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John Deere dealers merge to offset slump in ag market

December 23, 2006|by KATE S. ALEXANDER

WAYNESBORO, PA. - Two Tri-State-area John Deere dealers - Landmark Equipment of Hagerstown and Clugston Ag and Turf Inc. of Chambersburg, Pa., and Carlisle, Pa. - merged recently in an effort to balance the effects of the declining agriculture industry.

The October merger also included a buyout of assets from Stoneham's Inc., a dealer in Waynesboro, Pa., that now is owned by Alan and Erica Peck.

The two companies joined under the name Landmark Equipment LLC. Dave Quirple, partner and former owner of Landmark Equipment of Hagerstown, said the new company will operate dealerships in Hagerstown, Chambersburg and Carlisle.

Quirple estimates the merger will increase profits to about $35 million.

Tom Ellicott, territory manager for John Deere, said the corporation facilitated the merger to balance the number of dealers in the area with the number of remaining farmers.

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Ellicott said that the agriculture industry has changed drastically, while the network of John Deere dealers has remained the same.

"Deere encourages mergers and consolidations for balance, but it is a hard balance because not everyone wants to merge" he said.

For many small dealers, Quirple said changes in the industry made it challenging to turn a profit.

"It was becoming more difficult to be an independent dealer," he said. "It was difficult to make money without a very high volume of sales."

The merger of Landmark Equipment and Clugston Ag and Turf will change the way John Deere equipment is supplied and maintained in the area.

Instead of four independent dealerships with limited stock, Quirple said the merger and the buyout of Stoneham's Inc. allows Landmark Equipment to have three dealerships with greater variety and more staff.

The merger also will allow Landmark Equipment to have specialized staff. Ellicott said each John Deere dealer is required to service every piece of equipment it sells, which can require dealers to buy new tools or train new employees.

By merging, Landmark should be able to sell enough equipment to have not just competent, but expert technicians.

As a result of the buyout, Stoneham's no longer will sell John Deere, said James Stoneham, former owner of Stoneham's. The dealership, which was established in 1961, will sell Polaris and Carter motorsports equipment and operate a lawn-and-garden service center. Alan Peck said the service center will not service any specific brands.

While the company still will bear the name Stoneham's Inc., Stoneham said he no longer will work for the company. Stoneham will serve as sales manager for Landmark Equipment LLC, overseeing sales at all three locations.

Quirple said the merger will affect many people in the Tri-State area, but emphasized that he and his partners, Daniel Place and Les and Jeanette Clugston, are positive about the future of the company.

"We all look at this as a very good thing," he said.

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