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Dorel furnishings segment sales decline 19.6% in 4Q

Company's other divisions perform better

Michael J. Knell -- Furniture Today, March 11, 2011

MONTREAL — Dorel Inds. said its revenues in its home furnishings segment declined 19.6% in the fourth quarter $97.4 million, while earnings from operations in the segment fell 53.8% to $5.6 million.

Dorel, whose other divisions did well enough to give the company record sales and earnings for the year, blamed a slowdown at retail since the same quarter a year ago. The company said that most of its major customers - which include mass merchants such as Wal-Mart and Kmart - cut inventories and reduced orders.

Dorel said its earnings in the home furnishings segment, which includes ready-to-assemble specialist Ameriwood and importer and distributor Cosco Home & Office, were hurt by factors including lower sales and production levels and higher input costs, particularly increasing overseas freight costs.

For the year, home furnishings' revenues were up 9.5% to $507.8 million and earnings from operations were down 5.5% to $34.7 million. Most of the sales increase occurred in the first half of the year, when consumer tastes were focused on value-priced furniture in what was a difficult economic environment, the company said.

"Of the three segments, home furnishings is by far the one most exposed to mass merchant consumers in North America," the company said in a statement. "As such, it does not have other markets to lessen the impact of a large shift in consumer buying habits or customer initiatives on in-stock levels."

Dorel's juvenile segment, which produces a range of products from car seats to cribs and monitors, saw its 2010 revenue climb 3.5% to $1 billion. The leisure and recreation segment - which manufactures bicycles and athletic gear under a number of brand names - had 2010 revenues of $775 million, up 13.7%.

For the full company, fourth-quarter revenue was down 1.1% to $539.5 million while net income gained 4.2%, reaching $25.2 million or 76 cents per share.

Revenue for the year rose 8.1% to $2.3 billion, while net income climbed 19.2% to $127.9 million or $3.85 per share.

Although it's based in Montreal, the company reports financial results in U.S. dollars.

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Dorel furnishings sales fall 19.6%

Mar 28, 2011

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