Powerhouses of the New Economy
The B.E.100s profit from rewriting the rules of American business
THESE DAYS, THE CHIEF EXECUTIVES OF THE NATION'S LARGEST black-owned businesses make it extremely clear that their companies will not be held back by convention or boundaries. As if to confirm this position, a symbolic and substantial newcomer has joined this year's BE INDUSTRIAL/SERVICE 100 list: Baton Rouge, Louisiana-based No Limit Enterprises. Debuting at No. 25, the $110 million urban entertainment empire is run by rapper/entrepreneur Percy Miller, better known as Master P. Christening himself "the ghetto Bill Gates," he has tipped his hat to old guard BE 100S pioneers like Motown by building his enterprise from scratch. But his feet are firmly planted in today's technology-charged business environment: he employs a crew of corporate-trained, financially savvy professionals to operate his far-flung ventures, which range from music and film to real estate and toy merchandising. In the process, Master P and company are staking their claim, rewriting the rules and raking in a lot of dead presidents.
BE 100s companies like No Limit have truly become powerhouses of the New Economy--ones driven by technological innovation, high productivity and soaring financial markets. In fact, many of the old-line companies in such mature sectors as industrial manufacturing and automotive sales are souping up their operations by going digital: hawking products and services via the Web.
Innovation has been made possible, in part, by the financial prosperity of the national economy, which grew at a rate of 4.1% in 1999. Consumer confidence continues to surge. The national unemployment rate is at an all-time low. Despite an uptick in consumer prices in mid-April, inflation is still virtually nonexistent. And, even though the Federal Reserve has hiked interest rates five times over the past year, the cost of debt capital still remains manageable for most business owners.
Yes, the 285 entities that comprise the largest black-owned businesses have embraced this New Economy with a vengeance. Take the industrial/service companies and auto dealers. Total sales for these 200 companies were $16 billion, a 14.3% increase from $14 billion in 1998. Between the two lists, there are 46 companies that grossed $100 million or more in revenues, up from 39 last year.
This year ends the triumvirate that has dominated the BE INDUSTRIAL/SERVICE 100 list for much of a decade: J. Bruce Llewellyn's Philadelphia Coca-Cola Bottling Co., John H. Johnson's Johnson Publishing Co. and Loida N. Lewis's TLC Beatrice International Holdings Inc. TLC, the one and only $2 billion concern to be listed among the BE 100s, will probably never rise to its former glory: its board voted to unlock the company's value by liquidating its assets.
One of the most significant recent developments has been the rise of information technology firms. In fact, the new leader of the industrial/service companies is St. Louis-based World Wide Technology Inc. (WWT), the $413 million distributor of technology products and services. The company was edged out by Mel Farr Automotive Group, the Oak Park, Michigan, mega-auto dealer with gross sales of $432.4 million, for the title of No. 1 black-owned enterprise in the nation. Observers will be watching this year to see if WWT, last year's Company of the Year, will eventually overtake the automotive conglomerate.
More black-owned businesses are strengthening their positions by entering the financial markets. For instance, Radio One Inc. (No. 29 on the BE INDUSTRIAL/SERVICE 100 list with $93.3 million in sales) went public in 1999. As a result, the market cap of the radio broadcaster grew to $2 billion.
Moreover, it obtained the capital to acquire 21 stations for $1.4 billion, expanding its portfolio of such properties to 49. (See "High Frequency Profits," this issue.)
Because of such milestones, it is only fitting that our rankings have been expanded to include the BE ASSET MANAGERS list, the leading black-owned firms that manage the funds of institutional and retail investors. …