Evolution not revolution.NOT SO LONG AGO, IT WAS "THE ECONOMY, stupid." However, between the beginning of 1994 and the end of the year, thanks to a GOP power surge An oversupply of voltage from the power company that can last up to 50 microseconds. Although surges are very short in duration, they often reach 6,000 volts and 3,000 amps when they arrive at the equipment. Power surges are a common cause of damage to computers and electronic equipment. in the last national elections and a presidential race looming looming: see mirage. in the next, "it" became something else: politics. The shift is an important one for the CEOs of the BLACK ENTERPRISE 100s, the nation's largest black-owned businesses. The latest assault on affirmative action affirmative action, in the United States, programs to overcome the effects of past societal discrimination by allocating jobs and resources to members of specific groups, such as minorities and women. , led by a conservative-dominated Congress, threatens policies designed to lower race-based barriers to opportunity for minority-owned businesses. The climate that made this attack on race-based affirmative-action policies viable signals difficult times ahead for African-American businesses. But the BE 100s came through with a second consecutive post-recession year of solid growth. Last year's annual report was marked by dramatic upheavals in the BE 100s landscape--marked by family feuds This article is about the American game show. For other versions, see Family Feud around the world. For rivalries between families, see Feud. Family Feud , controversial deals and the explosive growth accompanying the 1993-94 economic recovery. (See BE 100s Overview, "Coming On Strong," June 1994.) However, this year's report finds more evolution than revolution among the nation's largest black-owned businesses. In fact, despite solid growth and a number of significant business deals, 1994 was more or less business as usual as compared with the previous year. Last year, the BE INDUSTRIAL/SERVICE 100 and the BE AUTO DEALER 100 combined for $11.71 billion in sales. Total revenue growth for these companies in 1994 was 13.91%, only slightly off 1993's rate of 13.9%. The number of people employed by the nation's 100 largest black-owned industrial/service companies and 100 largest black-owned auto dealerships also increased by 4.97%. However, this is a far cry from the astonishing a·ston·ish tr.v. as·ton·ished, as·ton·ish·ing, as·ton·ish·es To fill with sudden wonder or amazement. See Synonyms at surprise. 20% increase in employment reported by the BE 100s last year. Again, the double-digit jump in employment in 1993 was driven by economic recovery after the 1990-91 recession. With the Clinton administration Noun 1. Clinton administration - the executive under President Clinton executive - persons who administer the law pursuing an economic policy aimed at maintaining the recovery but keeping inflation in check, it may be years before we see another huge increase in jobs. However, for the second consecutive year, every company among the BE 100s Top Ten Employment Leaders (see chart) had at least 1,000 people on its payroll. In fact, the tenth-largest employer, The Gourmet Companies, the Atlanta-based food service business owned by Nathaniel R. Goldston III, had 1,100 employees in 1994. [TABULAR tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. DATA OMITTED] The BE 100s employed a total of 47,895 people in 1994. A majority of those, 39,997, were employed by the BE INDUSTRIAL/SERVICE 100, a 3.49% increase over 1993. The BE AUTO DEALER 100, while employing fewer people (7,898), had a greater increase in the rate of employment, 13.17%.
