When Nathan Chasen founded the 435th fastest-growing company on this year's INC. 500 list, America was awash in foreign debt, U.S. Marines were poised to intervene in a Central American civil war, and salvagers nursed fantasies of raising the Titanic. If those sound like yesterday's headlines, consider the number of yesterdays we are talking about. Chasen's start-up year was 1914, or about six decades before most of his INC. 500 competition got going; that makes N. Chasen & Son Inc. by far the oldest company in our class of 1985. And while the young Richmond, Va., paperhanger knew neither fame nor fortune during his lifetime (Chasen died in 1963, when his painting-contractor business was doing about $500,000 in annual revenues), he surely must have known something about survival in the marketplace.
"My father never had the business sense or training to make this company grow," says Irvin Chasen, chief executive officer and the founder's son. "For 35 years, it was literally a mom-and-pop operation. Oh, we'd add a few people here, a few people there, but growth was real gradual. In contracting, you know, rapid growth can be very dangerous. Lately, though, it seems like we've been in the right place at the right time."
For Chasen, the right place was office furniture, the right time, 1980. Before then, the company had been content with the $1 million or so in annual sales brought in by the painting business -- enough to sustain the operation, but not enough to expand it dramatically. When it had shown some ambition, moreover, the results had been decidedly mixed. In the mid-1970s, for instance, keeping volume up was the in-house buzzword, yet poor bidding on a series of commercial jobs had caused sales to rise while profits fell. Around the same time, Irv got sidetracked by a consulting career, and his efforts to launch a retail furniture division (Colonial Williamsburg reproductions) soured with a succession of less-than-stellar managers. In 1977, he was joined in the front office by son Jeff, who, like his father before him, had never given a job with the family business serious consideration.
"That's when I went back and started bidding paint jobs myself again, to show Jeff how it was done," explains Irv. "We really cleaned up our act. And Jeff helped enormously. We had been using a scan machine to call up the plans on every building project in the area, so we could cost them out and bid on [the jobs] without leaving the office. Jeff pointed out that we'd be better off using the service to find out what not to bid on, since everyone else had the service, too. And he was right. We dropped it, cut our operating costs, and got out of the wholesale bidding market entirely."
Not long thereafter, the golden opportunity arrived: A local department store, Thalhimers, was closing and putting its contract office-furniture business up for grabs. With encouragement from his son and from Larry Giancaterino, a onetime supermarket management trainee, Irv hired Thalhimers's designer and two of its salespeople and stuck them in an otherwise empty back room with a telephone and a manufacturer's catelog. When the local market for office furnishings -- especially systems furniture -- began to take off, N. Chasen & Son took off with it.
"We had almost no capital investment to make initially," notes Giancaterino, now vice-president of Chasen's Business Interiors. "A lot of our competitors were falling by the wayside. This company already had a great reputation for customer service, and we were able to get good people by paying them better and offering more attractive commissions. The upshot was, even though we were new to this [business], we had the look of experience."
"Upshot" nicely describes Chasen's revenue picture as well. Total sales climbed from $2 million in 1981 to $3 million in '82 to $5 million in '83. The spirit of adventure was suddenly running high in what had been, for the better part of a century, a sleepy little enterprise. Gambling on a satellite furniture branch in Norfolk, Va., Chasen reaped a big pay-off six months later when its largest competitor went belly-up, providing it with both manpower and a new customer base. In 1983, GF Furniture Systems Inc. offered Chasen half of its "company store" retail business in Washington, D.C. At about the same time, the boys from Richmond parlayed an opportunity into a small gold mine, winning a single $2.5-million contract in Arlington, Va., and garnering total '83 revenues of $12.3 million -- a growth spurt that was good enough for 213th place in last year's INC. 500 ranking.
Sales growth inevitably begets other kinds of growth, and management had its hands full simply meeting basic needs. In three years' time, 45 hirees went on the payroll (now numbering 95); a centralized computer system was installed; electro-static-refinishing and design-consulting divisions were established; and a company that had prided itself on paying every bill by the 10th of each month ("even the disputed ones," says Irv) and had only borrowed money to keep a modest line of credit on hand was suddenly asking lending institutions for seven-figure sums. Employee benefits (more vacation time, profit sharing, promotion opportunities, and so on) kept pace with the growth curve, but not all the problems to be solved were financial ones. The bedrock of the company, and still its most profitable division, was contracting; many of the old-line workers there were confused, if not downright disconcerted, by the coat-and-tie polish of the furniture people.
"Some of the guys wondered what was going on," concedes painting division vice-president A. B. Creasy, a veteran of 20 years himself. "We had to go out of our way to convince 'em they weren't being replaced."
"It's been a double image problem," adds Jeff Chasen. "People [who buy office systems] want to deal with successful-looking people. When the workmen saw our new building, though, the fancier cars parked outside, all that stuff, they worried about what was going on. I think it's helped that I'm not a very fancy guy myself. I don't like suits, I don't like ties, and when something mechanical breaks down, I like fixing it myself."
Irv Chasen now calls Jeff "Mr. Inside" and Giancaterino "Mr. Outside." Larry puts it a slightly different way. "My strength is marketing what we've got," he says, "Jeff's is making sure we make a profit." All agree that the balance between Chasen's localized, word-of-mouth, quality-service contracting business and its high-profile, high-performance, widely scattered furniture division is a happy one indeed. Well, maybe not entirely happy.
"One thing I'd like to see is our people having more fun with this," says Irv, the second-generation founding father. "They get so serious sometimes. Also, if it's all the same to everybody else, before I get hit by a train or something, I'd like to see some new executive offices, maybe ones that have a private bar and lavatory. Jeff took my old office, you know. I'm looking for new space."
And if the founding father could borrow a time machine and visit the future, what would Nathan C. think about all that he had set in motion?
"Actually," his son sighs, "my mother would probably be more impressed with this than he would. Money never motivated him. She was the one who pushed him. I think she'd be amazed."