45 Great Moments in Black Business - No. 33: BE 100s Define New Era for Black Business

45 Great Moments in Black Business – No. 33: BE 100s Define New Era for Black Business

For the 45th Anniversary of the BE 100s—the nation’s largest black-owned businesses—we share 45 milestone events that have had widespread impact on black economic development and American industry across four decades. This tribute salutes the iconic companies and CEOs that have been found on BE‘s annual list of the largest black-owned companies.

Today we reveal No. 33 in the web series “Great Moments in Black Business.” 

1988: BE expands the rankings, creating the BE 100s—the top 100 industrial/service companies and 100 leading auto dealerships—with record-breaking revenues exceeding $6 billion. 

In the 1940s, for Americans of African descent to talk about going out and acquiring companies would have been unrealistic. So you had great men like John Johnson and later Berry Gordy, and many, many others who started their businesses from scratch. That was fine. What I knew about was how to make acquisitions, how capital markets react and how to do private placements of securities. Those were the things I was prepared for, and I was looking to build on those strengths. By the time I became heavily involved in that area it had become an established tenet within American business that one could grow by acquisition. —Reginald F. Lewis

That quote from the late, celebrated financier was so apt when we released our June 1988 issue highlighting that year’s rosters of the largest black companies in the nation. As reported in the 1988 Company of the Year profile, Lewis led his company to execute “a one-two punch of dazzling financial maneuvering” by first gaining a 90-to-1 return on the sale of The McCall Pattern Co. for a $95 million profit, and then following up that accomplishment with the $985 million acquisition of Beatrice International Foods, the largest offshore business transaction at the time.

(Reginald F. Lewis. Image: File)


BLACK ENTERPRISE revealed the deal in an exclusive cover story of the megadeal that created TLC Beatrice International Holdings Inc., a conglomerate of 61 food companies that sold products like Butterball turkeys and Good Humor ice cream, among others, in international markets, and debuted with revenues of $1.8 billion. Lewis’ empire assumed the leadership position from companies of the legendary, bootstrapping entrepreneurs that he referenced.

The transition in which the world witnessed the first African American firm to crash the billion-dollar revenue barrier defined the emergence of a new generation positioned to take the helm of America’s leading black businesses as well as the reconfiguration of our core roster: The Top 100. Mirroring the activities of their white counterparts during the go-go 1980s, we reported that black businesses had achieved “explosive growth” in sales volume and payrolls as a result of mergers and acquisitions, joint ventures, new technology and innovative marketing.

(Reginald Lewis. Image: Black Enterprise Magazine, June 1988)


The following trends led to the editorial decision to develop what is today known as the BE 100s but they also set future commercial development in black business. As BE‘s Publisher Earl G. Graves Sr. wrote on the dawning of this new era: “Although automobile sales and services, hair care products manufacturing and publishing remain traditional bedrock companies, we have seen more blacks emerge in such growth industries as telecommunications, engineering and franchising. All of this activity signifies that many of the country’s black companies are undergoing corporate renewal.”

The dominance of the automotive sector drives creation of a new list. Since 1973, BE ranked all black businesses measured by revenues on the Top 100. However, in the mid- to late 1980s, BE auto dealers zoomed past black companies in other industries. For instance, these franchises comprised 53 of the firms ranked on the 1987 Top 100 and accounted for 41% of the listing’s revenues. As a result, we made the decision that these top performers should not be confined to one list. Citing the rankings of the nation’s largest black companies as the true barometer of African American business, our editors produced a separate ranking for auto dealers for the first time in the 16-year history. As such, we introduced the 1988 BE 100s—the BE INDUSTRIAL/SERVICE 100 and the BE AUTO DEALER 100. At the time, each roster produced collective gross revenues for the top African American industrial/service firms and black auto dealers totaling an unprecedented $4.1 billion and $2.3 billion, respectively.

Rise of the financial entrepreneur. With TLC leading the pack, the BE 100s found the first collection of entrepreneurs to increase the value of their holdings through mergers and acquisitions. In many cases, as Lewis did, they employed the financing vehicle of choice: the leveraged buyout, or LBO. In an LBO, often financed through the use of high-yield bonds (known as “junk bonds”), the cash flow or proceeds from the divestiture of assets of the acquired entity is used to repay the debt taken on to complete the transaction.

