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Major retailers faulted for improper gas appliances hook-ups

BY HBSDEALER Staff

Officials in Maryland’s Montgomery County have issued a report blaming Home Depot, Lowe’s and Sears for failing to ensure that gas appliances installed by their subcontractors were inspected as required by law, according to an article in the Washington Post.

Two-thirds of all gas water heaters bought last year by Montgomery residents in county outlets of Home Depot, Lowe’s and Sears were not inspected, according to data released by the Washington Suburban Sanitary Commission and Montgomery’s Office of Consumer Protection.

A follow-up inspection found that approximately 25% of the water heaters were improperly installed, putting consumers at risk for carbon monoxide poisoning and home fires, according to officials.

Montgomery’s consumer protection director, Eric Friedman, told the Washington Post that Home Depot, Lowe’s and Sears are cooperating with authorities to notify customers. But Friedman said that the retailers bear "some responsibility" for their subcontractors’ sidestepping of county safety requirements.

Friedman said his agency is considering fining retailers, which charge permit fees but do not ensure that the inspections are carried out. In essence, Friedman said, the stores have been overcharging customers.

"We think the retailers have some responsibility, certainly," Friedman told the newspaper. "The store is taking the consumers’ money directly, not the plumber." His agency is considering issuing citations to the retailers, Friedman said.  

Spokesmen for Home Depot and Lowe’s responded that the permit fee is not an overcharge because the stores collect the money to repay subcontractors. They said that the stores keep no funds from the fee and should not be subject to citations. A Sears spokesman said the company is confident that its installation process complies with standards.

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Scotts lowers forecast as consumers hold back

BY Ken Clark

Marysville, Ohio-based Scotts Miracle-Gro said it expects to report a 2% decline in sales for fiscal 2011 when it issues its full-year financial results Nov. 8.

The sales shortfall, coupled with associated gross margin pressure, will likely result in adjusted net earnings in a range of approximately $2.70 to $2.75 per share, according to the company. The company had forecast earnings of about $3.00 per share back in August.

The reduced outlook stems primarily from an unexpected year-over-year decline in consumer purchases in the United States during September.

"While we were counting on another strong fall lawn care season, the weather issues that plagued us throughout fiscal 2011 remained problematic during the fourth quarter," said Jim Hagedorn, chairman and CEO. "The impact of Hurricane Irene and other inclement weather in September all but eliminated lawn and garden activity in key markets during a critical period of our fall season, not only in our consumer business but for Scotts LawnService as well."

When the weather was good, so was business, Hagedorn said. "But the combination of weather, commodities and challenges in the mass merchant channel were just too much to overcome in a single season," he said.

He added that the company remains optimistic about its innovations coming to market in 2012.

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Industry Dashboard for Oct. 10, 2011

BY HBSDEALER Staff

The Consumer Watch section of the Dashboard shows unemployment and Consumer Confidence stuck in the mud. Gas prices, though, are quickly dropping.  

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