Tough day on Wall Street
Among the 20 major home channel stocks tracked by Home Channel News, only Huttig Building Products showed a gain for the day, up 0.18 percent. The HCN Index declined 6.91 percent on the day.
Among the double-digit percentage decliners, Builders FirstSource lost 14.19 percent, Louisiana Pacific lost 12.6 percent, and BMHC lost 32.4 percent, dropping 24 cents Monday to $0.50 per share. Shares of Home Depot and Lowe’s dropped 5.6 percent and 6.1 percent, respectively.
Hackett’s to open 11th location
Hackett’s, a chain of department stores with full service True Value Hardware departments, has made an agreement to open its 11th location, the Ogdensburg, N.Y.-based company reported.
The new store, which will be located in Lake Placid, N.Y., will occupy a 41,000-square-foot building that was formerly a Tops Market. The company said the store should be open by spring of 2009.
Hackett’s, a subsidiary of Seaway Valley Capital Corporation, opened its 10th location on August 2 in Sackets Harbor, N.Y. The company is one of the nation’s oldest retailers with roots dating back to 1830.
Each of its larger stores contains a True Value hardware department with hardware, tools, plumbing, paint and electrical departments. Other departments in the stores include men’s, women’s and children’s brand name apparel, athletic, casual and work footwear, home dZcor, gifts, seasonal merchandise and sporting goods.
Losses widen at KB Home
CORRECTED – As losses widened at KB Home in the third quarter, the company said that part of its new strategy is to build smaller houses, as demand for less square footage appears to be outpacing demand for the outsized homes that were popular during the housing boom.
Losses in the third quarter were $144.74 million, steeper than the $35.6 million in losses recorded in the comparable period last year. Losses at KB Home totaled $668.8 million for the first three quarters of the year, falling further from losses of $156.8 million in the same nine-month period last year.
Revenues were $681.6 million, down from $1.54 billion in the same period last year, a 55 percent decline. The company also saw an overall 10 percent decline in the average home selling price, to $239,700.
KB Home delivered 2,788 homes, compared with 5,699 homes in the year-ago period. The company’s cancellation rate jumped as well, to 51 percent from 27 percent a year ago.
KB Home CEO Jeffrey Mezger said the cancellation rate reflected “broader dynamics” in the housing market. To respond, the company is trying a variety of tactics, including building smaller homes and cutting the number of developments underway.
In the Inland Empire area of California, he noted, the company is shifting to smaller, less expensive homes, going from an initial size of 3,400 square feet at $450,000, to 2,400 square feet at $300,000 last year. Mezger said that change “worked for a time, but the market continued to move away from us.” In response, the builder has started building three-bedroom, 1,230-square-foot homes selling for $200,000 in the Inland Empire, he said.