Saturday, January 10, 2009

Windhorse:Evolution faces the credit crunch; challenges ahead but morale high

Windhorse's warehouse in Cambridge, UKWindhorse:Evolution is the FWBO’s largest Right Livelihood, indeed the largest in the Western Buddhist world, with annual sales of UK £9million, an impressively ethical approach to business, and a wonderful record of giving dana to many many FWBO and TBMSG centres around the world.

However they, like the rest of the Western economy, have been hard-hit by the recent economic downturn. This report aims to bring readers of FWBO News up-to-date with what’s happened and what they’re doing. It is based on material from Ratnaghosa and Vajraketu.

Final figures are still coming in, but sales for the 2008 Christmas period look to be down some 20% on last year, both in their shops and wholesale division. As a result their best-case projection for 2008 is a loss of £150,000 – their worst-case projection is £450,000. Nonetheless, they are confident they have the resources to ‘weather the storm’ for a year – though, like most of the retail industry, it is presently a case of fighting for survival. The collapse of the pound has also hit them hard, with the cost of many of their goods rising by 25%.

The main measures they are taking are cost-cutting – specifically looking for savings in their wage and rent bills. These are in the spotlight because they are the ‘levers’ actually available to them. Out of annual sales of £9m, they have a wage bill of £3m and a rent bill of £2m. They have instituted a ‘hiring freeze’ and, with great reluctance, made their first-ever redundancies in the business. This has been especially painful for a business that prides itself on looking after its employees. Sadly, they cannot guarantee there won’t be more over the coming months.

A major consideration in the minds of the Windhorse directors has been the livelihoods of their suppliers. Due to Windhorse’s ethical trading policy, they often know exactly who they are buying from, and have had long-term relationships with them for many years. They know, for instance, that if they disappear the livelihoods of 200 people in Bali would vanish – and many in Kenya, Guatemala, and China as well. This is a strong incentive to them to survive, and even if the very worst happens and they go under, they are determined not to close owing their suppliers money.

The great stupa in the centre of Uddiyana, the Windhorse warehouseThis seems pretty unlikely though - morale in the business is actually very good: Ratnaghosa says its as though the crisis has brought out the best in everyone. A couple of unprofitable shops have been closed (in Shrewsbury and Norwich) – but they are still looking to open 3 new shops during 2009! This is down from their original ambitious plans to open 5, and the openings have been deferred to be nearer Christmas so they will move into profitability quicker – but its still a mark of their confidence.

Notwithstanding the difficult climate, and the very real challenges they face, Windhorse are looking to the future and are determined to come out of the recession both stronger and in an expansionist mood. Exactly how this will manifest is not easy to predict – forecasting the future, says Ratnaghosa, has effectively become almost impossible.

The photographs show Uddiyana, the Windhorse warehouse in Cambridge, and the great stupa in its centre.

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