State’s Black Firms Crowd List : California Goes Non-Traditional, Places 14 on Magazine’s Top 100
A generation ago, George J. Comfort Jr. drove a truck for an electrical supply firm. But today, as president of Los Angeles-based Superb Electric Supply Inc., he is seeing sales mushroom as his company rides the crest of the downtown office boom.
“We supply all the stuff that goes between the walls that you don’t even see--conduit wire, motor controls, circuit breakers,” Comfort said. “It’s not a business most people would even think about. But I’ve been doing $10 million a year (in annual sales) now for the last four or five years.”
Comfort is just one of many business success stories that has made California home to the largest number of most successful black entrepreneurs, according to a survey released Tuesday by Black Enterprise magazine. California has 14 of the nation’s 100 biggest black businesses, more than any other state except New York, which also has 14, the magazine says.
The publication’s latest annual list of the top 100 black-owned industrial and service companies indicates that the nation’s entrepreneurial fervor, long symbolized by California’s Silicon Valley, is rubbing off on black business executives who are branching out into high-technology and other non-traditional fields. Today, more leading black-owned firms are “cutting innovative deals and spurring diversification of their enterprises,” the magazine notes in its 352-page June issue.
Traditional black business enterprises like construction, food and beverage retailing companies still dominate the magazine’s list, accounting for 35 of the top 100 companies. But black entrepreneurs such as Comfort have branched out into computer and information companies (13 out the 100), manufacturing (12) and even biotechnology (1).
“More opportunities are opening up for black businessmen,” added Gene Hale, president of the Los Angeles Black Business Assn. “We’re moving away from the traditional mom-and-pop-type business into (enterprises) that have high dollar value.”
Indeed, venturing into non-traditional markets appeared to be the key to success for the five California companies that joined the Black Enterprise list this year for the first time: Comfort’s firm Superb Electric Supply, Surface Protection Industries of Los Angeles, African Development Public Investment Corp. of Hollywood, TEM Associates Inc. of Emeryville and V-Tech Inc. of Pamona.
California is already home to nine other black-owned companies that made the magazine’s list again this year, including the well-known entertainment conglomerate, Gordy Co., formerly Motown Industries, which changed its name when it sold its flagship Motown Records to MCA Inc. and the investment banker Boston Ventures last year for an estimated $61 million. Gordy Co. is the top California company on the list, ranking No. 5 on the Top 100 manufacturing firms.
Construction Boom
Newcomer V-Tech, ranked 86th on the Black Enterprise list this year with annual sales of $7.4 million, has seen demand for its biomedical diagnostic test products and laboratory materials soar. The company, which offers a pregnancy test kit as well as diagnostic materials for various diseases, is preparing to present a three-minute test for AIDS to the Fifth Annual International Congress on AIDS next month in Canada, according to company President James Parker.
Similarly, two Los Angeles materials firms--No. 21 Surface Protection Industries, a paint and specialty coating manufacturer, and No. 52 Superb Electric Supply, have benefited from the downtown office construction boom.
To be eligible for its list, Black Enterprise said a company must be at least 51% black-owned. It must also manufacture or own its product or provide consumer or industrial services. The magazine does not include brokerage firms, real estate firms or firms that provide professional services, such as accounting and law firms.
Overall, the top 100 companies ranked in the Black Enterprise magazine survey had gross revenues of $6.75 billion in 1988, up 10.2% from the previous year.
While the Los Angeles-Long Beach metropolitan area has long been home to the largest number of black businesses--some 23,520, according to the Commerce Department’s latest survey--the overwhelming majority of those are small mom-and-pop operations specializing in traditional fields like food and beverage retailing and construction.
Despite the abundance of black-owned businesses in California, New York is still home to far and away the largest black-owned business in the Black Enterprise survey: TLC Beatrice International Holdings Inc., a food manufacturer and distributor formed from the $985-million leveraged buyout of Beatrice International two years ago.
TLC Beatrice, headed by former Wall Street lawyer Reginald F. Lewis, was the first black-owned company to make more than $1 billion in annual sales and reported revenue of $1.8 billion in 1987. The company’s 61 businesses include Butterball turkeys and Good Humor ice cream.
