Wayfair Inc. is the American E-Commerce company that sells furniture and home goods, has become a top priority for shelter-in-place shoppers during this ongoing coronavirus pandemic.
Formerly known as CSN Stores, the company was founded in 2002. It connecting shoppers to over 18 million products. The share price is going sky high during the pandemic.
The self-isolation period was a great game leveler for online furniture players. Other big rivals like Ikea and Raymour and Flanigan were shut because of stay-at-home orders, Wayfair remained open for business with its strong online presence.
Dan McCarthy, a professor of marketing at Emory University quoted .″I think Wayfair may be benefiting more from Covid-19 than almost any single other company except for like an Instacart,”
Williams Sonoma which operates Pottery Barn and West Elm — has a strong online business, too. during the COVID outbreak. The company had shown a 56% increased in revenue in 2019 from online sales in 2019.
That online business helped Williams-Sonoma weather the storm but it’s putting Wayfair up on the map and helping it to attract new customers.
In May, Wayfair announced first-quarter sales grew almost 20% from a year earlier, and the stock grew substantially. It has been trending higher ever since. On Monday, Wayfair shares hit the peak, a 52-week high of $200.28.Shares prices have soared are up 112% since January, as of Tuesday’s close.
However, Wayfair has had its share of problems and detractors.
“A business model of nightstands, credenzas, beds, sofas, sending them free shipping, guaranteeing the fact that the customer is going to like the product and it’s going to come not damaged is a high-risk business,” quoted Andrew Left of Citron Research.
In 2019, Wayfair generated more than $9 billion in annual sales. but simultaneously also lost almost $1 billion. Wayfair is burning through profits to speed up growth. Its 2019 budget on advertising was over $1 billion. and long term investors have shown defiance and remain skeptical of the company’s path to profitability.
As the country is gradually coming out of the lockdown and stores are opening, Wayfair will have questions to answer: Will it finally report a profit, and whether it can thrive after shelter-in-place orders are lifted and the rival market heats up