The Scotts Miracle Gro-Company is shopping Smith & Hawken, its high-end outdoor living products business. In the second quarter ended June 28, 2008, the Company said retail sales in the unit were down 24%, due mainly to a reduction in demand for teak furniture. They did say they continue see strong results in furniture with lower price points.
The Company said in its third quarter conference call “…reality requires that we reassess platforms that we previously believed were the source of long-term opportunity. In this environment we need to minimize distractions and focus on our core business. While we still believe the concept of outdoor living has great potential and feel strongly about the value of the Smith & Hawken brand in the core lawn and garden category, this business continues to be a drag on our earnings. As a result we are actively pursuing strategic alternatives for this business. At a minimum we will actively review our catalog strategy and underperforming stores while also attacking our overall cost structure. However our plans could also result in the sale of Smith & Hawken. For now it remains in the portfolio and I’m sure we’ll have more to say when we talk again at year end.
It is interesting to see Scott’s scrambling to exit this business while Urban Outfitter’s seems to be entering it with its new Terrain brand.