The rule in the world of Los Angeles’ biggest privately owned companies apparently is: If it isn’t broken, don’t fix it and don’t say much about it either.
For the second year in a row, Consolidated Electrical Distributors Inc. tops the Los Angeles Business Journal’s list of largest private companies.
And, for the second year, company officials were not interested in talking about the distinction.
Consolidated is part of a diverse group of firms from financial services to grocery wholesalers that place at or near the top of the list.
Like many of the companies on the Top 100 list, Consolidated keeps a low profile. It rarely, if ever, finds its name in the newspaper and does not boast about cutting-edge technology, or anything else. It just makes money by distributing very unglamorous electrical panelboards, transformers and switches from 440 locations all over the United States.
The business strategy for the Westlake Village-based, family-owned company, run by chairman and CEO Keith Colburn, helps keep it relatively anonymous. It typically buys up all the smaller electrical equipment distribution companies it can, usually keeping the local management teams and even the local company names.
“We never comment on anything,” said a tight-lipped receptionist at the company.
Few analysts who cover the industrial equipment industry are familiar with Consolidated’s inner workings. One said the closest he has ever gotten to Colburn is a casual conversation about sports at an industry convention 14 years ago.
Nevertheless, the company reports 1999 revenues of $2.6 billion, up from just under $2 billion the year before.
Asset management company Capital Group Cos. Inc., ranked No. 3 on the list, has a similar corporate culture. It’s more than 60 years old and very, very quiet.
“It’s a very private company,” said spokeswoman Jennifer Grigas. “We don’t advertise, we don’t grant interviews, we don’t talk to analysts and we never talk about specific clients.”
Still, reported revenues are somewhere in excess of $2 billion a year. Its boom has been fueled by the tremendous growth in the mutual fund industry.
No. 17 Platinum Equity Holdings, on the other hand, has been largely built through the acquisition of underperforming businesses, including units of large corporations. Platinum Equity made another Business Journal list earlier this year when it was recognized as the fastest-growing private business in L.A. in 1999.
Its substantial and speedy growth notwithstanding, Platinum also was in the news in recent months for losing out in the bidding match to take the Learning Co. off of Mattel Co.’s hands. Platinum lost out to Gores Technology Group, owned by Alec Gores. Alec Gores’ brother Tom is Platinum’s president and CEO.
There was some switching of places among companies at the front end of the list.
A-Mark Financial, which trades in precious metals and rare coins, moved from No. 8 last year to the No. 2 spot this year. And although founder, president, chairman and owner Steven Markoff is happy enough to see his company’s name on the list, he figures its movement upward is a coincidence as much as anything else.
While its 1999 revenues of $2.446 billion are substantial, “Actually, it’s a small decrease since last year,” Markoff said.
(In 1998, A-Mark reported revenues to the Business Journal as merely “over $1 billion.”)
Most companies in the top 15 reported an increase in revenues despite moving up or down on the list.
California Dairies Inc. kept its No. 4 ranking by increasing its 1999 revenues to $1.9 billion, a $220 million improvement over the prior year. Unified Western Grocers, reporting $1.83 billion in revenues in 1998 and $1.89 billion last year, slipped from No. 2 on last year’s list to No. 5 this year. And the J.F. Shea Co., which dropped from No. 3 to No. 6, increased revenue by $58 million.
In fact, you have to go all the way down the list to the citrus growers’ cooperative, Sunkist Growers Inc. (No. 14 this year, 7 last year), before you find a business willing to admit to a decline in revenue ($1.07 billion in 1998 vs. $862 million in 1999).
“What happened there was the freeze,” said Sunkist’s Claire Peters. “That took care of all the fruit.”
Uncharacteristically cold weather in the San Joaquin Valley in December 1998 devastated last year’s California citrus crop. As a result, the California orange crop was cut in half and the lemon crop was reduced by 20 to 25 percent.
The most dramatic jump up the list was made by Wherehouse Entertainment Inc., from No. 39 to No. 15. Thirty years ago, Wherehouse had six record stores in the Los Angeles area. In 1998, the company bought the 378-store Blockbuster Music chain from Viacom.
“It did take a couple of years to gel,” said company spokeswoman Susan Manzer of that purchase, which is largely responsible for the company’s revenue boost from $327 million in 1998 to $858 million last year.
In 1999, Wherehouse also entered into what Manzer called a “strategic partnership” with entertainment Web site Checkout.com to sell the company’s music products.
“That was Wherehouse’s first click-and-mortar deal,” she said. “Having the backbone of Checkout.com has allowed Wherehouse to increase its revenues too.”
