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Emerging entrepreneurs.

SOME FAST-GROWING BUSINESSES ARE breaking all the rules of slow and steady start-ups. These bold new firms ar forging full-speed ahead in industries like cosmetics, fashion, and canned foods, all areas arguably saturated, where big players have a choke hold on consumers. But, by stealing away market share and carving out a well-hidden niche for themselves, these ambitious companies have taken off like gangbusters.

Be profiles five companies less than five years old that have experienced accelerated growth. Granted, each one is battling that daunting first stage of the business life cycle. Each has had its share of growing pains and setbacks. And fast growth doesn't guarantee longevity. Still, if these young ventures stay on course and the winds of economic change don't steer them into troubled waters, they could find themselves anchored in a profitable cove for years to come.

ANTHONY MARK HANKINS: MORE THAN A NAME

When Anthony Mark Hankins was only seven years old, he sat down at a sewing machine and made a suit for his mother to wear to a wedding. Today, at 27, Hankins is still making clothes for his mother--and millions of other women.

Hankins is vice president and design director of Dallas-based Anthony Mark Hankins Ltd. His collection of dresses, suits, blouses and slacks is sold at J.C. Penney and Federated stores nationwide. And eight of his designs were picked up by Butterick Co., the pattern firm. After just one year in business, Hankins has seen total retail sales for his collections reach $40 million. His studio is netting about a 6% profit, or $2.4 million.

"It's extremely hard for someone to do that well right out of the box," says Allison Wolf, director of communications with the American Apparel Manufacturer's Association in Arlington, Va. "Given the consolidation in the industry, retailers aren't buying from many vendors, which means you have more designers fighting for store space."

Designing for major chains that handle manufacturing and distribution takes some of the load off of Hankins. It also gives him an advantage because he can reach a broader customer base, says Massimo Iacoboni, fashion director with the Fashion Association in New York. His designs may not be cutting edge, by Iacoboni believes he has staying power. "His clothes appeal to a wide group of women."

Initially, Hankins' line was targeted at African American women. But his clothes, ranging in price from $8 to $89, were snapped up by women of all races. Now Hankins' line is positioned for any woman who is tired of paying high prices for sportswear.

A graduate of the Pratt Institute Hankins studied prestigious Ecole de Chambre Syndicale de la Couture Parisienne trained with the internationally designer Yves Saint Laurent.

When he returned to the States in 1990, Hankins went to work for designers Willi Smith and Adrienne Vittadini. In a move that shocked his design buddies in 1991, he left New York's trendy Seventh Avenue, packed his bags and headed to Los Angeles where he took a job with J.C. Penney. "I heard about an opening in quality assurance, and I wanted to learn other elements of fashion and manufacturing," he says. "There I dealt with suppliers and did an awful lot of networking."

Hankins came up with the idea for an inexpensive line of women's clothing he called "urban style." But when the visionary shared his designs with J.C. Penney executives, they didn't share his enthusiasm. "A lot of people, especially older [designers], stood in my way," he says. "They were territorial and felt threatened. But I knew I had a great product women would want."

Hankins found a friend in Bruce Ackerman, former head of minority development at J.C. Penney, who ran interference on his behalf. In 1992, Hankins became the first in-house designer in the department chain's 90-year history.

His line of women's clothing sold like hotcakes, generating $18 million the first year. Hankins relocated to Dallas, J.C. Penney's national headquarters. But it wasn't long before he decided to strike out on his own. Taking $170,000 from his savings, Hankins, along with his mentor Ackerman, opened Anthony Mark Hankins Ltd. in 1994. In this limited partnership, Hankins owns a controlling interest the firm. For now, he holds the title of vice president, so that he can concentrate on designing and not the day-to-day duties of running the firm. Ackerman, the CEO, has more than 30 years of retail experience, including the handling of licensing agreements, as well as industry contracts.

