Profile: SPAR Group Inc (SGRP.OQ)

SPAR Group, Inc., (SGRP) is a diversified international merchandising and marketing services company and provides an array of services worldwide. The Company provides its merchandising and other marketing services to manufacturers, distributors and retailers worldwide, primarily in mass merchandisers, office supply, grocery, drug store and other chains, and independent, convenience and electronics stores. The Company also provides furniture and other product assembly services in stores, homes and offices. The Company has supplied these project and product services in the United States. During the year ended December 31, 2011, the Company operated in 10 countries, including United States, Canada, Japan, South Africa, India, Romania, China, Australia and New Zealand. In September 2012, it acquired 51% of a United States-based company that provides merchandising services.

Merchandising services primarily consist of scheduled, special project and other product services provided at the store level, and the Company may be engaged by either the retailer or the manufacturer. Those services may include restocking and adding new products, removing spoiled or outdated products, resetting categories on the shelf in accordance with client or store schematics, confirming and replacing shelf tags, setting new sale or promotional product displays and advertising, kiosk replenishment and providing in-store event staffing, and providing assembly services in stores, homes and offices. Other merchandising services include whole store or departmental product sets or resets, including new store openings, new product launches and in-store demonstrations, special seasonal or promotional merchandising, focused product support and product recalls. The Company’s operations are divided into two divisions: the Domestic Merchandising Services Division and the International Merchandising Services Division.

The Domestic Merchandising Services Division provides merchandising and marketing services, furniture and other product assembly services, radio frequency identification device (RFID) services, technology services and marketing research to manufacturers and retailers in the United States. The services are primarily performed in mass merchandisers, electronics store chains, drug store chains, convenience and grocery stores. The International Merchandising Services Division provides similar merchandising, marketing services and in-store event staffing through subsidiaries in Japan, Canada, South Africa, India, Romania, China, Australia, Mexico and Turkey.

Syndicated Services

Syndicated services consist of regularly scheduled, routed merchandising and marketing services provided at the retail store level for various manufacturers and distributors. These services are performed for multiple manufacturers and distributors, including, in some cases, manufacturers and distributors whose products are in the same product category. Syndicated services may include activities, such as reordering and replenishment of products, ensuring that the clients' products authorized for distribution are in stock and on the shelf or sales floor, adding new products that are approved for distribution but not yet present on the shelf or sales floor, designing and implementing store planogram schematics, setting product category shelves in accordance with approved store schematics, ensuring that product shelf tags are in place, checking for overall salability of the clients' products, placing new product and promotional items in prominent positions and kiosk replenishment and maintenance.

Dedicated Services

Dedicated services consist of merchandising and marketing services. These services include many of the above activities detailed in syndicated services, as well as, new store set-ups, store remodels and fixture installations. These services are primarily based on agreed-upon rates and fixed management fees.

Project Services:

Project services consist primarily of specific in-store services initiated by retailers and manufacturers, such as new store openings, new product launches, special seasonal or promotional merchandising, focused product support, product recalls, in-store product demonstrations and in-store product sampling. The Company also performs other project services, such as new store sets and existing store resets, re-merchandising, remodels and category implementations, under annual or stand-alone project contracts or agreements.

Assembly Service:

The company’s assembly services are initiated by retailers, manufacturers or consumers, for which the Company assembles furniture, grills, fitness equipment and many other products in stores, homes and offices. The Company performs ongoing routed coverage at retail ensuring furniture and other product lines are well displayed and maintained, and building any items or replacement items, as required. In addition, it provides in-home and in-office assembly to customers who purchase their product from retailers, whether in store, on line or through catalog sales.

In-Store Event Staffing Services

The Company provides in-store product samplings and in-store product demonstrations to national chains in target markets worldwide. The Company has also developed additional product offerings in an effort to expand this segment of its business.

Other Marketing Services

Other marketing services performed by the Company include testing promotion alternatives, new products and advertising campaigns, as well as packaging, pricing, and location changes, at the store level; calling on retail outlets (e.g. stores, restaurants, banks) to check on distribution or display of a brand and to evaluate products, service of personnel, conditions of store; gathering sales and other information systematically for analysis and interpretation, and utilizing technology to track merchandiser performance, product inventory at store level, as well as other related merchandising and marketing applications.