Daily News Archive
Brought to you by Home Furnishings Business
May 17,
2006 by in UnCategorized 
By Home Furnishings Business in Furniture Retailing on May 2006
Office supply, services and furniture retailer Office Depot has acquired Allied Office Products, the country’s largest independent dealer of office products and services, for an undisclosed amount.
Allied, with annual revenues of more than $300 million, currently operates sales offices from New York to California, with a strong concentration in the Northeast. Allied’s offerings include office supplies, break room and coffee services, janitorial supplies, computer products, custom printing, managed print services, promotional items, office furniture and design.
“This acquisition accelerates Office Depot’s growth, enhances our competitive position and extends our industry leading line of products and services,” said Steve Odland, chairman and chief executive officer of Delray Beach, Fla.-based Office Depot, in a statement issued Wednesday. “In particular, Allied’s strength in the Northeast will continue to broaden Office Depot’s presence in this important region, while their ability to meet the diverse needs of legal and medical customers will further our expansion in key vertical markets.”
Allied and Office Depot share the same business philosophy, said Howard Brown, chairman and chief executive officer of Allied Office Products.
“Office Depot has the breadth and depth of both national and private brands, as well as the promotional programs, purchasing power and financial clout necessary to empower our sales people to better meet customer requirements on a global basis,” he said.
Brown, his son Michael—who currently serves as president of Allied Office Products—and other key executives will continue as part of the management team within Office Depot’s North American Business Solutions Division.
“Allied’s management experience, national customer base and knowledgeable sales force are perfect complements to our existing contract organization and infrastructure,” said Cindy Campbell, executive vice president of Office Depot’s BSD division.
Office Depot has annual sales of more than $14 billion—including more than $3.8 billion via e-commerce—serves customers in 23 countries and employs about 47,000 people worldwide. As of April 1, the company had 1,049 retail stores in North America. Internationally, Office Depot has wholly- or majority-owned operations in 16 countries, and it operates retail stores under joint venture and license arrangements in another five countries.
May 17,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
The Bombay Co. reported first quarter 2006 sales of $118.7 million, down 2.8 percent from $122.1 million in the same period last year.
For the 13-week period ended April 29, the retailer lost $15.6 million, compared to a net loss of $8 million in first-quarter 2005.
Same store sales for stores open more than one year declined 1.2 percent in the first quarter. Revenue from non-store activity, including Bailey Street Trading Co.—the assets of which were sold during fiscal 2005—Internet, mail order and international amounted to 6.7 percent of total revenue for the quarter compared to 7.5 percent for the first quarter of the prior year.
Increases in revenue from direct-to-customer business, driven primarily by Internet sales and international wholesale operations of $2.4 million partially offset the loss of revenue from the Bailey Street, which totaled $3.6 million last year.
Retail store revenue declined 2 percent during the first quarter, about half of that related to a reduction in store count; and the rest related to lower same-store sales.
Gross margin for the first quarter declined 180 basis points versus the prior year, mainly because of a 150 basis point decline in product margin. The decline in product margin was related to a larger portion of sales being generated by promotional activity, particularly in the furniture area where the bedroom, dining room and kids categories had margin declines as a result of increased clearance activity.
Bombay opened four stores, including one combination store, during the first quarter and closed 20 stores. The company ended the period with a total of 482 stores compared to 495 stores at the end of the first quarter of fiscal 2005. Retail square footage, however, declined a modest 0.5 percent due to the difference in sizes of the stores as the company has moved stores from malls to off-mall sites during the past year.
During the second quarter, Bombay expects to open three stores and close 10 to 14 stores. The year-end store count is expected to be in the range of 460 to 465 stores.
“The overall environment for specialty home furnishings remains challenging,” said James Carreker, chairman and chief executive officer, who steps down June 3. “We saw a significant decline in traffic and business after Easter that adversely affected results. We continue to control expenses, investing in areas to drive business to remain competitive. We are testing national television broadcast on select cable networks during May and early June. We are tightly controlling our inventory levels and carefully managing liquidity and markdown levels in order to maintain flexibility. We enter the second quarter with an improved inventory content compared to last year and what we believe to be an improved assortment.”
May 17,
2006 by in UnCategorized
By Home Furnishings Business in Bedding on May 2006
Sealy Corp. reported net sales of $395.7 million for the first quarter ending February 26, an increase of 10.2 percent from $359 million for the same period a year earlier.
Gross profit was $176.7 million or 44.7 percent of sales as compared with $159.1 million or 44.3 percent of sales for the same period last year. Net income was $23 million after a $300,000 reduction due to the cumulative effect of a change in accounting. This represents an 11.3 percent increase over the $20.6 million in the same period a year ago.
“We are pleased with our first quarter results,” said David J. McIlquham, Sealy’s chairman and chief executive officer. “During the quarter we saw strong international performance, a successful launch of our new Stearns & Foster product line and the introduction of our new Posturepedic line. Strong demand for our brands, continuous focus on improving efficiencies in our facilities and the commitment of our employees continue to drive our success in the market place.”
May 16,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
San Francisco-based Design Within Reach reported net sales of $35 million for the first quarter ended April 1, a 1.4 percent decrease from the $35.5 million recorded in the same quarter last year.
Net loss for the quarter was $4.2 million, compared to net earnings of $900,000 posted in the first quarter of 2005. Included in the first quarter 2006 results are approximately $895,000 of professional consulting fees relating to Sarbanes-Oxley compliance and additional audit fees compared to the first quarter of 2005.
In addition, the retailer reduced its 2006 sales guidance to about $175 million, the low end of its previously released guidance of $175 million to $185 million. With its plans to re-evaluate strategy and prioritize cost-cutting measures, Design Within Reach is not providing annual earnings guidance and said that any previously issued earnings guidance should not be relied on.
Last week, the company replaced Tara Poseley as its chief executive officer. Ray Brunner, who has been with the company since 2002, succeeded Poseley in the position.
The contemporary retailer sells products through its stores, online and a catalog.
The company said in-person sales were about $20.9 million in the quarter. Design Within Reach has opened seven stores year-to-date and has two under construction, but it doesn’t plan to open new stores in fiscal 2006.
Online and phone sales dropped 18 percent to $10.7 million for the quarter. The company attributed the 16 percent online sales drop to a reduction in marketing price promotions from the same period last year. Phone sales were down 22 percent.
Moving forward, Design Within Reach said it will examine costs associated with online and phone sales to determine catalog profitability.
“I’m excited about the opportunity to lead a turnaround at Design Within Reach and am committed to instituting some major, but necessary, changes in the coming months,” Brunner said. “I have a strong understanding of our core competencies and firmly believe that our problem is not at the top-line, but an expense and control issue. Over the past several years, we have veered away from some of the basic tenets that made our business so successful by introducing products with lower unit costs and lower inventory turnover, and we have invested heavily in overhead. We are currently examining every line item to return to the fundamentals of cost control and bring DWR back to profitability.”
May 16,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
Traditional furniture retailer Mastercraft Interiors has filed for Chapter 11 bankruptcy protection citing declining sales and changing tastes as the reasons.
The Beltsville, Md.-based retailer has been in business since 1977 specializing in 18th- and 19th-century reproductions. The retailer has four stores and employs about 150 people. The company recently closed a store in Leesburg, Va.
Documents filed in federal bankruptcy court show the company has $10.6 million in assets, and liabilities are listed at $25.5 million. Revenue fell by $5.2 million to $45.3 million last year.
Bank of America is listed as Mastercraft Interiors’ largest creditor and is owed $10.3 million on a line of credit.