Among the largest black industrial/service companies, auto dealerships, and financial service companies at the time were engaged in such transactions to expand their operations. For example, the No. 1 company on the inaugural AUTO 100, Long Beach, California-based Shack-Woods & Associates steered to leadership by creating one of the first black regional megadealerships with seven outlets in California, Arizona, and Colorado. Pioneering auto dealers William E. Shack and Timothy L. Woods purchased Ford franchises that generated $89 million in revenues.

(Bill Shack, left, and Timothy Woods. Image: Black Enterprise Magazine, June 1988)


Chicago-based Soft Sheen Products Inc., the leading hair care products manufacturer and sixth largest industrial/service company, applied the strategic acquisition model to take their company global and stay competitive against majority-owned leviathans. Growing revenues to $81 million, the undisputed “King of the Jheri-Curl” —that popular ‘do of the day—was named one of BE‘s Most Innovative Companies due to its purchase of Dyke and Dryden, a London-based producer of black-hair care products, and Alaion Products, a Newark, New Jersey-based manufacturer of grooming products for black men.

(Gary E. Gardner, President of Soft Sheen in 1988. Image: Black Enterprise, June 1988)


Even black firms in the sleepy insurance sectors got caught up in the feverish mergers and acquisitions activity—sometimes engaging in hostile takeovers. In fact, Atlanta Life’s adroit approach to expanding its market share and agent network by these means earned it the status of BE Insurance Company of the Year in 1988.

Letting the employee run the shop. The emergence of the BE 100s also set the stage for entrepreneurs becoming more creative about management. In fact, the most inventive of the group turned out to be 95-year-old business icon A.G. Gaston, founder of Booker T. Washington Insurance Co., a major entity in his Birmingham, Alabama-based conglomerate. Our editors named it one of that year’s Most Innovative Companies because Gaston, who held a 97% controlling interest in BTW, sold the insurer and its subsidiaries, two radio stations and a construction company, it to its 400 employees–considered a first for a black entrepreneur at that level. The asking price: $3.5 million, reportedly a fraction of the value for the 55-year-old company that grew to become the nation’s seventh-largest black insurer.

(Louis Willie, CEO of Booker T. Washington Insurance Co., next to a portrait of A.G. Gaston, the company’s founder. Image: Black Enterprise Magazine, June 1988)


The move to technology and innovation. The BE 100s took the lead in programming black growth companies in the IT space as well as adopting new technology in a pre-internet world.

For instance, although nine computer/information technology companies could be found on the list, the firms in that sector generated a healthy 7% of total in revenues—an industrial collective behind firms in food and beverage, construction, and media.

Among BE’s Most Innovative Companies were West Caldwell, New Jersey-based H. F. Henderson Industries Inc. (No. 13 on the BE INDUSTRIAL/SERVICE 100 with $42 million in revenues), which demonstrated more than 100% revenue growth through manufacturing, among other products, microprocessor control panels for government and commercial customers; and Arlington, Virginia-based Integrated Systems Analysts Inc. (No. 18 on the 1988 BE INDUSTRIAL/SERVICE 100 with $36 million in revenues), one of the fastest-growing companies in the country at the time due to its development of advanced weapon systems for the Navy during the Cold War Era.

(C. Michael Gooden, president and CEO of Integrated Systems Analysts Inc. Image: Black Enterprise Magazine, June 1988)


These firms represent the precursors to today’s black tech giants, which now represent 37% of total revenues on our roster, led by list leader World Wide technology, the IT powerhouse with high-voltage revenues of $9.3 billion.

(Henry F. Henderson. Image: Black Enterprise Magazine, June 1988)


The old adage is that the old becomes new. As such, our industrial/service list has been renamed the BE Top 100 to reflect the dynamics of today’s industrial composition and business climate. The Great Recession wreaked havoc with black auto dealers, forcing us to reduce the roster to the BE AUTO 50. Although insurance company and savings & loans rosters are nonexistent, BE has maintained the listing for banks while adding rosters for leading black asset managers, investment banks, and private equity firms over the past three decades.

But one statement from Earl Graves Sr. in that June 1988 issue holds true: “By learning new ways to raise money from the capital markets and applying advanced technology, black companies can own and develop companies that rank among the nation’s largest corporations. Black businesspersons can gain a foothold in the mainstream without forsaking the black community.”