Hankins retained the ownership of his trademark name, allowing him to use his own label. More importantly, he kept his contract with J.C. Penney, allowing him to continue selling his line in more than 300 outlets and maintain a positive cash flow. "If Penney hadn't stayed with me, I probably would have gone bankrupt," he says. In 1994, total retail sales for his line at J.C. Penney was $28 million.

Now Hankins is setting his sights on the future. He has a line of dishwear and teddy bears, and wants to try his hand at men's fashion. "Eventually, I want to sell my products over the home shopping networks," says, smiling broadly.

OPEN-VISION: A LOT OF LITTLE COMPANIES ROLLED INTO ONE

White most entrepreneurs grow their companies from the bottom up, Michael S. Fields decided on a rather unorthodox route to entrepreneurship. He raised $35 million in venture capital to assemble a miniconglomerate of software companies.

Fields, 50, is the chairman of OpenVision Technologies Inc., a company that helps business manage their computers, in Pleasanton, Calif. The company has a suite of more than 15 software products and services, including file backup, scheduling, network security and performance monitoring. It has over 1,000 government and Fortune 1,000 clients, including Wells Fargo Bank, Mercedez Benz and Ford Motor Co.

The three-year-old company generated $20 million in revenues last year. This year's figure is estimated at $28 million, roughly $7 million short of predictions by industry experts a year ago. But fields is banking on the future demand for systems integration programs as corporations continue to scale down to personal computer networks.

According to Gartner Group Inc., an industry research firm, the market for systems software could reach $4 billion by 1998, compared to $500 million in 1994. Heavyweight rivals, including IBM, Computer Associates and Hewlett-Packard, could knock OpenVision out of the ring.

"OpenVision has a 12- to 18-month window of opportunity to come to the market with a good systems approach, as competition from the big boys continues to grow," says Chet Geshickter, director of research for Hurwitz Consulting Group in Watertown, Mass. "They started with a very ambitious plan," he adds. "They got a lot of venture money and bought a lot of products in a short time."

OpenVision is following in the footsteps of one of its competitors, Computer Associates International. The company grew into a $1.8 billion giant largely through acquisitions.

Fields' track record makes a strong case for his company. A native New Yorker, Fields got his start in 1963 as a programming analyst for Equitable Life Insurance. He spent 10 years at Burroughs Corp. before moving to Applied Data Research (ADR), a software company, where he rose to the position of vice president of North American sales and services.

He stayed at ADR for nine years before going to Oracle Corp., a fast-growing software supplier with then $500 million in sales. In 1990, he was made president of Oracle USA in charge of product sales and the firm's consulting divisions.

In late 1991, Fields and Bill H. Janeway, managing director with E.M. Warburg, Pincus & Co., a venture capital firm in New York, began discussing the need for a computer systems management company. "They wanted an experienced executive in the computer industry and were willing to put up an initial $25 million in a company that would go out and acquire small emerging technologies," Fields explains.

Within four months, Fields and the team at Pincus looked at about 160 companies or divisions of companies. They decided to purchase nine of them. OpenVision officially opened its doors in July 1992.

Since then, the company has had a total of $68 million in equity investment. Pincus has put in $25 million and Fields did a private placement that generated $43 million. The baton is in the air as to whether OpenVision will attempt to go public.

Building a company through acquisitions has a unique set of problems. "The biggest difficulty was that there was no centering the company culture," says Fields, who has 200 employees and consultants. "We had to create that along the way and understand how the people that came to us in the acquisitions would operate."

Fields is now concentrating on how to ward off competition and position the company for future growth. OpenVision already has international distributors in Asia, South America and Europe.

There are no plans to diversify into hardware or other types of technologies, such as database management programs, Fields insists. "We think there's a lot of space for us to build other tools and more integration in the systems management arena."

BLACK OPAL: BEAUTY IS SKIN DEEP

There is no substitute for clean, clear, healthy skin. Yet, for years, African American women have attempted to conceal skin imperfections with makeup. A complete skin care line for female consumers of color was unheard of.

