COVID-19 and your business
Every revolution in history has been preceded by a great crisis, lighted by a spark and spread by a team of believers. At LossLess Group we believe that we are at the inception of the connected textiles revolution, and everything around us at the moment confirms this belief.
The great crisis that precedes this revolution is, of course, Covid-19. As of today, we still don’t know how long it will stay with us, we are all learning as we go, but it is affecting every aspect of our lives in unprecedented ways.
We believe that a consequence of this crisis will be a much higher acceptance of change, especially of those aspects of the previous normal that were not so good to begin with.
All stakeholders in the textile management industry have been equally affected. The lock down meant travellers stayed at home, hotels experienced a dramatic drop in occupancy, and laundries and textile manufacturers lost their source of business.
The industry came to a halt, and many in it have been left fighting for survival. Latest estimates indicate that up to 25% of all jobs in hospitality may be lost by the end of the year.
The spark that will help ignite the fire is our RFID technology, and the alternative management strategies it enables. Through its implementation hotels improve their GOP by over 5%, whilst finally gaining control of their textiles and laundry operations, and saving cash while doing so.
It’s so much more than just technology, and so revolutionary, that we had to give it a new name: TaaS, Textiles as a Service.
We are looking for a few select people who dare to think differently, to join us and contribute to transforming the way textiles are managed everywhere. We believe this is the opportunity of a lifetime, in a time of global change.
If you think you have what it takes and are ready to join the revolution, click below to see our career opportunities and apply to be part of the action.
The challenging time of Covid lockdown has impacted on people in many ways, some withdrawing into hermit like isolation, some going a bit crazy to entertain themselves, and some have used the opportunity to hit the ‘pause button’ on their task oriented working life, to reflect and take stock on some strategic issues that we often do not have the time to contemplate.
Certainly, at LossLess Group we fall into the latter category. As a relatively young business we have been flat out doing today’s important things and not always allowing our strategy and purpose to catch up. The Covid ‘pause’ has allowed us to reflect on what we are trying to achieve, and how we are going about it.
We have also been able to document in detail, and after careful consideration, our strategy and business plan. This has led to our development of a new website, social media presence and a clear sense where we a travelling.
Perhaps the toughest challenge has been to define what we actually do. In the past, businesses have had a simple definition, as retail, manufacturing or banking etc. However, today businesses have far more complex definitions, as generally their definition would encompass some element of service, technology, marketing or innovation.
At LossLess Group we provide many activities that combine to make our business unique and compelling. We use highly complex technical RFID equipment to produce data. We have patented algorithms that create valuable information for our customers.
We use the Internet of Things to provide new processes to transform our client’s businesses. We provide a hands-on service to help our clients change the shape of their own operations. We provide leasing solutions to make the transformation cash efficient.
This all makes the challenge of describing our business within conventional terminology as quite mind boggling. Undoubtedly, we provide an asset tracking technology service, using RFID and the Internet of Things to allow businesses to maximize the availability of their key assets. Perhaps we are a ‘transformation enabler’?
Applied to the Hospitality sector, the technology converts commoditized rented hotel linen to valuable tangible assets that can be tracked through their lifecycle journey from room to laundry and back again.
The data generated allows hotels and laundries to reduce the amount of linen in circulation, improving reliability and reducing costs. As an asset, the linen can be financed by leasing it through LossLess Group, resulting in improved cash utilization and increased EBITDA performance.
It all makes perfect sense to us, but if you need more of an explanation about how we transform our client’s businesses, why not get in touch.
Homer Simpson famously said, there are only three kinds of people in the world: Those who can count and those who can’t. Whilst I tend to agree with Homer, in this occasion I do not, as I think there are only two types of people in this world: those who see the glass half full, and those who see it half empty. The fascinating matter of the fact is that there is no glass, so when you see half full, you always do, regardless.
Covid-19 has changed our world in unprecedented ways, but not all bad. Its fast forwarded adoption of new habits that we’ve discovered makes a lot of sense.
