Tariffs have been top of mind for wholesalers and retailers in our industry since they were levied at 10% in Sept 2018. The anticipation was, that with successful trade negotiations between the US and China, that those tariffs would go away in early 2019. Unfortunately, in May 2019 those 10% tariffs were raised to 25%.
Several companies have already communicated out plans to recover the cost of the tariffs through price increases or surcharges. Internally, Enesco has been reviewing financial impacts of the tariffs to our business, while also discussing options with our Retailer Advisory Board for their perspectives.
After weighing all the options, Enesco is announcing that we will continue to not pass along the additional cost of tariffs to our retail partners. We understand that even a shared pass through of these costs would put our retailer partners in the position of needing to absorb smaller margins or passing it along to their consumers, which in the end, could affect sell through in the critical Q3/Q4 periods.
A statement from Enesco CEO Todd Mavis sums it up best, "In our ongoing support of you, our valued customer, we remain the non-tariff company, as we have been since Sept 2018. After all, you should not be penalized for our decision on where we source product".