As my crackerjack editorial staff completes our August issue–which marks the 39th anniversary of BLACK ENTERPRISE magazine, the brainchild of Publisher Earl G. Graves Sr. who believes that African Americans can achieve a measure of the American dream through entrepreneurship–I reflect on how far black business has come and how far it must go. BE, along with a number of black business institutions, was launched during the era of “black capitalism.†Oddly enough, it was a program initiated by the Republican administration of Richard Milhouse Nixon, to provide financing and support for minority enterprises. Beyond government funding and capital from a score of receptive lending institutions, these enterprises were driven by the entrepreneurial fortitude of individuals like our publisher; Percy Sutton, founder and chairman emeritus of Inner City Broadcasting; Byron Lewis, founder of advertising agency UniWorld Inc.; and Ernesta Procope founder of insurance broker E.G. Bowman.
During that same period, another innovative, tenacious entrepreneur was making his presence known. Little did anyone realize that he would shatter barriers for African American entrepreneurs by creating the first black-owned billion-dollar conglomerate with operations spanning the globe. His example demonstrated to the world that African Americans could perform and win in any arena. His name was Reginald F. Lewis.
In 1970, the Harvard Law School-trained attorney left the corporate law department of Paul, Weiss, Rifkind, Wharton & Garrison and started Lewis & Clarkson with his partner Charles Clarkson. His firm specialized in helping small- and medium-sized companies gain capital. As general counsel of American Association of MESBICS (Minority Enterprise Small Business Investment Corporations)–later renamed the National Association of Investment Companies (NAIC)–he designed an industry that provided more than $100 million in financing to scores of minority firms. A desire to “do the deals myself†led him to launch his own investment firm, TLC Group, and he set out to conquer Wall Street. The firm awed the financial establishment when it acquired McCall Pattern Co.; Lewis invested $1 million of his own capital and $24 million in borrowed funds. In July 1987, Lewis sold McCall to a British textile firm for $90 million, a 90-to-1 return on TLC’s initial investment.
Less than six months later, the 45-year-old financial wizard shocked Wall Street and the business press once again by dwarfing that deal and, at the same time, vaulting black business to new heights. Lewis orchestrated the unprecedented $985 million leveraged buyout of Beatrice International Foods Companies, a collection of 64 processed food manufacturers in 31 countries, including Europe, Australia, and Asia. In December 1987, he completed the largest buyout ever of overseas assets of an American company. I take great pride that BE gained an exclusive on that coverage. I was the Associate Managing Editor then, and it was the first time I convinced our publisher to “stop the presses†as Senior Editor Alfred Edmond Jr.–today the Editor-in-Chief of BlackEnterprise.com–feverishly reported and wrote this groundbreaking cover story. It was one of those rare, rewarding moments when we scooped competitors Fortune and Forbes on a breaking news story.
In the 1988 June issue in which we
unveiled that year’s rankings of the nation’s largest black-owned businesses, TLC Beatrice International Holdings Inc. snared the No. 1 position on our BE INDUSTRIAL/SERVICE COMPANIES list with $1.8 billion in gross revenues. Only three other black-owned companies since have produced gross revenues exceeding a $1 billion: St. Louis-based technology firm World Wide Technology Inc. (No. 1 on the 2009 BE INDUSTRIAL/SERVICE COMPANIES list), Houston-based oil producer CAMAC International Corp. (No. 2 on the 2009 BE INDUSTRIAL/SERVICE COMPANIES list), and Prestige Automotive Group (No. 1 on the 2009 BE AUTO DEALERS list). Even by today’s standards Lewis’ achievements are remarkable, and they continue to represent the summit that more African Americans must climb to reach–and surpass. In January 1993, Lewis’ life was cut short at the age of 50 when he succumbed to brain cancer.Two weeks ago, on June 13, Alfred and I had the honor of attending the second annual gala luncheon that served as a tribute to his memory and a fundraiser for the museum that bears his name–the largest African American institution of its kind on the East Coast. (Learn more about the museum at www.reginaldflewis.com.) The event was hosted by Loida Lewis, the iconic entrepreneur’s widow who ran the mammoth enterprise for six years after her husband’s death before voluntarily liquidating the company’s assets, ensuring that shareholders realized “an incredible multiple†on their return per share.
“Selling the company was the toughest thing I had to do,†she told me in an interview in 1999. “I had great reluctance to put
the entire company on the block. But I felt that it was now time to complete the work of my late husband.†(Read “TLC’s Final Act,†Black Enterprise, September 1999.) Over the years, she has preserved his mission and legacy by making his biography, Why Should White Guys Have All The Fun?, a New York Times bestseller and a source of inspiration for the next generation of black entrepreneurs. She also mentors young business owners and oversees the 22-year-old Reginald F. Lewis Foundation, which funds universities and charities for communities of color in the United States and the Philippines.As more than 300 business luminaries in business, finance, and the arts gather on the lavish estate of the Lewis family in East Hampton, Long Island, they bear witness to a celebration of pioneering spirit and youthful audacity. The pioneer was Lee A. Archer Jr., the 89-year-old powerhouse who worked closely with Lewis in financing small and minority companies as head of a slew of MESBICS, as well as a member of the investment group that acquired McCall and Beatrice International. Archer, who also holds the distinction of being a Tuskegee Airman who earned Flying Ace status after he shot down five German Me-109 planes during World War II, was inducted as a Millennium Member of the Reginald F. Lewis Museum. (See Our World with Black Enterprise at blackenterprise.com/television). The maverick was R. Donahue Peebles, CEO of Peebles Corp. (No. 79 on the 2009 BE INDUSTRIAL/SERVICE COMPANIES list with $51.4 million in gross revenues), who received the Reginald F. Lewis Award for outstanding entrepreneurs under the age of 50. The 2004 BE Industrial/Service Company of the Year
currently controls a $4 billion portfolio of luxury hotels as well as residential and commercial properties.Reginald Lewis got us started but Loida took us on the journey,†Peebles, 49, said as he paid homage to the couple’s contributions to black business. He then shared his own journey: His grandfather was employed as a doorman of a Washington, D.C. Marriott that, years later, Peebles would acquire by using his financial prowess, Rolodex of contacts, and Lewis’ example as inspiration. As he recounted the story, it seemed like the same type of bold, deliberate move Lewis would have pulled off.
For all those who attended, it was an afternoon of empowerment and motivation–one that communicated that we can all soar to new heights and no longer bow to the limitations imposed by others. I felt privileged to be among those who gained an opportunity to talk to Lewis about his business philosophy and achievements as well as serve as one of his chroniclers. So as we complete an issue that identifies those who seek titan status, they will first have to endure the tests that come with each business cycle, each brutal competitor, each racial barrier, and each financial challenge. Trials that Reginald Lewis–and generations before him–faced and conquered. Their best advice has been uttered by Lewis to every entrepreneur with moxie and a dream that crossed his path: “Keep going. No matter what.â€