Prior to the coronavirus-induced shutdowns, Farmgirl Flowers was on track to post record revenue of $ 50 million this year. But founder and CEO Christina Stembel said that “everything changed” on March 16 when San Francisco County was ordered to take shelter in place.
“Supply chain, distribution channels and transportation – it all stopped,” Sembel told Yahoo Finance’s “The First Trade”.
Stembel says she was forced to immediately dismiss 90% of her staff.
“We had 197 employees on the morning of March 16, then on the evening of March 16 we had 6 people working,” she said.
“Unfortunately, no notice was given to business owners, which is very disappointing for me. We had 12 and a half hours to close our facility in San Francisco, which forced us to take time off. “
It’s a familiar story to many small businesses that quickly had to change their business models during the COVID-19 pandemic just to stay alive.
Stembel started Farmgirl Flowers in 2010 with her own savings and a cash back credit card to cover her business expenses. The e-commerce startup, which focuses on seasonal floral bouquets wrapped in rustic burlap, has since established a loyal following and is giving longtime floral businesses a run for their money.
“CEOs should have known better”
“I think there were so many failures all around the first installment and the second installment,” she said. “I don’t think much has changed. I applied to 18 banks so I cast my net as far as I can to see if we can get that round [of funding]. I don’t know if we will.
Stembel said it was “disheartening to see how the program was rolled out without any guarantees in place to ensure it went to companies that really needed it.”
Stembel refers to how large chunks of the Paycheque Protection Program the money was taken by large listed hoteliers and restaurant chains, like Shake Shack (SHAK), who has since returned a loan of $ 10 million he received under the emergency program.
“I feel very honored to be the voice of the taqueria down the street, the barber shop, the gym and the cafe because they didn’t get the loans,” Stembel said.
“It’s disappointing that the banks are prioritizing the companies that had the most money in the bank,” said Sembel, “which are the ones they have the best relationships with, and then it was also disappointing to see CEOs who should have known better than to opt for a loan that was not intended for them.
So far, Stembel has been able to bring back around 40 workers and with the PPP loan she expected to be able to bring back around 45 more. It hasn’t happened yet, but she remains hopeful.
Bank on mother’s day
Immediately after the shelter-in-place orders, Sembel said Farmgirl Flowers sales fell 60%, but rebounded quickly.
“Now our biggest challenge is how to meet the demand, because we had 5 weeks to completely change our distribution channel. “
Stembel’s business has since returned to its roots and sources much closer to home. She has found flower farms within 25 miles of her business and hopes she can meet the demand for her industry’s biggest holiday, Mother’s Day, which is May 10.
“[Mother’s Day] That’s what gets us through the summer months, and that’s why we’re doing everything in our power to pivot as quickly as possible to get enough supply for demand.
Alexis Christoforous is a co-host of Yahoo Finance’s “The First Trade”. Follow her on Twitter @AlexisTVNews.