Editor's Note: Melvin J. Gordon passed away Tuesday (Jan. 20, 2015) at the age of 95. In honor of his memory, we're resurfacing this Inc. Magazine article from 2000, in which he spoke about his second act as an entrepreneur. Business owners may also know him as father to Karen Mills, former chief of the Small Business Administration.
Melvin J. Gordon, 81
Present life: CEO and chairman of the board of Tootsie Roll Industries, a $397-million, 104-year-old candy company headquartered in Chicago
Former life: Gordon headed a hosiery company in Manchester, N.H.
Lessons learned: "In the early 1950s my company was making women's hosiery. When I was walking through a supermarket one day, I saw some nonfood items. I thought, 'Why shouldn't they be selling hosiery?' " Gordon says.
"We were the first in the industry to go into the supermarkets. Hanes and the others didn't come in until the 1960s. It was an instant success for us. We sold to more than 5,000 stores, including some of the leading chains.
"When I came to Tootsie Roll, in 1962, sales were about $22 million. The company was doing very limited business in supermarkets, but supermarkets were growing in size and popularity. I knew that display was very important. If you stand up your packages and show more candy, you do better than by laying your packages down. Off-shelf displays are the best, though. If you had hosiery standing up in racks, you sold much more than if it was lying on the shelves. We did that with candy, too. Using the techniques I learned in hosiery, we were able to quadruple our supermarket sales in two years.
"When I was in hosiery and then went into candy, everyone said, 'Why don't you fill stockings up with candy and sell them?' This got so prevalent that I was going to sock the next guy who mentioned it, and then I started thinking about it. In Mexico we tried out a plastic sock filled with candy. It turned out to be an important part of our success there, and later we did Christmas stockings, which became a growing part of our U.S. sales. Sometimes people say something as a joke, but when you think about it for a while, there may be a practical application for your business."
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