The jobs of 140 staff employed at Cooma-based retailer Birdsnest are secure following the Australian government’s announcement that it will provide a wage subsidy to businesses that have lost at least 30 per cent of the revenue during the COVID-19 crisis.
113,000 businesses have already registered their interest in the JobKeeper package which provides eligible businesses with a payment of $1500 per employee, per fortnight to help keep their staff on the books for the next six months.
Following the announcement of the $130 billion scheme yesterday afternoon Jane Cay founder and CEO of Birdsnest, slept peacefully for the first night since the fashion retailer began bracing for the impact of COVID-19.
“My initial response was tears of relief. Jobs are important everywhere of course, however nowhere do we feel it more than in regional areas,” Cay told Which-50.
“At Birdsnest, a family-owned business, our team is an extended part of our family and there were heartbreaking decisions in front of us due to the impact COVID-19 is having on our revenue. This subsidy is a lifeline to keep our team together at a time that we need each other more than ever, financially and emotionally.”
Cay, pictured above, is now confident that her regional business and the entire team will financially survive the crisis, and the business will be able to move from survival mode to play a role supporting the more vulnerable in their local community.
Despite yesterday’s announcement Sandradee Makejev, the founder and director of fashion retailer St Frock, wasn’t able to sleep last night because the package sounded too good to be true.
“I was anxious to meet with my CFO this morning to discuss it. COVID-19 has massively impacted our supply chain in China and our ecommerce sales evaporated overnight,” Makejev said.
“After going through the package I feel relieved and more positive about surviving the next six months. I will be able to keep more of the amazing team I have built together while we work through this difficult time.”
Nathan Huppatz, co-founder of Costumes.com.au, says his shop has suffered heavily from a drop in sales as the size of gatherings has been restricted. The package offers welcome relief for retailers who have been forced to close or seen their sales drop off a cliff as consumer spending has declined or the activity they cater for has been banned.
“From day one of this, our aim has been to keep all staff employed, which we are able to do thanks to our business position, but with a fall in sales this JobKeeper program from the government is a big help,” Huppatz said.
“It effectively helps cover a large portion of the monthly wage bill, and along with PAYG refunds and some other minor assistance should go a long way towards keeping most staff in the country employed — I hope.”
“Having enough work for your staff to do could be a separate issue, but for most businesses there are jobs people can do, even if it is different to their current day to day role. We are all working hard on new brands, new products and improving business processes and optimising procedures so that when we come out of this (eventually!) we can go back to the strong growth we had at the beginning of the year.”
Ben Hare, co-founder and COO of TinyMe says the Melbourne-based retailer has seen a significant decline in sales over the last couple of weeks corresponding to COVID-19 shutdowns.
“The JobKeeper program is going to be hugely helpful in keeping businesses alive through this economic crisis by underwriting one of their key expenses. It seems really well targeted to maintain the employment connection while providing for workers who otherwise would have to be laid off. Plus it’s just a really big stimulus for the economy, the Government hasn’t held back on this one.”
Jethro Marks, co-founder and co-CEO of TheNile.com.au noted the package will also provide relief if stronger lockdown measures, like those in New Zealand, are put in place. Across the ditch, their staff are no longer able to leave their homes to pick and pack orders from the online games and book store.
“We see the program as being an essential lifeline in the event the state or country are locked down entirely. We are very conscious that without this program it may result in having to let staff go, which we are trying to avoid as much as we can,” Marks told Which-50.
“Our New Zealand operation was shut down last week as part of their lockdown and the program there has been very helpful in ensuring our staff remain employed and ready to resume work after the lockdown finishes.”
Adapting to stronger demand
Sales haven’t slowed down at retailer Flora & Fauna, however, CEO Julie Mathers welcomed the package as well.
“We have to focus on the recovery the other side and it’s a lot easier to recover if you can keep the lights on and your team around you in these difficult times,” she told Which-50.
“The economy is suffering hugely and we cannot go into a depression so I believe this will help a lot of employees. It doesn’t necessarily help the highly paid or casuals under 12 months but it’s a really great way to keep businesses alive.”
While some non-essential retailers have had their sales evaporate, others are adapting to new ways of working to meet unprecedented levels of demand.
“We haven’t seen a negative sales impact of COVID-19 as we sell a lot of essential goods such as soap, personal care and some food,” Mathers said.
“However we have had to put new processes in place and overhaul how we run the business so we look a lot different internally to what we did a month ago. It’s a new normal for us and our priority has been the health of our team whilst still delivering a great experience.”
As well as hygiene products, groceries and alcohol sales are surging. According to CBA card data, spending on alcohol jumped once again last week, up 86 per cent for alcohol goods.
Lloyd Heinrich, CEO at The Wine Collective said his business has seen a significant uptick in demand as a result of the jump in online shopping in these challenging conditions.
“Fortunately we are on the tail end of a three-year digital transformation so we’ve had the capabilities to adapt quite quickly. For example, we are now working with Hatch, a labour exchange platform, to look at ways we can use some of the labour force that’s been put out of work by COVID-19.”