Staff Report
Published Jan. 6, 2009

Walter Industries Inc. has announced the closure of its Jim Walter Homes subsidiary.

Jim Walter Homes built more than 350,000 homes during its history but has not been profitable in several years, the company said in its announcement Tuesday. All links from its Web site were cut Tuesday afternoon except for the home page.

The company had offices in Goose Creek, Cayce, Columbia and Florence. The Cayce office handled sales in the Upstate. Jim Walter Homes hasn't had an office in the Upstate for about a year, someone at the Cayce office said.

Chris Davies, the company's Goose Creek branch manager, said two full-time employees would lose their jobs in the Charleston area, including her and a salesperson. Davies has been with the company for 19 years and lives in a Jim Walter home built in 1983.

"Every time a business goes, it's not just the business, but everyone they're associated with," Davies said. "You don't think about the janitorial service that you have that cleans the houses here or the landscaper that comes once a week. It just trickles down."

Davies said all homes that are under contract will be finished.

The company said it expects to record a pretax charge of approximately $8 million to $10 million in the fourth quarter of 2008 related to the closure of the business.

In the 1970s, Tampa, Fla., entrepreneur late Jim Walter stands in a partially finished home. The late Walter founded Jim Walter Homes in 1946 with $395 in savings to buy and sell his first shell home for a profit of $300. Jim Walter Homes has closed all of its offices in reaction to the housing downturn.

“The story of Jim Walter Homes began as World War II ended and soldiers came home to pursue the American Dream. Regrettably, it ends at a time when the fundamentals of the homebuilding industry have deteriorated in ways never seen before,” said Walter Industries Chairman Michael T. Tokarz.

Tampa, Fla., entrepreneur Jim Walter founded Jim Walter Homes in November 1946, when he used $395 in savings to buy and sell his first “shell” home for a profit of $300. As a result of the success of Jim Walter Homes, Jim Walter was able to build a Fortune 500 conglomerate with diverse businesses such as mortgage financing, coal mining and ductile iron pipe manufacturing. The company completed its spinoff of Mueller Water Products, which encompassed its interest in the ductile iron pipe and water products businesses, in December 2006. Mueller Water Products continues to be listed on the New York Stock Exchange today.

For the past several years the company has concentrated on its natural resources and energy-related businesses. The company said it expects to complete this strategy when it spins off its financing business early this year.

“Once we complete the separation of our financing business, Walter Industries will be repositioned as a ‘pure play’ natural resources and energy company,” Tokarz said.

Despite the efforts of Jim Walter Homes’ management and employees, including a major restructuring in 2008 that closed nearly half of the Jim Walter Homes sales centers, the business has remained challenged, and efforts to sell the business were unsuccessful.