The Pandemic Was the Best Thing That Ever Happened to Wayfair
But what happens to the online furniture retailer as the world opens back up?
Among the first things huge swaths of the American population did as they were suddenly forced to work from home in the early days of the pandemic lockdown was confront their need for a new desk. And an office chair. And better lighting. And, with extra cash from government stimulus payments, maybe some better patio furniture, an upgraded couch, and a new crafting table for the kids. With most home decor and furniture stores forced to shutter, they only had one place to shop: online.
This was great news, it turns out, for Wayfair, the e-commerce furniture and home décor stalwart that had plugged away for nearly two decades of unprofitability. The company ended up enjoying a blowout second quarter, reporting a massive quarterly sales leap from $2.3 billion to $4.3 billion. When founder and CEO Niraj Shah shared those impressive results with investors earlier this month, he credited these strange times. “Covid demand tailwinds benefited our sales momentum,” he said.
Translation: Wayfair had joined the ranks of companies like Zoom for whom the pandemic was a breakthrough branding event. Even more significantly, it also earned a profit of $274 million — the first time the company has been profitable since it went public in 2014. Shah didn’t shy away from proclaiming the lasting significance of this event, calling it “a turning point” for the business.
The spread of Covid-19 unexpectedly rushed the company’s timetable to reach profitability, and the market’s response has been enthusiastic in the extreme: Wayfair shares, which dropped under $25 in mid-March, have lately soared over $330 per share.
Indeed, as recently as this past February, the company had been asking investors to wait until 2021 for it to reduce expenses enough to finally cross the line to profitability. The company has been around for 18 years, and while shoppers have obviously become more open to buying furniture and home…