Legg Mason counters trend, plans to expand

March 03, 1995|By David Conn | David Conn,Sun Staff Writer

Ever the contrarian, Legg Mason Inc. plans to take advantage of the relatively slow times in the stock and bond markets to open as many as five new retail brokerage offices this year.

"We have, I think, committed to open five offices this year," Chairman Raymond A. Mason said in an interview yesterday.

Five new branches would amount to about 50 new hires, Mr. Mason said, although it's not clear yet in which states the offices would be located. At least one will be in Florida, and one may end up in Columbia, which is about the only major Maryland town without a Legg Mason office, he said.

The company has about 2,800 employees -- 900 of whom are brokers -- in 90 offices along the East Coast and throughout the South.

The push for new offices runs counter to the industry's cycle. In the last three months of 1994, Legg's profits fell 58 percent, to $4.1 million, from the same period in the previous year, as interest rates' upward creep dampened the demand for public stock and bond offerings.

Mr. Mason acknowledged that an expansion, at a time when business is down, has its costs. "It takes us probably 12 months after we get that office up and running when it's not losing money, then another year before it starts making some money," he said.

But he said it's become the company's practice to expand during tough times. Prospective hires are more available, for one thing. "Everybody is busy when you've got a market that's just exploding," he said.

In the fall, the company signed a deal to acquire Batterymarch Financial Management, a Boston investment firm with about $1 billion under management.

Business has started to pick up in the past month, after the Fed indicated it may not have to raise interest rates again soon because of signs of an economic slowdown. Legg's stock likewise has picked up, from $20.625 in early January to $22.625 yesterday.

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