Firm Hires ‘Watchdog’ to Control Spending : National Lumber Posts $1-Million Loss
National Lumber & Supply lost $1 million in its second quarter, a poor performance that company officials blamed on sluggish consumer spending and on costs accompanying the opening of two new stores.
In the quarter ended July 31, sales for the Fountain Valley home-improvement retailer fell 4% to $41.6 million, compared to $43.4 million in the previous year. National Lumber posted a net loss of $1.05 million for the quarter, down from net income of $336,667 for the same period the previous year.
“Having anticipated a continuation of our sales growth patterns established over the last few years, we increased our inventories and expanded our staff to take care of customer needs,” company President Melvin Jaffee said Friday in a prepared statement.
“This, along with the two new stores we opened in the last 12 months, added to our losses in the second quarter.”
This recent financial slide has prompted National Lumber to hire a “sort of watchdog” to control spending, particularly in the areas of advertising and overtime pay, said V.J. Carnevale, National Lumber’s vice president for finance.
William S. Takacs, former vice president of administration for May Co. has been hired as National Lumber’s director of planning, Carnevale said.
For the first six months of the fiscal year, National Lumber’s sales dropped 2% to $79.6 million, down from $81.5 million for the same period in the previous year. The company suffered a net loss of $980,301 in the first half of the fiscal year, contrasted with net income of $646,793 last year.
“We are obviously disappointed with our performance in the second quarter,” Jaffee said. “We are victims of extremely sluggish consumer spending in all areas of the retail market.”