June 1, 2005
Bold Players New Strategies
Today’s business environment moves at lightning speed. For the chief executives of the nation’s largest black-owned businesses, keeping pace is priority No. 1. They must continually re-evaluate corporate capabilities and tinker with their company’s infrastructure to gain maximum advantage. Many must contend with emerging competitors, but the most daunting challenge for these CEOs, whether they operate an industrial/service company or a financial services firm, is dealing with large majority corporations treading on their turf.
But the BE 100S are fighting back. By broadening the scope of their business, developing partnerships, or approaching their strategic objectives with a take-no-prisoners attitude, these CEOs are ensuring that their companies are full participants in the business mainstream.
Just look at two of our companies of the year. Dimensions International Inc. (No. 35 on the BE INDUSTRIAL/SERVICE 100 list with $98.6 million in sales) is an Alexandria, Virginia-based program management firm. DI acquired another BE 100S company, SENTEL Corp., an engineering and software services operation also in Alexandria, to produce a tech juggernaut. DI now has expanded capacity to compete against the majors for homeland security and defense contracts. And Fairview Capital Partners Inc. (No. 1 on the BE PRIVATE EQUITY FIRMS list with $1.6 billion in capital under management), our Financial Company of the Year, grew 77.8% in 2004 by shrewdly investing its capital in a slew of minority and majority firms.
Examples of such audacity and tenacity have marked the recent advancement of BE 100s companies: sales of the top industrial/service companies and leading auto dealerships grew from $21.9 billion in 2003 to $23.2 billion in 2004.
But in this environment, companies can change in the blink of an eye. For instance, R. Donahue Peebles, CEO of Peebles Atlantic Development Corp. (No. 18 on the BE INDUSTRIAL/ SERVICE 100 list with $202.9 million in sales), produced a jaw-dropping 147.47% increase in revenues through a dizzying array of real estate deals and hotel projects. Recently, Peebles sold his crown jewel, the Royal Palm Crowne Plaza Resort, which made history as the first black-owned luxury property in Miami’s trendy South Beach, for $127.5 million.
However, some deals were met with shock and disappointment by black consumers. Essence Communications Partners, the publisher of Essence magazine, will leave the ranks of the BE 100s after a 33-year tenure, following Time Inc.’s purchase of the remaining 51%. (In 2000, the media giant had acquired 49% of ECP.) To many, the transaction represented the takeover of another black institution in the same manner that Black Entertainment Television and much of the black haircare industry fell into the hands of majority corporations (see sidebar).
In the automotive arena, import dealers zoomed past domestic auto dealers. In fact, lackluster domestic sales have produced a decrease in the number of black auto dealers at General Motors and Ford. Many of this industry’s top performers, which include Shack Findlay Honda in Nevada (No. 18 on the BE AUTO DEALER 100 list with $110 million in sales) with a 49.57% increase in gross sales and Baranco Automotive Group in