We have relied on technology to do more with less, we have learnt to meet without travelling and to work without an office. We have rediscovered that gratis is great, that it’s ok if the backdrop is your bedroom, or to hear kids in the background, and that it’s fine to wander around the house to find a working spot. And if the dog barks, it barks. Because dogs bark.
The post-COVID-19 world has embraced change and that is great news for entrepreneurs, because they invent the future, and that will be easier now.
Glass half full
The prerequisite for any RFID-enabled linen tracking system is that assets are equipped with an UHF RFID tag. There are many tag suppliers, using different combinations of components, but the basic construction and composition is roughly the same.
At the core of a tag is a lentil, an enclosure made of epoxy resin, that contains the UHF RFID chip and a primary antenna, which is used for Near Field Communication (NFC). This is a way for objects to communicate over a short distance, for instance when you pay for groceries using the chip on your credit card. The encapsulation of the chip is done to protect it from exposure to harsh laundry environments.
The next component is a secondary antenna, often a wire or metallic thread, sewn into the carrier in a specific shape. This antenna enables communication over greater distances. Finally, there’s a carrier, mostly a textile material composed of polyester, or a combination of polyester and cotton. The durability of this carrier determines the lifetime of the tag.
Besides the quality of a UHF RFID tag, there is also the cost to consider. Prices have decreased from around one Euro in 2005 to under 30 cents per tag. This makes it more attractive to virtualize textile assets on a larger scale.
However, what is often forgotten is the additional cost of attaching the tag to the textile item in order to make it ‘connected’, i.e. able to communicate with other connected objects through the Internet of Things. The preferred time for tag integration is during the production process, rather than retrofitting existing linen. The cost of manual attachment can be up to 30 cents, an added expense that should be eliminated, or at least reduced to a minimum.
At LossLess Group, together with our partners, we have developed UHF RFID tags on a roll that, when used on a labeling machine, enable automatic integration during the production process at no additional cost. This has been successfully tested at Standard Textile, one of the large manufacturers of hospitality and healthcare linen.
Hotels, or if we want to use a more confusing term: the lodging industry, use 3 key performance indicators to measure their performance: ADR, RevPAR and Occupancy rate. However, unlike other holy trinities in business, this is really a duality as RevPAR is a product of the other two: RevPAR = ADR x Occupancy rate.
Let’s explain each of these metrics. ADR stands for Average Daily Rate, the price for an occupied room on a given day. Occupancy indicates the percentage of available rooms that are occupied on that day. RevPAR, which stand for Revenue Per Available Room, is calculated by multiplying ADR and Occupancy in the period measured.
Occupancy rate can be influenced, but not controlled by the hotel operator, i.e. they cannot force customers to come to their hotel. They can try to persuade them by implementing dynamic pricing strategies that adapt room rates to current or expected demand.
As a point of reference, during the economic depression between 2008 and 2012, occupancy rates barely moved, but ADR decreased by nearly 25%. There were travelers, but there was no money. A world impacted by COVID, and uncertainty of the state of economy that lies ahead, present an entirely different scenario. Perhaps for the first time ever, there are neither travelers nor money, leaving the hospitality industry gasping for a brand-new way of managing their revenue.
Since this is a health crisis, at LossLess Group we believe that health measures will bring back customers, and we have a solution to assist you realize that goal. Contact us to find out.
At LossLess Group , we consider it one of our primary responsibilities to help flatten the curve of environmental mismanagement. We operate in interconnected industries that have a common denominator: Textiles, a one trillion dollar annual market.
According to the WWF, the production of inorganic cotton is a relevant factor for the destruction of freshwater ecosystems. Each year, cotton producers use as much as 25% of the world’s insecticides and more than 10% of the world’s pesticides. By using our system, customers can better predict future textile requirements. This establishes a more efficient just-in-time pickup and delivery process with their laundries, and prevents overstocking because nobody knows if there is enough on site, or when clean linen will be delivered.