As a teenager growing up in New York City, Carol Jackson Mouyiaris was acutely aware of the limited choices of cosmetics available to African American women. She remembers using Max Factor and Charles of the Ritz custom blended powers, only to have their deepest tan barely parallel her caramel complexion.

That was 25 years ago. Today, Jackson Mouyiaris, along with her husband, Nikos, are the owners and founders of BioCosmetic Research Labs, a New York-based manufacturer of beauty products, namely the Black Opal Skin Care Collection and Black Opal for Men.

"I had known for years that I wanted to do something in the cosmetics and beauty arena for the ethnic market," says Jackson Mouyiaris who holds a master's in human relations from New York University and a J.D. from Boston University. At that time, the cosmetics arena was already saturated. So, she shifted her focus to skin care, relying on the expertise of Dr. Cheryl Burgess, a certified dermatologist who treated countless black men and women for skin disorders.

For years, hair care products dominated the ethnic beauty market, reaching $390 million in sales last year. In the early `90s, marketing beauty products to women of color became trendy for companies like Revlon, Cover Girl, Maybelline and Prescriptives. Ethnic cosmetics experienced record growth, hitting the $100 million mark in 1994. But products specific to black skin have remained practically nonexistent, even though ethnic skin care is a $75 million market (i.e., cleansers, toners, moisturizers, peels, lighteners, shaving gels and lotions).

Since its introduction two years ago, Black Opal has hit it big in the mass market. According to industry statistics, Black Opal now has a 33% share (dollar volume for the mass market) of the ethnic skin care segment, up from7% in 1994. The company had an estimated $8 million in sales in 1994.

Distribution has played a major role. Black Opal is sold in over 10,000 chain drug stores and discount variety stores, such as Rite Aid, Duane Reade, Drug Emporium, Wal-Mart and Woolworth. "This way we sell the product at a fairly inexpensive price, and avoid the high markup of being in a department store," explains Jackson Mouyiaris. Department store brands such as Flori Roberts and Fashion Fair cost about three times as much as Black Opal, which ranges in price from $5.95 to $11.95. Moreover, Black Opal doesn't have to pay for retail space or salaried, Vogue-like sales clerks behind the counter at, say, Nordstroms.

"It's virtually unheard-of for a small firm pitted against the Plenitudes and Oil of Olays of the world to make such a big splash," says Stephanie Hayter, a buyer at Genovese Drug Stores. "[Black Opal] is growing fast. People come in asking for the products by name."

Much of Black Opal's popularity can be attributed to its aggressive print and broadcast media campaign, which includes advertising in black women's publications such as Essence and Black Elegance. Black Opal for Men was launched with a near $2 million ad campaign starring Minnesota Vikings quarterback Warren Moon.

Prior to the launching of Black Opal's seven-line regimen in 1993, Jackson Mouyiaris spent four years studying market demographics and sizing up the competition. With the aid of research firms such as New York-based Ebony Marketing, she conducted a series of consumer focus groups and in-home product tests. She financed the skin care line with her personal savings.

Last month marked the debut of the Black Opal Color Cosmetics line, which now has industry observers wondering if Black Opal is growing too big, too fast. 'Black Opal is driving the growth of the skin care market, from what we are hearing from buyers and distributors across the country," says Lafayette Jones, CEO and president of Segmented Marketing Services Inc. (SMSi), a Winston-Salem, N.C., firm specializing in ethnic marketing. "[Black Opal] has an astounding growth rate, averaging 1,000% per year. However, market growth is one thing; stability is another."

Jones believes that the big cosmetic companies won't continue to let Black Opal have the ethnic skin care category all to. itself. He adds that with African American women having more choices at different price points and distribution centers of the cosmetics industry, companies introducing products run a greater risk of failure.

Thus, it's pretty much a Catch-22: BioCosmetic, the manufacturer of Black Opal, has to introduce new products to grow and sustain a significant market share, but to do that requires enormous capital. The jury is still out on whether the firm will eventually seek out venture capitalists, go public or even become acquired by one of the big cosmetics companies.

