"Significant pricing pressures"

Word has it that Hines Nurseries, one of the nations largest wholesale nurseries, didn’t have such a good year. According to Nursery Retailer Magazine, “Hines Horticulture is selling its color nurseries in the Northeast, four facilities total, plus certain assets in Miami. The company made the announcement as it released its second quarter results, which fell 12.4 percent from second quarter last year to $154.9 million. Net sales for the six-month period ended June 30 were $211.8 million, down 12.1 percent from net sales for the same period last year. ‘Delayed product availability as a result of rain in Northern California, poor product sell-through at our customers’ stores in the Southeast and lost market share throughout the Eastern Region all contributed to the sales decline in the second quarter compared to a year ago,’ says Rob Ferguson, Chief Executive Officer. ‘Despite our efforts, our market share in the Northeast, Mid-Atlantic and Southeast has continued to deteriorate. More intense competition, significant pricing pressures and customer consolidations have all contributed to the decline in net sales in these regions.’ In March, Hines sold 168 acres in Vacaville, CA, for approximately $16.9 million.” That Vacaville property is about 60 miles from here.

We don’t have too much sympathy for Hines. We don’t buy from them as they are thick in the box stores. I find the statement “…significant pricing pressures…” interesting. Could this be that the boxes are squeezing the wholesale nursery trade? I know that at Home Depot, vendors like Hines, don’t get paid until the product is sold at the retail level. If the plants remain unsold for any reason, Home Depot does not pay. Considering the care plants receive at my local Home Depot I am not surprised that there are many unsold plants. I wouldn't get the same treatment from Hines or any of my vendors. I have to pay, and then do my best to sell them.

Hines, Color Spot, and other nurseries that have sold their souls to the chains are going to see further “significant price pressures” as we move forward. I predict that some of these wholesale vendors are going to be sniffing around independent garden centers to see if they can pick up some business. It will never be enough to make up for the losses, but desperation breeds strange bedfellows. We pay before we sell the plants, and do a much better job keeping the plants looking better. Hines is going to find out that better independents have forged bonds with their suppliers, who didn’t sell out to the chains.