INDUSTRY NEWS

Today's affluent baby boomers are not slowing down, and the majority remain "on the move," with plans to move from their current homes within a few years, according to the latest Coldwell Banker Baby Boomer Real Estate Survey, as reported by the Building Owners & Managers Association.

According to the Coldwell Banker sales associates surveyed, baby boomers plan to make changes to their new homes.

Change % of BoomersAny renovation 87%Kitchen 79%Bathrooms 70%Backyard deck 28%Complete renovation 27%Bedrooms 16%

Source: Coldwell Banker

The survey, an online random sampling of 363 certified Coldwell Banker sales associates who market luxury homes, found that affluent baby boomer homeowners (ages 40 to 58) remain an upwardly mobile group. In fact, more than half of the baby boomers (52 percent) who purchased a luxury home through Coldwell Banker within the last two years told their sales associate they plan to spend fewer than five years in their current home.

In the opinion of the Coldwell Banker sales associates surveyed, baby boomers want to live in the suburbs.

Preferred Location % of BoomersSuburbs 67%City 21%Country/rural 10%Senior community 1%College town 1%

Eighty-six percent of these home buyers said they have purchased three or more homes in their lifetimes. Almost half said they have lived at their most recent residence for a period of only one to five years.

The Coldwell Banker sales associates indicated that 65 percent of their baby boomer clients made their most recent home purchases because they wanted bigger residences. A mere 17 percent were looking to scale down, while another 15 percent were buying a second or vacation home.

Coldwell Banker sales associates said baby boomer clients told them they wanted their homes to be located where they can continue to pursue favorite pastimes.

Hobby % of Boomers Shopping 71%Golf 69%Beach/waterfront 47%Biking 24%Hiking 22%Fishing 12%Athletic leagues 6%

The typical size of a recent luxury home purchased, according to the survey, was 4,500 square feet or less with four bedrooms, three bathrooms and a backyard. The overwhelming majority (88 percent) of these luxury homes cost approximately $1 million, while only 12 percent of the sales associates reported recent sales of homes costing more than $2 million.

The survey also indicated that 60 percent of these buyers purchased existing single-family homes, while 21 percent opted for new construction and 16 percent purchased condos/townhouses.

"Our survey clearly shows that wealthy Baby boomers want to enjoy the rewards of their hard work," said Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate Corp. "They want bigger and more luxurious homes and want to remain active. They are in their peak earning years, have benefited from many years of strong stock market returns and have built tremendous equity and appreciation in their homes. These factors, along with many receiving inheritances from their parents, are allowing the luxury-home market to thrive, and it should be robust for years to come."

The study was commissioned by Coldwell Banker Previews International and conducted by Zoomerang Research in January 2005. Coldwell Banker defines a luxury home as having a listing price of at least $500,000, priced within the top 10 percent of its market and of exceptional style and quality.

DAVEY COMMERCIAL DIVISON BECOMES OWN SERVICE LINE.

KENT, Ohio – The Davey Tree Expert Co. announced that Davey's Commercial Grounds Management (CGM) division, which was part of the company's residential/commercial service line, has become its own stand-alone service line and will be titled Commercial Landscape Services (CLS).

The organizational change, which became effective in January, establishes a service line with three primary service categories: grounds maintenance, landscape installation and tree moving, and golf and sports turf management.

In addition to the organization change, two key employees have been promoted. George Gaumer was promoted to vice president and general manager of the service line. Gaumer, who formerly served as the vice president of the company's commercial grounds management division, has more than 27 years of experience with Davey. He has been part of the company's commercial division since its inception in 1986. Dan Joy has been promoted to vice president, and has been with the company almost 29 years.

Demand for fencing products in the United States is forecasted to expand 3.6 percent per year through 2009 to $6.6 billion (measured at the manufacturer's level), with total unit demand reaching 910 million linear feet. Gains will be bolstered by an acceleration in nonresidential building construction spending, particularly in the key office, commercial and industrial segments. In the residential market, which accounts for approximately 60 percent of total fencing demand, growth will be supported primarily by the repair and improvement segment. An expected decline in single-family housing completions will restrain opportunities for new fencing installations. These and other trends are presented in Fencing, a new study from The Freedonia Group, Cleveland, Ohio.

