What do all prizefighters have in common? Proficiency in the sweet science, of course. But beyond that there’s heart, courage, hunger, and a desire to be the absolute best in the ring.
That fortitude is a quality shared by successful CEOs as they square off against the competition. While some struggle with adverse business conditions, these men and women focus on improving customer service, landing more lucrative contracts, and making strategic acquisitions to grow to the size needed to conduct business at its highest levels.
This degree of skill and determination is essential in today’s business environment, particularly as we evaluate the industries represented by the BE 100S. This mettle was found in many of the companies on our industrial/service, auto dealer, advertising agencies, banks, asset managers, investment banks, and private equity lists.
The stock market struggled against rising interest rates and increases in oil prices and other raw materials. These events not only impacted financial services companies but also industries that rely on the transportation of goods, as the increased cost of shipping spiraled down the supply chain.
On the automotive front, imports continue to outpace domestic brands, leaving many would-be contenders by the wayside. Advertising agencies have had to contend with an ever-changing industry as well as competition from larger general-market agencies that have worked harder to court minority advertising dollars.
Companies unable to roll with the economic punches were sent reeling to the canvas. But CEOs able to identify new revenue streams, land significant contracts, and acquire businesses with proven track records climbed the BE 100S rankings to take their place among the black business elite-the champions of industry. They are the title holders inspiring future generations of black entrepreneurs while ensuring that their companies are in condition to go the distance.
In some cases, the champs kept their belts. For instance, World Wide Technology, the nation’s largest black business, grew 32% from $1.4 billion to $1.85 billion by adding more than 500 customers, including Eastman Kodak and the Federal Emergency Management Agency. This year, CEO David Steward is confident that WWT will become the second black business to gross more than $2 billion in revenues.
Other companies were able to climb up the ranks and reach the top of their division. Take EARNEST Partners. The firm increased the total dollar amount of assets managed by 63% to $22.68 billion, ending the reign of the leader of the BE ASSET MANAGERS, Ariel Capital Management (No. 2 with $19.36 billion in assets under management).
Another champ is Eric G. Johnson, CEO of Baldwin Richardson Foods Co. (No. 37 on the BE INDUSTRIAL/SERVICE 100 list with $113.3 million in sales), which supplies liquid bakery ingredients for food manufacturers; produces sauces, syrups, and condiments for chain restaurants; and manufactures its own dessert toppings, mustards, and wing sauces under the Mrs. Richardson’s and Nance’s brand names. The organization acquired the Industrial Bakery Ingredients division of J.M. Smucker Co. last year. The deal -valued at $30 million-allowed Baldwin Richardson Foods to expand its bakery capabilities and grow gross sales by 26% in 2005.
Robert L. Johnson, founder and CEO of RLJ Development L.L.C. (No. 25 on the BE INDUSTRIAL/SERVICE 100 list with $168.1 million in sales), is the undisputed champion of acquisition. Through several strategic deals, RLJ has seen revenues increase 82.3% in just one year. And with the purchase of 100 hotels from White Lodging Services Corp. for $1.7 billion, the company will more than double the number of black-owned hotels in the United States.
RS Information Systems Inc. (No. 13 on the BE INDUSTRIAL/SERVICE 100 list with $360 million in sales), headed by President and CEO Rodney P. Hunt, has been no less impressive. The company’s joint venture, Energy Enterprises Solutions L.L.C., received a $1 billion contract from the Department of Energy. The seven-year deal is one of the largest federal contracts ever awarded to a small, black-owned business. Under the contract, EES will perform services in more than 12 different areas, including cybersecurity network operations, application development, capital planning, and strategic planning. This ensures that
RSIS retains its title as one of the nation’s largest black-owned companies, but it may also propel 1 Source Consulting, the black-owned firm that partnered with RSIS to form EES, to become a BE 100S firm in its own right.It wasn’t a good year for the domestic auto industry. Most dealers who managed to grow their business sold imports or luxury vehicles as foreign models continued to dominate sales. This trend was a blessing for Anthony L. Merritt, owner of Superstition Springs Auto Group (No. 12 on the BE AUTO DEALER 100 list with $151.4 million in sales).
True to the trend of his fellow champs, Merritt expanded his business. In May 2005, he began a $15.5 million renovation of his Toyota Dealership. Despite the presence of backhoes and construction crews, Toyota sales rose 5%. The garage’s first floor has 35 new service bays, seven detail bays, a parts boutique, car wash, and two showrooms. Merritt is looking forward to new Camry models from Toyota, his top-selling manufacturer. “That should be a major, major increase for me,” he says.
