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The freshman class of '96: these additions to the B.E. 100s add to the diversity which characterizes the largest black-owned firms.

THEY ARE THE NEW KIDS ON THE BLOCK, newcomers who have joined the ranks of the BE INDUSTRIAL/SERVICE 100, bringing another level of diversity to the top echelon of black-owned businesses. And while these concerns have moved into this exclusive neighborhood, they still grapple with the same challenges faced by the BE 100s mainstays. They have confronted the obstacles- intense competition, industrial restructuring and a tepid economy--through innovation, including leveraging their products, processes and reputations to gain market share, attract new customers and grow their business empires.

The companies are in diverse fields. One seeks to feed, and transform, an urban hub. Another features a former basketball player winning on another court--the metals industry. Thus far, they have all shown that they know what it takes to win in today's increasingly competitive business environment.

FEEDING THE MASSES

Every so often you can tell a great deal about a business and the person who runs it simply from its name. Such is the case with Community Pride Food Stores Inc. and its CEO Jonathan F. Johnson. The neighborhood supermarket has always been the breadbasket of the community. With decades of middle-class and business flight to the suburbs, however, many inner cities across the country have become barren shells, wanting for that basic and precious staple. Johnson has worked to make sure that this phenomenon does not occur in Richmond, Va.

Since 1992, the ambitious Johnson has fed the masses in this southern city and, at the same time, has built his seven-outlet Community Pride Food Stores into a $38 million emporium. "We are the only stores in the inner city here," says the 32-year-old Richmond native. "We saw operating these stores as another way of shoring up our communities.

If anyone is suited for this mission, it's Johnson. He's spent 13 years in the supermarket business, doing everything from bagging groceries and stocking inventories to managing stores. After graduating from Boston College in 1983, Johnson returned to Richmond with no idea of what he would do next and with no designs of becoming one of the city's leading grocers. He took a job as a bagger for Farm Fresh, one of the Old Dominion's largest supermarket chains, and then rapidly moved up through the ranks to management.

Johnson was struck, however, by the lack of choices that residents in working-class neighborhoods had when it came to shopping for groceries. In fact, some had to venture out to the suburbs to get less expensive, quality foods because some community stores sold distressed merchandise at relatively higher prices.

His big opportunity came when he met with area grocers and businesspeople, including representatives from Ukrop Supermarkets and Rich Foods Inc., a leading supermarket chain and a large food distributor, respectively. These businesspeople were looking for ways to economically strengthen Richmond's African American communities and improve race relations. "They had heard of my ascent at Farm Fresh and asked me if I was interested in running my own business. They asked me what I , would need to run my own supermarket. I told them half-jokingly that I would probably need a million dollars. They told me that they could arrange the financing."

Instead of building stores from the ground up, Johnson's strategy was to find outlets near black communities that could be easily renovated. Johnson initially targeted four grocery stores, part of a chain owned by his former employer. To purchase the stores, Johnson took out a second mortgage on his home, cleaned out his savings and bore, rowed $4 million. Rich Foods served as the co-signer of the loan.

Johnson gained a valuable mentor in Rich Food's chief executive, Donald Bennett. Asserts Johnson, "I have run stores but never a chain. Rich Foods showed me how to work with wholesalers and present the stores to the customers. I was told by Don Bennett that you had to do whatever it took to make the store profitable."

And he heeded the advice, developing a three-pronged operating plan. The first plank was charging his store managers to only order "grade A" merchandise for his customers, keeping those dollars in the community. Then, he pushed his employees to provide customers with first-class service, and then established a fleet of 14 vans to drive them home after they finished shopping. Another focus was Community Pride's fusing of marketing with community service. For example, Johnson developed a program with Coca-Cola and Kraft/ General Foods, and the city's public school system, to honor academic excellence. With its High Achieve-ment Program, Community Pride awards international trips to exceptional students who stay in school and earn top grades. Other deserving students receive lunch products from the co-sponsors and, along with their families, receive a 10% discount on purchases made at any of the chain's stores. "We wanted to create an opportunity for a child to make an economic contribution to his or her household while staying in school and pushing for excellence," he says.

