Woodside Homes files for Chapter 11 protection
Salt Lake City-based Woodside Homes, a national home builder with a large presence in the West and Southwest, has filed for Chapter 11 bankruptcy protection in California.
Earlier this year, Woodside Homes announced a plan to build more than 1,400 solar-powered homes in Sacramento, Calif., in conjunction with that city’s municipal utility district. The company said it still plans to build homes through the Chapter 11 proceedings, but the status of the solar project is unclear following the bankruptcy filing.
In a statement, Woodside Homes, said it intended to keep subcontractors, employees and others affected by the filing updated.
“Woodside will continue to operate in the normal course of business up to and beyond Sept. 16. Additionally, the company has been proactive with its subcontractors updating them daily as to the status of these proceedings,” the statement reads.
Investors and noteholders in Woodside Homes, including New York Life Insurance Co., Metropolitan Life Insurance Co. and JP Morgan petitioned to force Woodside Homes into bankruptcy after the builder defaulted on a total of around $730 million in loans.
The filing affects 185 of Woodside’s affiliated companies, primarily home builders under various banners throughout the country, such as Woodside Homes of Arizona, Woodside Homes of Florida and Woodside Homes of Minnesota. In all, Woodside operates in Utah, Arizona, California, Nevada, Minnesota, Texas, Florida and the suburbs of Washington, D.C.
Plum Creek sells interest in southern timberlands
Plum Creek Timber has entered into a joint venture with the Campbell Group, a timberland investment management company, involving 454,000 acres of timberlands in six southern states: Oklahoma, Arkansas, Mississippi, North Carolina, South Carolina and Georgia.
Under the terms of the agreement, Plum Creek will contribute the timberlands to the joint venture, and in return will receive a cash loan of $783 million contributed by Campbell. Plum Creek will use half the money to repay debt and the remainder for general corporate purposes, including share repurchases. Plum Creek will also receive a $705 million preferred interest in the joint venture.
The Campbell Group, based in Portland, Ore., will manage the joint venture lands for continued timber production. Campbell currently manages more than two million acres of timberland in 13 states. Campbell Group investors will receive a common interest worth approximately 91 percent of the joint venture’s common equity.
Seattle-based Plum Creek, a public company, owns approximately 8 million acres of timberland in 18 states, along with 10 wood products manufacturing facilities that make lumber, plywood and medium density fiberboard (MDF) in the Northwest.
High-end home goods market struggles, too
San Francisco-based Williams-Sonoma, parent of upscale home decor and kitchen retailers including Pottery Barn and West Elm, saw net earnings falter in the second quarter, down 29 percent to $18.4 million compared with $26 million in the same period last year.
Net sales fell 5 percent to $819.6 million from $859.4 million in the year-ago period. Comparable-store sales fell 11 percent.
Howard Lester, chairman and CEO of Williams-Sonoma, blamed the poor performance on a “deteriorated” macroeconomic environment in the second quarter.
“As we look forward to the third quarter and balance of the year — considering these trends — it is extremely difficult to know how the consumer will respond in the back half of the year,” Lester said. “While our history would say that trends would improve, what we are seeing today does not support that premise.”
Pottery Barn and Pottery Barn Kids stores showed the steepest declines, with comparable-store sales down 16 percent and 13.5 percent respectively. West Elm, Williams-Sonoma and Williams-Sonoma Home banners performed better than the company average.
The retailer’s combined direct-to-consumer net sales, including catalog and Internet sales, fell 4.3 percent to $356.4 million. The direct-to-consumer segment was hit with a $2.6 million one-time charge because of a product recall.
In the first and second quarters combined, Williams-Sonoma opened 28 new stores and closed 15 stores, including six Pottery Barn and nine Williams-Sonoma locations. The company opened five new West Elm stores, a property that sells home decor items at mid-level price points, as opposed to the higher price points at Pottery Barn and Williams Sonoma Home.
At the end of the second quarter, the company operated 613 stores in the United States, as well as seven direct mail catalogs and six e-commerce sites.