Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario
First of all, I’d like to thank those who have expressed support for Goodwill’s ongoing mission for the Toronto, Eastern, Central and Northern Ontario operations in the last 48 hours. I have been inundated with numerous messages with offers of help from many people, organizations and government.
It has been a very challenging time for Goodwill as it faces a cash flow crisis. As announced yesterday, Goodwill’s 16 stores, 10 donation centres and two offices were closed affecting more than 430 employees in the Toronto, Brampton, Mississauga, Newmarket, Barrie, Orillia and Brockville area. I recognize this all happened suddenly for those involved and unfortunately that is the situation we are currently facing.
To those employees and other members of the community who benefit from Goodwill’s services, please know that I am thinking about you and doing everything I can to bring clarity to this situation as soon as possible.
I know many of you have questions. I am examining all possible solutions. I humbly ask for your patience during this tremendously difficult time. This will take some time.
As a charity that relies on 85 per cent of its revenue on retail operations, we are faced with a business model that has low margins. With increasing competition in the retail space, we are not immune to factors impacting our cash flow.
From the time I arrived in 2011, we have implemented a strategy to turn around the financial operations of the organization to remain viable. We started a process of real estate consolidation and have been remodeling our business operations to reduce overhead costs as a means to increase store revenues. Through this we were able to gain momentum with definite signs of progress.
Each year this organization suffers from negative cash flow from December to March, requiring the remaining year to recoup the difference. During this time period from December to March, staffing reductions were implemented with employees working a reduced workweek.
Also during this time of year, Goodwill is impacted by a decrease in donations, which affects sales. Both these factors simultaneously impact our cash flow.
It is common for many Goodwill operations to experience the ebb and flow of reductions related to seasonality. We worked hard to make this a viable operation for the current locations impacted.
As we work towards solutions, we are fortunate that staff have come forward, including case managers, counselors and employee specialists to volunteer their time, assisting in the transition and connecting with other agencies and local partners. However, stores, donations centres and offices will remain closed until further notice.
Last night, I met with union leaders of the Canadian Airport Workers Union, who represent the employees impacted. In an open discussion, I reiterated to the union leaders that Goodwill is facing an imminent and fluid cash flow situation and is exploring a variety of options to continue its operations. We have continued that dialogue today. The union was encouraged that Goodwill will continue working with stakeholders and various levels of government to find a solution.
Goodwill has received an outpouring of calls from various stakeholders, including the mayor’s office, provincial government ministries, other community organizations and the public who want to help with the situation we are facing.
With limited resources, Goodwill is processing all incoming requests and putting together a plan of action. There are a number of components that need further certainty before I can provide further details. Let me reassure you that I am exploring a variety of options.
Goodwill TECNO is locally managed and run. This does not impact the Goodwill’s in other Ontario operations including London, Sarnia, St. Catharines and Hamilton.