The number of employees has grown from 73 to 543 in five years, but each still meets, albeit briefly, with Andrew or David Kay before he or she is hired. Production remains organized around small work teams with a working supervisor. Every worker learns each aspect of the assembly process; each is entrusted with writing his or her own time card. The new Solano Beach production plant was constructed on the basis of employees' recommendations and criticisms.
It is still Andy Kay's business; he holds 66% of the equity. But once each month the CEO goes out to the shipping dock to report on the company's progress to his employees. With 1983 sales of $75.3 million, a 1,280% increase from 1982 to '83 the news has been good.
COMP-U-CARD INTERNATIONAL INC.
Back in 1973, when Walter Forbes came up with the idea for his electronic home-shopping service, he hoped to catch "the next wave" in retailing and ride it to explosive growth. Now 11 years later he is still convinced that his prediction was right. But just as importantly he is also convinced that after 10 straight years of losses -- more than $7 million on less than $6 million in sales in the past2 years alone -- his company, Comp-U-Card International Inc. (#87) in Stamford Conn., is about to go into the black.
The idea behind Forbes's microchip shopping mall is simple: The system's 1-million-plus subscribers each pay $25 a year to obtain price and product information by their modem-equipped home computer or over a toll-free phone line from a 60,000 item database. It is a brokerage service offering consumers savings of up to 40% on household goods, drugstore products, and gourmet foods by choosing the best price offered by competing vendors.
"We could have turned the 800 number into a profitable operation along the way," Forbes insists, "but the future is with terminals, and we would have lost our lead." Forbes convinced his investors -- including such retailers as Federated Department Store Inc. and Jack Eckert Corp. -- to stay the course, spending the money to develop the computer database and systems. And with a report from the company's underwriter, Morgan Stanley, estimating a $6-million profit in 1984 due this spring, and with the system licensed worldwide, he feels vindicated.
"We knew it was a great idea, but no one else believed it," Forbes recalls. "We spent a long -- and agonizing -- time in the tunnel. But the rough part is over. Our earning potential is so high we probably couldn't suppress it if we wanted to."
THE HOME DEPOT INC.
Riding the wild cycles of the housing industry has proven problematic for any number of ancillary industries, but not so for The Home Depot Inc. (#26), an Atlanta-based chain of retail home-improvement centers.
"We're not a recession baby," says chief executive officer Bernard Marcus, who, in 1978, helped found the company, which hit 1983 sales of $256.1 million. "When new housing starts are down, people remodel. When they're up, more old homes come on the market that need repair. In either case, people want to save money. There's nothing more frustrating than calling in a plumber and spending $75 on what it would cost you $1.95 to do yourself."
Marcus married that kind of thinking to a revolutionary concept: supermarket-size, do-it-yourself centers featuring nationally advertised brands, huge floor plans (The Home Depot's 19 outlets average nearly 80,000 square feet apiece, three to four times the size of most competitors'), deep inventories ($4.5 million to $5 million retail value), and trained sales staffs (125 to 150 per store) who could counsel inexperienced customers in the finer points of undertaking specific projects. Costs have been held down by the lack of need for interim warehousing and distributors' fees. The result: The Home Depot now plans to open 11 stores this coming year (average annual sales: $18 million per location) and 10 to 15 stores thereafter, rapidly expanding from the Southeast (mainly Georgia and Florida) to the Southwest (Arizona).
To fuel that expansion, the company made an initial 400,000-share public offering in 1981. "Our long-term strategy has always been to build a national chain," says Marcus, "and our biggest investment, outside of inventory, has been in our people. Right now, about the only restraint we face is our ability to recruit and train new staff fast enough."
BYERS COMMUNICATIONS SYSTEMS INC.
"If we could figure out which of the three [service] areas we cover was the hottest," says Morgan Payne, president of Byers Communications Systems Inc. (# 74), in Atlanta, "we'd probably concentrate more on that one. As it is, our project-management skills are easily transferred from one area to another, and that gives us terrific flexibility."
Byers designs, installs, manages, and maintains a wide range of communications systems for cable television companies, common carriers (MCI, AT&T, The Bell Operating Cos.), and private networks, from universities to corporations. These systems include coaxial cable, fiber-optic lines, satellite earth stations, microwave transmitters, and cellular radio installations. Currently operating in more than 30 states, Byers has clearly profited from the explosion of private communications networks sparked by American Telephone & Telegraph's breakup. Conversely, according to Payne, the general retrenchment in the $6.1-billion cable TV business brought on by soaring building costs and shrinking profit margins has not cramped the company's style. "We're involved only in the nonconverter part of the system," he explains, "where service and maintenance contracts are still very much in demand."
Last year, Payne helped guide Byers through a reverse merger with Redfern Foods Corp. Having acquired 63% of Redfern stock, Byers sold off the food operation (Pioneer Beef Co.) and netted a quick $5 million in capital, saving, Payne estimates, about $1 million in the costs of a straight public offering. More recently, Byers made a $40-million stock-acquisition move on Cellwave Technologies Inc. of Claremont, N.C., a manufacturer of antennae and fiber-optic and copper cables. The anticipated alliance with Cellwave will more than double Byers's work force and greatly expand the company's already formidable service capabilities.
