Marathon Men

These CEOs have led their companies to perennial status on the B.E. 100s list. Here are their predictions for the next quarter century.

EDWARD LEWIS, CEO, PUBLISHER CLARENCE SMITH, PRESIDENT ESSENCE COMMUNICATIONS INC.
VITAL STATISTICS
Headquarters: New York, NY
Business interests: Publishing, licensing, entertainment
Key executives: Susan L. Taylor, editor-in-chief and senior VP; Elaine P. Williams, vice president and director of human resources; Harry P. Dedyo, CFO and vice president

Year Rank Sales Employees
1973 57 $2.0 million 28
1997 19 $92.8 million 130

When the Hollingsworth Group (now Essence Communications Inc.) launched its magazine for black women in May 1970 with a portrait-sized close-up of a brown-skinned woman wearing a high, round `fro, nothing could have shaken the publishing world and white and black America more. Twenty- sever years, two less partners and four editors-in-chief later, co- founders Edward Lewis and Clarence Smith have pushed Essence Communications Inc. (ECI) from a magazine to a diversified brand name synonymous with African American womanhood.

On the publishing front, there’s its flagship property, Essence magazine; then there’s Income Opportunities, a general market magazine targeted to start-up businesses; and two years ago, it started Latina, a magazine aimed at the Hispanic women’s market. There’s s a licensing c division with a collection of items from eyewear and hosiery to children’s books and a mail-order catalog. Finally, there’s its entertainment division, which once produced a weekly syndicated television program and now focuses on an annual awards show and three- day festival.

Success has been manifest, but not without a tough start. “We thought we’d be a lot further,” says Smith, president of ECI. “We didn’t anticipate how milch resistance there would be by marketers to an African American women’s magazine,” he says. Just getting out of the starting block posed challenges. “We had a business plan that called for $1.5 million in capital; we opened with $130,000,” adds CEO Lewis.

Smith says they underestimated the struggle it would take for not only cash and advertisers, but even newsstand space. “We also had to overcome the inexperience of not running our own businesses before. We learned that we could do with less,” explains Lewis.

Start-up pains and racism aside, the key to the company’s growth has been its diversification, pushing the balance sheet upwards. But to remain successful into the next decade, the company “must be leaner, nimble and able to take advantage of opportunities globally to continue to grow,” says Lewis. “There will be more opportunities to expand this brand, especially in West and South Africa, and this will continue to be the direction the company heads in,” adds Smith.

To that end, ECI still faces a number of challenges, namely financing for future projects. “There are absolutely more avenues, but it is still difficult for small and minority businesses to get the capital they need. And with the mergers taking place in banking, these banks are not geared to small business; we’re going to have to seek out other banks and venture capitalists for money,” Lewis says. While neither partner has plans to sell the company, neither would rule out the option. “Anything’s possible,” adds Lewis, “but we have to see how the world is conducting business and be mindful of our shareholders’ interests.”

The other cornerstone is developing the company’s next generation of leaders. While neither they have a suc
cession plan, Lewis has no children and Smith’s two sons are not involved in the day-to-day affairs of the company. But that has not stopped them from tapping the talent of the company’s limited partners and employees, most notably, its highly recognized and respected editor-in-chief, Susan L. Taylor.

Lewis says he doesn’t see himself running the magazine daily in 25 years. “We intend to encourage others and prepare middle managers to move forward and run this business. Black women will continue to be in the forefront.”

Adds Smith: “I think we have one of the best-known brands in the world and the future for our shareholders, associates and employees is very, very good.”

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