Plastic and concrete fence types are projected to post the fastest growth through 2009. Gains for plastic fencing will come primarily at the expense of wood. Plastic materials can offer similar aesthetics to wood with advantages in reduced maintenance costs.

Vinyl will continue to account for the largest share of plastic fencing demand, with wood-plastic composites and high-density polyethylene representing much smaller segments. Concrete fencing is available in styles that imitate wood, stone or brick. Precast concrete panels will provide the best opportunities for growth in this segment because of ease of installation and the ability to mold, shape and color them to meet end-user preferences.

Concrete fencing provides a formidable barrier to intruders and helps reduce noise transmission, characteristics that will continue to support gains.

Demand for metal fencing, the largest segment, is forecast to increase at a slightly above-average pace. An acceleration in nonresidential construction spending will drive advances through 2009, as metal is the primary material used in office, commercial and industrial fencing installations. Wood fencing, the second leading material used in 2004, will see sluggish growth because of weak new housing markets and competition from alternative materials.

Fencing (published in March 2005, 206 pages) is available for $4,100 from The Freedonia Group. For further details, call 440/684.9600 or via www.freedoniagroup.com.

LANDSCAPE ENTREPRENEURS LUSE, HANSONBUY BACK ARTEKA

The purchase of Arteka, from ValleyCrest Landscape Development, brings David Luse and Stewart Hanson full circle. Hanson started working with Arteka in 1973 – a company that designed and installed landscaping for residential and commercial clients. Luse started in the business as a kid mowing neighbors’ lawns, built a commercial landscaping business, then became a commercial developer. In 1990, Luse bought Arteka. Hanson stayed with company, becoming president in 1991. Luse and Hanson grew the company, and then took it public, along with six other companies as Landcare USA in 1998. In 1999, Landcare USA was acquired by ServiceMaster's TruGreen LandCare division. Landcare USA's construction operations were sold to ValleyCrest Landscape Development in 2001.

Hanson rejoined Luse again in 2003, and now the two own Organicare, based in Eden Prairie. Organicare franchises organic lawn, tree and shrub-care services, doing business in Minnesota, Texas, New Jersey and Connecticut. Luse and Hanson also own controlling interest in a product distribution company called EcoOrganics, acquired in 2003.

Hanson will run Shakopee, Minn-based Arteka. Most of the original staff is still in place. Along with Arteka's current commercial service offerings, the company will be pursuing residential work. In the meantime, Luse is planning a national sales force to market and sell the EcoOrganics product business along with developing commercial real estate.

SAN FRANCISCO – Gachina Landscape Management was named one of the Top 100 Place to Work in the San Francisco Bay Area. The San Francisco and East Bay Business Times, and the Silicon Valley/San Jose Business Journal sponsor the annual survey. The survey comprised a broad cross section of the Bay area's employers. The rankings are the result of a survey of more than 105,000 employees among a cross section of companies.

Gachina Landscape Management ranked No. 33 in the medium-sized businesses category with 101 to 350 employees. Seventy-eight percent of Gachina's 229 employees responded to the survey. John Gachina, founder and president of the company, was honored by the recognition. "Our company culture offers team members opportunities for growth and advancement as well as a competitive compensation/benefits package," he said. "We know our team is our greatest asset. It is especially rewarding that our team believes this to be true."

Since 1988, Gachina Landscape Management provides landscape maintenance, construction and irrigation services for commercial clients within the San Francisco Bay area.

CLEVELAND, Ohio – GIE Media, publisher of Lawn & Landscape magazine, announced that Chris Foster has joined the company as president & COO. Foster, who has spent the past five years on the Board of Directors for GIE Media, rejoins the company after serving eight years in various IT and Business Management capacities in the New York metro area. Foster began his business career with GIE Media in 1989 upon graduation from Schiller University in Heidelberg Germany with a BBA in international marketing and a BBA in international business administration.

Foster held several key management positions with GIE Media from 1989 – 1997, including IT operations management, general manager and CFO. He left GIE Media employment in 1997 to expand his business experience beyond the scope of GIE Media, a decision that now brings depth and expertise to his new leadership position with the company. Most recently, Foster served as vice president of product development for market research firm InsightExpress.

