What could the COVID-19 virus mean for MI retailers?
I spoke to two MI dealers who chimed in.
First, there are many unknowns about the causes and transmission of COVID-19. Equity investors might worry about a sudden jump in cases. Second, this outbreak has the potential to impact both the demand and the supply sides of the global economy.
As MMR reported on 3/4/2020, Messe Frankfurt has decided to postpone Musikmeese 2020
No doubt other MI related conferences could be impacted.
Still, there are signs to be optimistic.
When I asked Greg Watkins, owner of High School Music Service, San Antonio Texas how business was he said: “Too soon to tell what the future will be. We will know when we do the business drives for the next school year in August and September. As for now, our road reps are still going to schools, and directors are still ordering and repairing instruments. Business as usual.”
I also asked Watkins if he is seeing any disruption in the supply side.
He said he had received some notifications from China-based manufacturers. For example, Eastman music, with a string manufacturing plant in China, sent Greg notification that there could be delays, although he has not seen any in his orders as of yet. He said for other manufacturers, like Yamaha, “it’s business as usual.”
When I asked if his ordering pattern has changed, Watkins replie, “No. If I know I’m going to sell it, I buy it. I’m not worried about shortages.”
I then gave Felicity McCarthy, general manager at Ifshin Violins, located in El Cerrito California, a call. I was curious because Ifshin Violins, a boutique string shop, owns a manufacturing facility in China. She said after the extended plant vacation because of China’s Lunar New Year, she still hasn’t seen a reduction in supply. She said for now, “it’s looking like the previous tariff concerns. They came and they went.” She has not yet seen a supply shortage in her accessories like shoulder rests and rosins that she doesn’t manufacture directly.
As far as the stock market volatility, it’s important to note that Since 1981 there have been 12 epidemics including: HIV/AIDS, Pneumonic Plague, SARS, Ebola, Swine Flu, and Cholera. The six-month change of the S&P 500 Index following the start of the epidemic was positive in 11 of the 12 cases, with an average price return of 8.8%. The 12- month change of the S&P 500 Index following the start of the epidemic was positive in 9 of the 11 cases, with an average price return of 13.6%.
It’s probably a good time to check in with your financial advisor if you’ve not done so, who will likely tell you that past performance is no guarantee of future results.
Jaimie Blackman – a former music educator & retailer– is a Financial Advisor, Succession Planner & Certified Business Advisor. Blackman is a frequent speaker at NAMM’s Idea Center. Jaimie writes “The Sound of Money” a monthly column for MMR. Visit, bhwealth.com to subscribe to newsletter and podcasts. Registered Representative, First Allied Securities, Inc. Member FINRA/SIPC.
