Palm Mortuary sold

After more than eight decades as one of Las Vegas' best-known independently owned businesses, Palm Mortuary is being sold to a large national chain.

Ken Knauss, whose family bought Palm Mortuary 50 years ago, announced to employees about two weeks ago that he had agreed to a deal with Houston-based Service Corp. International, which owns more than 1,200 funeral homes and 365 cemeteries across the United States and Canada. No public announcement was made by either company, although it was first reported in the newsletter Funeral Service Insider. SCI declined comment while the deal is being reviewed by the Federal Trade Commission.

The terms were not disclosed, but the sale includes all six mortuaries and five cemeteries, a cremation service and the King David Memorial Chapel and Cemetery for Jewish funerals. A closing date has not been set.

The deal will make SCI, which refers to itself as the largest company in the death-care industry with $2.2 billion in revenues last year, the dominant funeral service in the valley. Jim Lee, the owner of Hites Funeral Home & Cremation Service in Henderson, estimated Palm Mortuary and SCI, which already operates three funeral homes and one cemetery in Las Vegas, handled 56 percent of all funeral services and 80 percent of burials in 2008.

SCI owns the Thomas and Jones Funeral Home and the Davis Funeral Home, which has two locations in Las Vegas.

Further, the deal will bring all eight of the cemeteries in town under the control of Houston-based companies, including SCI and rival Carriage Services Inc., which manages one cemetery for the city.

"From the service aspect, I am not necessarily concerned about the deal," Lee said. "But I would like to see more competition for burial space."

David Walters, owner of Desert Memorial Cremation & Burial, does not foresee major changes in the market because of the sale.

"Even though Palm was family owned, it was pretty much a big corporation and run like one," he said. "They had both funeral homes and cemeteries, similar to Davis. So I'm not sure there's going to be much of a change at all."

Phillips said Palm's operations will continue as before, with the name remaining in place. However, SCI has put both Davis Funeral Homes and Thomas and Jones under its Dignity Memorial label.

Knauss, who declined to be interviewed, did not prepare a statement explaining why he sold the business. He is the second generation of the family that has owned Palm since 1959. His father, Charles, has retired from the business.

But Phillips noted two trends that have started to pinch the industry. National statistics have shown a declining death rate due to a population lull between the World War II generation and the baby boom generation, whose members are mostly still too young to die in large numbers.

In addition, the recession has also hit the industry.

"Generally speaking, families are choosing what they can afford these days," Phillips said. "They are not spending on anything extra."

Further, a number of outside vendors have moved into casket sales, introducing discounting to what once was a major source of profits for funeral homes. For example, Costco Wholesale Corp. markets caskets and floral arrangements through its Web site, and Nevada is one of the states that allows nonfuneral homes to sell caskets.

Gene and Anna Parks opened Palm Mortuary in 1926 at a downtown location now occupied by the Golden Nugget. Anna Parks was the first female in Nevada to become a licensed funeral director.

The business' first expansion was only temporary.

The construction of Hoover Dam was not allowed to proceed unless there was a funeral home close by. This prompted the Parkses to rent a house in Boulder City in 1933 as a funeral home to meet the requirement.

In 1946, the Parkses sold their business to two businessmen who moved the location to North Main Street in 1957, where the corporate office is today. Two years later, Charles Knauss took over Palm and began the expansion that eventually placed locations throughout the valley.

Contact reporter Tim O'Reiley at toreiley@lvbusinesspress.com or 702-387-5290.