But Johnson has used more than in-store promotion and customer service to bolster Community Pride's fortunes. He's adopted acquisitions as a key part of his overall strategic plan: bagging another large grocery store in 1993; two conventional stores, smaller groceries that stock more than 13,000 items; and two combo stores, groceries stocking more than 25,000 items. His supermarkets include delis and bakeries. The results: volume has more than doubled, from $17 million in revenues in '93 to $38 million two years later. Johnson expects to ring up a whopping $60 million in sales this year. The combo stores are the cash cows of the operation, contributing 52% of total revenues.

Johnson takes the Community Pride banner seriously. His goal is to have his operation totally owned by employees and community members within five years. He has already begun diluting his 100% ownership stake by setting aside 50% of the stock that he will offer to his employees through a plan similar to a 401(k), which will be distributed based on rank and seniority. "My goal is to have a Community Pride completely owned by the employees and the community," he says. "I would rather have a smaller piece of a bigger pie than a big piece of a small pie."

COURTING THE METALS MARKET

Demetrius "Tony" Brown has always been competitive. He was coached by college basketball icon Bobby Knight and played alongside pro basketball star Isiah Thomas, as a member of Indiana University's team. He knows the thrill of victory--in 1981 his team won the coveted NCAA national championship.

Today, Brown is playing on a whole new court. As president and CEO of Fuci Metals USA Inc., he still fends off the competition and hooks top clients. And this year was a big slam dunk: Gross sales for Fuci totaled $61 million, making the company the highest ranking newcomer on the BE INDUSTRIAL/SERVICE 100.

Brown's North Brook, III.-based concern trades metal on the global market and supplies raw materials mainly to auto companies. The trading component is set at one price and sells for another. Fuci makes its money on the difference. Even though Brown deals with hard assets, he must contend with currency fluctuations that routinely come with dealing in foreign markets. "The international aspect of this business is what keeps me intrigued," says the 34-year-old Brown. As a top metal supplier, Brown also seeks to reduce his inventory risk by employing just-in-time warehousing techniques--keeping just enough of a commodity on hand to fill existing orders.

Brown became involved in international trading through basketball. After graduating from Indiana, where he majored in public environmental affairs, he was drafted by the NBA but ended up playing in the Italian Basketball League. Becoming fluent in Italian, he decided to spend his off-seasons working as a sales agent for Nuova Fucinati, an Italian company that produced alloyed metal for the automotive industry.

After cutting deals and placing orders with major auto companies, the enterprising Brown convinced executives at Nuova Fucinati that he could strengthen its presence and position among American automakers by opening an office in the U.S. Brown struck a deal in which he would own 51% of the new entity while Nuova Fucinati and their finance company owned the remaining 49%. He dubbed the company, launched in 1988, Fuci Metals USA. A year later, Brown used $250,000 of his personal funds to buy out the other shareholders to gain 100% ownership.

Fuci's three employees operate in its 1,500-sq.-ft. headquarters in Illinois. Meanwhile, his London office buys metals, primarily aluminum, from mills in Europe, Russia and China. In fact, Brown will import and sell as much as 50,000 metric tons of metal this year alone. And to finance the deals, Fuci has established lines of credit totaling $20 million with banks throughout the world. "You have the ability to fill the order," says Brown. "Our reputation of being service-oriented and reliable throughout the world has given the credit markets a lot of confidence in us."

