O.T. - obituary of the founder of a trading stamp company.
February 22, 1999
Curtis L. Carlson, 84, Founder of Trading Stamp
Conglomerate
By ROBERT McG. THOMAS Jr.
Curtis L. Carlson, who borrowed $55 from his landlord in 1938 and
didn't look back until he had turned a fledgling grocery-store
trading-stamp company into one of the world's largest private
businesses, died on Friday at a hospital near his home in Minneapolis. He was
84 and had been the sole owner of Carlson Cos., an international
conglomerate with 150,000 employees and $20 billion in annual revenue.
For a corporation whose more than 100 separate companies include the
Radisson and Regent International hotel chains, TGI Friday's and half a dozen
other restaurant chains, several travel agencies, a cruise line, the United States'
largest marketing services company, vast real estate holdings and a host of
other operations in 140 countries, the Carlson Cos. had distinctly humble
beginnings. So did Carlson.
Carlson, the son of a Swedish immigrant who became a neighborhood grocer,
had a childhood worthy of a Norman Rockwell painting with highlights by
John D. Rockefeller.
He was a golf caddy at 9, had his first newspaper route at 11 and quickly
added two others. He also operated a newsstand at a busy intersection,
worked his way through college driving a soft-drink truck and engaged in a
little light loan sharking.
In an exercise worthy of selling refrigerators to Eskimos, Carlson as an
18-year-old summertime bank messenger would lend cash-strapped tellers $5
on a Friday and collect $6 on payday the following Monday, transactions
whose three-day interest works out to an annual percentage rate exceeding
2,400 percent.
Somewhat redundantly studying economics at the University of Minnesota,
Carlson graduated in 1937 and went to work as a $110-a-month soap
salesman for Procter & Gamble. But he did not stay there for long.
At a time when some local department stores were seeking to assure repeat
business by giving customers Security Red trading stamps, exchangeable for
premiums, Carlson realized that such stamps would be ideal for grocery
stores, whose identical products left them little room to distinguish themselves
from the pack.
Acting on his vision, Carlson created Gold Bond Stamp Co. in 1938, with a
$55 loan -- and a bit of skulduggery: He paid a department store secretary $10
for a copy of the Security Red Stamp master contract, which became his
blueprint.
The idea was that a grocer would pay Carlson $14.50 for stamps that could
be exchanged for products that cost $10 wholesale but had a much higher
retail value. That made the stamps attractive to the grocer and to the store's
customers, but not at first glance to Carlson, whose $4.50 spread would
barely cover costs and overhead.
The magic of the business was that while the grocer would pay for the
stamps as they were issued, it might be months before customers
accumulated enough stamps to redeem them (a four-slice toaster proved to be
the most popular premium) and some would not be redeemed at all, leaving
Carlson with the float -- the use of the money -- for other investments.
The trick was to sell the program to enough stores to create a sizable float.
But as a salesman, Carlson -- who married his college sweetheart, Arlene
Martin, about the time he started the business -- was shameless. To draw
attention to his program he had his wife dress up in an eye-catching drum
majorette uniform and march through prospective stores extolling the glories
of Gold Bond stamps.
By 1941, he had signed up 200 accounts, but shortages created by World War
II made sales incentives superfluous, and for a while he had to take a job with
his father-in-law's clothing business.
Once the war was over in 1945, expansion came steadily. Indeed, Gold Bond
did well enough to finance a series of important acquisitions. By 1962, the
company had major investments in suburban Minneapolis real estate, including
the site of what became its $300 million headquarters in Minnetonka, and
acquired the downtown Radisson Hotel, which rapidly expanded into a
350-hotel chain.
As a result of the diversification, when the stamp business began to decline in
1968, the company continued to thrive. It changed its name to Carlson Cos. in
1973.
According to company figures, annual revenue, which did not reach $1
million until 1952, had climbed to $100 million by 1968, reached $1 billion in
1976 and topped $10 billion in 1993, with most of the growth resulting from a
blistering pace of diversification.
Although he acquired an 85-foot yacht, a luxurious hunting lodge, a family
compound at Lake Minnetonka and other trappings of wealth, Carlson found
nothing quite so much fun as business.
Accordingly, he became known as such a hands-on boss that his executives
made few major decisions, though they rarely complained. He paid them so
well (the top 25 getting new luxury cars every year) that they were said to be
bound to the company by golden handcuffs.
Never tempted to sell stock to the public, Carlson took pains a decade ago to
keep his company private -- and in family hands -- after his death by placing
all his businesses in a holding company, which his two daughters, Marilyn
Nelson and Barbara Gage, will now jointly own. He also set up trusts to hold
nonvoting stock for his eight grandchildren, six great-grandchildren and other
relatives.
Carlson, who is also survived by his wife, Arlene, and by a brother, Warren,
was so devoted to his business that after a brief retirement and quadruple
bypass heart surgery, he resumed control in 1991 and continued to run the
business until retiring again last year in favor of his elder daughter, Marilyn.
A man who gave millions to the University of Minnesota and other charities,
Carlson insisted the lure of money was not what drove him. "You keep score
with the money you make," he once said, "but you've got to get a thrill out of
doing something that works."
Copyright 1999 The New York Times Company |
