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Smith & Hawken to close


Smith & Hawken, the industry’s first upscale gardening retailer, will close its doors by the end of the year. Although the 56-unit chain had been struggling for months, the announcement by parent company Scotts Miracle-Gro came as a surprise to many employees, according to several media reports.

Store liquidation sales, which are being run by a third party, began yesterday.

"We would have preferred to sell the Smith & Hawken business in order to protect jobs and keep the retail franchise intact," said Scotts Miracle-Gro CEO Jim Hagedorn in a July 8 filing with the Securities and Exchange Commission. "Unfortunately, the combination of a weak economy and the lack of scale proved too great to overcome."

The Marysville, Ohio-based company, better known for fertilizers and pesticides than teak benches and English gardening shears, paid $72 million (including $14 million in debt) for Smith & Hawken in 2004. In the ensuing years, Scotts tried to boost revenues by broadening the brand’s merchandise and inking deals with True Value and Target, among other initiatives.

Last year, Scotts brought in Pat Farrah, one of Home Depot's original founders, to turn the company around. Farrah closed a number of stores and made cuts in staffing and salaries, but the chain continued to lose money. In the fiscal quarter ending March 28, sales at Smith & Hawken fell 23%.

At an investors conference in February, Hagedorn said he was inclined to sell Smith & Hawken for a reasonable offer. But until that point, Scotts intended to "run it hard." The strategy included job cuts and 25% pay cuts.

At the same conference Farrah talked about the difficulty of selling the business. "We didn't sell it because we couldn't sell it," he said. "And 'Can't sell it' means, I'm not writing a check for someone to take it."

Scotts expects to incur charges of $25 million in connection to the closure of the business.

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