Daily News Archive
Brought to you by Home Furnishings Business
November 13,
2007 by in UnCategorized 
By Home Furnishings Business in Furniture Retailing on November 2007
Blaming weak demand for furniture, La-Z-Boy, Monroe, Mich., reported Tuesday that net sales in its second quarter declined 12 percent to $365.4 million, which resulted in an after-tax loss of $9.9 million. The company posted a $1.95 million gain in the same period last year.
With the decline, La-Z-Boy lowered its guidance for its 2008 fiscal year. It now expects sales in the second half of the year to be down 4 percent to 8 percent and earnings per share to be in the range of 6 cents to 14 cents—down from 30 cents in the second half of 2007.
President and CEO Kurt Darrow said, “While we are disappointed that, due to industry headwinds, the improvements we have made in our business model are not clearly evident in our results, we posted reasonable operating margins in each of our wholesale businesses on significantly lower volume. In the midst of what continues to be a challenging environment across the furniture sector, we are executing against our strategy and making the necessary changes to our business model to ensure we remain both a leading and competitive manufacturer, distributor and retailer.”
He said the sale of the company’s Clayton Marcus and Pennsylvania House brands concludes its “portfolio rationalization.” He said the company will focus on manufacturing processes and structure its retail operations as a more efficient, integrated entity.
The company’s $9.9 loss for the quarter, which translates into 19 cents per share, includes a 7 cents-per-share writedown of goodwill, a 12 cents-per-share charge from discontinued operations and a 1 cent restructuring charge.
Sales in the company’s upholstery segment decreased 11.4 percent and casegoods declined 20.6 percent. Same-store sales at company and independent La-Z-Boy Furniture Galleries stores were down 9.1 percent.
November 13,
2007 by in UnCategorized
By Home Furnishings Business in Motion Upholstery on November 2007
An affiliate of New York-based Capital Business Credit has agreed to be the stalking horse bidder of selected assets and business operations of PeopLoungers.
The transaction, expected to be completed by mid-December, is pending approval of the U.S. Bankruptcy Court in the Northern District of Mississippi.
“We are extremely pleased that the elements of this transaction have been agreed upon and look forward to its consummation following court approval,” said Armand J. Carrano, senior managing director of The Finley Group, a turnaround company in Charlotte, N.C. “This association will provide PeopLoungers access to an extensive worldwide network of trading partners and operating resources, and together, with our simplified cost and capital composition, will permit PeopLoungers to focus on its core business proposition.”
PeopLoungers has been operating under Chapter 11 since May.
Capital Business Credit is a privately held factoring company providing middle market companies financial products and services.
November 13,
2007 by in UnCategorized
By Home Furnishings Business in Mattresses on November 2007
Leggett & Platt, the nation’s largest supplier of components for furniture and bedding, announced plans to become a smaller, but more profitable company Tuesday. As a result of a strategic review, the Carthage, Mo.-based company plans to eliminate one-fifth of its portfolio (representing $1.2 billion in revenue) and boost shareholder returns by 12 percent to 15 percent.
The businesses Leggett & Platt plans to sell include its aluminum products division and the least profitable segment of its store fixtures operation.
The company said the plans will involve restructuring-related charges of as much as $300 million. The company reported record annual revenues of $5.51 billion in January.
CEO and President David Haffner said, “We are making significant, necessary changes to the way we assess our portfolio of businesses, and to how we manage our asset base. We intend to be better stewards of shareholders’ capital, generate significantly more free cash, and return a larger amount of that cash to our investors. Our shareholder returns have suffered for the past few years, as part of our portfolio has dragged us down. We are correcting that by divesting several of our businesses. These are tough decisions we don’t make lightly because they affect many of our employee-partners; however, these actions are required to bring about a stronger, better performing, and more focused Leggett & Platt.”
November 13,
2007 by in UnCategorized
By Home Furnishings Business in Mattresses on November 2007
Atlanta-based Simmons announced Tuesday that sales in the company’s third quarter increased 20.1 percent to $312 million. Net income was $12.3 million, up from $10.4 million from the same period in 2006.
For the first nine months of 2007, net sales rose 16.3 percent to $857.3 million. “The strong sales momentum we have experienced over the last six quarters continued into the third quarter of 2007, with the third quarter being the seventh successive quarter our sales growth in the U.S. exceeded that reported by ISPA for the industry,” said Chairman and CEO Charlie Eitel. “In the third quarter and first nine months of this year, our business operated at record sales despite a very competitive sales environment.”
November 12,
2007 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on November 2007
Design Within Reach, San Francisco, returned to profitability in the company’s third quarter as sales increased 11.6 percent to $49 million.
Net income for the third quarter was $2.4 million after a net loss of $1.2 million in the third quarter of 2006.
“We are pleased to announce that the third quarter marked a return to profitability for Design Within Reach, and that our continued efforts to improve margins and manage expenses have begun to show a positive return,” said CEO Ray Brunner. “In a quarter characterized by challenging industry trends, our strong sales performance validates the market demand for well designed products.”
He said the company expects to broaden its audience with a new gift assortment at attractive price points. Brunner said he is “cautiously optimistic” about 2008 as the company continues to focus on growth strategies, expense control and margin control.
Sales in the company’s 65 stores, which it calls studios, increased 16 percent to $31.9 million. Direct Internet and phone sales decreased 3 percent to $11.8 million.
The company continues to expect full-year sales to reach about $190 million with break even earnings.