Hello again! I cannot tell you how good it is to be back writing for all of you. Two years ago, everything changed. Marcum had to cancel our Retail Symposium due to the pandemic because people were not leaving their homes, and businesses shut down for months. The good news is that we are coming back with our next Retail Symposium scheduled for May 19, 2022 in Los Angeles, California.
Over two years ago, I wrote an article titled “Will Magic Survive?” and I gave my opinions on what concerns I had for the future of trade shows. Tom Nastos, who then worked for Informa and ran the Magic show for over 40 years, told me that he kept my article on his desk as a constant reminder. Nastos has since left Informa and started a new venture as a co-founder of BluEnsign, a strategic advisory firm serving consumer brands and event planning organizations across the global value chain. He drives business development as well as the execution of client mandates focused on digital transformations, commercialization, partnerships and alliances, new market entry, product innovation and financial forecasting.
Nastos, while still at Informa, was going to be our keynote speaker at our 2020 Retail Symposium before the pandemic. Since so much has changed over the last two years, Nastos will now be addressing trade shows past, present and future. We are already seeing some trade shows coming back, but the attendance appears to be a fraction of past shows — and I believe change is necessary. Nastos will explore this topic and enlighten us regarding what lies ahead.
I wrote the following paragraph two years ago and I think it is even more relevant today: “But the more essential question is about the show’s relevance. Why are fewer of our clients attending? One reason is the shows are costly, from booth cost to all the related travel cost. The second major reason is our clients don’t need to attend in order to write business; they are finding other methods of securing orders. Clients now have the ability to communicate with buyers via the internet, and more of our clients are seeing their customers at other times of the year and do not need to see them in Las Vegas. Pre-internet, the once-a-year opportunity for face time was mission critical; this is no longer the case. It is my opinion that there are too many vendors at these shows, and I do not believe many of them write enough business to justify the cost of being there. Time will tell if the show can survive; we will just have to wait and see.”
I look forward to seeing you all in May at the Marcum Retail Symposium.
Business Update
The last two years have been a challenge for many of our clients with government-forced closures and only those businesses considered essential able to stay open. Many of our apparel clients were able to transition to producing medical garments and masks — which proved to be quite successful, not to mention helpful. Our clients in the food and beverage industry had mixed results depending on where and how products were sold. For companies selling products for consumers to use at home, business was excellent as everyone stayed home and cooked, whereas restaurant owners were really challenged to pivot and survive. The building and materials industries saw tremendous growth with those staying at home spending their money on household improvements.
The passage of the CARES Act by Congress provided the necessary resources to allow our impacted clients to receive funds through the Payroll Protection Program (PPP). The first of these funds were delivered to our clients in April and May of 2020. The PPP was extended, and our clients were able to receive a second round of funding in early 2021 if they met certain requirements. As of this article, our clients have received forgiveness of their first PPP funds and are in the process of getting the second round of PPP funds forgiven. Marcum has diligently worked with our clients to assist them with meeting the requirements for forgiveness and helping file the appropriate forgiveness forms.
The second benefit the government approved was the passage of the Employee Retention Tax Credit (ERTC), which provided the ability to claim this credit even if a business received PPP funding. Originally, you could not receive both PPP and ERTC. The credit for 2020 was limited to 50% of wages paid to an employee and capped at $5,000 per employee for the year. In 2021, the law changed to allow a credit of 70% of wages paid in a quarter and capped at $7,000 per quarter. This credit was good for the first three quarters of 2021 if you met certain criteria. Marcum worked closely with our clients to maximize the amount of ERTC available as a business cannot use PPP money for payroll and use the same payroll for ERTC.
The important thing is that our clients have survived a rough couple of years, and generally business has been good. As the cost of oil has increased, we are now facing a new hurdle: high inflation rates that are reminding me of the 1970s. The cost of everything is going up and, ultimately, the consumer will pay for this increase. In my opinion, this inflation is a direct result of this country not being oil independent, which is unfortunate since fuel is required to move consumer products throughout the country. Let’s hope we can get this under control.
Until next time, remember what I always say: if you are not having fun, then do something else!
