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NASHUA, N.H.-Ekco Group Inc., parent of Ekco Housewares, said it anticipates a second-quarter loss, related in part to disappointing sales from its housewares division due to a delay in orders from a major retail account.

The company has sought the guidance of Lehman Brothers to assist the board of directors in exploring Ekco Group's "strategic alternatives and ways to enhance shareholder value," according to a statement.

Ekco projects a loss per diluted share for the second quarter of fiscal 1999 to be in the range of $0.15 to $0.17, compared to last year's earnings of $0.02 per diluted share. Second quarter sales are expected to be between $59 million to $61 million.

Based on current market conditions, earnings per share for fiscal 1999 will be in the range of $0.38 to $0.40 versus $0.37 in fiscal 1998. The company plans to disclose full financial results for the period on July 26.

One analyst said that Ekco is exploring the sale of the company. "Ekco hired Lehman Brothers to sell part or all of the company," said the analyst. "Until Lehman Brothers completes its analysis of the business and develops a review, we are not able to comment," said Don DeNovellis, chief financial officer for the Ekco Group.

Lackluster export sales and sluggish industry-wide retail sales in the United Kingdom also hindered results, reported Ekco. However, the company expects an improvement in housewares sales by the second half of the year. DeNovellis added, "A significant amount of the sales shortfall came from this one retail account -- which is principally housewares products." But sales should start to improve by the third quarter, he added. "We are pleased with the strategic direction of the housewares business."

As a core supermarket supplier of gadgets and bakeware, Ekco Housewares has struggled in its pursuit of the department and specialty store business with its Via kitchenware division, sources said. In addition, the housewares division has had to contend with strengthened competitors, such as Bradshaw International, which acquired Bonny Products last year.

Bob Varakian, president of Ekco Housewares, would not comment on the possibility of Ekco's sale or financial condition, but noted, "Outside of sales off at one particular customer, we're tracking to expectations." He added that the company does not benchmark its strategy on the business of competitors. "Ekco Housewares has the best good-better-best bakeware lineup in the industry with the Baker's Secret, Cuisinart and Farberware brands," said Varakian, who also pointed to the strength of its Regent Sheffield cutlery line.
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Author:Thau, Barbara
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Jun 28, 1999

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