SIC 5087
SERVICE ESTABLISHMENT EQUIPMENT AND SUPPLIES



This industry comprises establishments primarily engaged in the wholesale distribution of equipment and supplies for barber shops, beauty parlors, power laundries, dry cleaning plants, upholsterers, undertakers, and related personal service establishments. Other products of the industry include carnival and amusement park equipment, firefighting equipment, janitors' supplies, and voting machines.

Service establishment equipment and supplies wholesalers specialize in one of four areas: beauty and barber equipment and supplies, custodial equipment and supplies, laundry and dry cleaning equipment and supplies, and other service establishment equipment and supplies.

NAICS Code(s)

421850 (Service Establishment Equipment and Supplies Wholesaler)

446120 (Cosmetics, Beauty Supplies, and Perfume Stores)

In 2003, according to D&B Sales & Marketing Solutions, there were nearly 21,338 establishments generating more than $15 million in sales. The industrial machinery and equipment industry was subdivided into four groupings: beauty and barber equipment made up approximately 36.2 percent of sales; custodial equipment and supplies accounted for about 23.3 percent of sales; laundry and dry cleaning equipment accounted for about 5.5 percent of sales; and other equipment and supplies made up about 21.4 percent of the sales. California, Florida, New York, and Texas controlled almost 36 percent of the establishments. Combined, they generated more than $5 million in sales.

The National Association of Wholesalers (NAW) issued a report in 1992 titled Facing the Forces of Change 2000: The New Realities in Wholesale Distribution. The report, based on the findings of a commissioned study undertaken by Arthur Andersen Company, included equipment and supply distributors among the examples of types of companies encountering competition from innovative market channels. Traditional merchant wholesalers, who represented 93.5 percent of industry establishments in the government's census, were expected to face the stiffest competition. Alternate channels included manufacturer direct sales, retail formats such as buying clubs and warehouse clubs, and inventory service providers such as subcontractors offering product assembly or transportation coordination. Merchant wholesalers were not expected to increase their market share in the overall national economy, however.

Unisource Worldwide Inc. of Berwyn, Pennsylvania led the industry with sales of more than $4.8 million for its fiscal year ended September 30, 2002. Sally Beauty Company Inc., headquartered in Denton, Texas, followed with sales of almost $1.8 million in 2002. Fastenal Co. of Winona, Minnesota placed third in the industry with 2003 sales of $994.9 million. Reinhart Institutional Foods Inc. of La Crosse, Wisconsin generated $415 million in 1997, the most recent year available. Clark Foodservice Inc. of Elk Grove Village, Illinois rounded out the top five industry leaders with 2001 sales of $320 million. In addition, Reinhart acquired Weis Foodservice of Sanbury, Pennsylvania and established the Reinhart Sunbury Distribution Center in 2002.

Unisource employed 10,000 workers who together generated total revenues of $553,530. Reinhart, although it placed fourth in total sales, was second in sales-to-worker ratio, with 750 employees producing $553,333 in revenue—just under $200 per employee less than the leader Unisource. Of the top five sales leaders, Clark placed third in this category with $413,333 sales for its 750 employees, exactly $140,000 less than Reinhart. Fastenal placed fourth with $201,388 sales for its 3,025 employees, and Sally Beauty placed fifth with $161,375 in sales for its 8,000 employees.

The industry employed 61,497 workers in 2001 with a payroll of $2.1 million. The majority of companies in this industry were small—employing less than five employees. In 2001, 2,298 companies had less than 5 employees; 1,207 had between 5 and 9 employees; 812 had between 10 and 19 employees; 849 had between 20 and 99 employees; 412 had between 100 and 499 employees; and about 605 establishments with 500 or more employees. In 2003, the employee total had increased to about 119,526.

Further Reading

Arthur Andersen & Co. Facing the Forces of Change 2000: The New Realities in Wholesale Distribution. Washington: Distribution Research & Education Foundation, 1992.

D&B Sales & Marketing Solutions, 2003. Available from http://www.zapdata.com .

Hoover's Company Profiles, April 2004. Available from http://www.hoovers.com .

Infotrac Company Profiles, 18 February 2000. Available from http://web4.infotrac.galegroup.com .

U.S. Census Bureau. Statistics of U.S. Businesses 2001. Available from http://www.census.gov/epcd/susb/2001/us/US421420.HTM .

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