Bankers are not the only businesspeople giving Fuci high fives. Five years ago, the company sold four steel furnaces to a Turkish dealer for $5 million. Also, the company was selected as the agent to acquire raw materials for Bratsk Aluminum, the largest aluminum producer in Siberia. And Fuci has gained a bevy of domestic customers, selling metals to such Fortune 500 companies as Reynolds Aluminum, General Motors and Ford Motor Co. These companies, in turn, consider Fuci one of their primary suppliers of the offshore aluminum they purchase. Fuci's efforts have netted the company top honors, including Ford's Q-I Award, the highest kudos given to a vendor.

After all these years, Brown is still on the winning team.

RELATED ARTICLE: NEW PLAYERS JOIN THE BIG LEAGUES

A total of nine new companies, including Fuci Metals USA Inc. and Community Pride hod Stores Inc., are making their debut on the 1996 BE INDUSTRIAL/SERVICE 100. These companies do business in awide variety of industries and many have been in existence for several years. But 1995 become the year they joined the exclusive ranks of the notion's largest block-owned businesses. The following is a summary of the other seven newcomers to the industrial/service list (along with their rankings).

Michael Alan Lewis Co. (MALCO), Union, Ill., No. 55

Chairman Wayne Embry Sr. leads this auto parts manufacturing company. The $34 million firm operates as a converter and fabricator of hardboard, fiberboard and insulation for automobile body parts. Embry, executive vice president and general manager of the Cleveland Cavaliers and a former NBA star, was also included among the "BLACK ENTERPRISE MVPs, The Most Valuable Black Professionals in the Business of Sports" (July 1995). With a staff of 300, MALCO has been in existence since 1978.

TeleCommunications Systems (TCS), Annapolis, Md., No. 70

With a staff of 314, this nine-year-old company specializes in advanced technology systems engineering, integration and manufacturing. CEO Maurice B. Tose led the company to sales of $28.2 million in 1995.

Innovative logistics Techniques Inc. (Innolog), Mclean, Va., No. 86

Innolog provides technical, administrative services, and training in the area of logistics engineering. With a staff of 220, the company had sales of $22.7 million in 1995. Led by CEO Verle Hammond, Innolog has been providing services since 1989.

Sykes Communications Inc., Houston, No. 94

CEO Ray Sykes manages this full-service marketing and communications firm, which provides advertising and public relations services to the government and private sector businesses. Among its regional and national clientele are the U.S. Department of Housing and Urban Development the Veterans Administration and Harley Davidson. Founded in 1985, Sykes Communications reported 1995 sales of $20.55 million.

Integrated Packaging Corp. Inc. (IPC), New Brunswick, N.J., No. 96

This packaging and container business landed a $75 million contract from Pepsi-Cola Co. to manufacture corrugated boxes last year (see "Taking The Pepsi Challenge," Newspoints, February 1996). With a staff of 87, the three-year-old company's CEO is Joseph Wilson. IPC reported revenues of $20.1 million for last year.

Wilson Financial Group Inc., Houston, No. 99

Wilson Financial Group, founded in 1986, is an industry leader in the funeral service industry. The company, with operations in five states, owns and runs 23 funeral homes, eight cemeteries, crematories, flower shops, vault and monument companies and other related business in the death care industry. With a staff of 350, the business is led by Chairman and President Gerald E. Wilson and had 1995 soles of $18.5 million.

General Scientific Corp., Arlington, Va., No. 100

General Scientific, founded in 1987, provides services for the design and production of defense weapons and manufacturers hardware and defense weapon systems, which they also test and repair. Headed by Chairman Henry Nash, the company services bath the government and private sectors. Among the products General Scientific builds are helicopter simulator models for government use. The company reported sales of $18.3 million last year.
COPYRIGHT 1996 Earl G. Graves Publishing Co., Inc.
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Title Annotation:The B.E. 100s; The Nation's Largest Black Businesses: includes a brief profile of new companies on the 100s list
Author:Dingle, Derek T.
Publication:Black Enterprise
Article Type:Company Profile
Date:Jun 1, 1996
Words:2153
Previous Article:Houston's big wheel: B.E. 100s Auto Dealer of the Year.
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