SOS adds new American supplier
Stationery & Office Supplies Limited, SOS, is looking to win back business lost to the pandemic through a deal struck with Affordable Interior Systems, AIS, an American supplier of office furniture.
The new partnership is expected to strengthen SOS’s ability to fulfil large orders within a time frame of three to six weeks, resolving the lengthy delays it has been experiencing with previous suppliers in the Far East. Over the past several months, SOS has taken to stocking excess inventory to mitigate rising shipping costs and ensure it has adequate stock to meet customer demand.
SOS’s supply arrangement with AIS also gives the company an edge over other local players in the office furniture space, said director and former chairman David McDaniel at SOS’s annual general meeting on Tuesday, citing AIS’s array of office furniture and supplies. McDaniel stepped down as chairman of the board in August and was replaced by Stephen Todd.
SOS’s core business is the sale of office supplies, stationery and furniture. In 2018, it diversified into book production, including student notebooks, choir books and writing pads, through the acquisition of Book Empire Limited, the maker of the SEEK brand.
Pre-COVID, the company’s revenue had surpassed $1 billion, largely attributable to its ability to secure contracts for the supply office furniture for the fast-growing BPO, or call centre, industry. But in 2020, business fell drastically when workplace and office projects paused and work was adjusted in favour of remote arrangements to contain the spread of the virus.
The problems worsened from the fallout in sales from the SEEK business, when students were mandated to do their schooling virtually.
Now, with employment once again trending upwards, SOS is positioning itself to regain some of the business lost to the pandemic.
“There is a need to have a quick turnaround time for furniture. Unfortunately, we have not been able to offer such quick turnaround time in the past because most of our suppliers come from Far East, but this deal will hopefully enable us to get those sales now,” McDaniel told shareholders.
Prior to the new supplier arrangement, SOS had found ways to improve its quarterly performance, including cost-saving measures. Earnings for the quarter ending September tripled to $19.7 million, while revenue rose eight per cent year-on-year to $258 million.
For the nine-month period, January to September, SOS made net profit of $78 million, three times more than the $28.6 million produced in 2020. Year-to-date revenue tops $809 million, putting the company back on track to surpass $1 billion in annual revenue again.
Over the short term, SOS expects to see further improvements in operational profit from lower shipping costs and a resurgence in performance of the SEEK business, now that more students are back in classroom settings, as the national vaccination drive continues.
SOS will also be expanding its Fairview, Montego Bay office, which will get started in the second quarter of 2022.