Lewis, Reginald F. 1942–1993
Reginald F. Lewis 1942–1993
Attorney, financier, entrepreneur
For some time before his death in 1993, Reginald F. Lewis was the most prominent black businessman in America. Lewis was the owner of TLC Beatrice International, a $500 million European conglomerate in food processing and distribution. His purchase of Beatrice International in 1987—a billion-dollar deal—was the largest offshore leveraged buyout in the history of American business. That spectacular coup came only months after Lewis reaped a ninety-to-one return on the sale of the McCall Pattern Company, a firm he had owned since 1984. Lewis, a Harvard-educated entrepreneur with a history of success on Wall Street, was hailed in the pages of Black Enterprise magazine as “one of the most celebrated businessmen of 1987,” a man who “defines a new generation of black entrepreneurs…that receive four stars for their boldness and daring.”
From the time of his purchase of McCall onward, the Baltimore-born investor found himself the subject of intense scrutiny as the first black to enter the high-stakes world of billion-dollar business takeovers. Lewis was never comfortable with the idea that he was a role model. As he put it in Fortune magazine: “It’s tough enough to operate without the added pressure that if I make a mistake, I let down 30 million people. I think of myself as an American of African descent who’s committed to what he is doing. If that work is an inspiration and helps others of my ethnic background, or any other, I’m delighted. But I don’t want it to seep into decisions of how we evaluate our business.” Lewis also told the New York Times: “I’m very proud of the accomplishments of African Americans, and I’m delighted that people feel [my] accomplishment adds to that list. But to dwell on race—to see that as something that becomes part of my persona—is a mistake, and I do everything I can to discourage it.”
Lewis’s penchant for profit-making began in his childhood. Family members and friends recalled him as an enterprising, hard-working youngster with a good head for business. He was born in 1942 in a working-class Baltimore neighborhood and grew up with three brothers and two sisters. Both of his parents worked, his mother as a postal clerk and his stepfather as a teacher. Lewis himself went to work at the age of eight, delivering newspapers. Fortune reported that as a child Lewis kept his earnings
At a Glance…
Born December 7, 1942, in Baltimore, MD; died of a cerebral hemorrhage, January 19, 1993, in New York City; son of Carolyn Fugett (a postal worker), stepson of Jean S. Fugett (a teacher); married Loida Nicolas (an attorney); children: Leslie Nicolas, Christina Nicolas. Education: Virginia State University, A.B., 1965; Harvard University, LLB., 1968.
Paul, Weiss, Rifkind, Wharton & Garrison (law firm), New York City, attorney, 1968-70; Murphy, Thorpe & Lewis (law firm), New York City, partner, 1970-73; Lewis & Clarkson (law firm), New York City, senior partner, beginning 1973; TLC Group L.P. (investment firm), New York City, founder, chairman, and chief executive officer, 1983-93.
Member: American Bar Association, National Bar Association, National Conference of Black Lawyers.
Selected awards: Distinguished Service Award from American Association of Minority Enterprise Small Business Investment Corporations, 1974; company TLC Beatrice International named top black business in America, 1988, by Black Enterprise magazine.
Addresses: Former office —TLC Beatrice International, 9 West 57th St., New York, NY 10019-2600.
hidden in a tin can known as “Reggie’s Hidden Treasure.” One day his grandmother chose a present for him to give his mother, but Lewis would have no part of it—the gift’s cost would have consumed all of his savings. A less expensive alternative was negotiated. Lewis’s mother told Fortune: “[Reginald] wasn’t cheap. But he was always thinking. He knew exactly what he had. He would never wipe himself out.”
Lewis’s parents separated when he was six, and he went to live with his maternal grandparents. The boy soon bonded with his grandfather, listening attentively to the older man’s war stories of France during World War I. After attending a Roman Catholic private school, Lewis went on to Dunbar High School, where he excelled both in his studies and in sports. He was a quarterback on the football team, a shortstop on the baseball team, and a forward on the basketball team. In all three sports he was named captain. Meanwhile he worked nights as a waiter in an exclusive country club. Jean S. Fugett, Lewis’s half-brother and the current chief executive officer of TLC Beatrice, told the New York Times: “In those days, all [Reginald] ever did was work and play sports. He was always extremely industrious and never one for idle time.”
As a young teen Lewis thought he might have a chance to play sports professionally. Later he realized his chances of achieving major league success were slim, so he transferred his energies to his studies. In 1961 he entered Virginia State University, where he majored in economics. After graduation he went directly to Harvard Law School. There, in his third year, he found the direction for his career in a course on securities law. “I found it completely fascinating,” he told the New York Times. “I wrote my third-year paper on takeovers. That, plus my general interest in economics, moved me in that direction.”