Among other new companies on the Black Enterprise list is Crescent Distributing Co. The New Orleans-based beer distributor posted sales of $45 million in its first year to debut at No. 12 on the Black Enterprise list, the highest position of any company appearing on the list for the first time.
The June issue of Black Enterprise, available May 18, also lists the top 100 black auto dealers and leading black-owned banks, savings and loans, and insurance companies.
The highest-ranking California firms on those lists were: Shack-Woods & Associates in Long Beach, No. 1 on the top auto dealers list; Family Savings & Loan of Los Angeles, No. 3 on the savings and loans list, and Golden State Mutual Life Insurance Co. of Los Angeles, No. 3 on the insurance list. The list of biggest black-owned banks includes no banks from California.
TOP BLACK-OWNED CALIFORNIA COMPANIES
List is drawn from the Black Enterprise 100 and ranked by 1988 sales. To be eligible for the list, a company must be at least 51% black-owned. It must also manufacture or own its product or provide consumer or industrial services. The magazine does not include brokerage firms, real estate firms or firms that provide professional services, such as accounting and law firms.
Rank Company Location 1988 sales 5 Gordy Co. Los Angeles $105 million 11 Dick Griffey Productions Hollywood $48.7 million 21 Surface Protection Los Angeles $30 million Industries 22 Westside Distributors South Gate $29.6 million 25 Advanced Consumer Burlingame $26.9 million Marketing 29 Beauchamp Distributing Compton $25.6 million 42 Bay City Marine National City $18.3 million 49 James T. Heard Cerritos $14.2 million Management 52 Superb Electric Supply Los Angeles $13 million 54 African Development Los Angeles $12.5 million Public Investment Corp. 66 Kass Management Oakland $10.5 million Services 68 TEM Associates Emeryville $9.4 million 86 V-Tech Pomona $7.4 million 90 J.E. Etheridge Construction Fresno $7 million Construction
Rank Type of business 5 Entertainment 11 Entertainment 21 Paint, coatings 22 Beer distributor 25 Systems integ., mail order 29 Beer distributor 42 Shipbuilding, repair 49 Fast-food operations 52 Electrical hardware 54 African commodities 66 Food serv., janitorial supply. 68 Automated support serv. 86 Biomedical test products 90 Comm., gen. contractor
Source: Black Enterprise Magazine
THE 5 BIGGEST BLACK-OWNED FIRMS IN THE U.S.
Industrial/service firms are ranked by 1988 sales Rank: 1 COMPANY: TLC Beatrice Intl. LOCATION: New York CEO: Reginald F. Lewis 1988 SALES: $1.96 billion TYPE OF BUSINESS: Processing, distribution of food products Rank: 2 COMPANY: Johnson Publishing LOCATION: Chicago CEO: John H. Johnson 1988 SALES: $216.5 million TYPE OF BUSINESS: Publishing, broadcasting, cosmetics, hair products Rank: 3 COMPANY: Philadelphia Coca-Cola Bottling LOCATION: Philadelphia CEO: J. Bruce Llewellyn 1988 SALES: $210 million TYPE OF BUSINESS: Soft drink bottling Rank: 4 COMPANY: H.J. Russell & Co. LOCATION: Atlanta CEO: Herman J. Russell 1988 SALES: $159.7 million TYPE OF BUSINESS: Construction, property management, food and bev. Rank: 5 COMPANY: Gordy Co. LOCATION: Los Angeles CEO: Berry Gordy 1988 SALES: $105 million TYPE OF BUSINESS: Entertainment Source: Black Enterprise magazine
OTHER CALIFORNIA FIRMS ON LIST
Auto Dealers 1 Shack-Woods & Associates, Long Beach 7 Pope Chevrolet, Modesto 18 Chino Hills Ford, Chino 29 Royal Carriage Buick GMC-Jeep Eagle, Oxnard 73 Mission Blvd. Lincoln-Mercury, Hayward 76 West Covina Lincoln, West Covina 94 Bill Nelson Chevrolet, Richmond 97 Executive Pontiac GMC Truck, Tustin
Savings and Loans 3 Family S&L;, Los Angeles 4 Founders S&L;, Los Angeles 6 Broadway Federal S&L;, Los Angeles 7 Time S&L;, San Francisco 21 Enterprise S&L;, Long Beach
Insurance Companies 3 Golden State Mutual Life, Los Angeles
Source: Black Enterprise magazine
