Tag - HVT

The Russell 2000 (NYSE: IWM) has extended its decline and remains the worst performing major U.S. index. At 2:03 p.m. ET, the small-cap index had dropped 10.73 points, or 1.54%, to 685.55. The Dow Jones Industrial Average (INDU) had retreated 105.02 points, or 0.85%, to 12,179.28.

The bears are in control as investors respond to news of current and possible future downgrades in the financial sector.

There’s speculation that rating agencies Moody’s, Standard & Poor’s and Fitch will move to downgrade major bond insurers MBIA Inc. (NYSE: MBI) and Ambac Financial Group, Inc. (NYSE: ABK).

That will create problems for banks that hold bonds insured by MBIA and Ambac, possibly leading to billions in writedowns.

Elsewhere, brokerage house Merrill Lynch & Co., Inc. (NYSE: MER) downgraded government-sponsored mortgage lender Freddie Mac (NYSE: FRE) to “sell” from “hold.”

Small-cap stocks have fallen more than their bigger brothers, with Cbeyond, Inc. (Nasdaq: CBEY), a provider of Internet protocol-based (IP) communications services, being one of the biggest losers.

Haverty Furniture Companies, Inc. (NYSE: HVT) CEO Clarence Smith said the furniture retailer’s top priority for 2008 is maintaining a strong balance sheet and hitting budgeted goals. Smith made the comments during a morning conference call.

“In this difficult economy, we know that cash is king,” Smith said. “We’re very strong financially.”

At the end of 2007, Haverty’s liabilities totaled $92.9 million, from $122.4 million at the end of 2006.

He said the Atlanta, Ga.-based firm plans to open new locations and close some old locations as leases expire or the local market deteriorates. Haverty also plans to continue paying its regular dividend to stockholders, Smith said.

The chief executive also said Haverty is working on its customer service levels, which he believes gives the company an edge over competition and will lead to additional sales.

Before the opening, Haverty posted fourth-quarter earnings of $1.6 million, or $0.07 per share, down 50% from $3.2 million, or $0.14 per share, a year earlier.

Quarterly sales totaled $205.8 million, down 4.7% from $216 million during the year-ago period. Wall Street analysts projected $205.8 million in revenue.

Total expenses declined to $102.3 million for the three months ended Dec. 31, from $103.7 million in the year-ago quarter.

Haverty Furniture Companies, Inc. (NYSE: HVT) reported sales for the month of September this morning.

The furniture retailer said September sales declined 14.3% to $62.1 million, compared with $72.4 million in September of 2006. On a comparable-store basis, September sales decreased 16.2 %.

For the first nine months, on a comparable-store basis, sales decreased 11.6%.

Shares of Haverty Furniture (HVT) were halted in pre-market trading.

The announcement in early March by Bassett Furniture Industries Inc. (Nasdaq: BSET) appeared to hammer another nail in the coffin for the U.S. furniture industry. The century-old company said it would begin closing its manufacturing facility in the Virginia hometown that bears the same name.

While the shutdown will eliminate 280 jobs, or 15% at Bassett, the announcement also sounded another death knell for American-made furniture that can’t effectively compete with cheap imports, mainly from Asia.

The struggles of Bassett, Haverty Furniture Companies Inc. (NYSE: HVT) and even giant Ethan Allen Interiors Inc. (NYSE: ETH) have left investors wondering if they should chop down their losses and toss them on a funeral pyre for what is an industry blindsided by a transition that it failed to anticipate.

As Bassett, Va., becomes another Appalachian region company town without much of a company, Bassett Furniture will use its plant there to process imported goods. This year, more than half of the company’s products will be made outside the United States.

Robert Spilman, the president and CEO, said in a press release that shutting down furniture making at the plant was part of Bassett’s transition “from being primarily a domestic furniture manufacturing company to a retailer, manufacturer and marketer of branded home furnishings.”