REBOUND-20 kicked off with a townhall led by two of our keynote speakers, Jeremy Lott, President of SanMar, and CJ Schmidt, President of Hit Promotional Products, where attendees were able to gain some insight from two of the largest suppliers in the industry on their reactions to COVID-19, thoughts about the future and get several of their burning questions answered.
While SanMar and Hit have different product offerings, both company presidents decidedly stated that they could tell the industry was in for a major disruption the night that professional sporting events were put on hold indefinitely. In fact, even in February, the idea that a slight disruption in supply from overseas might occur was only on the horizon and most North American companies hadn't yet developed a framework for combating COVID-19.
PPE has been a life-saver - no pun intended - for SanMar with the coalition formed by the U.S government made up of them and several major apparel companies to produce hundreds of millions of cloth masks for people on the front lines around the country. They have been working diligently on producing masks for over two months now with no sign of stopping. Hit has also ventured into PPE, selling the highly sought after KN95 masks from heavily-vetted manufacturers. One of their distribution centers is switching solely to the production of hand sanitizers, a product that Hit already sold. With a recent high demand they can't see falling anytime soon, it seemed like the best option moving forward.
Both companies have overcome great challenges and are still innovating with the times, but it hasn't all been smooth sailing. Jeremy and his father cut their own salaries down to $1 to help SanMar weather the storm. CJ, nor his mother, have taken a salary for the past six weeks, and as a company have cut their expenses by one-third to maintain a strong financial position. Hit also has a very strong inventory position at the moment, but supply chain challenges could become a reality next year depending on what the rest of 2020 has in store.
Looking ahead, there's no way to know for certain what next week, let alone six months from now holds. While forecasting is nearly impossible at this time, both SanMar and Hit have developed multiple strategic scenarios for the rest of the year and into the spring of 2021. They have have embraced challenges, taken advantage of new opportunities and created their own playbooks for whatever is to come.
We are looking forward to more thoughtful insights and innovative ideas over the next few weeks of REBOUND-20 from more industry keynote speakers such as David Nicholson, President of PCNA, Jonathan Isaacson, Chairman and CEO of Gemline, and Chuck Fandos, Chief Strategy Officer of The Pebble Group, to name a few.