Private Companies Fare Well

May 5, 2005
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DETROIT — While West Michigan’s public companies took a beating in this year’s Free Press 50, the Detroit Free Press’ annual ranking of the state’s top public companies released April 11, its private companies did exceedingly well in the companion list published this week.

Four West Michigan companies grace the top 10 of the 25-company Free Press Private Reserve list. Unlike the Free Press 50, where the rankings of all but one company fell, the four local entries on the private list each moved up a spot or two from last year’s rankings.

Meijer Inc. moved up to the No. 2 spot vacated by last year’s IPO of TRW Automotive. With an estimated $12 billion in revenues, Meijer is the region’s largest company, private or otherwise. It would have ranked 11th on the Free Press 50, ahead of Pulte Homes Inc.’s $11.7 billion.

In fact, Meijer has revenues roughly equal those of the seven West Michigan entries on the Free Press 50 list — Steelcase Inc. (27), Universal Forest Products Inc. (28), Spartan Stores Inc. (31), Herman Miller Inc. (34), Wolverine World Wide Inc. (39), Gentex Corp. (44), and Perrigo Co. (40) — combined. According to Forbes, Meijer is the nation’s ninth largest private company.

With estimated revenues of $6.2 billion, direct-marketing giant Alticor Inc., third on the Private Reserve, ranks as the region’s second largest company, also larger than any of the region’s public companies.

Gordon Food Service moved up two spots to No. 6; Haworth Inc. moved up two spots to No. 10.

If nothing else, the list highlights the fact that unlike other metropolitan centers, the bulk of West Michigan’s wealth remains within private business. In the wake of Sarbannes-Oxley and erratic market scares, that is likely to stay so.

“There really is no desire to go public,” Meijer spokesman John Zimmerman told the Free Press. “If your mission is to be the largest company in the world, then you would need to go public because you would need the funds to do so. But if your goal is just to continue on the growth path that you’re on and focus on your customers, then there isn’t a need to go public.”

As demonstrated by West Michigan’s companies and other entries like Illitch Holdings and Flint Ink Corp., there is a link between family business and private status. The Meijer family still runs Meijer Inc., the Gordon family runs Gordon Food Service, ditto for the Haworth family and the DeVos/Van Andel hierarchy at Alticor.

There are few examples of family control in the Free Press 50. There are no Borders at Borders Group Inc., no Dows at Dow Chemical Co. or Kelloggs at Kellogg Co.

“The family is involved in every aspect of the company,” Zimmerman said of multigenerational cochairman and CEO Hank Meijer. “Hank has always said we’re happily privately owned.”    

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