A Tale of Two Showrooms

The New York and Los Angeles metro areas are challenging business environments in the best of times. It’s fair to say that 2021 was nowhere near close to being best. The normal difficulties of operating in these big cities – like dealing with permitting offices and high costs – were magnified by COVID-19. Nonetheless, Chung and Speer forged ahead with their long-held plans to expand into handsome new spaces. Both will serve industry colleagues and homeowner clients. 

“We’ve had our retail and to-the-trade furniture showroom in the same location for five years,” shares Chung, “but three years ago we embarked on a journey to add a coworking space for interior designers.” Her Pasadena space was supposed to open in late 2019, but unexpected delays – both COVID-related and not – pushed it back to late 2021. 

Jeanne Chung’s new Pasadena, California showroom was delayed by COVID and non-pandemic hurdles. Photo: Jeanne Chung, Cozy • Stylish • Chic / Photographer: Dylan J Riley

“Initially, the pandemic helped us get our building permit through faster as the city wanted to clear everything out immediately. But then going back for revisions to our building permit proved to be challenging, as the city plan checkers were working remotely and it was impossible to talk to someone in person about the issues we were having.” It was one hurdle after another, Chung declared.  

Poggenpohl’s original plan was to open its flagship Soho, New York showroom in February 2020. The new space for the industry and homeowners finally opened in September 2021, Speer reports. Construction wasn’t the big challenge, she recalls: “The showroom was complete but closed for business and we had to wait over a year to initiate any marketing exposure.” 

The region wasn’t thinking about remodeling as COVID-19 began its initial American surge across its populations, so opening then didn’t make sense. “New York was one of the hardest-hit cities,” she notes. The upscale Soho neighborhood chosen for the new retail site was also impacted months later by vandalism and theft in the aftermath of George Floyd’s murder. “It was a time of so much uncertainty,” Speer observes.

In addition to the difficulties of opening new showrooms in this difficult environment, Chung and Speer both faced the same challenges as other business owners. 

Supply Chain Challenges

This one has been far-reaching, impacting designers, retailers and manufacturers. “Supply chain disruptions are severely affecting our industry, from not being able to get chips for intelligent toilets to the cost of cardboard going up 60 percent,” DPHA’s Glazer says about her association’s manufacturing members. “It’s been brutal.” Supply chain issues for factories have led to product delays for retailers and end users. “It’s hard to manage expectations when no one knows when things will actually correct themselves,” Glazer comments.  

Brizo and its parent company, Delta Faucet, were case studies in effective client communication during supply chain interruptions. Photo: Brizo

Delta Faucet Company and its upscale Brizo brand handled the disruption in a manner fit for a Harvard Business School case study when they pulled back on new product releases with a candid note to clients last year. “I have to say, I am very impressed with how they handled this,” Glazer shares. “They came out in front, put their core business and customers first, and grabbed the bull by the horns.” Social media chatter on the announcement shows that many designers felt the same about the two DPHA members, and wish other manufacturers had been as transparent.

Sweeney doesn’t expect to see product challenges for his projects resolving any time soon, the Canadian designer predicts. “I suspect that we’re still a year or two away from normal, however that is defined.  The world does seem, slowly, to be adjusting, and the shortage of raw materials [and] manufacturing will eventually catch up to the backlogs,” he anticipates. 

Sourcing most of its components domestically has helped ThermaSol avoid many supply chain challenges.
Photo: ThermaSol

Weidl shares that the majority of ThermaSol’s parts come from U.S.-based partners, which has helped them avoid the shipping nightmares many other manufacturers have had to contend with, “the exception being a few of our more advanced control screen components, which we do source overseas.” Like other companies impacted by widespread chip shortages, these have experienced lead time extensions, he reports. 

Houston-based Evans doesn’t expect his product issues to end this year, either. “I don’t anticipate relief until Spring 2023,” he asserts. Shipping times and damaged products have also challenged his firm (and many others). “I think the challenge for 2022 will be potential clients looking to big box stores or online retailers that can provide immediate stock and quick delivery.” 

