Despite completing the the fourth-largest acquisition in its history, the $4.6 million purchase of RHC/Spacemaster (Melrose Park, Ill.), Leggett & Platt Inc. (Carthage, Mo.) Leggett & Platt reported that second quarter earnings decreased 31 percent from last year's second quarter and sales were down 5 percent.
As reported by merchant banker S.K. Platt & Co. (Hinsdale, Ill.), L&P's commercial fixturing and components division (the majority of which is comprised of its Retail Store Fixture and Display Group) suffered a 6.2 percent decrease in external sales in the quarter. For the first half of 2003, external sales were down 3.1 percent.
According to Platt's report, L&P noted, regarding its division's results, ” … retailers and brand product manufactures have been postponing purchases (both for new stores and refurbishment of old stores) for close to three years, awaiting clear improvements in consumer sentiment. Once the economy improves there could be a significant wave of new spending in response to pent up demand.” It said it expects annual revenue from the RHC acquisition of $100-120 million, and break-even earnings for the first 12 months.
Steven Keith Platt is a regular contributor to VM+SD, which publishes his quarterly “Business Watch” column. He will be a participant in VM+SD's annual International Retail Design Conference, Sept. 17-19, 2003, in Miami Beach.