ETH was up prior to posting this
SHLD has gotten more heavily into crap furniture and future yard sale merchandise. They've both a long struggle ahead
If interested, looking for a pretty good tank today
Message 24447662
SHLD one of the most toyed with stocks on the exchange- thx to EL
After initial sell-off- barely down while JCP flails about down 8 1/2 pct, as if SHLD will fare any better
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Bleak future for furniture
Commentary: Investors and consumers remain on edge
By MarketWatch
Last update: 1:54 p.m. EDT March 27, 2008
NEW YORK (MarketWatch) -- Challenging. Difficult. The worst in 30 years. And that's just home furnishings.
Williams-Sonoma Inc. on Thursday gave a dismal forecast for the year, citing the weak economy, even as the home-goods retailer posted a higher profit in the most recent quarter. See full story.
In a statement, Chairman and Chief Executive Howard Lester said the company is operating in "one of the most challenging macro-economic environments we have seen in many years." And said it was approaching the year with "a high level of caution."
On a conference call with investors and analysts, Lester said the company was seeing consumer weakness in areas that were particularly hard-hit by the economic downturn, such as Florida, Atlanta, Southern California, Las Vegas and Phoenix. Areas that were more robust included Texas, Oklahoma and Chicago.
Generally, the consumer is simply spending less, Lester said.
Shares of Williams-Sonoma (WSM
PIR) .
This isn't a shock, considering the consumer confidence figures released earlier this week, showing sentiment at its lowest since the start of the Iraq war in 2003. See full story.
What's more, the Case-Shiller home price index showed U.S. housing prices in 20 major cities declined by a record 2.4% in January, falling for the 18th month in a row and bringing down prices by a record 10.7% over the past year. See more coverage.
Not only are prospective homebuyers sitting on the sidelines, but the prospect of opening one's wallet for any nonessential purchase seems unwise to many people.
"This feels a lot to me like 1990, maybe more difficult, I think. I think this is probably the worst time that I've seen since I've been in this business in 30 years," Williams-Sonoma's Lester said. "We have the election coming along. That's going to be a distraction, but I think it's going to be a difficult year."
The home furnishings and accessories business was a nice place to be several years ago. After the Sept. 11, 2001, attacks, consumers turned inward. They traded travel and dinners out for scrapbooking and game nights with friends, focusing on nesting and sprucing up their homes.
Easy credit, low interest rates and a flood of mortgage refinancings didn't hurt either.
No matter how hard the optimists wish it, there's still more pain to come as the real estate market collapses.
-- Angela Moore, U.S. commentary editor End of Story |
