Golden oldies

A giant tortoise might smirk, but living to see 100 is a big deal for humans and the businesses they create—otherwise we’d have more of them.Centenarian-grade longevity obviously is rare. Genetics…

A giant tortoise might smirk, but living to see 100 is a big deal for humans and the businesses they create—otherwise we’d have more of them.

Centenarian-grade longevity obviously is rare. Genetics are key: A family can keep a business alive that long and longer, or tear it apart. If a business beats the odds and survives three or four generations, finding heirs willing—or able—to carry the torch can be a tall order.

One thing is for certain: The survivors in many cases are facing threats to their existence they could have hardly imagined a few decades ago, much less a century ago.

In a time when competition from giant conglomerates and the pressure to consolidate is extreme, centenarian firms are disappearing. Business Report spoke with a few Baton Rouge-based old-timers to ask about their health, their secrets to longevity and newfangled threats to their success.

Capital City Press [The Advocate]

Founded: 1842 Revenue: $65 million [2007] Employees: 560

Changing times affect all businesses to some degree—but nobody’s feeling it more than the newspaper industry. The company belonging to David Manship’s grandfather, Capital City Press, acquired the State-Times in 1909. The paper, which began as the Democratic Advocate in 1842, is known today as The Advocate , which Manship heads as publisher.

He says it’s extremely rare these days for a newspaper The Advocate ’s size to still be family-owned. And while offers from large chains to buy still come in, they’re not nearly as frequent as they once were, reflecting the troubled state of the industry.

“The last two years we haven’t gotten as many,” Manship says. “We still get occasional offers. Before that, we’d get them all the time.”

Like other newspapers, the publication faces rapidly rising production costs and declining circulation and ad revenues—though circulation recently has posted slight growth. Nevertheless, the trend is endangering a model that sustained well-established businesses like The Advocate for decades.

“It is a really tough time,” Manship says. “You can get information in many more different places than you could back then.”

Enticing younger readers is a challenge when most newspaper subscribers are in the 35-and-older age bracket, he says. Still, Manship insists print newspapers will always have a place.

“There’s just something about a newspaper,” he says. “You put it down, you pick it up. I think people feel comfortable with it.”

The company is pushing its online presence, which has proved to be a fairly good revenue producer “but not near enough to carry a load,” Manship says. The newspaper recently raised the price on single-copy sales and home delivery, citing the poor economy and industry trends.

“We’ll survive,” he says. “We’ll tighten up the belt and trim our budgets a little bit, get a little bit smarter about how we write stories and stuff like that.”

Will a next-generation Manship take his place? The company has a few young family members working in various departments, though Manship isn’t sure whether any will take the reins. Whatever happens, three generations is a good run.

“We just never really were interested in selling,” Manship says. “I don’t know what else we’d do.”

Heroman’s Florist

Founded: 1878 Revenue: $1.4 million Employees: 15

It’s not all roses in the florist business. Heroman’s Florist has been around since 1878, plenty of time to experience economic hardship—the Great Depression, for instance. Add any number of recessions, including Louisiana’s experience two decades ago. David Heroman, the company’s chief operating officer, remembers it vividly.

“Through the recession in the late ‘80s, I remember Dad [Harry] coming home and siphoning gas out of the family vehicle to put in the delivery vehicle so we could deliver flowers,” he says.

Most recently, the Government Street store was closed for a month and half because of roof damage from Hurricane Gustav, which made landfall in south Louisiana in September.

“There’s always those obstacles,” Heroman says. “You’ve been through things, like the Depression, world wars, economic crises, 9/11. But when you have a backbone with family and a good staff you tend to say, ‘We’ve been here before. We’ll weather through it.’”

Heroman’s owes its longevity in part to finding a niche early on. The florist business grew out of a feed-and-seed operation the family started around 1830. Competition eventually proliferated to the point that the Heromans began growing, arranging and—most important—delivering mums and carnations, which was done with horse and buggy and bicycles in those days.

“We developed flowers as our industry because, to be honest with you, through the years there was too much competition—Sears Roebuck and things like that,” Heroman says. “We found nobody could do flowers as well as we could do flowers. We kind of morphed into the company we are today.”

Despite the economy and competition from big boxes and smaller retailers, Heroman’s appears to be on solid footing for the future. In terms of assets, there’s Heroman’s father, Harry, still president of the company and an indispensable source of advice. Then there’s the company’s 130-year-old pedigree. In Baton Rouge, the name “Heroman’s” is synonymous with the industry.

“All I can do is screw it up,” Heroman says.

Unless someone comes along with a big enough pile of cash, he adds, the business is likely to stay in family hands for the foreseeable future. Heroman, who didn’t join the business until he was in college, and that as a summer job, is only 37. As for the next generation’s interest in the florist trade, only the years will tell.