GLORY FOODS: TASTES JUST AS GOOD AS MOM'S

Move over Campbell and Goya, there's a new player in town. The next time you scan the canned food section at your local grocery store, look at little more closely. Glory Foods Inc. is creating a soulful presence among consumers craving Southern cuisine.

The Columbus, Ohio-based company offers a specialty line of seasoned food products, including collard greens, kale, pinto beans, sweet potatoes, field peas, corn bread mix and hot sauce. Glory Foods was founded by Bill Williams, president, along with Iris McCord, who serves on the board of directors, and Daniel A. Charna, vice president of production.

Although there are some 24 million African Americans in the U.S., few food companies market products aimed specifically at black consumers. Out of 318 food processors in the United States, Glory Foods is one of the few black-owned companies to create a specialty line of soul food.

Thus far, Glory Foods is shipping about 40,000 cases of its product monthly. Having reached 10% of the black consumer market in terms of distribution, the firm had sales of $3 million in 1994. Williams is projecting $4 million in sales for 1995, although he is aiming for 80% (8 million people) of his target market.

The idea for Glory Foods cropped up in 1989 when Williams, McCord and Charna were sitting around talking about traditional holiday meals prepared by various ethnic groups. They realized that there was a diversity of food products aimed at Chinese, Jewish, Italian and Hispanic tastes, but there was no product line targeting African Americans.

So, Williams parlayed his 20 years of experience as a food and beverage manager for hotel and restaurant chains and started Glory Foods with his three former co-workers. The partners financed the venture with $25,000 in personal savings.

One of the biggest challenges facing Glory Foods was finding black farmers to grow the vegetables. Williams learned firsthand how to plant and process greens, peas and beans under uncertain weather conditions.

He eventually recruited 10 black farmers via the Federation of Southern Cooperatives Land Assistance Fund, a group of more than 1,000 farmers who lobby for assistance to expand their business. "So, for instance, we encourage black farmers to grow black-eyed peas and then sell that product to us," explains the Culinary Institute of America graduate, who holds a bachelor's degree in hotel and restaurant management from the University of Massachusetts.

Glory's team also sought the assistance of such groups as Ohio State University's Department of Food Science and Technology, where they experimented with recipes, seasonings and packaging.

Focus groups were also conducted to test consumer interest and consumption habits. A survey of 400 African Americans conducted by a local research group found that 39% consumed greens weekly.

"We were looking to remove some of the drudgery of preparing the more popular Southern dishes in hopes of attracting those with little patience," says the 51-year-old Williams who was fed a diet rich in soul food as a child. Whereas fresh greens can take five hours to clean and cook, explains Williams, a can of heat-and-eat Glory greens takes only minutes to prepare. Moreover, a 27-ounce can of Glory greens costs about $1.49, compared to $.69 per pound for fresh greens.

Glory's "down-home" tasting products were first tested in 90 Ohio Kroger supermarkets in 1992. They were often sold out before they were reordered. Glory Foods anticipated shipping 7,000 cases for the year, but by year-end it had shipped some 30,000 cases. A year later, Glory Foods was launched nationally in over 15 grocery markets.

Today, Glory Foods is available on the shelves of more than 4,000 stores from Little Rock to New York. And the product can be found at such grocery chains as Safeway, Food Lion and Winn Dixie.

"Glory is a niche product that is slowly making a place for itself in the market," says Stan Sorkin, vice president of public affairs for the Pathmark grocery chain, which carries Glory Foods in all of its 142 stores. He adds that Glory's promotions program, including point-of-purchase displays and product sampling, is stimulating sales.

Ethnic foods have been gaining widespread popularity in the last couple of years. In part, Sorkin says, "because many consumers are trying products that resemble foods they grew up with or they feel they are returning to their roots."

Williams says that seasoned canned goods are a convenient and tasteful alternative. "I can't beat your mother's greens and corn bread. I'm smart enough to know that," he laughs. "But in her absence, we're just about the best."

