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Sears Holdings Says Offer Is Fair; Remains Committed

By Home Furnishings Business in on February 2006 Sears Holdings said yesterday that it remains committed to its offer of C$16.86 a share for outstanding shares of Sears Canada despite a special committee recommendation that the offer be rejected.

Alan Lacy, vice chairman of Sears Holdings, said the committee is basing its recommendation on a "flawed valuation report." "

"The optimistic expectations for Sears Canada's business that form the basis for the valuation report are unrealistic and inconsistent with the increasingly competitive retail market in Canada," Lacy said.

Sears Holdings is offering to acquire any and all of the outstanding common shares of Sears Canada, other than those already held by Sears Holdings and its affiliates, for C$16.86 per share in cash. Sears Holdings currently owns about 53.8 percent of the outstanding shares of Sears Canada. The proposed deal is worth C$835 million.

Lacy said the offer price represents a full and fair price for the company.

"We have owned over 53 percent of Sears Canada for more than 20 years and, if necessary, we are comfortable continuing to own less than 100 percent," Lacy said. "On March 17, 2006, shareholders will only have two choices: either tender to the Sears Holdings offer or continue to hold shares, which we believe will thereafter trade at a significant discount to our offer."

Young America Featured on Oprah

By Home Furnishings Business in on February 2006

Youth producer Young America will be featured on today's The Oprah Winfrey show as part of a special program highlighting the talk show host's work with Habitat for Humanity in rebuilding homes for young survivors of Hurricane Katrina.

Young America partnered with Oprah's Angel Network and Habitat for Humanity to rebuild homes.

"Many of these children have no tangible evidence of their lives before Katrina," says Glenn Prillaman, Young America senior vice president of marketing and sales. "They lost not only their homes and basic family necessities, but also their toys, their belongings and their beds – things that were uniquely theirs. We're happy to help give these young survivors a space to call their own, as well as hope for a brighter future."

Shortly after Hurricane Katrina devastated the Gulf Coast, Winfrey pledged $10 million of her own money and launched Oprah's Angel Network Katrina Homes Registry so viewers could help build homes for the hurricane survivors.

Partnering with Habitat for Humanity, Oprah's Angel Network not only built the homes, but furnished them, too.

Gould Joins Broyhill

By Home Furnishings Business in on February 2006 David Gould has been named director of supply chain management for Broyhill Furniture.

In his position, Gould is responsible for demand planning, logistics and inventory and shipping management. He reports to Dean Powell, senior vice president of operations.

Prior to joining Broyhill, Gould spent six years with Universal Furniture as director of supply chain and earlier, their director of demand management. He was responsible for container management, overseas product purchasing and scheduling, and operational systems analysis. Gould's experience also includes materials management with companies such as Maitland-Smith, Mannington Wood Floors and Emerson Electric.

"With David's vast knowledge of supply chain management, we continue to build a strong team at Broyhill that knows, understands and can project the needs of today's savvy consumer," Powell said. "David will keep the flow of our products matched to the pace of our customer's frequently-changing demands."

Katrina Drives Strong Start For Tupelo Market

By Home Furnishings Business in on February 2006 By Powell Slaughter

The impact of Hurricane Katrina has led to a rebuilding effort along the Gulf Coast that could help drive business at this week's Tupelo market -- where pre-opening day traffic was clearly stronger than August -- for several years.

"The dealers who didn't lose their locations are selling tons of furniture as people rebuild," said Bill Cleveland, president and chief operating officer of the Tupelo market. "The ones we talked to are obviously selling more furniture than usual. Right now, it's the northern ends of the storm area and where the damage was more from flooding than total destruction. Preregistration is up significantly over August and, more important, up nicely over last February. It's the rest of the week that will tell the story."

Several exhibitors said Tuesday that they already were seeing the effect.

"Sales are really starting to kick up with our dealers in a lot of the Katrina area, but the destruction along the coast was so complete, dealers tell me, that (some) dealers there still haven't recovered," David Ballard, president of Primo Designs.

Todd Evans, vice president of sales and marketing for Kathy Ireland Home by Standard, said early traffic opening day was a lot brisker than August's.

"A lot of our dealers have been shopping for our domestic laminate case goods and promotional occasional," he said. "Our business in the Katrina area has already risen 35 to 40 percent from last year, so we've seen a big spike."

Ballard and Cleveland noted that if the experience at retail in South Florida holds true, furniture retailers have to gear up to providing a valuable service rather than a product of choice for consumers.

"The number I saw is that Andrew destroyed or damaged around 150,000 structures," Ballard said. "Per capita income in South Florida is higher than in southern Alabama, Mississippi and Louisiana, but Katrina affected more than 450,000 structures in those areas."

Katrina created a situation where furniture isn't a discretionary purchase.

"The corollary is that this probably will be the juice at the Tupelo market for the next couple of years," Ballard said. "It's too early to tell whether it will be this week, but certainly by August."

For a while, anyway, Ballard and others believe dealers in the areas will focus as much on logistics as new styles.

"Dealers aren't necessarily focused on new product," he said. "They are asking 'How can I keep what I'm buying now flowing fast enough.'"

Havertys Reports Annual Sales, Income

By Home Furnishings Business in on February 2006 Atlanta-based Havertys has reported net income for the fourth quarter ended Dec. 31 of $6.8 million, a 22.4 percent decline from the $8.7 million posted during the same quarter last year.

Earnings for the year were $15.1 million, a 33.5 percent decrease compared with $22.6 million during the year before.

As previously reported, sales for the fourth quarter were $225.6 million, a 4.1 percent jump from sales in the corresponding quarter in 2004. Annual sales increased 5.5 percent to $827.7 million from $784.2 million in 2004. Comparable-store sales in 2005 increased 1.2 percent for the fourth quarter and 1.8 percent for the year.

Clarence H. Smith, president and chief executive officer, said the company's fourth quarter earnings reflected modest sales increases and improving gross profit margins offset by higher sales, general and administrative costs and much lower other income from property dispositions.

"The gross profit margins were 59 basis points better than the fourth quarter last year and the highest of any 2005 quarter," Smith said. "We attribute this progress to increased sales of our Havertys Collections private label products replacing sales of widely distributed merchandise sold under certain manufacturers' brands."

The retailer is putting a lot of emphasis on its private label product line.

"The Havertys brand has become a central focus for our future and key to further improving gross profit margins," Smith said. "We believe we can increase market share in 2006 as we strive to better connect with our customers and earn more of their business."
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