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EMESS MULLS BID TO SELL U.S. LIGHTING BUSINESS.

ELLWOOD CITY, Pa. -Emess PLC, the $264 million British lighting conglomerate, confirmed it has been approached by a large U.S. firm with an interest in acquiring Emess Lighting Inc., its U.S. unit based here.

In an April 13 letter to employees, associates and retail customers, Michael Dene, chief executive of Emess Lighting, wrote, "discussions are continuing and no final agreement has been reached."

Emess, the leading lamp supplier to Lowe's, sells Alsy lamps to mass retailers, and Cresswell lamps to department and specialty stores. The company, under Dene, has doubled its sales in the last five years, but recorded a "minimal" profit, according to Emess PLC chairman Michael Meyer.

"Last year, sales rose by 5 percent, but margins continued to decline. A 3.5 percent drop in the gross profit margin swung us from an operating profit to an operating loss," Meyer wrote in the annual report released April 11.

Emess reported 1999 sales of $54.66 million and an operating loss of $1.9 million for non-European businesses, including the U.S. and Australia. Company officials say Australia accounts for a "minimal" portion of that total.

"This weakness in the cost structure can be rectified by a merger with a competitor. We have to acquire or dispose. Since the U.S. market is now moving away from the European market in product terms, we will sell," Meyer wrote.

"American retailers are increasingly dependent on Far East sources for cheaper product, and [domestic] manufactured product has declined rapidly," Meyer wrote. In the past five years, Emess shifted its product line from almost all domestic hydrocal and iron production to an assortment of imported brass, metal, glass and ceramic lamps, torchieres and desk lamps from the Far East.

Emess owns a hydrocal lamp factory, warehouses and offices in Ellwood City. It holds licenses for Warner Bros.' Looney Tunes, Coca-Cola, Barbie and Norman Rockwell lamps. Emess PLC purchased Alsy Lighting in 1988 from an investment company.
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Comment:EMESS MULLS BID TO SELL U.S. LIGHTING BUSINESS.
Author:Meyer, Nancy
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 24, 2000
Words:326
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