Stocks down in 2008
But rent-to-own firms gain ground
By Larry Thomas -- Furniture Today, January 11, 2009
HIGH POINT — Unless you're a stockholder of Aaron Rents or Rent-A-Center, it's hard to put a positive spin on the performance of furniture stocks in 2008.
The rent-to-own stalwarts were the only two companies whose shares registered significant price gains in what was an otherwise unfavorable year for the industry's stocks.
More than half the 35 furniture-related issues tracked by Furniture/Today had price declines of more than 50% during the year, and 10 registered declines of more than 75%.
Only Aaron Rents, Rent-A-Center and Havertys (including the thinly traded Class A shares of Aaron's and Havertys) ended 2008 with higher share prices than at the end of 2007.
Havertys, whose shares finished the year at $9.33, eked out a mere 3.8% gain.
Aaron Rents, meanwhile, finished the year at $26.62 — a 38.4% gain — while Rent-A-Center closed 2008 at $17.65 for a gain of 21.6%.
The two rental powerhouses, both of which list furniture as one of their core product categories, reported brisk business throughout 2008 and have said they expect that trend to continue into 2009.
Aaron's, for example, said it expects to report next month that same-store sales grew 5% to 7% in the fourth quarter, while Rent-A-Center is projecting a same-store sales jump of 0% to 1% for the same period.
That's quite a contrast to the steady flow of same-store sales declines that most retailers reported last year. Havertys, for example, reported a 22.6% same-store decline in the fourth quarter, while Williams-Sonoma, parent company of home furnishings retailer Pottery Barn, said same-store sales for the eight-week period ended Dec. 28 plunged 24.2%.
Not surprisingly, most publicly traded retailers (with Havertys the notable exception) saw their stock prices go into a free-fall, especially in the second half of 2008.
Canadian retailers BMTC Group and Leon's Furniture registered declines of 22.9% and 30.2%, respectively, while shares of vertically integrated Ethan Allen tumbled 49.6%.
Shares of Canadian rent-to-own major Easyhome didn't follow the path of the company's U.S counterparts, falling 51.9% during the year, while Williams-Sonoma saw its shares tumble 69.7%.
The numbers were even worse for Jennifer Convertibles, Pier 1 Imports and Select Comfort. All three retailers saw their share prices plunge more than 90% during 2008, falling into penny-stock territory with prices of less than 40 cents each as of Dec. 31.
For airbed manufacturer and retailer Select Comfort, it was the second straight disastrous year for its stock, which plunged 59.7% in 2007.
The picture wasn't much prettier for publicly traded manufacturers and suppliers. With the exception of Canadian producers Dorel Inds. and Amisco, the stocks of manufacturers and suppliers registered double-digit declines, and many saw their share prices drop 60% or more.
Moreover, the top three U.S.-based furniture stock performers in 2007 all recorded steep declines in 2008.
Fabric supplier Culp Inc., whose shares were up 35.2% in 2007, fell 71.5% last year, while bedding producer Tempur-Pedic's shares were down 72.7% last year after a 26.9% gain in 2007.
In addition, shares of manufacturer and importer Hooker Furniture tumbled 61.9% last year following a 28.2% gain in 2007.
Three other well-known brands — Bassett, La-Z-Boy and Sealy — each saw their stock prices fall more than 60%, while Stanley Furniture and Flexsteel fared slightly better. Stanley's shares fell 34.2% and Flexsteel's declined 44.3%.
The worst performance among manufacturers and importers was registered by Chromcraft Revington, whose shares plunged 91.9%.
