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Largest Private Companies List Gives Snapshot of Pre-Pandemic NormalcyLock Icon

6 min read
AB 0522 Mark McLarty
<p>Mark McLarty, chairman and founder of McLarty Automotive Group, has focused his energies building U.S. operations during the past three years.</p> ( Karen E. Segrave)

Harps Food Stores moved up two slots to No. 14 on this week’s list of the 75 largest private companies headquartered in Arkansas, but CEO Kim Eskew is barely thinking about the fiscal year that ended 10 months ago.

Next year, he said, he expects Harps’ revenue to crack the top 10 thanks to a combination of expansion through acquisition and the impact of the coronavirus pandemic.

“The less people eat out, that’s good for us,” Eskew said.

That obviously won’t be true for every business on the 33rd annual list of the state’s largest private companies, but they all had fiscal years that ended before the pandemic began to affect economic life in Arkansas in March. This list, then, will serve as a baseline for pre-pandemic revenue.

Arkansas Blue Cross & Blue Shield, the nonprofit health insurance carrier based in Little Rock, again leads the list with 2019 revenue of $2.39 billion, its second consecutive annual decline after peaking above $2.5 billion in 2017.

No new companies entered the top 10 this year, but there was some shifting of position. Mountaire Corp. of Little Rock, with nearly 12% revenue growth to $2.35 billion, overtook Stephens Inc., whose revenue we have continued to estimate at $2.25 billion. (Stephens, the Little Rock investment bank, is notoriously secretive, but it is undoubtedly one of the state’s largest private companies.)

Mark McLarty’s McLarty Automotive Group of Little Rock jumped from No . 7 to No. 4 with a 33.6% increase in revenue, now bumping up close to $2 billion. Among the companies McLarty leapfrogged was RML Automotive, where his father, Thomas F. “Mack” McLarty III is vice chairman.

Next year’s numbers for car dealers on the list will undoubtedly look very different, as the auto industry has been among the hardest hit during the pandemic. Rick Parker, co-owner of Parker Automotive Group in Little Rock, told Arkansas Business that fleet sales had come to a screeching halt; no business travel means no car rentals, and that delays the need for car rental companies to replace their vehicles.

Kim Eskew
Kim Eskew, CEO of Harps Food Stores Inc., says that competition from Amazon is a growing concern, but more immediate competition comes from Walmart and a wave of new Dollar General stores. ( Beth Hall)

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Kim Eskew, CEO of Harp’s Food Stores Inc., and Mark McLarty, of McLarty Automotive Group, saw their companies move up the list of the state’s largest private companies

Home Cooking

On March 10, days before schools and then other establishments were ordered closed due to COVID-19, Harps announced that it would buy 20 stores from Town & Country Grocers Inc. of Fredericktown, Missouri, and it has added four more since February. When the conversions are complete, the chain will have 114 stores.

Harps is headquartered in Springdale, less than 20 miles from its most fearsome competitor. And while Walmart Inc. of Bentonville was crowing about a 10% increase in same-store sales during its first fiscal quarter (February-April), CEO Eskew was keeping his sales figures close to the vest. During March and April, Eskew said last week, Harps’ same-store sales were up more than 40%.

Even as the initial shock of the pandemic eased, sales are still tracking at almost 20% above last year, he said. (Most of the companies’ fiscal years track with the calendar year, but Harps closes its books on the last Sunday in August.)

The reopening of restaurants, with restrictions, has moderated the explosion in grocery sales, but Eskew believes the trend toward more home cooking will outlive the pandemic. “It’s going to take a long time for restaurants to really recover,” he said.

In and Out

After last year’s list appeared in the weekly print edition, Larry Zigerelli, then-CEO of FFO Home in Fort Smith, revealed that his company’s 2018 revenue was $169.8 million — good enough to be ranked No. 58 when the list was reprinted in the end-of-year Book of Lists. Displaced was Slim Chickens, the fast-growing Fayetteville restaurant chain.

But this year, FFO Home is out again and Slim Chickens is back in. It turns out that FFO Home has a sizable out-of-state equity investor, Sun Capital Partners Inc. of Boca Raton, Florida, that makes it ineligible for the list. (Zigerelli seems to be out as well — his LinkedIn profile says his tenure at FFO Home ended in 2019 — but FFO Home has closed its stores during the pandemic and no one responded to emails.)

Slim Chickens, meanwhile, moved up to No. 69 with revenue of $122 million in 2019.

Out-of-state investors deposed three other companies from the list:

• Flash Market Inc. of West Memphis, which was quietly acquired in July 2019 by Transit Energy Group of Greenville, South Carolina, a portfolio company formed last July by Energy Capital Partners Management LP of Short Hills, New Jersey. The terms of the sale by the family of the late Harold Patterson were not disclosed.

• Mid-South Sales Inc. of Jonesboro, which reported $143.3 million in revenue in 2018, was acquired by Cadence Petroleum Group of Asheboro, North Carolina, in January 2019.

• E. Ritter & Co. of Marked Tree sold a majority interest in its Ritter Communications subsidiary to Grain Management of Washington, D.C., and Sarasota, Florida, in November.

Tobacco Superstores of Forrest City has dropped off the list because its website now lists only 35 stores, fewer than half the number that it had in years past. The company has not provided revenue figures in several years but was estimated at $150 million when it operated some 90 outlets.

Those departures depressed the price of entry on the list to $91 million and made room for:

• No. 71 CTEH of North Little Rock, the environmental emergency response company whose revenue blossomed from $58 million in 2018 to $110 million last year;

• No. 73 Benton Properties Inc. of Springdale, a franchisee of Sonic restaurants;

• No. 74 Carco Capital Inc. of Fort Smith, which had not made the cut in almost a decade; and

• No. 75 Huffman & Co. of Little Rock, a construction and development company founded in 2004.

This is the last appearance on the list for Salmon Cos., the North Little Rock contract mail carrier. In the fiscal year that ended Sept. 30, Salmon had $341.1 million in revenue, according to the Husch Blackwell analysts who track U.S. Postal Service expenditures. By then, Salmon Cos. had been sold to 10 Roads LLC of Homewood, Illinois.


How the List Is Compiled

Arkansas Business introduced its annual list of the state’s largest private companies in 1988 and continues that tradition this week.

The list originally sought to find the 50 largest companies that are owned and headquartered in Arkansas, but it was expanded to 75 companies in 1996. The list seeks to be comprehensive and authoritative, but the very privacy of the private companies means that it has never been either.

There are undoubtedly companies that belong on this list that we haven’t identified, and others consistently decline to share their top-line revenue figure, which is the number used to rank the list.

More than 120 companies were surveyed for this year’s list. Of the 75 that made the final cut, 65 either volunteered revenue data or reported it publicly. The rest are estimates and are footnoted as such.

If you know of a company that should be on the list, or comes close and should be surveyed for future lists, please contact Editor Gwen Moritz at GMoritz@ABPG.com.

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