SOS temporarily halts student notebook production, summer restart expected
Stationery & Office Supplies Limited, SOS, has temporarily halted the production of exercise books or notebooks amid a fallout in sales from the switch from classroom learning to virtual tutelage, which rely more on digital devices.
The company is instead looking to produce around 20 per cent more ruled pads, quire notebooks and stenographer pads under the SEEK brand, which will be targeted at the corporate market.
“Coming into a new year, SEEK would normally focus on back-to-school market in January, with a further spike in sales after the Easter break. Without schools reopening we used this time and focused on the production of items used primarily in the corporate market,” said SOS Deputy Managing Director Allan McDaniel.
“SEEK will restart the production of exercise books during the summer months to prepare for the expected reopening of school in September,” he told the Financial Gleaner.
Both the shift towards telecommuting or 'work from home' programmes and the movement of schooling from classrooms to computer screens have drained business from the sector in which SOS operates.
SOS itself has seen its revenue fall by 20 per cent to $972.3 million, of which the SEEK line contributed $39 million, down from $60 million in 2019; while over $100 million was erased from its bottom line. Profit fell from $134.5 million to $33 million for year ending December 2020.
The company founded and controlled by the McDaniel family is mainly a supplier of office supplies that diversified into publishing through acquisition about three years ago, but has been experimenting with various initiatives to keep the company going under the pandemic.
For example, SOS pivoted into the sale of home office furniture, and also now trades in heavy-duty racks that extend up to 36 feet and capable of holding up to 5,000 pounds of goods. The racks are mainly in demand by car parts businesses, food processors, and the hotel industry.
“As was expected, without the reopening of schools the back-to-school market is not there. We have seen a 40 per cent increase in sales of SEEK's corporate products during the same time,” McDaniel said.
SOS is not looking to add any other products to its line-up. It's next project will be the expansion of the Fairview, Montego Bay office, which the deputy MD said would get started on the expansion in the second quarter of 2022.