LESCO Changes for the Future

While LESCO’s sales didn’t grow in the third quarter, executives are hopeful that new store locations and structural changes to the company’s organization will boost sales and profit.

“We are not satisfied with flat sales,” said Michael DiMino, president and chief executive officer of the industry-leading turf products distributor. “As previously announced, we have made the necessary changes in the leadership and structure of the sales organization to get us back to the sales growth we expect.”

Those changes, while not yet implemented entirely, were enacted in an effort to salvage LESCO’s goal of increasing profitability by at least 6 percent this year. Sales for the third quarter were $144 million – flat with 2001 sales of $144.1 million. Lawn care sales for the quarter increased to $77 million, up 3.6 percent from the comparable period of 2001 ($74.3 million). Golf sales increased 2 percent, and national account sales declined 16.2 percent during the third quarter.

Appointed as CEO in April of this year, DiMino is determined to rescue LESCO from a lengthy financial drought that led to the resignation of former CEO Bill Foley. The new executive plans to drive revenue by opening several stores throughout the country and adding more than 50 lawn care sales representatives to LESCO’s selling team.

 “We will be opening between 15 to 25 new service centers in 2003, and with these new stores and the structural changes we have made, our model can and should produce 6 to 8 percent annual sales growth,” DiMino said.

Executives are confident the company will meet – and possibly exceed – its goal of opening the new service centers in 2003. The addition of these centers will bring the company’s total to nearly 250 stores by the end of next year.

Although locations for all of the new stores have not been announced, two leases have been signed in California. The new stores – in San Diego and Sacramento – will be open for business by the spring of 2003.

DiMino said those future locations are just two of the many West Coast sites LESCO anticipates for the near future. Locations in the West are of significant interest to the company, since it has never before opened stores in that area. Increased profitability in conjunction with expanding LESCO’S reach westward is the hope of DiMino and others.

In addition to opening two dozen new stores, LESCO has been “revamping” its sales force – adding 54 outside lawn care sales representative positions and bringing the total of outside salesmen to more than 100. The new representatives will not work in service centers; rather, they will go straight to their customers’ places of work to better meet their personalized needs.

Although this is a new approach for LESCO, DiMino said the results have been extremely positive thus far.

On Nov. 4, LESCO’s stock closed at $11.57, only 6 percent off its 52-week high.

The author is Assistant Editor - Internet of Lawn & Landscape magazine and can be reached at aanderson@lawnandlandscape.com.