The whimsical and philosophical Yogi Berra says, “What’s gonna happen is gonna happen, and we won’t know till it happens.” Actually, this remarkable intellectual giant and sought-after sage is right if he’s talking about the present state of the economy. I would guess what Yogi means is face the facts, don’t sugar-coat, tough it out, and when “it happens” we’ll know it. Simple but true. He’s saying don’t waste time lamenting your predicament, contemplate your situation and go into a survival mode until “it happens.”
We are in a deep recession and we can’t change that. Industry leaders, many retailers and mill executives all have educated opinions on what’s “gonna happen.” The consensus is that the recovery will begin in the fourth quarter of this year and gain momentum through 2010, and continue until the economy is vibrant again, the housing market is stable and growing, unemployment is down to acceptable levels and the stock market is back to pre-recession positions. So, the outlook for 2009 is grim.
Consumers have altered their shopping attitudes and severely modified their spending patterns. They are not eating out as much, going to the movies less and buying only what they need—no frills.
Unfortunately, floor coverings are viewed by consumers as postponable items, and this might make some of our retailers wish they were in the grocery business. But, they shouldn’t despair nor should they rejoice, just play the hand they’re dealt. It’s refreshing when an industry executive is candid and not evasive, comforting and not self-serving. Vance Bell, CEO of Shaw Industries, and Randy Merritt, Shaw’s president, spoke about the economy at the company’s recent Flooring Network convention in Orlando, Fla., and called the shots as they saw them.
“We are in an unprecedented recession, but I see in 2009 an opportunity to bring about successful change,” said Bell. He urged the retailers to use this environment to improve so they will be stronger when things turn around. “We know what’s going on, but we’re still optimistic. Recessions happen with regularity. In the past 35 years, we’ve been through five downturns—about one in every seven years—and I’ve been through all of them. But, this is the toughest one, the most severe. This is more than a downturn, it’s a resetting. It has unique factors: the credit crunch, the housing collapse, government intervention, to name a few. On the positive side, floor coverings have been in a downturn for two-and-a-half years and we feel we’ll get out of it sooner than others.”
Merritt described business as riding your first bike. “First time on there is uncertainty and you’re shaky. But you grow used to it and get stronger, you can ride faster and longer—maybe even do a trick or two. Then come the hills. You fly down without thought—even without a helmet. Then you come to the bottom and hit the upside, which becomes very tough to climb. At times, you probably felt like you would never get to the top, but eventually you make it and you’re that much stronger and better prepared for the next time you encounter a hill. Does that remind you of your business?” he asked. “When you started, you might have been unsure of yourself… but you eventually move on to running the business and start growing by leaps and bounds. Now we’re on the uphill side and this the steepest we’ve ever had to climb.”
Merritt explained, “Before making the journey uphill, your bike should be well oiled, the tires full of air—the bike should be in shape. Having the right bike is like having the right partner. It can help you overcome the hills easier.” Of course, the advice was not commercial-free. He did say Shaw would help your bike and “give you that extra gear and burst of energy to make it over the top.” Yogi agrees: Keep your bike ready because what’s gonna happen is gonna happen. You can take that to the bank.