Joan Waters six months ago that Corporate Office Furniture Co. (COFCO) would only be 5% off last year’s revenue pace, she might have had a hard time believing it. But that's just where the West Kensington-based company is positioned with a little more than two months left in 2020.
Even so, Waters has a tempered perspective when she factors in the lack of big projects in the pipeline for next year and the uncertain future of offices created by the Covid-19 pandemic.
COFCO, which provides office furniture to clients such as University of Pennsylvania Health System, Burlington Stores, Penn Mutual Insurance Co., Incyte, Independence Blue Cross, QVC and Morgan Lewis & Bockius, had to furlough its delivery and installation team when the pandemic struck in March and clients were not allowed to accept deliveries until Pennsylvania Gov. Tom Wolf permitted construction activities to resume on May 1. The company secured a more than $1 million Paycheck Protection Program loan</a> through OceanFirst Bank and used the money to retain most of its office staff and bring back two-thirds of its delivery and installation team.
PPP was “absolutely worth it,” Waters said, noting that it served as a needed financial bridge for COFCO between April and June while it was unable to deliver and submit invoices for projects. There are still some clients that have not reopened, so they have not yet been invoiced and excess inventory sits at COFCO's warehouse facility. Despite that, the company has managed to stay somewhat close to its 2019 revenue pace of $75 million and bring all of its roughly 100 employees back to work.
Waters said the company was strengthened by its fortunate decision to enter the Washington, D.C., market, where it has offices just a few blocks from the White House. Government entities have not pulled back as much as businesses on new office projects.
In Philadelphia, COFCO has targeted more work in the life sciences area, which dovetails nicely with its traditionally strong connections in the health care space. That is almost enough to make up for a massive drop in business from colleges and universities.
At the moment, the decision to go into Washington is looking really good,” Waters said. “And we’ve been fortunate to pick up some market share during this time. We are down about 5% but the pie is smaller and many of our competitors are down 15% to 35%.”
In addition to shifting focus, Waters said COFCO was prepared for having its employees work remotely. That allowed the company to land a big piece of business in Washington from British multinational defense, security, and aerospace company BAE Systems and complete the delivery despite the constrictions from the pandemic. COFCO has also managed expenses, with plans to move into cheaper space in Washington and not fill vacant positions.
The major issue Waters sees is when she looks at the pipeline for major projects in the next year. There is the new five-story, 378,000-square-foot headquarters for AmeriHealth Caritas at Ellis Preserve in Newtown Square opening soon. COFCO will be supplying the furniture for the University of Pennsylvania Health System’s $1.5 billion pavilion set to open in 2021. It is also bidding for the new Morgan Lewis & Bockius headquarters at 2222 Market Street</a>, but that’s not opening until 2022. Aside from those, the big ticket projects for the next year are hard to find.
Waters said perhaps not until there is a viable Covid vaccine will there be any clarity on the issue, though she knows there will be an increase in remote working that could put a permanent dent into her business. For example, a large client just decided to close four locations nationwide after determining during the pandemic that they could be just as effective with many employees switching to permanent remote working arrangements.
“There are significantly fewer projects than normal,” Waters said. “People are still figuring out what they are going to do when they move back into their space, so they are passing on buying new or more furniture. I can’t ever remember being at this point of the year where we didn’t have more than one big project lined up for the next year.”