The trend toward foreign cars has impacted more than just auto dealers. John A. James, chairman and CEO of James Group International (No. 52 on the BE INDUSTRIAL/SERVICE 100 list with $78.3 million in sales), boasts a 35% increase in revenues on the strength of foreign car sales. The supply chain management company handles consolidation and deconsolidation, warehousing, and distribution of materials primarily to the auto industry. According to James, there are more than 17 million vehicles made and sold in North America and close to 40 million across the globe. “My increase in sales has been primarily with non-U.S. automotive companies,” he says. “Right now, a lot of my growth is occurring because I’m dealing with first-tier suppliers, the large suppliers to these auto companies.”
Being able to press the advantage and strike at the right time is the mark of a great pugilist. In business, it’s called knowing your market. R. Donahue Peebles, president and CEO
of The Peebles Corp. (No. 10 on the BE INDUSTRIAL/SERVICE 100 list with $449.7 million in sales), certainly knows his. The Coral Gables, Florida-based real estate developer saw a remarkable 121% growth in revenues. Peebles attributes the growth to his sale of the Royal Palm Hotel in 2005 for roughly $127.5 million. “Our strategy is to continue to look at emerging markets on the acquisition side,” he says. “We are diversifying geographically and by product type. Our company is growing in terms of the number of projects that we do. The dollar volume of our company will grow as a result of that.”Through strategic partnerships, acquisitions, and the right business models, these CEOs are ensuring that their companies achieve the growth and scale to get in the ring with industry heavyweights, while simultaneously delivering knockout blows to the competition.
With razor-sharp skills, a comprehensive business strategy, and a lot of heart, these BE 100S heavyweights have emerged victorious. How do they withstand adverse conditions and knock out competitors? They focused on improving customer service, landing lucrative contracts, and making strategic acquisitions to conduct business at its highest levels. Here’s how our champs performed over the past year:
November 2005
Energy Enterprise Solutions L.L.C., a joint venture of RS Information Systems Inc. (No. 13 on the BE INDUSTRIAL/SERVICE 100 list with $360 million in sales), is awarded a $1 billion information technology contract to perform services in 12 areas, including cybers
ecurity and network engineering and operations.
Serial Entrepreneurs
The number of different companies headed by serial entrepreneur Charles H. James III that has appeared on the BE 100s Industrial/Service 100 List over the last decade:
C.H. James (Holdings) Inc.
Restaurant Holdings
Prime Source Food Service Equipment
June 2005
New Jersey-based City National Bancshares Corp. (No. 3 on the BE BANKS list with $363.42 million in assets) expands to 125th Street in Harlem and increases its municipal account relationships. The company attests that both contributed to a robust 11.8% growth in total assets.
C.H. James & Son
December
2005BMW/MINI of Sterling (No. 21 on the BE AUTO DEALER 100 list with $108 million in sales) ends the year on a high note, selling 1,300 new BMWs, 500 used BMWs, and 700 MINI Coopers. CEO Thomas A. Moorehead says his greatest challenge is expanding his facility fast enough to meet demand.
January 2006
MV Transportation Inc. (No. 11 on the BE INDUSTRIAL/SERVICE 100 list with $373.48 million in sales) wins a $540 million contract with the Washington Metropolitan Area Transit Authority to oversee MetroAccess, the transit services that fall under the Americans with Disabilities Act in the District of Columbia and parts of Maryland and Virginia.
Three
March 2006
R. Donahue Peebles, CEO of The Peebles Corp. (No. 10 on the BE INDUSTRIAL/SERVICE 100 list with $449.66 million in sales), opens the doors of The Residences at The Bath Club, a $225 million oceanfront property in Miami Beach.
February 2006
Oprah Winfrey, chairwoman of Harpo Inc. (No. 17 on the BE INDUSTRIAL/SERVICE 100 list with $290 million in sales), inks a three-year deal worth $55 million with XM Satellite Radio for her own radio channel, Oprah & Friends.
230.1%
May 2006
Prestige Automotive (No. 1 on the BE AUTO DEALER 100 list with $1.01 billion in sales) holds the grand opening of its first foreign dealership, a Mercedes-Benz dealership in St. Clair Shores, Michigan. Gregory Jackson, CEO of the 2005 BE Auto Dealer of the Year, says it was part of his strategy to diversify his portfolio and protect against downturns in the domestic market.
February 2006
Robert L. Johnson, CEO of RLJ
Development L.L.C. (No. 25 on the
BE INDUSTRIAL/SERVICE 100 list with $168.1 million in sales), signs a deal to buy 100 White Lodging hotel properties for $1.7 billion. RLJ will acquire 87 of the properties in the second quarter of 2006 and the other 13 over the next two years.
-Additional reporting by Wendy Harris, Cliff Hocker, Tykisha N. Lundy,
Jeffrey McKinney, Nicole Marie Richardson & Tennille M. Robinson