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Shedding light on the lighting category

BY HBSDEALER Staff

No surprise here: the warehouse home center channel dominates the interior and exterior lighting category, as well as ceiling fans, a category where big boxes enjoy a whopping 73.5 percent dollar share. But based on consumer data from NPD Research, the story in these bright categories seems to be a move to the middle price points from the discount/mass merchants on one extreme and the specialty lighting and electrical supply stores on the other.

According to research, the average price paid for a lighting purchase was $44.82 in 2007, up from $40.22 in 2006. Broken down by channel, consumer spending at mass merchants jumped $6.20 to $28.88, while consumer spending at lighting and electrical supply stores declined from $88.29 to $74.50.

“Specialty retailers seem to be coming down, while warehouse clubs and mass merchants are going a little upscale,” said Mark Delaney, NPD Group’s director of home improvement. “These shifts may be driven by competition, or just a result of the overall economy.”

Energy efficiency has played an increasingly large role in the sale of lighting across the country in recent years, but NPD’s research shows an opportunity for Energy Star or other energy-focused marketing programs. Consumers who purchased 42.4 percent of lighting units did not know if their purchases were Energy Star compliant.

“To me this says that there is an opportunity for Energy Star or the individual retailer or manufacturer to provide education on their products, or be more aggressive in promoting the energy efficiency story,” said Delaney.

In the ceiling fan category, there was a slightly higher connection to Energy Star, but still consumers purchasing 39.9 percent of items did not know if their lighting carried the Energy Star label.

Environmental friendliness also is playing out in the exterior lighting category in the form of solar lighting. This category jumped from 17.5 percent of dollar share in 2006, to 22.0 percent in 2007. In addition to the energy savings of solar, the technology has improved in recent years. Still, the leading segment of exterior lighting remains the exterior wall mount segment.

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Sandell Construction Solutions makes acquisition

BY HBSDEALER Staff

Schenectady, N.Y.-based building products manufacturer Sandell Construction Solutions recently acquired Diedrich Technologies, a supplier of professional masonry detergent products for restoring and maintaining old and new buildings.

Diedrich, based out of Oak Creek, Wis., is a producer of products used for historic homes, particularly for buildings that appear on the National Register of Historic Places.

“Sandell offers solutions to support and extend a building’s life over the long term. With the acquisition of Diedrich Technologies, Sandell now encompasses all of the masonry market’s needs, from initial construction to maintenance of the building,” the company said in a release.

Sandell’s products include masonry products; copper, mechanical, PVC, metal and rubber flashings; mastics; weep and drainage devices; sill plate seal and shingle starter strips; and flashing termination bars.

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Sears fourth-quarter income sinks 47 percent

BY HBSDEALER Staff

Hoffman Estates, Ill.-based Sears Holdings reported net income and sales down for the fourth quarter and year ended Feb. 1.

For the quarter, the company reported net income of $426 million, down 47.5 percent from $811 million in the prior-year quarter. Net sales were $15.1 billion, down 6.8 percent from $16.1 billion in the previous year.

Net income for the year was $826 million, down 44.6 percent from $1.5 billion in the same quarter last year. Sales for the year were $50.7 billion, down 4.3 percent from $53 billion from last year.

Domestic comparable-store sales declined 4.5 percent for the quarter, with Sears Domestic declining 4 percent and Kmart declining 5.2 percent. For the year, domestic comparable-stores sales declined 4.3 percent, with Sears Domestic declining 4 percent and Kmart declining 4.7 percent. The company also reported a more pronounced decline in comparable-store sales in the month of January.

“Our fourth-quarter and full year results continued to be negatively impacted by the worsening economic conditions faced by both our customers and competitors, as well as increased markdowns taken to clear excess inventory,” said W. Bruce Johnson, Sears Holdings’ interim CEO and president. “Given the challenging retail environment, we will work to improve and tighten our management of costs and inventory levels in 2008.

“Further, we believe that our recently announced restructuring will position us to navigate the difficult conditions that lie ahead and operate our businesses more efficiently and effectively,” he added.

The company also stated that the results were partially offset by improved operating results at Sears Canada.

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