Also, making textiles traceable has a preventive effect on theft, resulting in fewer replacements and washes needed. Fewer wash cycles means lower usage of detergents, water, gas and electricity, and lower carbon emissions. Finally, failure to manage textiles when taken out of circulation has serious environmental consequences. Most textiles end up as waste, and are an increasing component of landfills, estimated to exceed 100 billion pounds globally, one third in the United States alone.
These materials can take up to 50 years to decompose. It is estimated some 95% of all textiles have the potential to be recycled, but only 15% are. Our lease model exists because we are able to attribute a residual value to textiles, making them fit for trading in a secondary market and re-use. We believe companies will implement our system not only to manage the lifecycle of their textiles, but also to contribute to social responsibility initiatives. Lower consumption of textiles, and more efficient wash and distribution models improve carbon footprint and reduce the use of natural resources.
Following the Covid-19 outbreak and the deep impact it has on our lives and our communities, every business will have to contribute to a new ecosystem focused on health. At LossLess Group, we provide a range of tracking services, focused on managing the lifecycle of connected textiles. Covid-19 has been a global eye-opener, putting us all in front of a mirror, and making us realize that our primal need is the preservation of health.
It may be too early to say how indelible a mark this event has left, but it has reminded us all of our own fragility and submissiveness. We may like to think otherwise, but in the grand scheme of things we are pretty small. However, life will go on as it always does, and the question is how each one of us can contribute to alleviating the unavoidable transition to whatever new normal lays ahead.
We have adopted new behavior to avoid contamination by social distancing and avoidance of direct contact with any potentially contagious surface. To stay safe, stay home! Our comfort zone has become our control zone, and getting out of it means exposing ourselves to risks. Only technology applied to the things around us can meet our demands for safety of our environment.
We have just witnessed the first wave of COVID-19, and until a vaccine is developed, we will need to find ways to coexist with the virus. Science has come out with a mitigating strategy based on 2 predictive actions: Testing and Track and Trace.
At LossLess Group, we are adapting our existing track and trace platform to allow customers in hospitals, hotels, restaurants and care homes to check if any linen item they come in contact with has been processed with a washing program that guarantees full disinfection. This is our modest contribution to the collective objective of preserving health.
Whilst asset leasing is a widely used financial construction, to date, it has never been applied to industrial textiles. In order for textile assets to be qualified as an entity that is fit for lease, it first needs to be transformed into a ‘true’ asset.
Historically, banks have shown no interest in offering financing solutions for textiles as these were considered a commodity with little or no residual value. This market gravitates around NFR (Non-Financial Risk) opportunities, and focuses heavily on assets that maintain high residual values, like technology and motor vehicles.
However, our control technology transforms a textile article into an assets with a demonstrable residual value at the end of its lifecycle. By doing so, we have created options to access an area of the finance market in which Asset Finance Companies (AFC) operate. This is a niche within the financial industry centred on a very specific product: asset and credit rights financing.
Effective January 2019, lease accounting is governed by IFRS 16, a standard that replaced IAS 17. For who’s interested: a little bit of history. In 2003, the International Accounting Standards Board (IASB) issued International Accounting Standard 17 (IAS 17), governing the treatment of leases. IAS 17 allowed considerable discretion in determining whether a lease was an ‘operating lease’, which could be held off the balance sheet, or a ‘finance lease’, which could not.
IAS 17 used a dual model classification approach. Finance leases were capitalized on the statement of financial position as an asset and liability, and reported on the profit and loss statement as an interest and depreciation expense. However, IAS 17 allowed companies to report operating leases in the footnotes of financial disclosures, which the IASB considered an accounting loophole.
Keeping operating leases off the balance sheet was believed to obscure the true nature of a company’s liabilities from potential investors. In an effort to increase transparency, IASB in 2016 announced the new accounting standard IFRS 16, which introduced significant changes to the treatment of leases, aimed at balance sheet transparency.
What is important for any business that incurs a variable cost for laundry related activities, is that a fixed lease cost is accounted below EBITDA. This is an important metric for any business as it is often used as the basis of performance and valuation.