Event rental consolidation
An industry that works only the background and which has heretofore been a business for small local entrepreneurs is getting into the oligopoly game. According to a Wall Street Journal article ("Local Event-Rental Companies Consolidate," 0/12/06):
Once the domain of tiny mom-and-pop shops, the $3 billion event-rental industry is consolidating into the hands of a few big players racing to shore up national dominance.
Among the growing national players cited are:
- Milwaukee-based Karl's Event Rental, which last year put on events in 45 states.
- El Segundo, Calif.-based Classic Party Rentals and
- McCook, Ill.-based Chicago Party Rental.
These growing companies run events from weddings and corporate get-togethers to hospitality tents at the Kentucky Derby, Superbowl, and PGA tour events, anywhere big corporations entertain.
These companies have been gobbling up small regional operations. For example, Classic has bought 11 competitors since 2003 with operations in 7 states -- 6 of them over the past year, And the company plans to buy out 3 or 4 each year form now on. "By purchasing businesses across the country, bigger event players say they instantly obtain a new client base, as well as the expertise of the local shop owners who have relationships with a region's party planners and givers."
Event rental companies are doing more than assuring that the champagne glasses aren't chipped and that the tents don't leak. Their customers are demanding in terms of timetables, special decoration needs, exotic props, and the desire to appeal to jaded event-goers.
It also allows them to centralized key, high end inventory for big events and to support a big corporation or athletic series nationally in a professional way that big corporations will pay extra for. (Only the big serve the big.)
