Women Businesses See Economic Fallout
By SANDI CAIN
Orange County’s largest women-owned businesses lost some of the gains they made in 2000 as the economic slump and effects of the terrorist attacks hurt companies across all industries last year.
The 25 largest women-owned businesses saw revenue decrease 2% to $1.1 billion last year, though local employment was up 4% to 4,369 workers, according to this week’s Business Journal list, ranked by 2001 revenue.
The list ranks companies that are at least 51% owned by women. Fifteen of the companies on this year’s list are 100% woman-owned.
Reflective of the economy as a whole, individual company results were mixed. Of the 19 companies that provided revenue figures, 10 posted increases while nine said revenue dropped.
But businesses contacted for this story remain hopeful that this year will be better.
“We’ve begun to see a real turnaround,” said Karen Powers, president of No. 5 Tustin-based Abbott Resource Group Inc., which fell two spots this year. “I’m not going to say it’s a flood (of business), but it’s a steady stream.”
For the second time in as many years, there’s a new No. 1,this time Irvine-based In-N-Out Burgers. The intensely private, family company headed by Esther Snyder is pegged by the Business Journal at $250 million in 2001 sales, based on about $1.5 million in revenue for each of In-N-Out’s 164 eateries.
This year’s higher estimate for In-N-Out drops Orange-based Villa Ford,last year’s leader,to the No. 2 spot. The auto dealer, owned by Karen Baldwin and Peggy and Brian Butler, opened a 35,000-square-foot showroom and parts and service department in August, but saw its revenue drop 11% to $126.9 million last year amid a tough year for Ford Motor Co.
“I’m projecting $138.8 million for this year,” Brian Butler said.
Profit was better than normal in the first quarter, he said, but business has been slower than normal so far in the second quarter.
The list includes Business Journal estimates for six companies that declined to provide revenue figures: In-N-Out Burgers; No. 7 Costa Mesa-based Alpha Systems Lab Inc.; No. 10 Anaheim Hills-based Eastwood Insurance Services Inc.; No. 22 Irvine-based McMahan Business Interiors; No. 22 Irvine-based Pacific Building Care Inc.; and No. 24 Orange-based Systems Integrated.
International Bay Clubs said its revenue dropped due to an expansion that’s in the works.
When the estimates are excluded, the remaining 19 businesses saw revenue drop 5% to $727.5 million.
The biggest sales increase by percentage was at No. 17 Irvine-based Spirit Silkscreens Inc., a maker and printer of T-shirts, which makes its debut with a 29% increase in annual revenue to $23.6 million. The company is opening its first global facility next month in Mexico City.
“We had a great year in 2001,” Chief Executive Kim Herbert said.
The next biggest sales increase was at association management company No. 21 Mission Viejo-based Merit Cos., back on the list after a two-year absence. Merit posted $17.5 million in revenue, up 22% from the prior year.
Chief Executive Melinda Masson attributed the growth to expansion into new areas of California and the launch of a new company called Community Technology Inc.
The new venture’s Internet-based offering helps associations create and manage community intranets. The system already is in use in Ladera Ranch. Merit also has created an online “Backyard Bulletin” that helps associations develop a simpler method of communication.
“It’s a newer amenity,” Masson said. “Homeowners are expecting it now.”
But almost as many companies posted losses as gains last year.
Abbott Resource Group saw the biggest drop,44%,after it sold a money-losing division, according to Powers.
The sale helped refocus the company on its core staffing services business, Powers said.
Other companies that saw double-digit setbacks last year included No. 18 Santa Ana-based Allen Tel Products Inc., a maker of telecommunications products that saw revenue dip 25% to $22.6 million due to the economic turndown, according to a spokesman.
And No. 20 Irvine-based Workplace Interiors LLC,though new to the list,posted $18.1 million in revenue, down from $21.3 million a year earlier.
“Our business is very economy driven,” managing principal Brooke Blomstrom said. “Expansions and new furniture are one of the first things to go in a downturn. It’s looking better for 2002. But it’s still going to be a tough year.”
The biggest jump in rank on the list comes at No. 7 Alpha Systems, up from No. 16 last year. The maker of computer video security products saw demand for its projects surge 50% after Sept. 11.
And Brea trucking services company Megatrux Inc. rose four spots to No. 8.
Megatrux opened an office in Las Vegas last spring and in Indiana last November. In addition, it created a new division,Megatrux Express,in Hawthorne last year to address a demand for deferred air freight providers.
“Regardless of anything else, freight still has to move,” President Karen Pelle said. “It may not be as abundant (as it was), but it may be moving smarter.”
Losing ground in rank was Allen Tel, which fell five slots from last year, the biggest drop on the list.
OC employment was up at eight companies but down at seven others. Four companies had no change.
The biggest employment gains were at No. 4 Anaheim-based QPS Inc., a maker of DVD drives, compact disc burners and high-capacity hard drives. QPS boosted its OC ranks by 50% to 45 from 30, though companywide employment fell. That was due to an expansion of the OC facilities to new digs in Anaheim last year.
And No. 15 Santa Ana-based ProCare One Nurses LLC, a nurses’ agency, posted employment gains of 29% to 900.
The largest percentage drop in employment was at Abbott Resource Group, which shrunk 42% due in part to shedding a division. Another staffing company, No. 11 Irvine-based Helpmates Staffing Services, saw its numbers fall by 12% to 38.
Four companies dropped from the list, the most notable being Huntington Beach-based Team Fuel, which ranked No. 5 last year. The company received an infusion of venture capital last year, hired a board of directors and is no longer 51% woman-owned.
Two others dropping off the list were No. 19 Seal Beach-based Pinnacle Petroleum Inc. and No. 25 Lake Forest-based iBASEt, a software maker that shared the No. 25 spot last year. Business Journal revenue estimates for both companies came in below this year’s $17 million cutoff point.
The last company to drop was No. 20 San Clemente-based Presenting Solutions, which made its debut on the list last year. The company, a distributor of presentation products, saw its revenue fall to $14 million.
Women-owned businesses,like minority-owned businesses,aren’t easily distinguishable on the surface, so newcomers on the list are as likely to come by way of referral or Business Journal research as from revenue growth.
One newcomer this year,Spirit Silk-screens,came to our attention when its owner, Kim Herbert, was nominated for the Business Journal’s Women in Business awards presented last month (see related story, page 1).
