Basic, and in the black
Traditional retailers and longtime manufacturers stick to what they know to get through hard times
With all the attention paid to flashy tech and life science companies in Massachusetts, it's important to note how many traditional businesses achieved positions on the Globe 100 list. From bricks-and-mortar retailers to venerable manufacturers, they continued to grow despite the recession.
They did it by sticking to the basics.
Framingham discounter TJX Cos., number nine on this year's list, saw its revenue increase 3.6 percent in 2008, according to the Globe survey, as the merchant maintained its off-price formula of delivering brand names and fashion at extreme value. When the economy spiraled downward last fall, chief executive Carol Meyrowitz instituted a hiring freezing, cut costs, and adjusted inventory levels.
"We did not react with drastic measures," Meyrowitz said. "And customer traffic has continued to increase in these difficult times."
In nearby Natick, BJ's Wholesale Club saw revenue soar 11.2 percent last year, according to the Globe survey. Coming in at number 16, BJ's drove up sales by expanding its fresh foods selection, increasing the number of brand names, and offering gas at discounted prices.
"In light of the toughening economy, we positioned ourselves in a way that satisfied our members' desire for saving money without sacrificing quality," BJ's chief executive Laura Sen said.
Work-uniform supplier UniFirst Corp. capitalized on the economic woes by retraining its sales force to focus more on value and offering service that could save customers money. Revenue at the Wilmington business, which ranked number 20, rose 12 percent, while profit margin jumped 18 percent, according to the Globe survey. Steven Sintros, UniFirst's chief financial officer, said new business increased by double digits in 2008, thanks to new customers and existing clients adding more services.
"In tough economic times, you need to sell the value more than just the service itself," Sintros said. "We go in and provide a free cost-analysis. If you can prove you can save them money in these times, you get more customers."
Toolmaker L.S. Starrett Co. also weathered the storm, increasing its revenue 2.7 percent and ranking number 71, according to the Globe 100 list. President Douglas Starrett said the Athol company increased sales by introducing new saw technology and new precision measuring tools, along with expanding its reach in China and Poland. In North America, L.S. Starrett focused on lean initiatives in its factories, improving the speed at which products are made in some parts of the factory by as much as 25 percent.
"The industrial markets held up better in 2008 than other channels of business. But traditionally, our industry has always lagged the economy; we are late at getting into problems," Starrett said. "Unfortunately, we're expecting a very tough next six months."
Laundry equipment supplier and manager Mac-Gray Corp. boosted revenue 22.9 percent last year and came in at number 75 on the Globe 100 list. Michael J. Shea, chief financial officer of the Waltham company, said Mac-Gray racked up good results by making a large acquisition at a good price last spring, before the credit markets froze. Mac-Gray bought Automatic Laundry Co. for $116 million, helping the Waltham business increase its density and add new markets, where it manages laundry rooms for colleges and apartment buildings. Expanding into Seattle and Portland, Ore., helped Mac-Gray offset the loss of business in other markets.
"When unemployment goes up, vacancy rates go up at apartment buildings, and that hurts us," Shea said. "Diversifying into other markets has helped protect us."
Jenn Abelson can be reached at firstname.lastname@example.org.