1995 BLACK ENTERPRISE 100s
PERCENT
1993 1994 DIFFERENCE CHANGE
Total Sales(*) $10,280.801 $11,711.205 $1,430.404 13.91%
Total Staff 45,628 47,895 2,267 4.97%
1995 B.E. INDUSTRIAL/SERVICE 100
Total Sales(*) $6,156.821 $6,727.458 $570.637 9.27%
Total Staff 38,649 39,997 1,348 3.49%
1995 B.E. AUTO DEALER 100
Total Sales(*) $4,123.980 $4,983.747 $859.767 20.85%
Total Staff 6,979 7,898 919 13.17%
(*)In millions of dollars, to the nearest thousand. Prepared by B.E. Research. Reviewed by Mitchell/Titus & Co. ARRIVALS AND DEPARTURES The nation's largest black-owned industrial/service companies posted sales of $6.7 billion in 1994, an impressive 9.27% increase over the previous year's sales. [ILLUSTRATION OMITTED] Behind the numbers, the BE INDUSTRIAL/SERVICE 100 was marked with notable departures and arrivals of companies on the list. Gone, for example, are Brooks Sausage Co. Inc., Network Solutions Inc., Barden Communications Inc. and Threads 4 Life. Last year, Barden Communications CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Don Barden agreed to sell Barden Cablevision to the Comcast Corp. of Philadelphia. At the time the sale was announced, Barden told BE that more restrictive regulations and new competition--namely telephone companies--in the cable industry prompted him to sell the business. "Unless a company has two million or more subscribers," says Barden, whose Detroit-based cable business had about 119,000 subscribers, "they will be unable to compete in the next three to five years." Barden, who netted over $100 million from the sale of his cable company, still owns several radio stations, but Barden Communications is no longer large enough to qualify for the BE INDUSTRIAL/SERVICE 100. In February, Brooks Sausage CEO Frank Brooks Frank J. Brooks (Born September 6, 1978 in Brooklyn, New York) is a Major League Baseball player. A left-handed pitcher who bats from the left side, Brooks is 6'1" tall and weighs 200 pounds. He is currently a member of the San Diego Padres organization. sold his 51% of the Kenosha, Wis., sausage manufacturing business to Aurora, Ill.-based OSI (1) (Open System Interconnection) An ISO standard for worldwide communications that defines a framework for implementing protocols in seven layers. Control is passed from one layer to the next, starting at the application layer in one station, proceeding to the Industries Inc., which owned 49% of Brooks' company. Both OSI and Brooks Sausage were suppliers to the fast-food giant, McDonald's. The following month, Science Applications International Corp., a San Diego-based high-tech company, announced that it would acquire--for an undisclosed sum--Network Solutions Inc., the Herndon, Va.-based systems integration concern headed by Emmit McHenry. Unlike the controversy generated by the sale of Johnson Products, the Chicago-based hair care products company, to Miami-based IVAX IVAX Industrial Vax (Dec Computer) Corp. two years ago, the sales of Barden Cablevision, Brooks Sausage and Network Solutions generated no news beyond that of the deals themselves. And Threads 4 Life, the Los Angeles-based clothing manufacturer best known for its Cross Colours Cross Colours was an American-made hip-hop clothing brand, whose products peaked in popularity between Fall 1992 and Spring 1993. Cross Colours was created in 1990 in Los Angeles, California by the designer Carl Jones, a graduate of "Otis Parsons School of Design", and marketed fashion line, dissolved its manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. after four years of torrid growth. Instead, it chose to license the Cross Colours name to other manufacturers. Newcomers on the list include Los Angeles-based Karl Kani Infinity, whose namesake name·sake n. One that is named after another. [From the phrase for the name's sake.] namesake Noun CEO decided to spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. his clothing line after his Threads 4 Life partners Carl Jones and T.J. Walker closed down their manufacturing operation; and Active Transportation Co., the Louisville, Ky., trucking company that last year completed a $50 million acquisition of Jupiter Transportation System Inc., a $240 million, Kenosha, Wis.-based trucking operation. (For profiles of Karl Kani Infinity and two more new BE 100s companies, see "The Freshman Class of '95," this issue.) Unlike the past several years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time emergence of new BE INDUSTRIAL/SERVICE 100 companies did not provide a significant boost to the combined sales growth of the list. Total sales for the 17 new companies on the 1995 list amounted to $569.112 million. The combined gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. of companies displaced displaced see displacement. from the BE INDUSTRIAL/SERVICE 100 was $532.005 million. Thus, turnover on the list resulted in a net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight gain of only about $37.1 million, as compared to $139.4 million the previous year. Despite turnover, there are still BE INDUSTRIAL/SERVICE 100 mainstays anchoring this year's list. For example, the top four companies remain unchanged since 1988, the year that the nation's largest black-owned industrial/service companies and auto dealerships were accorded separate