IMG usually does about $100,000 of weekend business at its Harrison Street store. What with war protests and clogged pedestrian and car traffic, business dropped by half. And it hasn't recovered. Across the board, business is down by about 20% to 30%, Tony estimates.
IMG has the added problem of importing goods from troubled areas throughout the Mideast. Two years ago, the brothers started manufacturing in China, Indonesia, the Philippines, Burma, and Vietnam. They are working to move the bulk of their manufacturing to these somewhat more stable locales, but that plan didn't come to fruition in time for the war. By the second week, because of disruption in supply chains, the brothers had only about 50 shipping containers of goods from the Middle East, enough to last about two months in normal circumstances. The disruption of supplies and decline in revenues presented the brothers with some difficult choices.
They decided to close two stores, one in San Francisco and another in Los Gatos, Calif. About 20 people stateside will be laid off. About 200 overseas employees will lose their jobs. "We have to downsize, so we can expand in the future," says Tony, who dreams of a 100-store chain and opening a large factory in their native Afghanistan. "Sometimes business is up. Sometimes business is down. The most important thing is that while many businesses are closing, we are not. We are making some tough choices now so we can weather any storm. You have to stop the bleeding now and keep your eyes on the long-term goal."
Monitoring the Globe
PPR INTERNATIONAL, JACKSONVILLE, FLA.
Keith Frein, CEO of PPR International, a Jacksonville, Fla., company that recruits and places domestic and international traveling nurses, starts his day by checking the color-coded icons on his computer desktop that track the daily terrorism threat. Frein proceeds to review a steady stream of real-time numbers tracking nurses in the pipeline. And he reads immigration laws. "I never stop reading, because every country has different rules," says Frein. "I've become a culture keeper." * PPR hires nurses from countries such as India and the Philippines and contracts work for them in American hospitals. The 74-employee company, founded in 1996 by Frein and Dwight Cooper, is profitable because of a drastic U.S. nursing shortage. But post 9/11, PPR suffered a severe drop in business. Frein learned that the INS can become terribly disrupted during periods when foreign nationals must be scrutinized intensely. Immigration delays can create havoc in the lives of foreign nurses, and many decided not to come to the U.S.
In the year leading up to the war, PPR allocated a greater portion of its budget to the domestic side of its business and increased its dedication to monitoring global changes. When the war started, PPR sent blasts of e-mails to nurses keeping them abreast of their immigration status. The company divided up the countries it does business with in-house so that one person was in charge of the e-mails from India, one from the Philippines, and so on. Frein compared the back-and-forth communication during the war to a sudden spike on an EKG monitor, adding, "Technology is great, but many nurses still want a personal response." The extra effort helped PPR retain its nurses this time around. --Patrick J. Sauer
Making It Happen
GROUP TRANSPORTATION SERVICES, CLEVELAND
By week two of the war, Group Transportation Services founder Mike Valentine was looking at some weak numbers. GTS had failed to meet its first-quarter projected growth by about 10% and wasn't signing up many new clients. But in the glass-half-full scenario, revenue was still up by about 19% for the first quarter from a year earlier, an "enviable position" in its industry, says Valentine. Still, Valentine was used to much more. From 1997 to 2001, GTS sales increased by 2,335% to more than $15 million.
GTS bills itself as a transportation solutions company -- a kind of one-stop resource for shipping. It figures out the fastest and most cost-effective way for its clients to ship almost anything; they also audit, track, and trace freight. Valentine achieved his meteoric growth in large part by courting trade associations. With a diversified client base and agreements with 26 trade associations, GTS has a stable client base not dependent on any one account.
The highly ambitious Valentine decided from day one that the war was "absolutely not going to stop us from success." At the beginning of the war, the staff had gathered for a prayer vigil. During week three, Valentine gathered together the staff again and laid out an aggressive plan to reach $200 million in sales over the next five years, a 1,333% expected growth. The plan? The entire crew, not just the marketers, will look for new customers, new sales, new opportunities. And they're going to focus on big-ticket sales. Last year, they landed a $16 million contract to handle all domestic shipping for an international freight forwarder, and are working hard to get more business like that. Valentine also announced that he was bringing in a highflying new salesperson known for his multimillion-dollar deals. "We can't sit around and wish things were better. You need to make things better."
Joan Raymond is a freelance writer based in Cleveland.
Please E-mail your comments to editors@inc.com.