Lewis graduated from Harvard Law School in 1968 and went to work with the prestigious New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison. After two years there he moved on to Murphy, Thorpe & Lewis, the first firm in which he was a partner. Lewis told Black Enterprise that his early years as an attorney gave him valuable lessons that he later applied to his business dealings. “I practiced law in a small firm, and we were always very client-oriented,” he said. “We had to listen to a lot of different people with a lot of different views on how things should be done and still bring value to the client. Through that process I began to identify certain characteristics that were common to successful people, such as integrity, a high energy level, high ethical standards, and the capability to work through challenges and disappointments, which are, of course, inevitable in business. I think you begin to get a good feel for who can perform and who can’t, and that becomes the common element that you look for.”
In 1973 Lewis reorganized his law firm with a new partner, Charles Clarkson, giving the firm the winsome title of Lewis & Clarkson. The partners concentrated on Lewis’s strong suit: corporate law and the venture capital business. Much of the firm’s work was spurred by new federal legislation aimed at encouraging business opportunities for minorities. Lewis found himself helping clients such as General Foods and Aetna to launch programs intended to stimulate minority enterprises. He also quickly developed a reputation for venture capital development for minority-owned firms. According to Black Enterprise, “Over the years, Lewis…helped a large number of minority enterprise small business investment corporations (MESBICs) acquire funding and gained a great deal of practice in the art and science of structuring deals. As general counsel to the Washington, D.C.-based American Association of MESBICs …between 1972 and 1979, Lewis became recognized as an architect of the MESBIC industry.” It has been estimated that Lewis negotiated more than $100 million in transactions for MESBICs in the years between 1973 and 1984.
Working with venture capital companies in that capacity served as a training ground for Lewis. It was only a matter of time before the enterprising attorney decided to do some deals for himself. In 1983 he formed an investment firm called the TLC Group, a name whose initials he consistently refused to disclose. (Most observers agree that the most likely combination is “The Lewis Company.”) To staff the new company he turned to several old friends: Everett Grant, who had been with Price Waterhouse in public accounting; Thomas Lamia, a Washington D.C. lawyer; Cleveland Christophe, a Citibank executive; and his law partner Charles Clarkson. The TLC Group soon set out in hot pursuit of its first big game, the McCall Pattern Company.
McCall, a home-sewing products and publishing concern, was struggling under sagging sales and deep debt. Lewis purchased the company with a million dollars of his own money and a $24 million loan to the TLC Group from the First Boston Corporation, a New York investment banking firm. Lewis told Black Enterprise that although McCall had been overlooked by many Wall Street analysts, it was actually a prime candidate for acquisition: “A lot of people had written off [McCall] as not having much of a future, [but] the more I researched the facts the more I thought it had a great future, because its strongest asset was its most fundamental asset of all, and that was the people. It had a wonderful group of employees at the top, the middle and throughout the organization who had excellent experience, who knew their business very well and who were committed to doing what was necessary to keep the company dynamic. The company had actually performed very well for a long period of time. When I delved into the facts, I decided that the fundamentals were actually quite good.”
In the wake of the 1984 leveraged buyout of McCall Pattern Company, Lewis kept the outfit’s top management team virtually intact, drawing from their expertise to chart a new course for the company. He introduced a new emphasis on cost-containment and cash flow management. In order to restore the appearance of fiscal health, he engaged in some creative accounting, buying a McCall’s factory in Manhattan, Kansas, then leasing it back to the company. In due course, McCall succeeded in raising an additional $22 million from the bond market. In Black Enterprise, Alfred Edmond, Jr. wrote: “In the case of McCall and TLC, it was a marriage made in heaven. Thanks to the introduction of new products, including a line of greeting cards, and an emphasis on quality, cost control and cash flow, Lewis completely rejuvenated the sluggish 113-year-old company within two years. McCall’s had its best year ever in 1986, generating $63 million in sales and $4.9 million in earnings.”
The following year Lewis sold the McCall Pattern Company for $95 million, reaping an astonishing 90-to-l return on TLC’s initial cash investment. That dramatic coup assured Lewis a top ranking in Wall Street’s financial community and friendship with other Ronald Reagan-era power brokers, such as Drexel Burnham Lambert executive Michael R. Milken. Milken helped Lewis to engineer his next major transaction: the Beatrice takeover.
A multinational company with products as far-flung as Italian ice cream, German sausage, and Irish potato chips, Beatrice International’s operations are spread throughout Europe, Latin America, and Asia. Lewis liked the company for several reasons. As a food products concern not tied to the U.S. dollar, it seemed amply protected from both consumer buying cycles and the softening of the dollar in the late 1980s. And as a company with many separate operations, certain of those operations could be sold off to finance the deal—the typical leveraged buyout, in other words. This indeed is what transpired: TLC acquired Beatrice International for $985 million, then sold the Canadian operations to a Toronto firm for $235 million and the Australian operations for an additional $100 million.
