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Fleetwood Enterprises Inc. today (April 5) announced that its board of directors has authorized management to sell its manufactured housing retail and financial services businesses.
However, according to a press release, Fleetwood’s board and management remain committed to the wholesale manufacturing division of its Housing Group.
The announcement represents the latest in a series of strategic moves by the Riverside, Calif., builder. In early March, Elden Smith replaced Ed Caudill as president and CEO. Last week, Roger L. Howsmon, formerly executive vice president of the Housing Group, also stepped down.
While the Housing Group’s wholesale division has made strides, the retail division continues to lag. For Fleetwood’s fiscal third quarter, ended Jan.23, the wholesale division incurred an operating loss of $4.4 million and the retail division posted a $9 million loss.
Wholesale division revenues for the quarter increased 29% to $183.7 million while retail division sales declined 20% to $53.6 million. In addition, unit sales from Fleetwood retail stores decreased 31% to 884 homes, and the HomeOne Credit finance subsidiary originated $7.2 million of loans in the quarter, compared to $10.3 million in the third quarter the year prior.
Fleetwood said management has been authorized to pursue the exit plan for Fleetwood Retail Corp., comprised of 125 retail outlets, and HomeOne Credit Corp. over the course of the next 12 months.
“We are taking this action in order to stem losses and concentrate our attention on our core businesses,” said Smith. “We are convinced that returning Fleetwood to its traditional focus on manufacturing operations and wholesale distribution channels in both our manufactured housing and in our recreational vehicle businesses provides us with the best opportunity to regain our former position as the industry leader in both.”
Smith said the company also was consolidating adjacent manufacturing plants in both Alma, Ga., and Waco, Texas, noting, “By combining these operations, we will experience immediately improved capacity utilization.”
The company stated that its expects the costs, charges and expenditures related to the exit plan will be substantial, but it was unable to estimate the amounts at this time.
These costs, as well as the ongoing financial results for the retail and financial services businesses, will be accounted for as discontinued operations effective with the fourth fiscal quarter.