Mike Landfair

Pissed Consumer

On May 1^st, I posted about Havertys (HVT).  I write that the store was “using credit to stimulate sales rather than discounts.  At the time, Havertys reported a 24% increase in earnings for the latest quarter even though sales dipped 3%.” 

I thought the idea was unusual.  I have been a proponent of downplaying price as a reason for the public to visit our store, Landfair Furniture + Design Gallery. 

On June 8^th, in FURNITURE Today,  Havertys reported “its June same-store sales plunged 26.2% from the year before as consumers continued to rein in spending.  For the second quarter, same-store sales declined 12.7% and total sales were off 10% to $168.4 million.

I put the company in my tickler file for an earnings follow up report.  When they last reported in March, they had net income for the quarter of $1,035,000 on $188.82 Million in revenues; about ½ of 1% profit margin.  Pretty skimpy margins compared to Ethan Allen (ETH) and Williams Sonoma (WSM), but about par for the industry as a whole according to Yahoo.

I checked this morning on Havertys to see if any earnings have been reported or estimated.  Not yet.  I did discover a web site called Pissed Consumer and saw that Havertys was listed there with 18 complaints since the first of the year.

I immediately googled Landfair Furniture and Pissed Consumer.  Nothing!  Great!

I know that when you do almost $200 million in revenues per quarter, as does Havertys, you are bound to get complaints.  In this age of the internet and shopping on line, however, you can not afford to have complaints to reach this level of awareness. 

I would spend much more time on complaint resolution and less on offering credit to lure more consumers into the store.

Posted by Mike Landfair on July 14, 2008 | Comments (0)