Expanding Along with Carlson

A little-known centimillionaire gets rich by staying private

Curtis Carlson, a freewheeling entrepreneur who made his first millions selling Gold Bond Stamps, has a gilt complex. He loves gold. The energetic conglomerateur controls the worldwide operations of his Minneapolis-based empire (hotels, restaurants, discounting) from offices reminiscent of that Bondian archvillain, Auric Goldfinger: his gold-embossed telephone, gold vinyl chair and gold-striped sofa are set off by the rich, warm shades of a gold-hued carpet. When Carlson's Gold Bond Stamp operation was at its peak in the 1960s, its executives drove a fleet of company-owned gold Cadillacs. A gold-framed saying in one of his offices reflects Carlson's buck-starts-here philosophy: "Lest you forget, our sole purpose here is to make money. However, let's have fun while we are doing it."

A robust Midwesterner of sturdy Nordic stock, the tall, silver-haired Carlson, 64, keeps both his personal life and his business private, and he is barely known outside his native Minnesota. He has collected a string of 101 companies in ten groups without ever having sold a share of stock to the public, along the way amassing a fortune estimated at $100 million. Because his companies are private, they are not required to report sales or profits figures. But he has allowed TIME Correspondent Patricia Delaney a closer look at the far-flung activities of the Carlson Companies, Inc.

Combined revenues, he revealed, totaled $1.041 billion last year, up a remarkable 170% from 1975. Now Carlson hopes to hit the $2 billion sales mark in 1982. Carlson does not disclose profits because he plows everything back into the company and thus keeps taxes low. Says he: "Net profits are meaningless. Growth and cash flow mean everything."

The most visible part of the Carlson empire is the Radisson Hotel Group, which last year generated revenues of $90 million. There are 19 hotels with a total of 7,139 rooms, and Carlson hopes to expand by 1,000 rooms a year. He opened a resort hotel a year ago in Scottsdale, Ariz., and the Radisson Oasis, built near the Pyramids outside Cairo, will be finished by the end of 1979. Farther afield, Carlson is negotiating with the Chinese to build a hotel in Peking. He has a particularly active period of growth planned for two recently acquired restaurant chains, TGI Friday's and Country Kitchen. Carlson aims to increase the Victorian-style TGI Friday's from the present 30 outlets to 55 by 1984 and add 100 outlets a year over the next five years to the 320-restaurant Country Kitchen chain.

Two stalwarts among the Carlson groups accounted for almost half of last year's billion-dollar-plus sales. One of them, the catalogue showroom retailing operations, which grossed $216 million, embraces brand-name discount chains that require little in the way of display space, sales help and security personnel because customers order merchandise from catalogues. Thus the companies can undercut many of the big low-price chains like K mart. The other, the Carlson Premium Group, which last year got one-third of its $250 million revenues from Gold Bond Stamps, organizes incentive programs for companies that reward high-achieving employees and dealers with expensive trips and gifts. Carlson also has a sporting-goods importing business, a diamond wholesaling operation, a gold-jewelry manufacturing firm, a natural gas exploration and production company, and owns or manages $200 million worth of real estate across North America.

Not bound by any need to satisfy directors or shareholders, Carlson moves freely. Like a hummingbird, he darts from company to company, quickly moving in to focus attention on one aspect of his operations, then moving on to the next. A magnet for minutiae, he once dropped in on one of his hotels unannounced and wrote a lengthy memo to the manager on the impropriety of serving mashed potatoes with an omelet; according to Carlson, the accompaniment should have been French fries.

He normally keeps dozens of new deals going at once. His independence gives him a competitive edge over rivals, who must go through strict management channels. Once, while spending a weekend relaxing aboard his company's 85-ft. yacht, the Curt-C, Carlson heard a Milwaukee promotion company that produces inflight shopping catalogues was for sale. He bought the firm within two days.

To his employees, Carlson is part saint, part demon. He works tirelessly, and expects nothing less from subordinates. His executive row is nicknamed Ulcer Alley. Managers must meet monthly profits targets or file "deviation reports" explaining how and why they were unable to do so. An annual four-day show-and-tell fiesta at the sprawling company lodge at Minnesuing Acres near Superior, Wis., also spurs executive performance. Corporate officers are required to recount how they have or have not met their sales goals of the year. Recalls a former employee: "Carlson would chew you out for three hours straight while others stared down at the table, dreading that they would be next." Says Carlson: "You have to keep a little tension in the air, or things get too lackadaisical."

But Carlson, who once threatened to drive nails up through a salesman's chair to get him out on the road, amply rewards performance. Roughly 20 executives get a new luxury car every year, and high-achievers can receive bonuses of up to 50% of their salary. To celebrate the company's ascension to the $1 billion sales mark, 39 senior officers and their spouses will be treated to a three-week trip through the Orient this month. More important, says Carlson, "my top executives will retire as millionaires."

Ever since he was young, Carlson has shown a colorful blend of salesmanship and independence. After graduating from the University of Minnesota in 1937, he took an $85-a-month job as a soap salesman, but the entrepreneurial spirit moved him in 1938 to ask his landlord for a deferral of a month's rent. With this $55 he started the Gold Bond Stamp Co. He quit his job and began selling the stamps to neighborhood grocers until 1952, then advanced to supermarkets. The seven-to eight-month "float" between the time that he sold the stamps to the grocer and the time the customers cashed them in gave Carlson the money needed to buy the premium gifts and print stamps. Long before the market in trading stamps slumped in the late 1960s, Carlson began to diversify. His first major move came in 1961, when he bought the venerable Radisson Hotel in Minneapolis, using the convenient float. In subsequent acquisitions, he had generous lines of credit from many banks.

Carlson still has so deep a respect for a dollar that he continues to pump his own gas at a self-service station. But he generously donated $1 million to the drive, of which he is codirector, to raise $20 million for the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota. He is active in other charities and has finally delegated enough authority to set aside time for regular sessions of swimming and tennis. But the companies remain his passion. A pillow on Carlson's gold-striped sofa reads: "I love this business. Sit down and watch me run it."

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