SAN DIEGO (KGTV) — A Carlsbad company is feeling the impact of the Coronavirus epidemic in China.
JLab is a headphone and ear bud company. They design their products in Carlsbad, but production happens overseas, mainly in China.
The country shut down for Chinese New Year and with the outbreak of Coronavirus, everyone stayed in quarantine.
"We were at about 10 percent capacity 10 days ago, we're up to 20 percent capacity today and we expect to be up to 50 percent capacity by mid-March," CEO of JLab Win Cramer said factories were shut down for about two months.
That translated to delayed deliveries, "some products were delayed by two to three months, some products were delayed by 15-20 days," Cramer said.
Cramer said Spring is a critical season for production, "this is when retailers turn over the wares that they sell in favor of the new fashion, the new technology."
Adding to the stress, the company has been hit for the past year and a half with tariffs from Chinese goods.
"We paid $6-$7M in tariff fees to the government this year," Cramer said.
That led to cuts across the company, chopping everything they could without sacrificing their team or raising the price of their products.
Cramer said they even looked at little things around the office, "we had to renegotiate with our coffee supplier, say, 'hey, can you help us through tariffs? Can you bring your costs down so we can still use your service?' And they agreed."
Cramer said they've left six positions unfilled and haven't been able to update office technology.
While JLab continues weathering the storm, they're bracing for another hit, "so these things are coming together, supply is getting better but demand appears to be softening a bit because of fear."
Fear playing out on Wall Street, as the DOW Jones Industrial drops, and keeping consumers from spending.
Cramer said he is hopeful for a rebound, "we believe there is a light at the end of the tunnel, we just don't know how long that tunnel is."