Nacco Industries Inc. plans to close more than 50 underperforming Kitchen Collection stores before the end of March due to lackluster sales and profit performance.
Earlier this month, Nacco reported lackluster fourth-quarter and full-year results for The Kitchen Collection chain of 304 stores, a $6.9 million loss for 2013, more than twice the loss posted in 2012.
The company said in a statement mall traffic, especially to outlet malls, was down in 2013, and that the overall outlook for 2014 was “uncertain” as the middle-market customer still faces economic concerns. In addition to the store closings, Kitchen Collection will cut costs in other opportunistic areas at its remaining stores and headquarters, which includes eliminating its medical benefit plan for employees.
Kitchen Collection’s 2014 revenue is expected to decrease due to fewer stores, but operating profit could break even, according to Nacco. The focus going forward is to concentrate on selling higher-margin products and expand its online business.
Nacco, which also owns Hamilton Beach Brands Inc., saw better results there tallying net income of $25.1 million compared to $21.2 million in 2012. The company’s sales volume in the U.S. small kitchen appliance market is expected to grow moderately in 2014, Nacco said in a statement.
