HOUSING: Window shade company to lay off half its local work force

Hunter Douglas has been hurt by the housing downturn, weaker consumer spending.

By ZACH FOX - Staff Writer | Wednesday, September 17, 2008 7:08 PM PDT ∞

The North County branch of a European home furnishings company announced this week that it will lay off employees, the third area company to do so recently in a weakening economy.

Netherlands-based Hunter Douglas will shut down its Poway window-covering production plant, laying off 166 of its roughly 300 employees at that location, said Sarah Fletcher, a spokeswoman for Hunter Douglas. Worldwide, the company has about 20,000 employees. "Production is being gradually transferred to other facilities," Fletcher said.

Other Poway workers, involved in customer service, sales and repair, will remain, she said. Over the last year, the company's stock price has lost half its value and its profits declined 5.5 percent, from $327 million in 2006 to $309 million last year.

Hunter Douglas joins at least two other big North County employers in announcing cutbacks in recent weeks. Callaway Golf, based in Carlsbad, said it will eliminate 9 percent of its local work force. Hewlett-Packard said it will trim 24,000 workers worldwide; the computer giant declined to say how many workers at its Rancho Bernardo printer and digital photography plant might be affected.

San Diego County entered a severe housing recession after prices peaked in November 2005, tumbling 30 percent since then, according to Standard & Poor's Case-Shiller Home Price Index. And North County house sales started to falter in 2006, falling 30 percent from the previous year.

New house sales have been particularly ravaged, with new condominium sales in North County diving 90 percent this year from 2007, according to MarketPointe Realty Advisors, a San Diego research firm.

Because homeowners typically remodel when buying a new home, the drop in sales has particularly affected housing-related businesses, such as Hunter Douglas, which sells window shades.

"It's everybody. It's Home Depot, it's Lowe's, it's local interior designers. It's literally everybody that's any way tied to housing," said George Whalin, chief executive of Retail Management Consultants, based in Carlsbad.

Whalin said Hunter Douglas should be less affected because it deals with high-end consumers, and values on expensive houses have not declined as much as the overall market.

Online, Hunter Douglas blinds and shades sell for between $30 and $300 per window.

Most housing sales in recent months have been at the lower end of the market, as turmoil in Wall Street has made banks reluctant to lend large sums of money.

Further, an onslaught of negative news and the disappearance of easy credit appear to be driving down consumer spending, which fell in August from a year ago. Economists have played particular attention to the drop in consumer spending because it is one of the economy's largest drivers.

"People have spent so much money and taken out second mortgages that are not there anymore. And now they have to cut back," said Kelly Cunningham, an economist with the San Diego Institute for Policy Research. "That's affecting these optional things, where you can get by with your existing shades. This is certainly a lean time."

Hunter Douglas has also been unable to escape the recent turmoil on Wall Street spurred by the failure of insurance giant AIG. The company's stock fell 8 percent Wednesday to $31.03 per share.

Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Read his blog, "On the Realside," at nctimes.com/blogs/minding_your_business