Research firm points to garage as opportunity
Port Washington, N.Y.-based NPD Group pointed to garage storage as a home improvement category somewhat immune to the housing downturn, as well as an opportunity for home improvement retailers.
“Garage storage is somewhat immune to the current housing market downturn,” said Mark Delaney, director of NPD Group’s Home division. “It’s not like the kitchen category. Consumers who plan on redoing their garage are doing so, regardless of what the housing market is doing.”
Some of the garage storage findings from NPD Group include:
• Warehouse home centers took the lion’s share of dollars at 47 percent in the garage and storage sector. Mass merchants followed at 32 percent and department stores at 5 percent.
• The garage storage segment attracts mostly high-income male shoppers.
• During the 12 months ending October 2007, men accounted for 64 percent of the dollar share in the garage storage and organization sector.
NPD Research is based on monthly tracking of 30,000 opt-in respondents in 70 categories.
“Areas ‘outside’ the home are getting more attention and are benefiting from the trend in making visual statements out of previously simple spaces. Garage storage is one of those areas that has evolved from simple products like bike racks and tool hooks into a race to build the ultimate ‘man cave’ complete with refrigerators and flat-screen TVs,” said Delaney.
While women account for only 36 percent of the dollar share in the garage storage and organization sector, “NPD consumer research shows that women mainly shop for home improvement items within mass merchants, where items generally sell for less. Women might become a bigger piece of the pie if mass merchants begin to carry more aspirational items or if department stores and warehouse clubs adjust their marketing efforts to appeal better to women,” said Delaney.
“Garage storage is an up-and-coming category that seems somewhat recession-proof. Retailers looking to attract a higher income consumer should consider expanding their assortment in this area,” added Delaney.
Lennox reports ‘solid’ fourth quarter
Global HVAC manufacturer Lennox International reported what it called a “solid” fourth quarter, with earnings down slightly to $38.8 million from $41.1 million in the same period last year, a 5.5 percent drop. Sales were up 1 percent to $887 million from $873.7 million in the same period last year.
For the full year, earnings were $169 million, up 1.8 percent from $166 million in 2006. Sales totaled $3.75 billion, up 1 percent over the prior year’s total of $3.71 billion, with foreign exchange contributing 2 percent to growth, the company said.
“Lennox International had a solid fourth quarter and strong results for the year,” said Todd Bluedorn, CEO of Lennox International. “Three of our four businesses — Commercial, Service Experts and Refrigeration — had outstanding performance, with profit growth in the double digits and margin expansion.”
Those areas of growth offset a “tough market” in residential sales, a segment in which the company took “aggressive cost reduction actions” this year, Bluedorn said.
The HVAC giant reaffirmed its 2008 outlook, with revenue growth expected at 2 percent to 5 percent.
Menards eyes Austin, Minn., site
Eau Claire, Wis.-based Menards has proposed a new store in Austin, Minn., a south central Minnesota city close to the Iowa border, according to a report in the Austin Post-Bulletin.
The retailer has proposed a 162,000-square-foot store on a 78-acre site, which includes space for other commercial developments and multi-family homes, according to the report.
It’s unclear when construction could begin on the project, from summer 2008 to spring 2009.
The site is near a Target store, and a nearby site includes a Wal-Mart Supercenter currently under construction. The Menards store is expected to employ 150 to 200 people.