Haefren Baum

Topics: Financial ratios, Generally Accepted Accounting Principles, Balance sheet Pages: 2 (1198 words) Published: October 18, 2014
Haefren Baum
Nature of the Business

Haefren Baum is an independent home furnishings retailer associated with Wiegandt that sells high quality furniture. The company began as a partnership in 1965. Haefren Baum became a retailer for Wiegandt in 1968. Two years later, it became a corporate entity. Haefren Baum is located in Cologne, which is one of the most populated and rich cities in Germany. Haefren retails home furnishing from a location downtown Cologne, and three recently constructed stores in Rhineland.

Marketing Analysis
Located in downtown Cologne Haefren Baum is a high quality retailer, which recently expanded its operations by opening three retail outlet stores in nearby Rhineland suburban areas. The company carries Wiegandt’s high quality furniture whose furniture is heavily advertised. Since the economic condition has not been steady and new competitors are entering the market Haefren Baum had to decrease its prices in order to maintain sales volume, these challenges (competition, economy) caused a decrease in sales by (-21%) between 93,94, a decrease of( -1.24% )between 94,95. Haefren Baum’s products reflect cyclical demand because others seasons did not cause a decline in sales, but instead the economy and competition. The German recession has slowly been improving, but it has not helped the furniture market, and the future does not look very promising for Haefren since they will need to adapt to the growing competition also. Overall, Haefren market position seems to be improving, sales growth will get better but I cannot say that the company will be successful in the future.

Operations Analysis
Wiegandt provided its retails distributors’ credit on 2% 10 net 30 terms, which is consistent with competitors in the industry. Haefren Baum upper limit on outstanding balances were established on historical furniture order, and they had a limits of DM 60,000. Although the sales of the company have declined significantly their cost of goods sold...
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