Husqvarna says demand for garden gear in US weak

ULM, Germany, Sept 19 Wed Sep 19, 2007 4:09am EDT

ULM, Germany, Sept 19 (Reuters) - Garden and construction tool maker Husqvarna (HUSQb.ST) said on Wednesday it had seen weak demand for garden equipment in the United States in recent months in what is usually the peak sales season.

While U.S. consumers faced tougher credit terms and lower disposable incomes amid a recent housing slump and credit squeeze, the market for garden gear was not likely to collapse, Husqvarna's head of consumer products in North America, Bob Cook, told a meeting of analysts and investors in Germany.

"For the consumer things have not been strong," Cook said.

"The trend now looking forward is constrained ... But we see no signs that we're going off the cliff."

"So the consumer, we think, is going to be OK."

The U.S. Federal Reserve on Tuesday cut interest rates by a bigger-than-expected 50 basis points in a bid to keep recent financial turmoil from seriously denting the wider economy.

Cook said U.S. falling home sales and residential construction put only a small damper on revenue at the Sweden-based lawn mower and chain saw maker with the main driver of sales being replacement of old equipment.

"We feel very comfortable in the market place," Cook said.

The weather, which can often have a significant effect on buying patterns, had been relatively conducive to sales in recent months, he added.

U.S. retailer Sears Holding Corp (SHLD.O), Husqvarna's key North American distributor, reported a rise in inventories last month, but this did not mean Husqvarna products had remained on the shelves, Cook said.

"Sears' stocks rose in August, but those are not our products (in inventories)," he said.

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