When the ink dried, Lewis found himself at the helm of a huge business empire located in all parts of the globe. The new boss let it be known that he would retain the hands-off managerial style he had used at McCall. “We rely on managers to understand their businesses,” he told Time magazine. “I want the people who work for me to look at challenges, roll up their shirt sleeves, and get to it.”
Lewis was well known before the Beatrice deal, but afterwards he ascended to that sort of celebrity reserved for those who successfully manipulate vast quantities of money. He was not comfortable in the limelight, feeling that his accomplishments were not at all related to his race. The entrepreneur told Black Enterprise: “I’m always amused by people who talk about the overnight success of TLC Group. We’ve been banging away at this step-by-step for 20 years. I’m often disturbed by the notion of the so-called glass ceiling, but you know, glass can be broken. I’ve never liked hearing people say you can’t do this or you can’t do that. The point, though, is not to just say it. It’s important to be prepared to act and sacrifice, to accept [the fact] that if this is what you want, just wishing it would happen is not enough. You’ve got to follow through and take the necessary steps to make it happen.”
In the wake of the Beatrice acquisition, Lewis sold more assets in order to retire some of the conglomerate’s debt. By 1990, the trimmed-down company boasted $1.1 billion in annual sales from 15 operating units employing some 7,000 people, mostly in Western Europe. The size and scope of Beatrice assured Lewis the position of most successful black businessman in America. Not everything went as planned, however. The TLC Group withdrew a public offering of stock in 1990 when Wall Street investors questioned the amount of profit to be reaped by the Group and the high price per share. Later that same year Lewis was served with two lawsuits stemming from his management of McCall Pattern Company. Two different McCall’s buyers accused Lewis of heaping debt onto that company, siphoning away key assets, and keeping misleading financial records—charges Lewis denied vehemently. In 1993, McCall’s was reorganizing after a Chapter 11 bankruptcy proceeding.
Lewis made philanthropy a part of his agenda for many years, donating generously to political candidates such as Jesse Jackson and private urban renewal programs. In 1992 he gave a $3 million grant to Harvard Law School for the establishment of the Reginald F. Lewis International Law Center, the first building at that university named after an African American. He also contributed a million dollars to Howard University and a sizable gift to his alma mater, Virginia State. Late in 1992 Lewis—who had remained trim and athletic throughout his career—discovered he had brain cancer. He managed to arrange for an orderly transition of power at TLC Beatrice, naming his stepbrother Jean Fugett, Jr., chairman of the company. Lewis died of a cerebral hemorrhage on January 19, 1993.
Several hundred people attended Lewis’s funeral at the Riverside Church in Manhattan on January 25, 1993. Among the mourners was longtime Lewis friend David N. Dinkins, mayor of New York. Dinkins told the crowd: “Reginald Lewis accomplished more in half a century than most of us could ever deem imaginable. And his brilliant career was matched always by a warm and generous heart.” Dinkins added: “It is said that ‘service to others is the rent we pay for space on earth.’ Reg Lewis departed us paid in full.”
Black Enterprise, October 1987, pp. 21-22; November 1987, pp. 9, 42-46; June 1988, pp. 150-52; February 1990, pp. 23-24; March 1993, p. 17.
Business Week, August 24, 1987; April 13, 1990, p. 100.
Financial Times, August 11, 1987.
Fortune, September 24, 1987, pp. 122-23; January 4, 1988, pp. 32-33; January 15, 1990, pp. 123-24.
Jet, February 8, 1993, p. 33; April 26, 1993, pp. 9-10.
New York Times, July 10, 1987; March 20, 1988; January 26, 1993, p. B-6.
Time, August 24, 1987, p. 42; February 1, 1993, p. 23.
U.S. News & World Report, August 31, 1987, p. 44.
Wall Street Journal, August 11, 1987.
Washington Post, August 23, 1987.
—Anne Janette Johnson and Warren Strugatch
"Lewis, Reginald F. 1942–1993." Contemporary Black Biography. . Encyclopedia.com. (September 21, 2017). http://www.encyclopedia.com/education/news-wires-white-papers-and-books/lewis-reginald-f-1942-1993
"Lewis, Reginald F. 1942–1993." Contemporary Black Biography. . Retrieved September 21, 2017 from Encyclopedia.com: http://www.encyclopedia.com/education/news-wires-white-papers-and-books/lewis-reginald-f-1942-1993