Death Industry Struggles in Recession

LOS ANGELES (TheStreet) -- In a time in which they're struggling to cover their living expenses, many Americans are shelving their death expenses for the time being, a choice that has affected the so-called "pre-need" market of the funeral industry -- i.e., paying for your cemetery plot and related expenses while you're still around to pay them. At the same time, cremation is an increasingly popular choice over burial in a casket.

"In a weak economy, it's very challenging to sell someone funeral and cemetery pre-need products," says Debbie Young, director of investor relations at Services Corporation International(SCI Quote), which operates more than 1,500 funeral homes and 400 cemeteries as the largest company of its kind in North America. "It's discretionary -- not something you need to do today. If it's [a matter of], 'Should I pay my mortgage or buy a cemetery plot?' then they're thinking, 'I think I'll pay my mortgage.' " (An extreme example: To help pay off the mortgage on her home, a woman last week placed an ad on eBay(EBAY Quote) for a crypt currently occupied by her late husband at the Westwood Village Memorial Park in Los Angeles, directly above the tomb of Marilyn Monroe and diagonally above the space reserved for Hugh Hefner. The winning bid was $4.6 million.)

Art From Ashes uses cremation ashes in its pieces.

SCI reported pre-need funeral revenue of $101.5 million in the second quarter, down from $109.1 million from a year earlier. Pre-need cemetery revenue was $88.8 million in the second quarter, less than the $96 million for the same quarter in 2008. Stewart Enterprises(STEI Quote), the second-largest company in the U.S. funeral business, also reported declines, and so did Hillenbrand Inc.(HI Quote), the holding company for Batesville Casket Co., the biggest casket company in the U.S.