(4) Paul M Barrett, Mega Death. America’s biggest undertaker is buying a rival to get even bigger. But is its growth coming at the expense of grieving families?
http://www.businessweek.com/arti ... expense-of-mourners
Quote:
(a) “In the death-care industry, as practitioners call it, SCI [for the full name, see quotation (e)] casts a long shadow. Based in Houston and publicly traded on the New York Stock Exchange, it operates more than 1,800 funeral homes and cemeteries in the US and Canada. It has 20,000 employees and a market capitalization of $4 billion. For 40 years, SCI has gobbled competitors as the pioneer consolidator of a fragmented industry.
(b) “Already No 1 in death care in North America, SCI expects by early 2014 to ingest the next-largest chain, Stewart Enterprises, based in New Orleans. In one gulp, SCI will grow to 2,168 locations. If the $1.4 billion transaction gets antitrust clearance from the Federal Trade Commission, the combined company would control some 15 percent of the US industry, with much larger shares of prime markets in Florida, Texas, and California.
(c) “small operators do cling to one competitive advantage: The [SCI] chain charges customers more than independently owned rivals. Whatever cost savings SCI achieves, it keeps or passes along to its shareholders. Zahn recently cut his price for a no-frills cremation to $1,000. Nearby SCI-owned competitors using the central Fort Lauderdale facility charge $1,450 and higher. Nationally, SCI charges $3,396 on average for a cremation with memorial service—30 percent more than independently owned rivals, according to data compiled by Everest Funeral Package, a Houston-based “concierge” funeral planning service. For traditional funerals, SCI charges $6,256 on average (excluding casket and cemetery plot), 42 percent more than independents.
(d) “The $16 billion-a-year US funeral industry comprises roughly 25,000 mostly small, family-owned businesses, but it’s consolidating with the spread of chains such as SCI and Stewart. Average profit margins are growing, according to research company IBISWorld, from 5.8 percent in 2008 to 6.5 percent in 2013.
“‘We are really a cash cow,’ Aaron Foley, SCI’s assistant treasurer, told attendees at an investment conference in August in Chicago. Based on its current inventory of ‘pre-need’ contracts—under which consumers put down money for eventual funerals, locking in the current prices—SCI has ‘a backlog of future revenue of $7.5 billion,’ he boasted. That figure would jump to $9.2 billion with the Stewart merger. ‘We are going to be poised to benefit from the aging of America, the baby boomers,’ Foley said. Deaths in the US are forecast to increase at an average annual rate of 1.1 percent over the next five years. At SCI, earnings per share rose 26 percent in the first half of 2013. ‘This growth,’ Foley said, ‘was driven in large part due to the strong flu season’—ie, a lot of old people got sick and died last winter.
(e) “SCI’s founder and chairman, Robert Waltrip * * * grew up in the 1940s in a second-floor apartment above his father’s modest funeral home on Heights Boulevard in Houston. In the ’60s, young Waltrip began acquiring rivals, combining their operations. He called the technique ‘clustering’ and compared it to that of McDonald’s. By 1970 he’d given his company its singularly vague name and made Service Corporation International the first publicly traded funeral chain. * * * Through all the ups and downs, Waltrip became very wealthy. A barrel-chested man who speaks with a Houston drawl, he owns large ranches in Texas and Colorado and raises prizewinning cutting horses and cattle.
My comment:
(a) There is no need to read the rest, except reading the graphic in Web page 1 to compare prices of funeral costs between independently owned funeral homes and SCI.
(b) This is one of the three feature stories--and also the cover story. The cover reads: “Death Inc. You can’t escape fate--or SCI. Inside America’s fastest-growing merchant of death.”
(c) megadeath
http://en.wikipedia.org/wiki/Megadeath
(a term for one million deaths by nuclear explosion)
(d)
(i) cutting horse (n; First Known Use 1881);
“an agile saddle horse trained to separate individual animals from a cattle herd”
http://www.merriam-webster.com/dictionary/cutting%20horse
(ii) cutting (sport)
http://en.wikipedia.org/wiki/Cutting_(sport)
(The sport originated from cattle ranches in the American West, where it was the cutting horse's job to separate cattle from the herd for vaccinating, castrating, and sorting)
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发表于 11-1-2013 08:09:44
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