It is a given that businesses and by extension economies, perform better when there is predictability. And so business people and political leaders have surely discovered by now that 2020 is not going to deliver that for them. In fact, the novel coronavirus (COVID-19) has turned this year into one that is plagued with sleepless nights.
Barbadians from every walk of life will tell you things have been tough over the past five months and confidence that the situation will significantly improve over the rest of the year is seemingly more doubtful. Nearly half of the island’s workforce is jobless, the economy has shrunk significantly, the main foreign exchange earner is struggling to put it mildly and all the indicators suggest that every sector of the economy will come under immense pressure well into 2021.
The fact that even the best analyses cannot provide leaders with the confidence in what could possibly occur in the coming months, is making businesses large and small very nervous.
But just as individual households are trying to develop strategies to survive and operate during this period of a global pandemic, enterprises too are taking some tough decisions. The forced shutdowns have meant that even the traditional brick and mortar offices have been largely replaced by virtual operations from the dining rooms in many homes.
Since COVID-19 made its deadly appearance earlier this year, some of the biggest commercial giants have fallen. 2020 has become a literal graveyard of corporate corpses. Names like the Hertz Corporation, JC Penny, and Neiman Marcus have all filed for bankruptcy citing massive losses caused by the COVID-19 pandemic.
And so against this backdrop, it should not go unnoticed the defensive action taken by directors of the local conglomerate Cave Shepherd & Co Ltd to protect the group by moving to amputate a long-time loss-making arm.
The iconic brand which has as its brand slogan “Changing-Growing” has evolved into a dynamic corporate which no longer stands on the one-legged retail sales it started within 1906. The group is now more diversified and includes financial services operations.
This week the Cave Shepherd Group conceded that with the tourism sector on pause, very few local buyers around with the spending power to drive the sales necessary to sustain the business, the directors rightly agreed to write down nearly $40 million in losses. They agreed it was too much to bear and they could not pump more money into the struggling duty-free and retail businesses, given the high degree of uncertainty in the market.
Jobs are on the line, but the boldest of the decisions these directors said they were prepared to consider is walking away from their 40 per cent investment in Duty-Free Caribbean which operates several popular brands. This could mean giving up their interest in the group’s legacy operation – represented by the department store that has become part of Barbadian cultural and a signpost in a slowing dying City landscape.
What the decisions indicated is a determination by directors that 2020 is not the year to be ruled by sentimentality. It is a year that requires tough, decisive, informed decisions. The company has decided that an amputation is much more tolerable than a gravely ill body on life support.
And while we abhor the thought that many of the sales associates we have known and loved may be among those forced walk away from their jobs, we commend the leadership of the Cave Shepherd group for taking the tough decisions required to ensure that the company survives and is in a position to thrive again. 2020 is that kind of year. You either dominate what it throws your way or you can start writing your own obituary.