The furniture retailer, which operates 118 showroomsin 16 states, attributed the poor performance toexpenses related to its new Florida DistributionCenter. "The overall impact from closing andconsolidating six warehouses into our new Floridadistribution center, while operating in the height ofthe season, was more costly than we had estimated,"says Haverty president & CEO Clarence Smith.

In particular, the retailer says it spent $1.9 millionoperating duplicate facilities, along with moving,training and severance costs. Moreover, it sufferedincreased demurrage charges of $600,000 due to moreimported goods arriving during this transition thanexpected.

Nonetheless, Smith contends that the distributiontransition was necessary. "We are better positioned tomore efficiently handle our growing share of thedynamic Florida markets and have improved our abilityto add new markets and stores in our largest andfastest growing state," he says.