2008 Articles
October 13, 2008
Atlanta Business Chronicle: "Retreat, hell! Growth firms still see growth"
Many of Atlanta¹s fastest-growing private companies are taking a pragmatic approach about the prospects of continued growth in uncertain times. Executives with several Atlanta companies provided insights about their strategies in a shifting economic landscape.
Atlanta Business Chronicle - by J. Scott Trubey Staff writer
Though some had a wait-and-see attitude and some are more bullish than others, none are in a panic or retreat mode. Dan Campbell, president and CEO of Hire Dynamics LLC, a professional staffing firm, said his company is receiving more résumés as
layoffs increase, particularly in the finance sector.
The company has not felt an immediate impact firms are still hiring but Campbell said the company is waiting to see if there will be a trickle-down effect.
As a fast-growing company it definitely has us going in a more cautious mode, Campbell said.
Hiring has slowed in many sectors, but the company is bullish about healthcare and about retail- and hospital-based pharmacies, which are seeing tremendous growth despite the souring economy.
The key, Campbell said, is not to over-extend and to focus on the company's core.
There's no doubt there¹s a little retrenching going on. We are not aggressively looking at opening up a lot of outside offices, Campbell said. The company instead is focusing on growth within its existing offices.
A downturn in the economy is precisely what Hotel Equities Inc. President and CEO Fred Cerrone said he's been preparing his company to weather and come out stronger on the other side.
Hotel Equities, which operates 24 mid-scale hotels throughout the Southeast with six more hotels under construction, is forging ahead with its plans to grow to 50 owned or managed hotels by the end of 2010.
"We're comfortable. We¹ve selected good markets, we¹ve selected good flags, we've got good teams in place and we're not over-leveraged," said Cerrone.
Cerrone said the company will grow through hotel development, buying existing projects and taking over hotels as a third-party manager. The company has 11 development deals in place and is investing about $60 million in five properties currently under construction in Florida and Georgia.
Cerrone said he expects to see accelerated growth through other channels, such as bank foreclosures and assuming management contracts of distressed properties in good markets.
Hotel Equities also is doubling the size of its Dunwoody offices an increasing its investment in employee and management training.
"The credit crunch hasn't directly impacted business operations at Stratix Corp., which is not heavily leveraged and doesn't depend on bank financing for its daily operations," said CEO Bonney Stamper Shuman.
Stratix is a mobile technologies systems provider to retail stores, transportation and logistics firms and the government.
"Clients, particularly on the retail side, such as The Home Depot Inc. (NYSE: HD), are being more conservative in how they spend their money, prolonging projects, such as adding new stores, expanding older ones and upgrading technology," Shuman said.
"There is certainly a trickle-down effect," she said. "We're fortunate we've been very conservative and therefore we haven't [directly] felt the cash crunch."
"If we stay flat this year, that¹s a moral victory," said Shuman, whose firm employs 150. When many companies are slashing their workforce or closing their doors, Shuman said staying flat is an accomplishment.
Mike Landry, founder and chief technology officer at Servigistics Inc., an Atlanta-based software firm that specializes in inventory and workforce management, said he still expects double-digit growth for the year, though
it might not be as robust as previous years.
The company is focused on selling its products, which help companies like General Electric Co., Rolls-Royce Plc and Embraer Aircraft Maintenance Inc. become more efficient in ordering inventory, managing their workforces and accessing the trapped capital invested in parts that sit in warehouses.
Internally, Servigistics is clamping down on costs such as travel budgets, while exerting more effort in marketing its products. Landry said the company ultimately sees this as a growth time.
"We get more attention but we have to manage a longer sales cycle than we do otherwise," he said.
Jonathan Silver, the president of Atlanta Coffee Supply Group LLC, a supplier to high-end restaurants and coffeehouses, said the companies he supplies are changing their buying habits. Many are waiting until stocks run
out to order coffee and even cup lids.
To maintain cash flow, Silver said he¹s keeping fewer products in the storehouse.
"Today it's about is 'What are we going to sell this week?'" Silver said.
The company is also ramping up its marketing and considering cross- promoting its Lakehouse Coffee brand with its restaurant customers.
Ramesh Maturu, the vice president and co-founder of information technology firm Pyramid Consulting Inc., said the company is taking a wait-and-see approach to see how the downturn will affect its clients.
"We're still growing but not at the pace we thought we would last year," Maturu said. Pyramid is not heavily leveraged, and most of its clients are sound companies.
The company is trying to more closely manage expenses.
Reach Trubey at strubey@bizjournals.com.