lists. New York's TLC TLC total lung capacity; thin-layer chromatography. TLC abbr. 1. thin-layer chromatography 2. Beatrice International, now under the leadership of Loida Lewis, the widow of founder Reginald F. Lewis, remains atop the BE INDUSTRIAL/SERVICE 100 with sales of $1.8 million. The international food processor and distributor is followed by Johnson Publishing The Johnson Publishing Company is an American publishing company owned and managed by the family of John H. Johnson. It is headquartered in Chicago, Illinois, USA. Snubbed by advertisers when he founded his company in November 1942, John H. Co., with $306.6 million in sales. Headed by CEO and founder John H. Johnson John Harold Johnson (January 19, 1918 – August 8, 2005) was the founder of the Johnson Publishing Company, an international media and cosmetics empire headquartered in Chicago, Illinois that includes Ebony, and Jet , the Chicago-based publisher is celebrating the 50th anniversary of its flagship magazine Flagship Magazine is an independent magazine for gamers [1]. Published in the UK, it started in 1983 for PBM players [2]. Since its hundredth issue in 2002, it has extended its coverage to include boardgames, role-playing games, web games and massively , Ebony ebony, common name for members of the Ebenaceae, a family of trees and shrubs widely distributed in warmer climates and in the tropics. The principal genus, Diospyros, includes both ebony and persimmon trees. , this year. In the Nos. 3 and 4 slots, respectively, are Philadelphia-based Coca-Cola Bottling Co., headed by J. Bruce Llewellyn, with sales of $305 million; and Atlanta-based H.J. Russell & Co., Herman J. Russell's construction and concessions management business, with $154.7 million in sales. As a matter of fact, there was considerable concern on the part of the editors of BE that TLC Beatrice, in the aftermath of Reginald Lewis' sudden death of a brain tumor Brain Tumor Definition A brain tumor is an abnormal growth of tissue in the brain. Unlike other tumors, brain tumors spread by local extension and rarely metastasize (spread) outside the brain. in 1992, might no longer meet the 51% black-ownership standard to qualify for the BE 100s. First, there was the question of how the Wall Street attorney's stock was redistributed re·dis·trib·ute tr.v. re·dis·trib·ut·ed, re·dis·trib·ut·ing, re·dis·trib·utes To distribute again in a different way; reallocate. Adj. 1. during the year following his death. Second was the fact that Loida Lewis, who assumed the chairmanship of the company in 1993, is an Asian-American (she was born in the Philippines). The latter question was easy. Prior to Reginald Lewis' death, 55% of TLC Beatrice's stock was in the control of an African-American family, namely the one comprised of Reginald, Loida and their daughters Leslie and Christina. Did that family cease to be African-American upon Lewis' death? Absolutely not. That leaves the question of stock distribution. An examination of the prospectus filed with the SEC by TLC Beatrice in January provides clear answers. Filed for the purpose of announcing a secondary public offering of most of the common stock owned by nonfamily shareholders, it reveals that the Lewis family remains in control of 51% of the company's stock. In addition, a majority of the company's board of directors are African-American; when the offering is completed, the Lewis family will have complete control of all appointments to the board. Thus, TLC Beatrice, the assets of which remain based primarily in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). , continues to meet the BE 100s 51% ownership standard. For her part, Loida Lewis is unequivocal about TLC Beatrice's identity in the business marketplace. "There is absolutely no doubt in my mind that TLC Beatrice International is an African-American-owned company," she told the editors of BE in March. "This is the legacy of my late husband, and I will do everything in my power to advance his vision." AUTO DEALERS ON CRUISE CONTROL See adaptive cruise control. Still enjoying the renaissance of the domestic auto market, the BE AUTO DEALER 100 spent 1994 trying to maintain momentum while remaining lean and efficient. Sales for the nation's largest black-owned auto dealerships increased to $4.9 billion last year, for a 20.85% sales jump for 1994. While impressive, it is a decline from 1993's nearly 24% sales growth pace, perhaps a sign that the rate of new car buying is cooling off. Total sales for the 16 new dealerships on the 1995 BE AUTO DEALER 100 list amounted to $624.621 million. The combined gross sales of dealerships displaced from the list was $573.879 million. Thus, turnover on the list resulted in a net sales gain of about $50.7 million. 1994 was a particularly productive year for Taylor Dealerships Inc. (formerly Smokey Point Sales Inc.) in Arlington, Wash. Led by CEO Henry F. Taylor, the dealership was the top sales growth leader of the BE 100s, with sales increasing by 172.3%, from $18.8 million to $51.2 million last year. (See "Top Ten Growth Leaders" chart.) The boost can be credited to Taylor bringing his two other dealerships, which did not qualify for the BE AUTO DEALER 100 last year--Totem Hill Pontiac-Buick-GMC Truck in Kirkland, Wash., and Friendship Ford in Lebanon, Ore.