previous year. CEO Farr purchased three new dealerships in Houston, Baltimore and Dayton, Ohio. But what he believes will significantly boost his margins is the increased volume from his 17-acre used-car emporium in Royal Oak, Michigan. The site includes a finance company, an ad agency and a 100- sq.-ft. service facility. “I see value in targeting the urban consumer, a market that has been overlooked by majority dealers,” Farr says. “We wanted to give affordable cars to the financially-challenged. At the same time, we want to educate these consumers.” Each customer who purchases a vehicle from the super store must attend a two-hour seminar that reviews everything from making timely payments to vehicle upkeep. Farr’s vision: erecting a used-car megastore in every urban hub where he operates a dealership.
ADJUSTING TO THE NEW BUSINESS CLIMATE
Now more than ever, the BE 100s companies have to stay flexible to handle the changing dynamics of their respective industries. Perhaps no company knows that better than Drew Pearson Marketing (DPM), the 1994 BE Company of the Year. The Addison, Texas-based licensed sportswear manufacturer saw its fortunes ebb because of the baseball strike in 1994 and subsequent fan backlash in 1995. Sales slid from $77.5 million in 1993 to $42 million in 1995, a staggering 45.8%. The decline forced CEO Pearson to revise the company’s game plan. Over the past 18 months, Drew Pearson Companies went after licenses as diverse as the NASCAR auto racing circuit and Warner Bros., producing head gear for the movie Space Jam. The company scored major financial touchdowns by introducing new products for its largest customer, the National Football League, developing the first-ever polar fleece cap to don the trademarks of professional football teams. The concern also picked up the license to create merchandise for NFL apparel targeted at women. DPM scored $50 million in gross sales, an impressive 19% increase in 1996 sales to place it No. 40 on the 1997 BE INDUSTRIAL/SERVICE 100. “The baseball strike gave us a wake-up call,” asserts Pearson. “We will always make sure that we now have a diverse mix of licenses.”
Gary, Indiana-based Powers & Sons Construction Co. Inc. (No. 92 on the BE INDUSTRIAL/SERVICE 100 with $22.52 million in gross sales) shifted its focus from public works to private construction. (In 1996, private construction projects accounted for 85% of gross revenues, compared with 50% in 1995.) Though the new focus resulted in the concern’s massive 31.4% drop in sales, CEO Mamon Powers Jr.’s tactics were clear cut: improved profits by focusing on local construction jobs and minimizing costly out-of-state projects. Not hampered by government restrictions, the company also employed what Powers calls “ahead-of-time” management, completing projects 30%-50% faster and, in turn, reducing overhead and payroll costs on a given job.
DEALING WITH THE FORTUNE 500
One of the most dramatic develop meets of the past year has been the increased shrinkage of the Fortune 500′s vendor base. It has forced many BE 100s suppliers to rapidly expand their business thrust, demonstrating dexterity in various