“The next crop is 8 years old and 5 years old,” Heroman says. “Now my daughter, who’s 8, says she’s coming to work here. She likes flowers and she likes to stick them in a pot and the whole nine yards. I’ll give her every opportunity to make that decision however she wants to.”

Kean’s the Cleaner

Founded: 1900 Revenue: $6 million Employees: 130

It’s likely the people who design women’s clothes these days aren’t thinking about the dry cleaner. Delicate buttons, broaches, sequins, appliqués, multicolor dyes, synthetic fabrics with natural fibers—it’s enough to make Rock Rockenbaugh, CEO of Kean’s the Cleaner, reach for the antacid.

“It hasn’t hit here yet, but I’ve read about it: They’re starting to use some kind of grass to make clothes, which is going to be a challenge for the dry-cleaning industry,” he says.

The weirder clothes get—and it’s mostly women’s clothes we’re talking about here—the harder they are to clean, the more time and attention they require, and the more money Kean’s has to spend cleaning them. All this does is make it more challenging for Rockenbaugh to stay with the business model—whipping stains others can’t—while grappling with no-frills competition that charges less. But that’s business.

Cotton was cotton and wool was wool back in 1900, when the Kean brothers bought a laundry that the Sisters of St. Joseph had run since 1868 to support an orphanage. The Keans focused on starching collars, which used to be separate from shirts. They expanded into shirts and dry cleaning. Over the decades, Kean’s took on uniforms and linen service for hospitals, hotels and restaurants.

As late as the 1950s, Kean’s had a massive market share—something like 90% of the market for laundry and dry cleaning. By 1985, the company had grown into a regional entity and was doing $36 million in revenue.

“It was a partnership,” Rockenbaugh says. “Back then, there was probably 10 to 15 Kean family members working. Each family member had a different sector of the business.”

Going into the fourth generation, the Keans sold off the biggest piece of their business to Cintas Corporation—uniforms and linen service—after a disagreement over whether to bring in nonfamily members to help run the company, Rockenbaugh says. Cintas didn’t want the laundry and dry cleaning.

“That’s what continues,” he says. “Good for me, because I wouldn’t have had this opportunity. Unfortunately for Kean’s, you lost a big player. They employed a lot of people.”

When Frank Kean sold the business to Rockenbaugh, Kean had hoped for a local buyer, though he was willing to look elsewhere in the industry if necessary.

“He said, ‘It’s a family-owned company, and I’d like you to keep it that way,’” Rockenbaugh says. “I know what family means, and even though my family is small, we’re going to run it like a family.”

On top of garments that are increasingly difficult to clean, there’s plenty of starch in the competition, including discount cleaners. In economically nerve-wracking times, meanwhile, customers tend to spend a little less on dry cleaning, Rockenbaugh says. Kean’s has closed a few locations that didn’t have enough volume, though the company recently opened a store in Prairieville.

“We don’t plan on not being in business,” he says. “We may do less of it. We may not be in all the places that we were. Today, it’s very difficult to be all things to all people. Will we survive? We’ll have to do things differently.”

Louisiana Companies

Founded: 1890 Revenue: Would not disclose Employees: 55

Louisiana Companies is an example of a company that’s known expansion and diversification, gotten knocked around financially, pulled in its sails and—after reconfiguring to a leaner trim over the last couple of decades or so—is humming along in the black.

It was created in 1890 as Louisiana Fire Insurance Company by a group of the state’s leading citizens. The scope of this early venture is revealed in its strategy of writing insurance on no more than one house in a given block, so if the whole block went up it wouldn’t wipe out the entire company.

In 1900, the firm signed a reinsurance contract with Great American Insurance Company of New York. In 1926, it leapt into the agency business. That lasted until the mid-1960s, when Hurricane Betsy walloped south Louisiana and Great American pulled out of the reinsurance contract.

Louisiana Fire Insurance became Louisiana Companies, a holding company for the firm’s insurance agencies, surplus lines brokerage, mortgage loans, real estate and computer services. The mortgage loan operations were divested in 1981, followed by the excess and surplus lines [wholesale insurance] company in 1986 and, finally, the real estate operations in 1989. Today, it’s one of the largest independent insurance agencies in the state, if not the largest, says CEO George Nelson.

As far as keeping the business afloat during tumultuous economic times, Nelson says it could be worse—that his business isn’t as tough as some other people’s.

“In our case, we don’t have any inventory that can become obsolete or spoil,” he says. “We’re not highly dependent on credit. We’re not constrained in this kind of environment. Relatively speaking, we are a personal-service business. So the only way to screw it up would be to spend more money than you make, which others have managed to do. So far we’ve avoided that.”

