Building an enduring franchise requires finding new ways to reach the consumer and leveraging core strengths and attributes to expand in new growth categories. That’s why we acquired Smith & Hawken®.

The traditional lawn and garden category has evolved in recent years and is more lifestyle focused than ever. Decks and patios have become the place where gardens and living rooms merge. As that has occurred, Smith & Hawken has become the gold standard in the outdoor living category.

The addition of Smith & Hawken not only allows us to build stronger relationships with consumers, but we can reach them in a new way – directly. In our first year of ownership, Smith & Hawken had revenues of nearly $160 million and grew by 7 percent. In our most important category, outdoor furniture, sales improved by 21 percent. Our progress also went beyond the financial statements. We also made significant improvements to our catalog, supply chain and organizational structure, all of which will help propel business in the future.

In 2006, we will make significant improvements to our Web site that enable online purchases of our products to be easier and more rewarding. We also will begin redesigning our stores to set a more dramatic and consistent tone for the brand. Finally, we will support the outdoor living concept and the Smith & Hawken brand through an exclusive agreement with Target. By spring, an exclusive line of Smith & Hawken products will be available in more than 1,400 Target stores around the United States.