TUPELO — Just a few years ago when investors were looking for 30%, 40%, 50% returns, “meat and potatoes” companies like Hancock Fabrics sat on the back burner.
Not these days, says company CEO Larry Kirk. “In the late 1990s when dotcoms were all the rage, nobody cared about the fabric business,” he said. “But when the bubble popped, people came back to things they understood that made real cash.”
In uncertain times, Tupelo-based Hancock (NYSE:HKF) is a company that continues to return profits year after year and pay dividends to stockholders. Back when many people were investing in more glamorous companies, “all we could do was stick to our strategy,” said Kirk.
“Nobody talks about all the blocking and tackling that you have to do to get better.”
The blocking and tackling paid off in solid sales trends for the company, which has made a profit for 40 straight years. Net earnings were up 35% in 2001, and 59% in 2000. In March of this year, Hancock’s board of directors increased the quarterly cash dividend to 8 cents per share, a 100% increase from the previous dividend rate of 4 cents. The stock has taken its share of dips, even falling into the single digits in late 2001, but has hovered steadily between $10 and $20 since then.
Hancock operates a total of 435 stores in 43 states. The company employs about 7,000, 500 of which work in Mississippi.
Hancock’s ability to withstand changing lifestyles and the economic roller coaster is thanks to longer-term perspective. No quick fixes, says Kirk, but changes designed to last a longer span of time. As a fabric supplier, Hancock has come up against its share of obstacles. Cheap imports of ready-made clothes have lessened people’s desire to sew, and today’s trend of two-income households has robbed some families of time to sew. But although these shoppers have less time, they do have more money to spend on ready-made pillows, lamps, mirrors and other decorative items.
Hancock’s answer to America’s changing lifestyle was home d
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