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D.R. Horton issues preliminary fourth-quarter results

BY HBSDEALER Staff

Fort Worth, Texas-based home builder D.R. Horton released a preliminary fourth-quarter report showing net sales orders dropped 48 percent to 6,374 homes, a total value of $1.3 billion, from 10,430 homes, a value of $2.5 billion, in the previous year.

The company’s fourth-quarter cancellation rate rose to 48 percent, compared with a rate of 40 percent in the year-ago period.

For the year, the company saw net sales orders drop 35.2 percent to 33,687 homes, or $8.2 billion, from 51,980 homes, or $13.9 billion.

“Inventory levels of both new and existing homes remained high, while pricing remained very competitive,” said Donald Horton, chairman of the company’s board of directors. “We also experienced reduced mortgage availability due to tighter lending standards, and buyers continued to approach the home buying decision cautiously. We expect the housing environment to remain challenging.”

The company will release its fourth-quarter results on Nov. 20. D.R. Horton builds homes in 27 states.

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Centex warns of impending $1 billion in charges

BY HBSDEALER Staff

National home builder Centex has warned of an impending second-quarter charge of $1 billion, primarily in land value writedowns, following a three-month period of falling home sales combined with lower land values.

Of the approximately $1 billion, Centex paid $850 million to cover declining values of real estate and undeveloped land. The company will release official second-quarter results on Oct. 23.

Centex said home sales fell 13 percent in the second quarter, while it has set aside a provision of $60 million for higher expected losses in the mortgage and credit markets. A provision is an amount of money set aside as an allowance for bad loans, taking into consideration defaults and term renegotiations.

Net home sales dropped to 5,953 units, down 14 percent from a year ago. The company’s backlog of new homes decreased 38 percent to 9,633 units.

Based in Dallas, Centex builds homes in 25 states.

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Bombay Company sold; new owner to operate solely in Canada

BY HBSDEALER Staff

Home decor retailer Bombay Company has been sold at auction in a deal that would see all the company’s U.S. assets liquidated, with operations continuing only in Canada. Financial terms of the deal were not disclosed.

Retail investment companies Gordon Brothers Retail Partners and Hilco Merchant Resources won an auction for the home decor company, which filed for Chapter 11 bankruptcy protection in September.

Bombay said the two investment groups have proposed that Canadian retailers Bowring and Benix have agreed to help keep the Canadian Bombay stores open.

If the U.S. Bankruptcy Court in Ft. Worth, Texas, approves the deal, Bombay could start store closing sales as early as this week. Other Bombay assets, including its U.S. intellectual property rights and its real estate assets, are not part of the proposed transaction.

“This is a difficult day for Bombay in the United States,” said Bombay CEO David Stewart in a statement. “Over the coming weeks and months, our U.S.-based employees will work closely with [the investment groups] to prepare, stock and operate the stores during the holiday season.”

The company operates a total of 384 retail outlets in the United States and Canada.

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