--under one corporate umbrella with the original Smokey Point Sales operation. Even so, Taylor says he had a good year last year and expects to continue to do well in 1995. "I'm counting more on used cars than new cars in my sales strategy," he explains. "Consumer response to new cars is unpredictable and depends largely on how the economy is going. Also, you have to rely on the manufacturer making the models you want available to you in the numbers you want. With used cars, you know what products are proven, and their availability. They sell even if the economy is not doing well." [TABULAR DATA OMITTED] THE HOT INDUSTRIES Next to auto dealerships, the food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. industry remains the most highly represented sector among the BE 100s. Companies in this industry generated 23.6% of the combined sales on the list, or nearly $2.8 billion. Even excluding the $1.8 billion in sales contributed by TLC Beatrice, food and beverage remains the most productive sector among the nation's largest black-owned industrial/service businesses. Not surprisingly, this sector also dominates the "Top Ten Employment Leaders" (see chart), which is led by TLC Beatrice (4,200 employees) and includes: Atlanta-based La-Van Hawkins Inner City Foods, which owns and manages Checkers checkers, game for two players, known in England as draughts. It is played on a square board, divided into 64 alternately colored—usually red and black or white and black—square spaces, identical with a chessboard. Chicken franchises; Milwaukee-based V&J Foods, which owns Burger King franchises in Wisconsin and Michigan; Thompson Hospitality L.P., a Reston, Va., operator of Shoney's Restaurants; and The Gourmet Companies. [ILLUSTRATION OMITTED] The next most prominent industries represented by the BE 100s are media, followed by technology. These sectors generated 7.9% ($920.6 million) and 7.5% ($882.7 million) respectively of the total sales of the 200 businesses. With the aggressive integration of technology and media to create lucrative marketing opportunities along the information superhighway (1) A generic name for the Internet. (2) A proposed high-speed communications system that was touted by the Clinton/Gore administration to enhance education in America in the 21st century. Its purpose was to help all citizens regardless of their income level. , this sector promises to continue to be an area of growth for the BE 100s. Significantly, two of the three publicly traded businesses on the industrial/service list are media companies. Washington, D.C.-based BET Holdings Inc., the first and only company traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , reported $97.5 million in 1994 sales to land at No. 10 on the BE INDUSTRIAL/SERVICE 100. (For more on the landmark BET Holdings initial public offering, see Milestones In Black Business, this issue.) The other company, Granite Broadcasting Corp. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , was the hottest media stock of 1994. Traded on the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on exchange, the owner of network television broadcasting affiliates came in at No. 18 on the industrial/service list, with sales of $76.2 million. Because of its sterling performance in 1994, Granite is also BE's Company of the Year (see "Solid As A Rock," this issue). In the area of technology, Pulsar Data Systems in New Castle, Del., leads the pack. Ranked No. 5 on the industrial/service list, the systems integration, office automation and computer resale company reported $137 million in sales in 1994--a 73% sales increase--landing the company among the top ten sales growth leaders. Pulsar is followed by Marlton, N.J.-based RMS (1) (Record Management Services) A file management system used in VAXs. (2) (Root Mean Square) A method used to measure electrical output in volts and watts. 1. RMS - Record Management Services. 2. Technologies, a computer and technical services operation ranked No. 6 with $121 million in sales, and Envirotest Systems Corp., the third publicly traded BE 100s company, ranked No. 12 with sales of $96.4 million. Envirotest, based in Phoenix, is traded on the NASDAQ exchange. The construction industry, led by H.J. Russell & Co., continued to generate a significant proportion of BE 100s business, pulling in 3.4%, or $393.3 million, last year. In keeping with the South being recognized as a growth area for the construction business (see cover story, "The Hottest Industries For New Business Opportunities," March 1995), Solo Construction Corp. of North Miami Beach North Miami Beach, residential and resort city (1990 pop. 35,359), Dade co., SE Fla., on the Atlantic coast; inc. 1931. It is a major office and retail area. , Fla., had a strong year. Solo Construction's sales increased by 72.5%, to $30.25 million, making it No. 56 on the BE INDUSTRIAL/SERVICE 100 and 10th among the top 10 growth leaders. THE OUTLOOK FOR 1995 Several major events on the horizon for the coming year should profit or plague the BE 100s during the coming year. Going for gold at the Games. The Atlanta Summer Olympics figures to be a bonanza Bonanza saga of the Cartwright family. [TV: Terrace, I, 111–112] See : Wild West for black-owned businesses, such as The Gourmet Companies and H.J. Russell & Co., who've spent the past five years positioning themselves for this opportunity. Roanoke, Va.