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The good, the bad and the contracts

Gerald Arding of Arding Marketing talks to Blinds & Shutters about the ups and downs of the past year. Has it been as bad as many think?

“Well, the forecast was for meltdown in the UK economy,  we were heading for a full blown recession, house prices would tumble by  20–30 per cent and unemployment would rocket. And this was the optimistic view point.

Exactly how has the window blind industry in the UK fared so far this year?

Yes there has been an appreciable reduction in business throughout the industry this year,  no doubts here. In general 10–15 per cent would seem to be the figures most feel has been the year-on-year reduction. It's perhaps not surprising that these figures are true for both retail and trade. As always though, it is very difficult to generalise as where some specific markets like conservatories have found pressures on sales even greater, the contract market in general has done much better with most manufacturers in this field still talking in bullish terms about full order books and some good contracts going forward into next year.

This is being achieved without cutting prices and doing deals.

However in general, in times of difficult trading there is a need to promote and offer a better deal than your competitiors. Most companies will continue to spend or possibly increase their budget spend in areas like sales, marketing and advertising. From a manufacturing point of view efficiencies, yield loss, utilisation of labour all come under the microscope and quite possibly attract more expenditure in the knowledge a gain will be made in the future. The quicker the pay back, the better of course.

Many companies are luckily not short of money.  Prudent investment in the better times has meant a comfortable buffer now and these investments are not painful to make. The decisions after some comfortable years of relatively easy performance might well be more difficult, however. Even companies suffering reductions in turnover without large cash holdings are not necessarily looking at serious cash flow problems and imminent bankrupcy. Liquidity whilst tightening up a little can still be prudently managed and there is a reasonable amount of business around to keep most companies managing a reasonable performance with a profitable operation. Yes, there have been more liquidations than we have seen in preceeding years but then there will always be casualties when an industry slows down.

We have seen in difficult times before that consumer demand for smaller furnishing items like window blinds have proved highly resilient in times of economic stress. As never before, the fashion element for window products will continue to have a major effect on sales. Even if house prices drop and sales of houses decrease, there will still be a hungry need for people staying put to give their homes and dwellings a little TLC as the clocks change, the evenings get darker earlier and the need to enjoy ones life inside as opposed to the garden returns. No matter what happens,  Christmas Day will take place on the 25th of December and we all want our houses to look their very best and preferably as stylish as possible.

A tightly run ship is always a good thing and the present situation has focused us all in this direction.   What then of the next 12 months? I was going to call a banker friend for advice but then remebered who it was that seems to have been a major cause of the current woes. The call never happened.   More of the same we all seem to think and whilst we grapple with global problems be they economic or political, globalisation will have its say.  Nearer to home,  the performance of sterling will have an effect whilst the housing market and availability of money will certainly effect the amount of money in easy circulation.

Fundamental to all economies is the level of confidence and whilst this has been dented, there is still an ability for people to spend. What they want now, more so than for a long time is to see a benefit – possibly a saving possibly a quicker delivery, perhaps just longer credit than we have seen before. All are possible in todays climate.

At the same time perhaps next year will be a better year for weather and nobody has suggested that when the economy is difficult we suffer more atlantic depressions than usual – other types of depression prehaps.

At the same time, even though some poeple might think it highly inappropriate and vulgar,  certain sections of our community seem to continue to pay themselves huge pay increases and bonuses (mostly just before they are sacked for poor performance) and whilst this continues, this will ensure there are many people about  capable of buying many window blinds. We can also relax happy in the knowlegde that the Olympic jamboree moves to London in four short years – always a good one for the economy of the host nation and to make matters even better,  we have a new England Football manager!

Happy Christmas and a reasonably prosperous 2009.”

  • Arding Marketing T: 01342 713923
 

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