Old Hickory rides again
The Hermitage, Andrew Jackson’s Nashville plantation house, sits just a few miles down the road from the site of the 2007 STAFDA Convention and Trade Show.
A few words here about General Jackson and his times might help us better understand our own challenges. (Note to accounting: They may also help me write off the $15 admission ticket to the Hermitage as a legitimate business expense.)
Let’s begin with tariffs, free trade and protectionism. These concepts helped define the Jackson presidency. More than a century later, they also overshadowed many of the dealings on the STAFDA show floor, as distributors braced for the possibility of increased duties on Chinese and United Arab Emirates nail imports. (See article on page 1.) If duties are approved, “Nail importers will have to pay dearly on each container load,” said Greg Drouillard, STAFDA president, and president of Target Building Materials in Windsor, Ontario, during his state of the industry speech. “We’re talking serious dollars.”
In the spirit of Adam Smith and free trade, this editorial cautions against the folly of trying to make at home when it will cost less to buy abroad. But where did Jackson stand? Tariff supporters can claim Jackson on their side, though the extent of his support is questionable—he favored a “judicious tariff.” He was more a unionist than a protectionist. His sentiments and those of his archrival southerner, John Calhoun, gave rise to the classic battle of the after-dinner toasts:
Pro-tariff Jackson: “Our federal union; it must be preserved!”
Anti-tariff Calhoun: “Our union; next to our liberty, most dear!”
Passions aren’t quite as high in 2007, but a lot is riding on the upcoming decision of the U.S. International Trade Commission. As news breaks, we’ll have it at homechannelnews.com.
More than any single issue, Jackson’s life story and rise from orphan to frontier lawyer to president stands as one of the most remarkable true stores in American history. As a matter of coincidence, STAFDA’s keynote speaker, Chris Gardner, told a rags-to-riches tale that brought him a well-deserved standing ovation. Gardner’s life was portrayed in the Hollywood movie “The Pursuit of Happyness.”
From a retailer’s perspective, the most amazing thing about Jackson is his failure as a merchant. This heroic figure, this strong-willed force of nature and a legendary leader of men—somehow didn’t survive as a retailer in a pre-presidential business venture.
He blamed the banking system, which he felt received far too much credit for its role in nurturing U.S. commerce, and he bitterly fought the national bank all his days as president.
In his speech last month, Drouillard advised STAFDA delegates to “welcome the competition.” He might have added that being able to compete in this business is a badge of honor. It should come as no small satisfaction to today’s successful retailers that they have found success in a field where a man like Jackson did not.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.