As the president of the city’s largest office equipment supplier, Bill Toutant didn’t need a reporter to fill him in on the big news Thursday from one of Ottawa’s most prominent employers.
Toutant’s company, Advanced Business Interiors, sells desks, chairs, moveable walls and other products to dozens of clients in the federal government and private industry. Among its customers is e-commerce giant Shopify, which sent tongues wagging across social media Thursday when CEO Tobi Lutke tweeted that the firm’s offices would remain closed until 2021 and many of its 5,000 employees would continue working from home permanently after the COVID-19 lockdown ends.
Needless to say, Toutant wasn’t thrilled to find out one of the biggest names on his customer list has effectively decided it likely won’t be needing his services for the foreseeable future.
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“Basically, everybody’s living in a ‘I don’t know what the hell’s gonna freakin’ happen’ mode,” he says of his industry, which has been dealt a massive blow as customers across the region have shuttered their offices and put equipment spending on hold during the COVID-19 crisis.
“All I can say to you is it’s scary.”
As the global economy slowly emerges from the grip of measures designed to curb the spread of the novel coronavirus, office equipment suppliers are left wondering how they’ll adjust to a world in which many clients have gotten used to working remotely and might decide, like Shopify, that they no longer need fancy corporate digs to operate effectively.
Toutant says revenues at ABI have plummeted 90 per cent since the pandemic began as virtually all its clients put the brakes on everything but essential spending, and the company has furloughed all but about 30 of its 120 employees. They’re still being paid 85 per cent of their salaries thanks to the federal government’s wage subsidy and a 10 per cent top-up from the company itself, but Toutant knows the federal relief won’t last forever.
Government contracts
Taking a glass-half-full approach, he says things could be worse. A wave of government contracts that flooded in just before the lockdown has given ABI enough cash flow to tide it over for the next few months. What happens beyond that, Toutant says, is anyone’s guess.
“We don’t know what people are going to do,” he says. “Getting people into your facility, which is usually how you close deals, is going to be tough. We should survive through this, but if we get a second wave (of COVID-19 infections) in September, we’re dead.”
Still, other local industry leaders say they’re optimistic the office equipment business will rebound later in the year as companies resume more traditional work habits and people begin craving a return to the more collegial office environment.
Robert Hill, a principal at Ottawa’s NUA Office, says he’s had dozens of Zoom meetings with clients, designing and architects over the past two months. Although he says people are making the best of the situation, he questions whether they’ll continue to embrace remote working technology once they’re comfortable resuming face-to-face interactions with colleagues.
“Not a whole lot of them are saying, ‘You know what? I can’t wait to work from home for the rest of my life,’” Hill says. “I think people need somewhere to collaborate and that’s going to be where the focus is.”
“Not a whole lot of (people) are saying, ‘You know what? I can’t wait to work from home for the rest of my life.’”
Although he estimates NUA’s revenues have fallen about 30 per cent since the pandemic began, Hill believes customers will be eager to reimagine their workspaces once the economy reopens. He anticipates a surge in demand for products such as moveable walls that will allow employers to quickly and effectively remodel their workspaces as they see fit.
“If everyone gets going, there’s a chance that we get a huge bounceback,” Hill says. “In my mind, there isn’t an office in Ottawa that doesn’t need to change something. There’s going to be a logjam of people that want to buy product. I think there’s lots of opportunity if we’re business-savvy and understand the trends.”
Toutant is also hoping for a bit of a bump in sales later this fall as customers look to reboot their offices with more partitions and other design elements that promote physical distancing. But he suspects just as many clients will be watching their pennies until they get a better handle on their financial situation.
“Some people are going to say, ‘Screw it, I’m not spending money and staying home until we get a vaccine,’” he says.
“It’s not going to be a ‘buy, buy, buy’ situation. It’s going to be ‘survive, survive, survive.’”
