Demand good now, but Lifetime CEO expects a change

Trying to forecast economic demand for your company's products during a pandemic isn't something they teach in business school.

For Richard Hendrickson, the CEO of blow molder Lifetime Products Inc., it's a complex picture.

As government coronavirus shelter-in-place orders expand, demand for many of the company's plastics products used in the home, such as for recreation and backyard storage, are holding steady or in some cases growing.

But he's also trying to figure out if that demand will continue, and he wonders if the economy is at a transition point — if concern about the virus and larger economic impacts will cause more pullbacks in spending.

Hendrickson has been posting detailed updates on social media, letting employees and others know what's going on both with sales and with the steps the company is taking to protect employees and shore up its factories against the virus.

So far, sales for things the Clearfield, Utah-based firm makes for the home are holding up, items like plastic lawn and garden equipment, coolers and tables and chairs.

As well, as people shop online, internet sales for playsets have been "far above demand" and the company's been working to catch up to orders for sheds, he said in a March 24 update.

But in a March 26 interview, he also thinks the region could be approaching a transition point for the overall economy.

"With the stay at home orders, and when travel decreases, a lot of our product families do okay, while people stay at home," he said. "But that's only to a certain point. And when the economy gets to a certain level, even people staying at home aren't buying anything.

"I would imagine you and I are having this conversation right on the edge of where we start to see some of that demand soften because of society's transition in the way we're treating this," he said. "And then I think there'll be a pretty good rebound, but I think the worst is yet to come."

The immediate closing of sporting goods chains hurt sales for things like their line of kayaks, and while sales to other products for retailers like Sam's Club, Costco and Walmart have been ok, he said he's starting to see "even those retailers start to make more space for essentials and push back on some of the elective products."

"If things continue like they are and I assume that they will, I think we'll start to see a softening in most products within the next few weeks," he said.

For now, it's watching and preparing. The company has been taking steps to protect employees, like taking employee temperatures when everyone reports to work, a lesson from its factory in Xiamen, China, where it's already been through that country's COVID-19 outbreak.

The preparation also includes telling employees that eventually, a positive case will in all probability show up among its more than 2,000 employees in the U.S., and discussing what the firm will do when that happens.

Hendrickson said in a March 27 update that the company, with factories in Utah and Tennessee, has "essential" status under government rules to remain open.

It's supplying equipment to hospitals and the defense industry, as well as having letters from retailers like Lowe's, Home Depot and others declaring that Lifetime is essential to their supply chains.

The firm's tables and chairs are being used in a coronavirus testing center being built at a University of Utah medical campus, for example.

"Everybody wants to stay in business. Everybody wants to keep working," he said. "It's a great spirit of teamwork, really, in a time of unknown future."