Gardiners’ online model offers brands ‘virtual distribution’ through e-commerce, including its own business-to-consumer websites, with products sent direct from its warehouses to consumers.
In the first phase of lockdown, this element of the business performed reasonably well. However, that was eclipsed by the abrupt decline of Gardiner’s traditional wholesale model: its revenue dropped by 80% in April 2020.
While competitors furloughed employees, Gardiner’s top team monitored the situation in daily virtual board meetings – and held its nerve.
“By calmly listening before making decisions, and holding off kneejerk reactions, you come to a far better medium-term view,” says James. “We were able to do that because of our financial strength, which gave us the ability to deal with fluctuations.
“HSBC were exceptionally supportive right from the start, really taking the time to discuss different scenarios and potential solutions.”
The business took advantage of a three-year business interruption loan, enabling it to manage cashflow despite an unexpected load of unsold stock.
Shifts in practice
Over the weeks that followed, a gradual acceleration in online sales vindicated the board’s decision to avoid furloughing staff.
Several omni-channel retailers began to see the value of Gardiners’ virtual distribution model in the lockdown environment. New agreements were signed with both retailers and brands.
Gardiners’ sales team pivoted from traditional sales to persuading and explaining the online service to potential clients. And tech employees had to work fast to carry out web integrations with these new partners.
Buying practices changed too. “Rather than buying as a wholesaler, our buyers had to think through the eyes of a retailer, since we were now seeing demand driven directly from consumers,” James explains.
“It was also important to manage relationships with suppliers, because we had to delay orders for brands that were not doing well online, and request faster stock for high-performing brands.
“Meanwhile, the warehouse teams had to pick and individually pack items for dispatch to consumers – again, a very different process from traditional wholesale.”