State’s Black-Owned Firms Thrive : Minorities: Companies in California registered a 6.7% increase in revenue while the national average rose only 0.3%, a survey shows.
While the nation’s largest black-owned businesses had virtually no revenue growth as a group last year, such firms in California surged ahead, helping the state claim the title of home of the largest number of successful black entrepreneurs, according to a survey released Tuesday.
Black Enterprise magazine’s latest annual list of the top 100 black-owned industrial and service companies contained 14 California firms--more than any other state. New York, which tied California for the top spot last year, ranked second on the new survey with 13 firms.
In a separate top-100 list, Black Enterprise cited the revenue leaders among America’s black-owned automobile dealerships. Nine California dealerships made the list, putting California second to Michigan (12 dealerships) among the 100 leaders.
Survey statistics also showed that the revenue trend for the top black-owned California firms bucks the national average. Of the 200 firms on the two lists last year, 22 were California-based. There are now 23 California firms on the two top 100 lists.
The California firms--not counting the newcomer to the list--had combined revenue of 677.2 million in 1989, an increase of 6.7% over the previous year’s revenue.
By contrast, the combined revenue of the leading black firms on the two national top 100 lists totaled $6.81 billion in 1989--up a negligible 0.3% over 1988, the report said.
The magazine’s editor and publisher, Earl G. Graves, blamed the economic climate and governmental policies for the flat performance nationwide.
“A sluggish economy has wreaked havoc on major industrial sectors--from auto manufacturing to finance,” Graves said. “And the Reagan Administration’s legacy of exclusion has been realized with the subsequent retrenchment of affirmative action plans and minority business set-aside programs.”
On the other hand, local black business leaders were upbeat about the performance of the largest California firms owned by blacks.
“California has a diverse economy, and there are lots of opportunities,” said Gene Hale, chairman of the 400-member Black Business Assn. of Los Angeles. “California hasn’t had a recession in a long time, but there have been regional recessions in other parts of the country. The climate is right for business starts. Blacks are moving into different fields like high-technology.”
Traditional black business enterprises such as construction and food and beverage retailing still dominate the magazine’s national list, accounting for 31 of the top 100 industrial and service firms. However, the number of firms in fields related to computers and office supplies increased to 18 in 1989 from 13 in 1988.
Among the most successful companies in these nontraditional sectors is Advanced Consumer Marketing Corp., a Burlingame, Calif.-based holding company involved in sales of computers and garden supplies and direct mail marketing. Black Enterprise named the firm its “BE Company of the Year.” The company ranked 13 on the magazine’s list of industrial and service companies.
Ranking ahead of Advanced was the Los Angeles-based Gordy Co., which includes the entertainment operations of Motown Industries, whose record business was sold in 1988 to MCA Inc. and Boston Ventures.
Among the other high-ranking California firms was Shack-Woods & Associates in Long Beach, No. 1 in the nation on the auto dealers list.
Retaining the top spot among industrial and service companies was TLC Beatrice International Holdings Co., the foods processor and distributor. The New York-based holding company acquired the international food businesses of the former Beatrice Cos. in a $985-million buyout in 1987.
However, like many of the other companies, TLC Beatrice suffered from weak conditions in the economy and declining capital pools. A planned public offering of 35% of the company, which would have made TLC Beatrice the first black-owned company on the New York Stock Exchange, was withdrawn in December due to a sagging stock market and a weak reception by investors.
THE BIGGEST BLACK-OWNED BUSINESSES
The following are lists of the 10 largest black-owned industrial and service companies in the United States and in California as compiled by Black Enterprise magazine. To qualify for the list, a company must have been fully operational in 1989 and must be at least 51% black-owned. It must manufacture or own the product it sells or provide industrial or consumer services. The list includes the company, city where headquartered, line of business and 1989 revenue. The California list includes the national ranking in parentheses.
1. TLC Beatrice International Holdings, New York, food processing and distribution, $1.51 billion.
2. Johnson Publishing, Chicago, publishing, broadcasting, cosmetics, hair care, $241.3 million.
3. Philadelphia Coca-Cola Bottling, Philadelphia, soft-drink bottling, $240 million.
4. H. J. Russell & Co., Atlanta, construction, communications, food and beverages, $132.9 million.
5. Gordy Co., Los Angeles, entertainment, $100 million.
6. Soft Sheen Products, Chicago, hair-care products, $87.2 million.
7. Trans Jones Inc.-Jones Transfer Co., Monroe, Mich., transportation services, $78.6 million.
8. Bing Group, Detroit, steel processing and distribution, $73.9 million.
9. Maxima Corp., Rockville, Md., systems engineering and computer management, $58.4 million.
10. Dick Griffey Productions, Hollywood, entertainment, $50.2 million.
THE CALIFORNIA TOP 10
1. Gordy Co., Los Angeles, entertainment, $100 million (5).
2. Dick Griffey Productions, Hollywood, entertainment, $50.2 million (10).
3. Advanced Consumer Marketing, Burlingame, systems integration, mail order, $47.8 million (13).
4. Surface Protection Industries, Los Angeles, paint and specialty coatings manufacturing, $35 million (23).
5. Westside Distributors, South Gate, beer distribution, $31.1 million (27).
6. Beauchamp Distributing, Compton, beer distribution, $29.3 million (28).
7. V-Tech Inc., Pomona, biomedical test products, $15 million (51).
8. African Development Public Investment, Hollywood, importer of African commodities, $14.8 million (52).
9. James T. Heard Management, Cerritos, fast-food restaurants, $14.3 million (55-tie).
10. TEM Assns. Inc., Emeryville, technical, management and computer support services, $13.6 million (58).
Source: Associated Press
