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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (62603)	4/23/2005 8:41:38 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

Furniture - Ethan Allen was supposed to be sourcing furniture from India - I'm surprised to read that so much is from the US. They have many free standing stores, some in moderately expensive areas. Lazy - Boy seems to be getting sales traction with the Todd Oldham collection - much hipper designs which appeal to some Boomers, Gen X and some Gen Y. Restoration Hardware sells lots of 'gimicky' stuff - old fashioned record players - and many of thier items seem to be overpriced. They also occupy the most expensive shopping mall real estate of any of the stocks mentioned, even more expenisive that Ethan Allen. This would be on my short list for shorts.

To: TobagoJack who wrote (62603)	4/24/2005 9:52:00 PM
From: Slagle	Read Replies (2) \| Respond to of 74559

TobagoJack Re: "What do the carpets now say?" Monday I hope to be able to talk to some people in the industry who might offer some insight. This weekend I have been listening to the MHK Q1 conference call and the tone is cautious, reminds me of the 1970's. Jeff Lorberbaum, the MHK CEO answers for the company and the questioners are all asking for information that bears on the industry outlook as much or more than anything MHK specific. I guess the guys from these investment banks, ect. want the same info we are looking for. MHK has had two carpeting price increases in Q1 due to increase in yarn and other raw materials. From what a analyst said I assume there may have been at least one price increase last year. These price increases were not across the board but by style, ranging from 1% to 2% each and all from the rise in oil price. He was questioned about carpet inventory and there has been considerable inventory build and he cites "softness" in the carpet market, both from MHK experience and from what MHK customers tell him abot the market. One important item; he cites the 3 to 4 months lag in the system till the price increases work their way down to the retail customer or end user. He implies that the effect of the recent price increases may not have been felt yet. There are several questions bearing on the expected direction of yarn prices. Louberbaum says that after many years of being unable to raise prices the fiber producers are eager to do so. He says that he can't predict, not knowing if oil will be $40 or $80. They tried to pin him down to the percentage decline in residental vs. commercial but he refused, stating something about being the "only public carpet company". Here is waht I get from all this: Carpet sales have begun to slow in the most recent quarter and inventories have begun to rise. BUT.....how much of the slowing is due to whatever rise in price that has by now made its way ddown to the end user or....is some of the slowing due to a general slowing of demand in the end market? It may be that his customers are shifting their purchases to cheaper carpets. He did say that his polyester carpet (which is made from recyled PET bottles) is selling well as there has been no price increase there. Back in the early 90's I went along on a couple of sales calls to see Lorberbaum when he was VP at another mill. Guess I should just call him up and ask "Hows business?" <G> Slagle Slagle