First let me say that I am an independent(multi-bag) manufacturers sales rep representing Hooker Furniture. I own quite a bit of the stock, and bought more at $41 before the split. I believe everyone should look at my post knowing my realtionship... I do see many things you never will and after seeing some of the posts wanted to share them. I believe the future holds good things for Hooker and it's stock. Not to mention it's dividend!:)
Some of my biggest decision makers on buying more of the stock:
#1 The Purchase of Bradington Young - they had 26 sales reps when Hooker bought them (early 2003), and by the end of 2003 they now had the entire salesforce (which I believe is the most professional in the industry) of Hooker Representatives (93!)selling their products. That is almost 4 times more people (with no more cost to Hooker), they are more professional than the BY force, and tons of realtionships that never exsisted for this company. It is already showing.. you can bet advertising cost will increase to fill the huge demand for leather swatches and catalogs for this huge influx of new dealers, and they only get them with qualifying orders. These are short term costs as catalogs and leather swatches last a long time. I can assure you the growth at BY will be impressive... and just as Hooker has a strong pressence in imported goods, you will see the same in leather upholstery from BY...filling a completely different consumer from the regular higher end Bradington Line. We have already seen some of this product in our design meetings 2 weeks ago for the High Point Market in April.
#2 New sourcing from Hondourous, and Vietnam. Indeed some items brought out at the last market from these countries have already swamped the factories we are dealing with. A very good thing for the future.#\
#3 And this may be the most important. Hooker has a very strong domestic presence, adn even though competition is incredible from abroad, Hooker is learning what they can make here in the US that we can compete with. And that is straight line designs that have less labor, and work well with the automation Hooker has invested in. They have learned how to compete from a domestic view point.
#4 Long term health - I firmly believed that Hooker has a unique design process in our industry. Not to get too complicated..dealers and reps from all over the contry literally vote on thousands of items to be brought out in the High Point Furnituer Market. They literally know what will seel before they show...and may be the most customer driven company in the industry. I was there to see the start of this 25 years ago adn even though costly, keeps Hooker's line from ever getting "cold".
Lastly..about the Anti-Dumping Petition (China Bedroom Only) Hooker has signed. China is forcing it's currency to follow the American Dollar, while the dollar's value is dropping all over the world. This is clearly not healthy as well as illegal though it woudl be easy for Hooker to take this as lower prices, in the long run it is a false high. Plus, the backbone of Hooker is their Employee Owners. There is a fierce loyality from management with these employees, and intrun the same loyality from the employees to the company. This is one of the reason for Hooker's success, and management never loses sight of that, which leads me to my last thought.
I come from a 100+ year Furniture Family Backgroung (not Hooker) and have a degree in Furniture Engineering. Quite simply.. there is no better management in the the Furniture World than the team at Hooker ... in the offices ... and in the plants... and this is why I continue to buy the stock ... and look for small dips to buy more.
It certainly is best for the remaining employees. If you dont like getting less than 40 hours, then go work somewhere else. I suppose we should pay people to do nothing for a short term while the company goes out of business. "Hey, they may be out of business since their expenses were greater than their income, but they sure went out with a bang by paying too much in the end!"
re: "I've lost respect. This is not best for me. I've had short time week after week when other plants work 40 hours. All due to imports. Leave the best for employee part out. "
Good luck with your shares. My point is this, Tom's is weak and for this reason, I've liquidated my interest. He should have made up his mind from the beginning instead of bailing out and running from the coverage. I've heard from the finance guy but not the CEO. Proof position of weak leadership. Hey they could also lower their cost by ceasing to provide group health benefits. But I agree, we'll never see eye to eye so good luck. Perhaps we'll chat in 6 months or so.
Look, all I'm saying is any company that finds a way to produce goods at a lower cost will have higher margins than if it continued to produce goods at the higher cost. It's simple math.
Also, companies have no obligation whatsoever to employ people they do not need (that's tantamount to charity). HOFT is doing what any other well-managed company would do in the same situation.
It's obvious we don't see eye to eye. Do what you want, I'm keeping my shares.
Is Hooker getting larger margins from goods they are selling to retailers or are the retailers getting the margins? I don't think you will see their margins bursting at the seams from imported goods being sold. Is it only the volume of goods that are being sold at reasonable margins that is making their sales of record proportions? I'm sure your information is better than mine.
The dollars being earned by employees from the Hooker ESOP on average will not float the average employee 60 days if they lost their job. Granted, Hookers stock has preformed well but the average plant persons pay is somewhere around 10-12 buck an hour. How much stock can they purchase and still raise their family's in todays economy.
I agree that duties are an "IF". But I think the commerce department has never dispatched a team internationally to investigate trade issues where duties have not been imposed. Hooker will survive the bedroom duties either way because they do very little bedroom business. Look, don't think because FBN is not supporting the coalition that means it want come to fruition. FBN can't support it because if it did, they would lose the entire Lane presence in wood. They've closed to many facilities to support this petition.
My point throughout this conversation, Hooker's leadership has proved to be weak as water for waffling. The whole exercise is to determine if China is illegally dumping bedroom furniture. You wouldn't think Hooker would not be neutral to finding out the truth.
I can agree to disagree.
Your Question: Have they forgotten how to manufacture the goods they need to sell?
My Answer: No, but it costs more to manufacture goods in the US than abroad. Keeping costs down by importing translates into higher margins and earnings, which is good for shareholders (including employees who own HOFT shares).
Your Question: What will Hooker do when duties are imposed on bedroom goods from China and it is too expensive to do business there?
My Answer: IF duties are imposed on bedroom goods from China... I don't take duties as a given, esp since FBN (largest US furniture maker) was opposed to duties from the start and HOFT took a neutral stance.
Why and how is this decision the best for the employees? How does an investigation by the U.S. Gov't. to determine the legality of trade practices of which no determination has been made good for the employees of a petitioning company who buckled to retail pressure and is now neutral. Nobody is running away from free trade! The petition only engages the govt to determine if this is "fair trade". Would you like to lose your job to someone doing the same thing you do for a living but they are doing it illegally. How can doing business with a country that is not obeying U.S. law the right thing? ----- Also, the steel industry is a totally different issue as they garnished safeguards not dumping duties. Out of curiosity, how did tariffs effect hurt domestic businesses and please be specific. It was my understanding that Bush buckled to European pressures.
Perhaps we can agree to disagree. I am glad you are proud of their decision. Maybe Hooker can engage you to look their employees in the eyes when they shut down their next plant and you can sell those people that it was right for the shareholder.
I only want your thoughts on 2 issues.
Have they forgot how to manufacture the goods they need to sell?
What will Hooker do when duties are imposed on bedroom goods from China and it is to expensive to do business there.
Good luck with your stock and for every one person of respect this management team earned, they've lost 10.
I respond: They gained my respect as a shareholder for making the choice they did.
Besides, you're not considering the supply side. HOFT was very low on inventory at the end of the quarter and derives a substantial amount of its imports from China. HOFT needs to import even more goods in 1H04 in order to rebuild inventory and continue to sell goods. If the Chinese suppliers were to cut them off, then they wouldn't have any goods to sell in the first place and it wouldn't matter what the retailers did.