Products arriving damaged is unfortunately quite widespread. “This is happening all over the place and in every industry,” Glazer comments. For those designers waiting on their order to come in, that fact isn’t comforting. 

Add inflation to delays and damage for a terrible trifecta. “Every week we receive multiple emails from vendors that there is a price increase. It has become challenging to keep up with it,” laments Chung.” By the time a client approves an item, there may be a price increase or it may be out of stock or discontinued.”

Personnel Challenges

Once your products finally arrive in good condition, you need people to deliver and install them, coordinate with homeowners and trades, and resolve issues. Speer lost staff as team members moved out of the New York area or were hesitant to take public transportation before vaccines were available, she says. (She’s now back to full staffing, she reports.) 

Like so many other design pros, her Poggenpohl team did as much of their work as possible from home. “In order to complete our projects, we still needed to visit homes,” the retailer notes. 

ThermaSol executive Weidl has also seen his team adapt. “We are still working with somewhat of a ‘hybrid situation,’ allowing employees to work from home if they need to,” he reports. “We feel very lucky that we have very little staffing challenges,” he comments. 

Other kitchen and bath organizations have been harder hit, DPHA executive Glazer comments. “Showrooms are busier than they have ever been, which is fantastic. However, the staffing shortages you hear about across the country are severely impacting showrooms and manufacturers alike. One of our members said that they are having trouble finding people to work in their factory in North Carolina – even with a significant signing bonus.” Unlike designers, they can’t do their work remotely. “When showrooms opened back up after the shutdown, several of our dealer members found it hard to retain their staff due to fear or a shift in life priorities that has affected all industries,” the association executive observes.

Skilled labor shortages are especially acute, both in the U.S. and Canada. “Given the tremendous demand, there aren’t many in our industry out of work,” Sweeney comments. “There’s massive demand for skilled tradespersons in our city, which has become more of a problem during the pandemic with so many renovation projects being requested by clients.” He cites carpenters as the greatest shortage. 

“The toughest trades to hire and retain have been quality trades,” Evans stresses, blaming the shortage for firms like his to larger-scale projects. “The pool has been dismal!” This has impacted completion times, he says. “My project’s lead times have been impacted greatly by the decision to wait for the availability of the best-suited trades for a project.”

Client Challenges

Which brings us to another widely reported business challenge: Managing client expectations and communications. “It’s been difficult sharing our shipping delays,” Poggenpohl’s Speer shares, “but everyone seems to understand as the entire world is experiencing delays for home improvement products.” Her team’s approach has been staying in close contact and giving clients weekly status reports. “They appreciate our transparency,” she notes. 

Considering that clients have access to a range of other options, “it will be our responsibility to espouse the value of our full design services and the importance of design completed from beginning to end by a dedicated, qualified and committed interior designer,” Evans suggests. 

Last Words

If you’ve been dealing with these business challenges, you’re certainly not alone, and it’s probably ‘not you.’ At the same time, challenges provide the opportunity for improvement and innovation. “Prior to COVID, we never engaged in designing remotely,” Chung says. “However, we quickly adapted. Since the start of COVID, we successfully completed a vacation property in Tiburon (California) and have projects in New York and Maryland in the works.”

Sweeney offers these words of wisdom: “We’re heavily focused on improving our process – our differentiating factor. Even supply chain issues can often be mitigated by a change to how we plan,” he says. The design-build owner is projecting growth in 2022. “This will test our current processes and force us to evolve. I’m told more companies die from indigestion than starvation, and I intend to be around for a long time yet.” That’s quite a fulfilling plan, don’t you think?

 

Jamie Gold, CKD, CAPS, MCCWC is an award-winning author, wellness design consultant and industry speaker. Her third book, Wellness by Design (Simon & Schuster), published September 2020. You can learn more about her Wellness Market presentations, books, Wellness Wednesdays Clubhouse conversations and consulting services at jamiegold.net.

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