for $149 million. The deal also made him the first African American to wholly own an establishment in the gambling capital of the world.
Rush Communications Inc. (No. 16 on the BE INDUSTRIAL/SERVICE 100 list with sales of $192 million), run by CEO and hip-hop godfather Russell Simmons, also produced some “phat” returns in 2001. The move to sell Def Jam Recordings and restructure the company around urban fashion has paid off handsomely for Simmons and company. Named the BE Company of the Year, Rush produced an astounding sales growth of 92%, up from $100 million in 2000 (see “BE Company of the Year,” this issue).
CASUALTIES OF A TOUGH ECONOMY
Typical of our list, there were a number of businesses that checked out last year. nineteen companies dropped off the list because of divestitures, bankruptcies, failure to meet our eligibility standards, or an inability to meet this year’s revenue threshold. One such casualty was Medical Care Management Co., a freshman at No. 58 on last year’s BE INDUSTRIAL/ SERVICE 100 list with $60 million in gross sales. The Nashville, Tennessee, HMO management firm voluntarily filed for Chapter 11 bankruptcy protection last December after missing more than $8 million in debt payments.
(See “Condition Critical,” Newspoints, this issue.)
Those that forfeited their black ownership status were among the most prominent on our list. For instance, Active Transport, the Louisville, Kentucky-based trucking operation that became the nation’s fourth largest black-o
wned business, Drew Pearson Marketing, BE’s 1994 Company of the Year, and Alert Staffing, a freshman company that was ranked among the top 15 industrial/service firms in 2001, left this year’s list after the CEOs sold their majority interest.
Another highflier fell off the list. Over the last year, Radio One, the 2000 Company of the Year that exhibited phenomenal growth (sales rose 56% from $177.2 million in 2000 to $276.9 million in 2001), lost its majority black ownership. The company’s secondary offerings of stock reduced the equity stake of African American owners, including Chairperson and Founder Cathy Hughes and CEO Alfred Liggins, to roughly 25%. When Radio One went public three years ago, Liggins maintained at the time that their performance “benchmark isn’t against other African American firms. … We’re here to compete, period, and position ourselves as the preeminent urban media company.” Mission accomplished.
One of last year’s biggest surprises, however, was the sale of Wittnauer Worldwide L.P. (No. 83 on last year’s BE INDUSTRIAL/SERVICE 100 list with $35 million in gross sales) to competitor Bulova for $11.6 million. Joining the list with much fanfare in 1998, Charles D. Watkins, the former president and COO, told BE that the 126-year-old watchmaker was a sickly venture almost from the start. He said it was undercapitalized when he and former Chairman and CEO Robert Coleman acquired it from Westinghouse Electric Co. for $25 million in 1996. Watkins said they “just couldn’t finance the debt” as the management team unsuccessfully tried to resuscitate the company through lobbying efforts and by acquiring venture capital. In the end, Watkins and Coleman retained