The company is still owned in part by descendents of its founders and investors, and there’s a direct link between Nelson and the company’s early ownership/management. His grandfather, Justin Querbes, who’d planned to move back to Shreveport and go into farming after graduating from LSU, wound up buying half the firm after an appeal for help from the company, which in the late 1920s was struggling in the run up to the crash of 1929.

Today, Nelson says the goal is to be “the last man standing,” retain its dominance and—despite regular inquiries from would-be buyers—”remain independent forever.”

“My goal is to have the company long outlive me as an independent business,” Nelson says.

Olinde’s Furniture

Founded: 1886 Revenue: $72 million [2007] Employees: 364

In 1886, Tom Olinde’s great-grandfather founded the New Roads general store that led, through several entrepreneurial twists and turns, to the family’s 21st-century empire: four Olinde’s furniture stores, four Ashley Furniture HomeStores and Baton Rouge Beer, a wholesale beverage company.

“We’re kind of straddling our risk,” Olinde says.

Gone are the hardware, farm implement and wholesale grocery operations the family used to run. As the market shifted, the Olindes shifted their plan, which helps explain why their businesses are still around. Surviving the Great Depression, two world wars and the late 1980s weren’t easy.

“We changed when we needed to change, and hopefully we can continue to do that,” Olinde says. “But also we’ve been a little bit diversified.”

Things aren’t getting easier. The furniture business is very attuned to the economy, and Olinde’s longtime independent competitors were disappearing from the Baton Rouge market well before the current troubles began. Kirschman’s, Kornmeyer’s, Valenti’s—they all belong to history now.

“It’s real hard to be a single, independent store now,” Olinde says. “You’re competing against a lot of very sophisticated retailers, the big-box guys, the Pottery Barn and Restoration Hardware, that are both catalog and have sophisticated Web sites and nice showrooms.”

In response, Olinde’s is trying to focus on things it does well compared to the big boxes—customer service, for instance—and is putting more emphasis on its own Web site. The company is taking other measures as well, including shortening its supply chain and buying from domestic sources when possible.

Olinde’s opened its newest store last fall between Covington and Hammond—a move the company might not have made had it been able to foresee the economic downturn, Olinde says.

“We’re a little bit concerned about the current economy, but what we’re trying to do is just pull in our sails a little bit and operate a little more efficiently,” he says.

Rabenhorst Funeral Home

Founded: 1866 Revenue: $5 million Employees: 55

Rabenhorst Funeral Home had already been in business nearly 70 years by that September in 1935 when it received two notorious customers: Huey P. Long, and the man widely believed to have been his assassin, Dr. Carl Austin Weiss.

Karen Rabenhorst Kerr, who runs the funeral home today with her three brothers, remembers her father talking about the incident. That the bodies of Long and Weiss were being kept in the same place didn’t go over well with some members of the community.

“There was some friction,” Kerr says. “He said they had armed guards at all the doors.”

Kerr’s great-grandfather, Charles Ferdinand Rabenhorst, a cabinet maker whose casket orders steadily outnumbered his furniture orders, started the business in 1866. No doubt he would have been astounded to know his business would be thriving 142 years later. Today, the company is the largest family-owned funeral home—and possibly the oldest family-owned business—in Baton Rouge.

Why does Rabenhorst persist when so many competitors have gone by the wayside? Good management over the decades is key, obviously. Phil Rabenhorst, Kerr’s oldest brother, says “a little kindness goes a long way,” and that’s what keeps families coming back.

“You’re always going to have a market, but it depends on how you conduct your business,” he says. “We like to think we handle our services with a requisite degree of discretion in a very dignified way. I think people respond to that. They appreciate that.”

The name recognition accumulated from 100-plus years in operation doesn’t hurt, Kerr says. But it is a business, and like any other business, Rabenhorst is not immune to market forces—new competition from large conglomerates, for instance. The funeral home receives regular offers to sell, but the Rabenhorsts have so far resisted.

“We really haven’t been interested in selling,” Kerr says. “There’s such a strong tie to the business because it’s our family.”

The company now is on its fourth generation. Kerr and her brother are in their early 60s. Is there a fifth generation ready, willing and able to keep it in the family? It’s by no means certain that will happen—and willingness doesn’t necessarily translate into competence.

“There were two fifth-generation members for a while,” Kerr says. “One went back to school, and the other decided to pursue another career. I don’t know if they’ll come back.”

Phil Rabenhorst is in no hurry to see the family’s run end.

“I think it does illustrate how there’s a lot of good in tradition,” he says. “Certain traditions need to continue. They’re going to have to change to a degree, but things become classics because they work. They answer a real need.”