One New York-based, direct-to-consumer brand has initiated open dialogue with its consumers about a loss of revenue and furloughs resulting from the coronavirus.
Jewelry brand Catbird posted a letter from its founder Rony Vardi on Instagram last week saying that the company had no choice but to furlough a majority of its employees. “This is the most difficult moment this business, built with such care and love, has ever faced. We have held out for as long as possible, but we have no choice but to temporarily lay off a portion of our staff until we can reopen,” said the letter.
Its remarks represent a new kind of transparency in this unprecedented era — in which small businesses, facing a do-or-die moment, are appealing to consumers’ emotions with a sense of honesty about the pitfalls of the coronavirus economy. Catbird’s post received nearly 11,000 likes, more than 500 comments and resulted in “hours” of direct messaging with customers and fans offering their support, according to Catbird co-creative director Leigh Plessner.
Speaking with WWD, Vardi said that Catbird’s two stores (one in Williamsburg, Brooklyn, the other in SoHo, Manhattan), have been closed for weeks and the company is no longer able to ship e-commerce orders because all of its production and fulfillment is based in Catbird’s Brooklyn Navy Yard headquarters, which is now closed by government mandate. This has resulted in an 80 percent dropoff in revenues over the last month. As of the fall, Catbird was shipping some 2,000 pieces of jewelry a week from its Brooklyn offices.
“It seemed like the only way to go about it was to be public-facing about it,” Vardi said of sharing Catbird’s financial troubles with its social media community. “It goes hand in hand with the very honest and authentic voice we’ve had for the last 16 years. People have been so kind and sweet, there’s been so much outreach. A lot of people are supporting small businesses right now because they know that’s what feeds many people,” she said.
“It’s been really easy to talk about something really hard publicly because there is no agenda, messaging point or story to keep straight. We are just telling people exactly what’s happening,” said Plessner.
Vardi said that the company was strategic about its furloughs, and held out until the U.S. approved a government aid package with expanded unemployment benefits. “Everyone we furlough won’t get a pay cut, with a few exceptions, so as not to disrupt people’s lives so they can stay in the city, pay their rent and we can recover,” she said, noting that furloughing in this capacity will help prevent layoffs and ensure job retention post-COVID-19. Catbird will continue to extend healthcare benefits to furloughed employees for “at least three months.”
The company is still accepting online orders that will ship once Gov. Andrew Cuomo deems it safe for New York to return to business as usual.