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All eyes on Wall Street

BY HBSDEALER Staff

The bears were out in force on Wall Street Thursday, as markets appeared to be spooked by a French bank’s effort to freeze three funds that invested in the United States subprime mortgage market. Particularly hard hit on the financial markets yesterday were home channel stocks.

Of 16 major home channel and home-related companies tracked by Home Channel News (see below), only Tractor Supply and Andersons showed gains on Thursday. The decliners were led by two-step distributor Huttig Building Products, down 16.09 percent on the day, and home improvement product manufacturer Masco, down 7.17 percent. (Read more here.)

Among retailers, Home Depot was down 5.32 percent. The company Thursday said, “in view of current financial market conditions” it may need to renegotiate the terms of its previously announced sale of its HD Supply division to three private equity groups. (Read more here.) Number-two home center retailer Lowe’s was down 3.65 percent, on the same day it announced it was losing Doug Robinson, who was in charge of its Canadian operations. (Read more here.)

As the stock markets were leaking, United States retailers reported moderate growth for the month of July, when same-store sales grew 2.6 percent, according to the tally from the International Council of Shopping Centers (ICSC). The housing market figured heavily in the analysis from Michael Niemira, ICSC’s chief economist.

“As we have noted earlier this year, a consumer ‘soft patch’ began in February 2007, and the latest data suggested it continued through July,” he said. “The housing market drag continues to dampen consumer demand and with it the overall economy.”

While Wal-Mart’s same-store sales for July increased 1.9 percent, its shares fell more than 4 percent, its biggest single-day drop in four years.

 Following Thursday’s 2.96 percent decline of the S&P 500 Index and a 2.83 percent decline in the Dow Jones industrial average, the markets stopped the bleeding on Friday. The Dow closed down a mere 0.23 percent, and the S&P 500 actually increased slightly.

Friday Gainers:

Home Depot: 35.92, up 0.36%

Sears Holdings: 133.10, up 2.46%

Lowe’s: 27.76, up 1.20%

BlueLinx: 8.10, up 0.12%

Weyerhaeuser: 66.42, up 0.23%

BMHC:14.23, up 9.04%

Builders FirstSource: 14.20, up 5.73%

Stanley Works: 56.55, up 0.69%

Black & Decker: 89.68, up 0.09%

Sherwin-Williams: 69.14, up 4.68%

Friday Decliners:

Huttig: 5.17, down 3.72%

Masco: 25.78, down 0.96 %

Wolseley: 20.60, down 2.60%

Wal-Mart: 46.07, down 0.82%

Andersons: 49.04, down 3.33%

Tractor Supply: 48.98, down 3.96%

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Restoration Hardware lowers outlook

BY HBSDEALER Staff

Restoration Hardware has lowered its fiscal 2007 earnings guidance, due to a challenging, competitive environment in the home furnishings market and weakness in the home-building sector.

The company says it now expects a loss-per-share of between $0.21 and $0.19, “reflecting below-plan revenues and a higher-than-anticipated mix of promotional selling.”

“The company has several new growth vehicles in place that we expect will drive revenue growth in the second half of the year, including the recent introduction of Restoration Hardware Trade [and] the continued rollout of the Restoration Hardware Bed & Bath Catalog,” said Gary Friedman, president and CEO.

The company also has announced a redesigned Web site that will launch in the fall.

Additionally, the company said it has signed a 15-year lease for a new distribution center in West Jefferson, Ohio. The company said construction would begin this fall on the 800,000-square-foot facility.

The facility will be used to stock the company’s East Coast retail stores and its non-furniture, direct-to-consumer business.

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Lowe’s plans distribution center in Mississippi

BY HBSDEALER Staff

Lowe’s is planning to build an approximately $15 million distribution center in Mississippi, according to the Hattiesburg American newspaper.

Construction for the 130,000-square-foot facility is planned for October in Purvis Industrial Park, in Purvis, Miss. The facility is expected to employ 35 people, according to the newspaper.

In a May conference call with investors, Lowe’s COO Larry Stone discussed the company’s longstanding plans to expand distribution capabilities. Lowe’s most recently opened a new distribution center in Rockford, Ill., part of a company goal to grow inventory at 75 percent of sales growth. Another new distribution center has been planned for Lebanon, Ore.

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