Lesco Announces New Distribution Plan

STRONGSVILLE, Ohio – One of the most well-known names in the green industry is preparing to dramatically expand its national presence.

Lesco, the expansive distributor of power equipment and related landscape supplies such as turf seed, fertilizer and pesticides, will now offer independent distribution organizations the opportunity to carry proprietary Lesco products in an attempt to enter as many as 500 additional markets across the country. Currently, Lesco serves lawn and landscape professionals through its 228 Service Centers in 38 states, in addition to 78 Stores-on-Wheels that serve the golf course market.

“We have the professional turf industry’s most comprehensive, branded product line, but it’s not available everywhere in the country,” explained Bill Foley, Lesco chairman, CEO and president. “Now, we’ve chosen to launch an aggressive program to make our product line available throughout the U.S. via independent marketers who already have the infrastructure in place to market our products.”

Essentially, this plan is designed to create a national network of Lesco dealers, while the company also plans to expand its Service Centers by adding more than 100 new locations starting in the second half of 2002. Even though the company has closed seven Service Centers in recent months, none of the currently existing service centers will be affected by this announcement.

Foley went on to say that this program will strengthen Lesco’s position in the industry, which is already unique due to its vertical integration model that combines manufacturing and distribution. “Our desire is to extend our distribution throughout the U.S. into markets that won’t have a Service Center in their location,” he pointed out. “This provides a very unique opportunity for a number of companies to expand their business platform.”

Lesco hasn’t signed any agreements for such a distribution deal yet and it is just beginning to market this concept to potential partners this month, but Foley said a deal that would “provide a new business to an eight-store chain” is nearly complete. “In some situations, there are larger organizations with a broad geographic reach that may be interested in this,” he observed, adding that these Independent Marketers, as they’re being called, may ultimately include dealers, nurseries or other industry retailers. “Plus, there are also small towns where a smaller business might be the better match.”

Foley, who has watched the Lesco stock fall from a high of $25 in 1997 to its lowest point in the last five years at its current level of about $10 a share, said Lesco is going down this road in order to continue growing the business even during a fluctuating economy by penetrating markets that haven’t been available to it in the past. “I don’t think it’s any secret that the industry has had a pretty tough year,” Foley commented. “We think this will expand our market penetration in a period of slowing growth.”