Hines Horticulture secures financing
Hines Horticulture has secured $62 million debtor-in-possession financing, which the commercial grower will use to continue operations as it seeks to sell its assets. The loans, approved by the U.S. Bankruptcy Court for the District of Delaware in Wilmington, come from three pre-petition lenders: Bank of America NA, PNC Bank NA and GMAC Commercial Finance.
Hines Horticulture filed for Chapter 11 on Aug. 20, citing a rise in production costs, pricing pressure from large customers and weather-related factors. The Irvine, Calif.-based company is the industry’s largest producer of ornamental shrubs and container-grown plants in the country, selling to more than 6,670 retail outlets. Its customers include Home Depot, Walmart and many independent garden centers.
Black Diamond Capital Management, which is Hines’ largest unsecured creditor and the holder of a majority of its $175 million in senior subordinated notes, has offered $58 million in cash for the company, according to court papers. Hines pursued several possible restructuring alternatives in the months before its bankruptcy filing, including a sale of all or pieces of the business, a new debt or equity infusion or a balance sheet restructuring.
Hines’ products are mostly sold under the “Hines Nurseries” trade name. The debtor operates seven commercial nurseries across the country where plants are grown for sale to retailers and other businesses.
Beacon Lumber to close yard
Beacon Lumber, a family-owned lumber and hardware dealer in New Bedford, Mass., plans to close and auction off its lumber division, according to a report in the local newspaper South Coast Today.
The lumber company plans to keep its paint and hardware store opened, while shutting down its lumberyard and auctioning off materials and equipment on Sept. 20, according to the report.
The closure was due to increased competition, a poor economy and failure of pro customers to pay some debts, the owners said. The yard saw most of its business from contractors.
Because of the struggling housing market, the owners told the newspaper they’ve decided to shift the business’s focus to consumer hardware.
The company was purchased in 1982, by Armand and Steve Brodeur. At its height, Beacon lumber employed about 100 people, down to around five today.
Survey gives insight into what new-home buyers expect
The housing market may be slower, but there still are some buyers out there, and a recent J.D. Power and Associates Survey shows how their desires are changing.
The survey, which ranked home builders based on a number of design and consumer preference elements, included insight into what new-home buyers expect in their new purchases, notably on the “green” side of the market.
The study found that 28 percent of new home buyers perceive that their home is environmentally friendly, but a vast majority of these home buyers — 75 percent — say that their home builder did not identify the home as “green.”
The top green features that home buyers believe a new home should include are: energy-efficient heating and air conditioning units, energy-saving appliances, energy-saving lighting and temperature-controlling windows.
Overall satisfaction with new-home design has increased to 782 on a 1,000-point scale in 2008, up 36 points from 2007. Compared with 2007, the importance of the floor plan has increased in 2008. In addition, the flexibility and ability of builders to make non-standard design changes — such as relocation of an interior wall — is a particularly important new component in satisfaction with new-home design.
The study also found that 92 percent of home buyers reported receiving sales incentives. Among home buyers who report receiving incentives when purchasing their home, the average sales incentive totaled more than $16,500.
Also, the percentage of home buyers who report that construction on their new home was finished when they signed the sales contract has increased to 39 percent in 2008 from 32 percent in 2007.
Home quality has remained stable since 2007. The rate of customer-reported problems decreased in 2008 to 1,151 problems per 100 homes from 1,345 per 100 homes in 2007.
J.D. Power reported that the proportion of homes delivered both completely finished and on time has increased to 70 percent in 2008 from 58 percent in 2007.