Wal-Mart off to a good start in fiscal 2008
Wal-Mart Stores, ranked third in the Home Channel News Top 500, posted first-quarter earnings of $3.022 billion, up 6.9 percent from $2.862 billion in the same quarter last year.
The company’s U.S. same-store sales, not counting fuel, increased 2.9 percent in the quarter, as total sales increased 10.2 percent to $94.1 billion.
“We’re off to a solid start, with record first-quarter sales and earnings,” said Lee Scott, Wal-Mart Stores president and CEO. He added: “Our business is even more relevant to our customers today, given the current economic pressures.”
Total sales in the Bentonville, Ark.-based company’s international division grew the fastest in the quarter — up 22 percent to $23.937 billion. Sales at Sam’s Clubs grew 7.6 percent to 11.112 billion, and sales at Wal-Mart Stores increased 6.6 percent to $59.073 billion.
Mafia case enters home improvement channel
A sweeping indictment unsealed last week by the U.S. Attorney’s Office in Newark, N.J., alleges a far-reaching criminal enterprise engaged in illegal gambling, extortion, loan sharking, labor racketeering and a fraud scheme involving a Lowe’s store in Paterson, N.J. Members of both the Gambino and the Lucchese crime families were named in the indictment, which charged 23 individuals and capped a two-year investigation by the FBI.
One of the defendants, India Fugate, worked as a 28-year-old customer service associate at Lowe’s in Paterson, N.J. According to the indictment, Fugate fraudulently obtained personal identification information from Lowe’s customers and, with the help of Gambino family member Andrew Merola, used the information to open store credit cards and purchase merchandise.
The indictment describes a second scheme where Fugate and other organized crime figures created fake bar codes that enabled them to fraudulently purchase goods from Lowe’s, Home Depot, Best Buy, Circuit City and other New Jersey stores. The items, which included power tools, were allegedly purchased at greatly reduced prices.
Other parts of the indictment allege betting on sporting events using a Web site and tool-free phone number, collecting payments from construction projects that wanted to use non-union labor and forcing coffee cart vendors to pay kickbacks.
Chris Ahearn, a spokeswoman for Lowe’s, said the company “was pleased that we were able to support the FBI in its investigation.”
BMHC will combine SelectBuild and BMC West
Building Materials Holding Corp. (BMHC) announced a net loss of $33.9 million for the three months ended March 31, compared to a $5 million loss for the same quarter last year. The company also announced it will be unifying its two major business units, BMC West and SelectBuild companies, in order to streamline operations. The company estimates the move will reduce expenses by $20 million to $25 million.
Net sales for the quarter were $355 million, down 37 percent from $599 million from last year.
“Challenging industry conditions continued across U.S. home-building markets during the first quarter,” said Robert Mellor, chairman and CEO.
Mellor also said that the company is working to realign its business to meet the current market conditions, which included reducing its work force by 20 percent during the quarter.
“We are conducting a comprehensive analysis of our business and developing an initial plan for improved profitability and cash flow to right-size the organization to reflect today’s home-building market,” Mellor said.
According to BMHC, the realignment will flatten the company’s organizational structure by reducing its existing 13 regions to seven: Intermountain (Colorado, Idaho, Montana, Utah), Midwest (Illinois), Northwest (Oregon, Washington), Pacific (California, Northern Nevada), Southeast (Florida), Southwest (Arizona, Southern Nevada) and Texas.
Company president and COO Stanley Wilson said the company intends to maintain the two unique brand identities, while taking advantage of the new synergies created by the realignment.
Along with the realignment, SelectBuild’s accounting, accounts payable, purchasing, payroll and information technology elements will be absorbed into the existing corporate structure.
BMHC also said that, upon the completion of the evaluation, it expects to shut down a number of underperforming business units, as well as consolidate some business units into other operations.
“With the centralization of administrative functions, the regional realignment and the closure or consolidation of certain business units we expect to be better positioned to focus our unified vision on maximizing operating efficiencies and growth opportunities for our core businesses,” said Mellor.