A range of companies, ranging from the world’s biggest exhibition company to a furniture retailer and a firm which runs hostels for backpackers, have spelled out the impact of the coronavirus outbreak on their businesses.
Informa, which specialises in business-to-business events around the world, has postponed or cancelled almost 130 events worth more than £400m in revenue due to the coronavirus outbreak.
Furniture retailer DFS said that more than £200m of sales it would normally expect in the run-up to Easter are now at risk, while Safestay, which operates hostels across Europe, said it was facing “a material downturn” in bookings.
Informa, a FTSE 100 company, which has suffered a £1bn drop in its market value since the start of the year as a result of share price falls, said that its events arm accounts for about 65% of £2.9bn in total group revenues.
It has rescheduled about 45 large events worth about £350m in budgeted revenue. Another 70 smaller events have been rescheduled worth about £50m. Thirteen events, worth about £25m, have been cancelled so far.
The company has a portfolio of more than 450 business-to-business events and exhibitions with about 40% of revenue in North America, 30% in Asia, 10% from the Middle East and the remainder across Europe and the rest of the world.
Exhibitions that have been moved include the Natural Products Expo, Game Developers Conference (GDC), HotelEx and Aesthetic World Congress.
Stephen Carter, Informa’s chief executive, said that in the case of widespread cancellations the company is not fully covered by insurance. He said insurance policies either don’t cover communicable diseases or have “payouts capped or collared in some way”.
The hostel company Safestay said in a stock market update that the spread of coronavirus was having an impact on bookings throughout its network, which includes hostels in the UK, Italy, Germany, Spain and several other European countries.
“We have experienced a material reduction in new bookings over the last week against our expectations and there have been a growing number of group bookings from schools and colleges which have been cancelled or postponed,” the company said.
The furniture retailer DFS, which also owns Sofology, Dwell and Sofa Workshop, said the number of shoppers coming into its showrooms had dropped since last Tuesday.
The chief executive, Tim Stacey, said the firm normally takes £330m of orders between now and June, the end of its financial year, with Easter and the May bank holidays particularly busy. Some of that is already in its order book, but the rest – about £220m – is at risk if the virus continues to spread in the UK.
DFS has four factories in China which were shut for an extra three weeks following the lunar new year break, but are getting back to normal.
A UBS analyst, Olivia Townsend, said the impact of the virus on retailers had shifted away from potential stock shortages from factory shutdowns in China to the impact on sales.
Clothing retailers, she said, could also suffer as many spring and summer ranges are due to launch this month, but she also said DFS could take a big hit in coming months: “The high ticket value of sofas may mean DFS is more impacted by lower consumer spending than retailers selling lower-priced items.”
