OFFICE furniture and equipment supplier, Stationery & Office and Supplies (SOS) is on track to delivering its second-best results at the end of its current financial year which closes December 31. This following a 190 per cent increase in pre-tax profit for its third quarter which ended September 30.

Adapting to the ongoing global disruption, the office furniture retailer recorded significant growth in all areas of the business during its recently concluded third quarter when compared to the corresponding period in 2020. Revenue grew 8% to $258.4 million while pre-tax profits increased from $6.8 million to $19.7 million.

SOS executives posited that it has not been easy operating in the fast-changing pandemic market, with many challenges encountered during the quarter such as the no-movement days imposed by the Government in the fight against the coronavirus disease. In addition, interrupted production schedules, power issues in China and a shipping rate increase of approximately 400% also posed challenges.

According to the management, “these compounded the headwinds of 2020 when COVID-19 triggered a downward trend in sales from corporate Jamaica”. However, SOS is rebounding at a faster rate than anticipated and ahead of its competitors within the industry.

SOS Chairman Stephen Todd highlighted that the company’s focus on “containing costs and making several adjustments such as maintaining higher inventory levels to counter the impact of a worldwide shipping backlog is proving to be the right approach. This, coupled with our staff rising to the challenge of going above and beyond to ensure a seamless process for our customers, has allowed us to rise to the demand for our products”.

During the course of this year, SOS made the strategic move to increase inventory ahead of the global shipping crisis that saw prices skyrocket and result in the cost to ship a container moving from US$4,000 to US$20,000. The pre-emptive move has saved the company millions in extra costs. According to Todd, “In addition to being able to pass on these savings to customers, having the largest stock on the island gave SOS a competitive advantage. We can access greater market share through local sub-distributors and an expanded, direct client base because our products are readily available.”

The SOS chairman stressed that the market environment is currently favouring resellers, noting that “The numbers are up 35% year on year as we have found that, due to high shipping costs, the volume of goods readily available is lower for many suppliers — forcing them to come to SOS where the goods are available for immediate sale.”

SOS has also sparked growth in new categories. In response to the shift in work environment from in-person to virtual, SOS broadened its customer base and included home office supplies. With prolonged physical distancing measures and the increase in available stock to meet market demand, home furniture sales grew almost 2.5 times, from sales of $7.3 million to $18.3 million.

The combination of foresight and agility is yielding higher profitability levels at SOS. Earnings per share for the third quarter was $0.08, an increase of $0.05 compared to $0.03 at the end of the same period in 2020. For the nine months ended September 30, 2021, earnings per share stood at $0.31, almost triple that of the comparative period in 2020 when the figure was $0.11.

Year to date, SOS continues to perform creditably with sales of $809.3 million, or 13.5 per cent higher year-on-year, while profit before tax totalled $78.1.6 million, up from $28.6 million a year earlier, which was a 175% increase. Directors praised the company for being highly responsive to the uncertain environment.

“We just returned from a conference where we were prospecting new offerings and we will be increasing our supplier base. We are committed to serving our customers with efficiency, speed and competitive prices, and we will adapt to evolving market needs to stay ahead of our competition,” Todd asserted.

Last month SOS appointed long-time team member Allan McDaniel as its new managing director and named Kelli McDaniel Muschett as the deputy managing director. They have both taken over the reins of David McDaniel, their father and co-founder. Stephen Todd, who has played a critical role in developing the strategic outlook for SOS,, was also appointed chairman.