La-Z-Boy stores need more sales, not more snow

February 19, 2010

La-Z-Boy’s company-owned stores are starting to show signs of life after more than a year’s worth of operational changes and cost-cutting initiatives, but La-Z-Boy CEO Kurt Darrow acknowledged this week that the cost-cutting has gone about as far as it can go.

It’s going to take a bump on the top line to completely reverse the retail group’s operating losses, he told securities analysts on a recent conference call.

“Our team is being relentless in trying to find ways to both increase their sales and control their costs … but I don’t want there to be any mistake … we cannot cost-cut our way to profitability in this model,” Darrow said.

“Could we do a little better than what we did this quarter? Absolutely. Would it get us profitable without more sales? Absolutely not,” he said firmly.

He declined to disclose same-store sales for the 68 company-owned stores, but for all 308 La-Z-Boy Furniture Galleries locations, they were up an encouraging 3.7% for the quarter ended Jan. 23.

Darrow believes the positive trend should continue in the current quarter, but said the two massive snowstorms that pounded the Northeast and Mid-Atlantic states and kept shoppers at home on Presidents Day weekend certainly didn’t help.

It also didn’t help that most of the company-owned stores are in the hardest-hit regions.

“We had stores where we had to remove snow from the roof or we couldn’t open them,” he said.

Posted by Larry Thomas on February 19, 2010 | Comments (3)

Industries: Furniture Manufacturing , Upholstered Furniture , Furniture Retailing , Homepage

December 26, 2011

In response to: La-Z-Boy stores need more sales, not more snow
DISAPPOINTED commented:

SALES MUST BE A DIRECT LINK TO QUALITY AND CUSTOMER SERVICE. BOUGHT A SOFA, IN 3 DAYS IT WAS SQUEAKING LIKE CRAZY. CALLED THE STORE, REFUSED TO REPLACE IT. STATED THEY WOULD "FIX IT" BUT TO DO SO WOULD HAVE TO TAKE SOME OF THE UPHOLSTERY OFF. COULD NOT GUARANTEE THE UPHOLSTERY WOULD LOOK JUST THE SAME AS NEW,. THREW THE COUCH OUT AND WENT TO STAR FURNITURE AND BOUGHT A NEW COUCH, WORK IN A HOSPITAL, TOLD EVERY PERSON I CAME IN CONTACT ABOUT LOUSY FURNITURE.

February 23, 2010

In response to: La-Z-Boy stores need more sales, not more snow
Robert Mark commented:

You cannot cost cut your way back to profitability as Darrow said. However this industry is so incestuous with itself that it has lost its ability to stand back and think out of the box. The stores are boring. The products are boring. Whooptydo for brand name recognition. The company is production driven and not product driven. For all the cutting the bean counters with MBA's can do, they cannot grasp the fact that the product simply does not have the eye candy to create a "must have" feeling in the minds of its yawning customers who are spending money on IPhones and computer games.

February 22, 2010

In response to: La-Z-Boy stores need more sales, not more snow
Big M commented:

With that said, LaZboys sales overall were up over 5% for the last quarter and have made a profit for four quarters in a row which is a much better performance than Ethan Alan or Furniture Brands or most of the other names. I think these guys should be recognized as turning things around in a difficult time. The other companies I mention are still in a spiral downward crash on sales.