Chains Are Gobbling Up Funeral Businesses
Submitted by:	N.O.V.A. April 2005
Source:  	Times Picayune 07-08-1990

*************************************************
Copyright. All rights reserved.
http://www.usgwarchives.net/copyright.htm
http://www.usgwarchives.net/la/lafiles.htm
************************************************  


It's happened with grocery stores and fried chicken outlets - so why
not funeral homes? Nationwide more independently owned, or "Mom and
Pop," funeral homes are being scooped up by funeral home chains.

In Louisiana, one of the largest chains is known simply as Security
Plan, a company owning 16 funeral homes state-wide, with eight in
New Orleans, including Tharp-Sontheimer, Lamana-Panna-Fallo, and
P.J. McMahon and Sons. The company also owns Jacob Schoen & Sons.

Security president Dennis Caballero said one reason for the advent
of the chain funeral home is the potential for reduced overhead.

"This is a market share industry," Caballero said. "There's really
only a certain number of people who are going to die every year. If
your funeral home did 400 funerals last year, this year you may do
398 or 402. It doesn't change much, but costs still increase, which
means that it might be more difficult for the independent funeral
home to make it because they're really out there on their own
financially."

Frank Stewart, chairman of Stewart Enterprises, agreed. "Even if a
funeral home is family-run," he said, "when it comes time for Mom
and Pop to retire, the children may find they don't have the
financial means to take over because so much of a home's assets may
be tied up in investments."

Stewart said because chains are less likely to suffer similar
financial constraints, they are in a better position to add to their
holdings.

Although Stewart Enterprises is known locally as the owner of Lake
Lawn Metairie cemetery and funeral home and Memorial Funeral Home in
Chalmette, the company also owns and operates about 70 other
cemeteries and funeral homes nationwide in states including
Maryland, Florida, West Virginia and Texas.

Revenues are about $110 million a year.

The two companies dominate the local business. In a 1986 lawsuit,
Stewart charged that Security Insurance's 10 area funeral homes
controlled "no less than 68 percent of the burials of deceased white
persons."

But even with the protection of a chain, funeral homes in the early
1990s aren't exactly sure routes to financial success.

"It can be a very tough business," said Dawn Scardino, assistant to
the Louisiana State Board of Embalmers and Funeral Directors. "Some
funeral homes locally may make as much as $1 million a year, but
profits are quickly eaten up by staff salaries, equipment,
mortgages, insurance, and the rest."

Even without operating costs, funeral homes face challenging
economic times, said a recent industry report. The report said that
today's market for the 22,000 funeral homes in the United States is
"slow-growth." For the more than 400 funeral homes in Louisiana, the
outlook is much the same. "It's not really a growing industry, it's
one that stays the same year after year," said one New Orleans
funeral home director. "I know a lot of people in the city who would
love to bail out if some chain would only make them an offer.

"After awhile you get kind of tired of always having to pay these
big bills you need to pay in order to stay in business."