Bates Manor

In: Business and Management

Submitted By spirospireas
Words 2169
Pages 9
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Bates Manor
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Category: Business
Autor: peter 29 March 2011
Words: 2148 | Pages: 9
INTRODUCTION
In April 2008 BatesManor ("BM") merged with Lea-Meadows, Inc. ("LM"), an upholstered furniture manufacturer for living and family rooms. This merger was the result of the death Charlton Bates' father-in-law, who left Charlton's wife controlling interest in LM, a line that will fill the gap in BM's product mix.
Lea-Meadows' is a 75+ year old company, selling upholstered products made of the finest fabrics and frame construction in the industry. Its net sales in 2007 were $5m and have increased 3% annually for the past 5 years. The total upholstered industry had sales of $15.5b and is anticipated to have sales reach $16.1b in 2008. LM has 15 sales agents, who represent several manufacturers of noncompeting lines. These agents spend approximately 10-15% of their in-store time on LM products. Those agents get 5% of sales as commission and there is little other cost associated with them.
BatesManor sells medium-to high priced wood for bedroom, living room and dining room furniture. The company had net sales of $75m in 2007 and a before tax profit of $3.7m. The industry sales of wood furniture in 2007 were $12.4b and are projected to be $12.9b in 2008. The company currently employs 10 full time sales reps, who work off of an average salary of $70,000 (plus expenses) and a commission of .5% of net sales. The total sales admin costs in 2007 were $130,000. BM's sales reps are highly regarded and known for their knowledge of wood furniture and their willingness to work with buyers and sales personnel. On average the reps are making 10 calls per week and each call averages 3 hours. VP of Sales, Bott, is recommending an annual increase per account per year to 7 calls (7,000 calls…...

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