-based Terry Manufacturing, ranked No. 78 on the industrial/service list with $23 million in sales, figures to get a major boost by The Games over the next two years. An apparel manufacturer (which has produced uniforms for the guys on fries at McDonald's as well as those on the front line in the Gulf War), Terry Manufacturing was the first African-American-owned comapny to obtain a license, granted by Atlanta Centennial Olympic Properties, to make apparel using the Olympic logo. For CEO Roy Terry, this deal has implications beyond the '96 Games: "We expect this to be a steppingstone step·ping·stone n. 1. A stone that provides a place to step, as in crossing a stream. 2. An advantageous position for advancement toward a goal. into the licensed apparel business." In case you missed it: It's politics, stupid. The 1996 presidential elections, or rather, the advertising that we'll be bombarded with along the way to the polls, will mean big revenues for network broadcasting outlets such as those owned by Granite Broadcasting. But while economics still count, the force and direction of the political winds as the election year approaches, and the results of the election itself, will have far-reaching implications for the BE 100s. The threat to eliminate minority set-asides and other provisions designed to ensure that black-owned businesses participate in the business of the nation could blunt the rapid growth of the largest black industrial/service companies, a significant number of which do at least 50% of their business in the public sector. The situation is serious enough to prompt several of the CEOs of these businesses to organize with the intent of establishing a political action committee to advance the black business agenda (see "A New Entrant en·trant n. One that enters, especially one that enters a competition. [French, from present participle of entrer, to enter, from Old French; see enter. In The War," Newspoints, this issue). Meanwhile, more black business owners, a constituency seen as most receptive to the GOP's generally pro-business positions, are speaking out in defense of race-based business development programs and policies (see "Setback For Set-Asides," this issue). Included among the prominent black Republicans taking a stand against the attacks on minority business development programs is Maxima Corp. CEO Joshua I. Smith Joshua I. Smith is Chairman and Managing Partner of the Coaching Group, LLC (management consulting). As part of the Coaching Group, Mr. Smith served as former Vice Chairman and Chief Development Officer of iGate, Inc. (broadband networking company). . Smith, whose systems engineering firm (No. 42 on the BE INDUSTRIAL/SERVICE 100, with sales of $41.25 million) is a graduate of the Small Business Administration's 8(a) minority contract set-aside program and was appointed chairman of the U.S. Commission on Minority Business Development by George Bush. "It's unfortunate that people think the set-asides for minorities are the only ones," Smith told BE. "We are looking at tens of billions of dollars going to universities, farm subsidies, aerospace and other small businesses. I'd say that the set-asides for minority procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. is one of the areas that works best." The important lesson likely to be learned by the BE 100s during the coming year: It's not just the economy, nor is it politics--it's both. [ILLUSTRATION OMITTED] RELATED ARTICLE: ELIGIBILITY FOR THE B.E. 100s The BE 100s are comprised of the BE INDUSTRIAL/SERVICE 100 and the BE AUTO DEALER 100. To be eligible for the INDUSTRIAL/SERVICE 100, a company must have been fully operational in the previous calendar year and be at least 51% black-owned. It must manufacture or own the product it sells or provide industrial or consumer services Consumer Services refers to the formulation, deformulation, technical consulting and testing of most consumer products, such as food, herbs, beverages, vitamins, pharmaceuticals, cosmetics, hair products, household cleaners, [paints, plastics, metals, waxes, coatings, minerals, . Brokerages, real estate firms and firms that provide professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. (accountants, lawyers, etc.) are not eligible. To qualify for the AUTO DEALER 100, a dealership must have been fully operational in the previous year and be at least 51% black-owned. BLACK ENTERPRISE consults industry analysts and other sources to verify the information contained on the lists. All data are reviewed by the accounting firm Mitchell/Titus & Co. Companies not appearing on this year's list (but previously listed) have been excluded because they are no longer black-owned or their gross sales have dropped below the minimum level required to make the list. The BE 100s, as well as other business lists compiled by BE, are available on computer disk, in both DOS and MAC formats. TopList Software provides mailing addresses and phone numbers of the companies listed as well as other software features. For more information, contact B.E. Business Programs at 212-886-9576. |
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