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Non-Tech : Central Garden & Pet Co. (Nasdaq : CENT)
CENT 32.29-0.4%3:59 PM EST
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To: Dale Baker who wrote (13)7/9/1999 2:57:00 PM
From: Dale Stempson  Read Replies (1) of 73
 
RE: >>> ...can you comment on competition and how CENT can defend its margins in lawn care? <<<

Dale B., I think CENT has a couple of tools they can and do use to maintain reasonable margins on many of their products (including lawn care):

1) Proprietary Branded Products - Branded products represent about 25-30% of sales. Margins are normally higher than distributed products. CENT intends to actively grow this side of the business through continued acquisitions and new product development. FWIW, I seem to recall they currently own over twenty manufacturing facilities (not including numerous contract manufacturing arrangements).

2) Growth - CENT is currently the leading national distributor of lawn and garden and pet supply products. Continued growth (primarily through acquisitions) should help maintain their leadership position, putting them in the unique position of being able to offer a large (and unmatched) selection of products and services. In a world where it seems everyone is trying to cut down the number of suppliers they work with, companies like CENT should be able to do better at defending their margins due to their purchasing power and product offering. In addition, being a national distributor allows them to pursue the major national retailing chains where local and regional distributors would likely come up short.

Regards - Dale
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