RAP SNACKS: ALL THAT AND A BAG OF CHIPS

James A. Lindsay is nibbling away at the $10 billion U.S. salty snack food industry. The 33-year-old founder of Philadelphia-based Rap Snacks Food Co. ships some 360,000 bags per week and gets less than 5% of his product returned. From New York to Maryland, thousands of people as week are snatching up bags of Rap Snacks potato chips and popcorn. Rap Snacks Food Co. grossed $1 million in 1994, its first year in business.

A North Philadelphia native, Lindsay says he's on a mission. "I want to provide a quality product to the consumer as well as address the social issues surrounding inner city areas, and improve the image of rap music." It's not surprising that each one-ounce Rap Snacks bag carries a printed message, such as "Stay in School," "Education is Knowledge," "Stop the Violence" and "Realize Your Dream."

Initially, Rap Snacks potato chips came in two flavors, Bar-B-Quing With My Honey (Lindsay's No. 1 seller) and Back At The Ranch. Other flavors now include Plain Jane and Got That Chili Cheese. Rap Snacks popcorn line includes flavors like honey barbecue, hot cheese and the triple mix (caramel, cheese and butter).

A graduate of Cheyney State University with a degree in marketing, Lindsay started out as a sales rep for the black hair care giant Johnson Products. But it was a stint as a territory manager for Warner-Lambert, which distributes such brand-name products as Halls cough drops. Trident gum and Certs breath mints, that whet Lindsay's appetite for a personal piece of the snack food industry. "When I serviced the stores in my territory, I noticed that the items with the fastest turnover were the snack foods--namely, potato chips," he says.

Getting by with a little help from his friends and family, Lindsay raised $40,000 to launch Rap Snacks. But then he had a hard time landing a manufacturer--five turned down the idea. Then Nibbles & Gibbles Inc., a baked potato chip manufacturer in Chambersburg, Pa., bit, agreeing to produce Rap Snacks for about 11 cents per bag.

Still, Lindsay knew distribution would be key to Rap Snack's success in the consumer market. "Fortunately, I had developed some pretty good relationships with distributors while in my former positions. When I was ready to pitch my own product, I called on them."

Within six months, Rap Snacks was on local store shelves--mostly mom-and-pop shops. Lindsay maintains control over product quality and distribution by contracting exclusive distributors. And every chance he gets, he visits the stores. Currently, Rap Snacks' distributors include A&H in Philadelphia; Swartz and Sons in Baltimore and Washington; Paradise Foods in Boston, New York and New Jersey; Anpilsil in New Jersey; and Kelly Food Co. with distribution in 11 Midwestern states. Lindsay says that essentially his operation is a one-man show. I do all the billing, place all of the orders and develop all of the products." He does concede to having just one delivery driver and a receptionist.

Lindsay isn't daunted by the fact that the industry is controlled by a few major companies. Pepsico's Frito-Lay garners a whopping 400/o market share and dominates volume-driven supermarket chains. Others, such as Anheuser-Busch's Eagle Snacks brand, Wise Potato Chips, Keebler Co., Procter Gamble Snacks and Nabisco, each have roughly a 3% to 7% market share.

But national companies tend to ignore smaller secondary market firms like Rap Snacks, which account for some 2% of national sales, or about $200 million. Right now, the secondary market has its advantages for Lindsay: He doesn't have to fight for supermarket shelf space.

So far, Rap Snacks' niche of marketing specifically to young hip-hoppers is paying off. Lindsay expects this year's sales to reach $2.5 million. "We realized kids are the main purchasers of snack foods, and we decided to do something that they could relate to."

His next move is to partner with Wise Potato Chips to increase national distribution. For a product that the majors didn't think would last, Rap Snacks is slowly making its way into smaller grocery chains and proving itself to be "all that and a bag of chips."
COPYRIGHT 1995 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:five fast-growing Black-owned companies
Author:Gite, Lloyd
Publication:Black Enterprise
Article Type:Cover Story
Date:Nov 1, 1995
Words:3804
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