Polyurethane foam supplier Foamex International's shares were down 97.4% last year, but two other suppliers, Leggett & Platt and Valspar, did relatively well compared with other furniture-related stocks. Leggett & Platt's shares were off 12.9%, while Valspar saw its stock price fall 19.7%.
| Year-end furniture stocks ups, downs | |||
|---|---|---|---|
| Percent change in closing price, 2007-2008 | |||
| Close 12/31/07 | Close 12/31/08 | Percent Change | |
| 1. The Furniture/Today index includes 20 footnoted furniture stocks (Dec. 30, 1988 = 100). 2. American Depository Receipts (ADRs). 3. Prices in Canadian dollars. A = American Stock Exchange; M = Montreal Stock Exchange; N = New York Stock Exchange; O = Over the counter; T = Toronto Stock Exchange Source: Data Network, Huntington, N.Y. Information and data herein though believed accurate, is not guaranteed. Data Network is not liable for any inaccuracies. |
|||
| Gainers | |||
| Aaron Rents 1 (N,RNT) | $19.24 | $26.62 | 38.4% |
| Aaron Rents (Class A) 1 (N,RNTA) | 17.26 | 21.95 | 27.2 |
| Rent-A-Center (O,RCII) | 14.52 | 17.65 | 21.6 |
| Haverty Furniture (Class A) (N,HVTA) | 8.99 | 9.62 | 7.0 |
| Haverty Furniture 1 (N,HVT) | 8.99 | 9.33 | 3.8 |
| Losers | |||
| Leggett & Platt 1 (N,LEG) | $17.44 | $15.19 | -12.9% |
| Valspar (N,VAL) | 22.54 | 18.09 | -19.7 |
| Stanley Furniture 1 (O,STLY) | 12.00 | 7.90 | -34.2 |
| Flexsteel Inds. 1 (O,FLXS) | 12.00 | 6.69 | -44.3 |
| Natuzzi 1 (N,NTZ) | 4.61 | 2.40 | -47.9 |
| Masco (N,MAS) | 21.61 | 11.13 | -48.5 |
| Ethan Allen 1 (N,ETH) | 28.50 | 14.37 | -49.6 |
| Hooker Furniture 1 (O,HOFT) | 20.10 | 7.66 | -61.9 |
| Bassett Furniture 1 (O,BSET) | 9.34 | 3.35 | -64.1 |
| Williams-Sonoma (N,WSM) | 25.90 | 7.86 | -69.7 |
| Culp 1 (N,CFI) | 6.96 | 1.98 | -71.5 |
| La-Z-Boy 1 (N,LZB) | 7.93 | 2.17 | -72.6 |
| Tempur-Pedic 1 (N,TPX) | 25.97 | 7.09 | -72.7 |
| Sealy Corp. 1 (N,ZZ) | 11.19 | 2.51 | -77.6 |
| Furniture Brands Intl. 1 (N,FBN) | 10.06 | 2.21 | -78.0 |
| Cost Plus 1 (O,CPWM) | 4.34 | 0.94 | -78.4 |
| Design Within Reach (O,DWRI) | 3.70 | 0.68 | -81.6 |
| Chromcraft Revington 1 (N,CRC) | 4.80 | 0.39 | -91.9 |
| Jennifer Convertibles 1 (A,JEN) | 4.75 | 0.36 | -92.4 |
| Pier 1 Imports 1 (N,PIR) | 5.23 | 0.37 | -92.9 |
| Select Comfort 1 (O,SCSS) | 7.01 | 0.25 | -96.4 |
| Foamex International 1 (O,FMXL) | 2.92 | 0.08 | -97.4 |
| Quaker Fabric (O,QFAB) | 0.01 | 0.00 | -97.5 |
| Canadian cos.3 | |||
| Dorel Inds. (T,DIIA) | $28.75 | $27.99 | -2.6% |
| Amisco (T,IAC) | 1.45 | 1.38 | -4.8 |
| BMTC Group (T,GBTA) | 22.70 | 17.51 | -22.9 |
| Leon's Furniture (T,LNF) | 12.90 | 9.00 | -30.2 |
| Bestar (T,BES) | 0.54 | 0.35 | -35.2 |
| Easyhome (T,EH) | 19.75 | 9.50 | -51.9 |
| Shermag (T,SMG) | 0.87 | 0.10 | -89.1 |
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