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Published: 3 august 2020 17:41

No job cuts at Kauno Baldai despite pandemic impacting on sales

„Kauno baldai“ gamyba
SBA nuotr. / Production line at the „Kauno baldai“

Sales revenues at Kauno Baldai, the largest upholstered furniture manufacturer in the Baltic states and managed by SBA, approached EUR 9 million in the first half of this year. This is 13% below last year’s record when the company achieved EUR 10.4m in the same period.

The half-year results with lower furniture sales were mainly influenced by restrictions imposed during the coronavirus pandemic. Despite declining business volumes, the company has preserved jobs and has no plans to reduce its workforce.

"In the second quarter of the year, retail trade came to a halt in the majority of Kauno Baldai export markets, except for Sweden and the Netherlands, where stores never closed. Now we are chasing lost time. Currently, our business in furniture has already returned to pre-pandemic levels in Germany, Benelux, Scandinavia and our production lines are operating at full capacity. Although there is a perception of a second wave of coronavirus in the markets, we are focused on weathering the possible worsening of the pandemic as smoothly as possible," says Tomas Mauricas, head of SBA Kauno Baldai.

According to Mr Mauricas, during the peak of quarantine in the second quarter of this year, Kauno Baldai sales volumes reached EUR 3.8m, some 30% below last year when the company achieved a sales value of EUR 5.4m. The company's results were impacted by having to suspend production for several weeks in April due to quarantine. Even after a significant drop in sales, Kauno Baldai has kept on all employees. The company currently employs 350 people, maintaining levels since the start of this year.

"Despite the difficult year, we are determined to preserve all jobs and have brought together a competent and motivated team, which already is and certainly will be an critical aspect for further growth. When the pandemic recedes, we will be prepared for a rebound," says Mr Mauricas.

Coronavirus has also altered the blueprint of the Kauno Baldai customer-base - potential new buyers postponed their buy decisions until autumn, with some customers the volumes of purchased products were reviewed and we also lost a few customers. So Kauno Baldai is currently poised to take advantage of the situation to win new customers, as the coronavirus has encouraged European furniture retailers to review supply chains and search for new manufacturers closer to home. If no coronavirus restrictions are imposed in Europe in autumn the company intends to look once again for new contacts at international furniture exhibitions.

Recently, Kauno Baldai has enjoyed double-digit growth. One of the main reasons for this lies in the strategic decision taken a few years ago to create their own furniture collections. Currently, the furniture designed by the Kaunas-based workforce accounts for about 75% of products sold. Sales are also growing rapidly in the new German market.

Kauno Baldai sales revenues in 2019 were EUR 20.5m. The company exports 100 per cent of production to Western Europe.

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