In other news, GIE Media hired Mark Rook as creative director. Rook's 20 years of experience includes publication, marketing collateral and logo design. Rook has earned awards from the American Society of Business Publication Editors, the Turf and Ornamental Communications Association, and the Business/Professional Advertising Association.

GIE Media also recently hired Doug Adams as its director of marketing and market research. Adams most recently spent three years as the director of marketing for Stamford, Conn. market research firm InsightExpress.

The grass is greener in South Carolina.

According to a recently released report, the state's turfgrass industry is the fastest growing sector of South Carolina agribusiness and makes up a large segment of the state's economy.

"Our turfgrass industry supplies sod to more than 1 million lawns and more than 400 golf courses across the state," noted John Kelly, vice president for public service and agriculture at Clemson University, Clemson, S.C., in an article published by the South Carolina Times & Democrat. "Combined with the commercial production of ornamental horticulture – the trees, shrubs and flowers that landscape our neighborhoods and public spaces – turfgrass is a major economic force. These two industries provide more than 25,000 full-time jobs and contribute some $2 billion to the state's economy."

Approximately 18,000 acres are devoted to commercial sod production in South Carolina, Kelly noted in his article, adding that the annual growth rate of the state's agribusiness is about 10 percent.

CLEVELAND, OHIO – LESCO announced first quarter results for the period ending March 31. According to the company, net sales for the first three months of 2005 were $98.1 million vs. $102 million in the comparable period a year ago. Lawn care gross sales were $84.3 million compared to $85.7 million in the first quarter of 2004, while golf gross sales were $15.5 million vs. $17.2 million in the same quarter last year. Total Service Center gross sales increased 0.3 percent to $69.1 million from $68.9 million, while same-store Service Center sales fell 4.1 percent.

"We are encouraged by the performance of our class of 2003 stores that produced growth of 22 percent in the first quarter," said LESCO President and CEO Michael Dimino. "Unfortunately, total sales were impacted by late season snowfall, combined with colder temperatures in the Northeast and Midwest, which delayed sales of preemergent combination fertilizer. Since the beginning of April, we have seen the expected rebound in sales."

Gross profit increased to 23.8 percent of net sales, or $23.4 million, compared to 23.1 percent of net sales, or $23.6 million, in the first quarter of 2004. Approximately $1.2 million is attributable to incremental operating costs for Service Centers opened in 2003 through 2005, and $800,000 related to ongoing training and incentive initiatives.

LESCO opened one new Service Center during the first quarter of 2005 in Upland, Calif. On March 31, there were 275 Service Centers in operation, vs. 256 at the end of the first quarter of 2004. The 49 Service Centers opened from 2003 through the first quarter of 2005 generated net sales of $7.1 million and a four-wall, pre-tax loss of $800,000.

The company reiterated guidance for 2005 of full-year revenue growth between 7 and 8 percent. By customer sector, lawn care sales are expected to increase 8 to 10 percent, while golf is anticipated to be flat to down slightly.

As part of the company's strategy of opening new Service Centers throughout the year, the company expects to open approximately 30 to 35 in 2005, with 14 to 17 opening by the end of the second quarter 2005.

CLEVELAND, OHIO – The Lawn & Landscape Media Group announced the dates and locations for the 2005/06 Growing Your Business Seminar Tour for contractors looking to sharpen their companies’ operational efficiency.

The seminars will feature industry consultant and Lawn & Landscape columnist Jack Mattingly of Mattingly Consulting, who brings years of in-the-field experience managing and consulting with leading landscape contracting operations.

Sponsored by John Deere, the seminars will present lessons taken from proven operational management systems that are designed to provide attendees with a defined, precise "game plan" to become more organized, operationally efficient and profitable. Topics include:

The Lawn & Landscape Growing Your Business Seminar Tour kicks off August 18 in Indianapolis and runs through March 2006. Check the tour dates and locations to find the closest seminar to you, then contact Lawn & Landscape's conference division to register. For more information, contact Michelle Fitzpatrick at [email protected] or call her at 800/456-0707, ext. 218, or visit www.lawnbizseminars.com.

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