Wittnauer’s FUBU, Halston, and Zeus trademarks.
WOUNDED BY A CHANGING WORLD
No business seemed immune to the maladies brought on by the recession and terrorism — even those that hawked pizza. At New Orleans-based Lundy Enterprises L.L.C. (No. 84 on the BE INDUSTRIAL/SERVICE 100 list with $33.8 million in sales), which operates a chain of Pizza Hut restaurants, outlet patronage dropped to abysmal levels. On some occasions there was as little as 15% occupancy. “It turned out to be a horrible year for us,” said CEO Harold W. Lundy. “Folks just wouldn’t come out because of the 9-11 phenomenon.” Sales are turning around this year, he says, with the introduction and promotion of the latest offering, the P’Zone, a pizza sandwich.
BE auto suppliers showed that their fortunes rose and fell based on the corporate performance of the Big Three. Just take a look at the wreckage: sales for The Bing Group (No. 8 on the BE INDUSTRIAL/SERVICE 100 list with sales of $287 million), the largest black-owned automotive supplier, dropped 7.7%, while revenues for Bridgewater Interiors (No. 18 on the BE INDUSTRIAL/SERVICE 100 list with sales of $174 million), which creates seats for General Motors, skidded 20.3%.
It was also a tough year for media companies with advertising at its lowest level in decades. Fortunately, most BE broadcasters remained lean during the flush times such as Roberts Broadcasting Co. (No. 75 on the BE INDUSTRIAL/SERVICE 100 list with sales of $36 million). The St. Louis-based company has 37 employees — primarily technicians and programmers who air the Home Shopping Network — to man its 12 television stations. “The whole industry’s gotten its butt kicked,” says CEO Michael V. Roberts. “But you still have to have the fundamental staff.”
Granite Broadcasting Corp. (No. 27 on the BE INDUSTRIAL/SERVICE 100 list with $136.2 million in sales) adhered to the principle of maintaining a tight staff as well. Nonetheless, the broadcasting conglomerate spent much of the year seeking life support. Antsy creditors, dissatisfied shareholders, and a volatile stock market besieged the company and its CEO, W. Don Cornwell. Sales slid 23.3% for the year due in part to an estimated $313 million that broadcasters lost in advertising during the five days following Sept. 11 when networks televised the aftermath of the crisis without commercial interruptions.
Granite’s problems centered on two factors: poor timing and a cash-flow crunch. Citing difficulty making payments on a 10-year, $362 million arrangement with NBC for the rights to a San Jose, California-based network affiliate, Cornwell announced the sale of his Detroit station three weeks after the terrorist attacks. Then, a month before his first payment was due, he sold the network back to NBC for $230 million. On the upside, the sale garnered a 411% return — Granite purchased the station in 1991 for $45 million — and placed the company back on solid footing.
FINDING OPPORTUNITIES PROVES THE BEST MEDICINE
Some companies stayed the course. A perfect example is PRWT Services Inc. (No. 49 on the BE INDUSTRIAL/ SERVICE 100 list with $65 million in sales). The Philadelphia-based