December, 1991

Fruits of Thought

Buying The Business Back

Rarely has the close of an era been so neatly capsulized as with the announcement in November 1991 that a British court has declared Asil Nadir, the man who built Polly Peck from nothing, personally bankrupt.

The decade of the 1980s was a period of enormous change in produce. The top three banana companies changed hands, supermarkets experienced a rash of leveraged buyouts, the oil companies pretty much gave up on growing produce, and a welter of foreign companies, Dalgety, Albert Fisher, Polly Peck and others went on an American produce acquisition binge, ricocheting around the continent, making history and millionaires.

But for all this, Polly Peck was special. In the 1980s, theirs was the single best performing stock in the world. For a brief moment they were the fastest growing produce company. And on paper at least, Asil Nadir went from being a poor Cypriot immigrant to one of the wealthiest men in the world. And now it all lies in ruins.

My family played a role in the Polly Peck saga and in the roaring eighties of produce. My family has a long established story in the produce industry, from the days when my great-grandfather, Jacob, was a wholesaler in the old Wallabout Market in Brooklyn, to my grandfather, Harry, an auction buyer in New York, to my father and uncle, Michael and Sydney, who sold the family’s business, Prevor Marketing International, Inc., to Polly Peck 3 ½ years ago.

Prevor was Polly Peck’s first U.S. produce acquisition and it turned out to be merely the nose of the Polly Peck camel sticking in the American produce tent. In rapid succession, Polly Peck acquired Mendelson-Zeller, Standard Fruit & Vegetable Co. and, of course, its crown jewel, Del Monte Tropical Fruit Company.

The empire now is in various states of disarray, with companies being sold for pittances to salvage what Polly Peck’s administrators can get. They pin their hopes on a stock offering for Del Monte, but with banana prices in the cellar, it’s not going to be easy. Mendelson-Zeller has been sold or, more accurately, the little bit that remained of the company. Other produce companies are on the verge of a sale or being closed down. But for my family, our personal involvement in the Polly Peck saga has drawn to a close.

My father, Michael, and brother, Barry, have signed a contract to purchase Prevor Marketing International, Inc. back from Polly Peck. What’s interesting though, is that when Polly Peck bought the company for twelve million dollars up front back in 1988 – Polly Peck sent press releases around the world trumpeting its achievement. This year, as it sells companies for fractions of what it paid, the press releases no longer arrive.

I look at my father now and he seems happier. He was happy to sell years ago. Not only was the price right but the business had changed and all that exporting and importing had come to require not merely produce marketing skills, but an enormous facility for lending money to growers around the globe and carrying export receivables to distant lands. To be freed of that financial burden was like lifting a weight off my father’s shoulders.

And yet, these past three and a half years have had pressures all their own. And when I look at my father today, I see a new kind of relief.

Perhaps, in a sense, nothing much has changed. After all, my father and brother, serving as chairman and president, have run the company without interruption.

But they are enormously conscientious people, and even if they ran the company themselves, they did it to achieve the goals of the owners even when that conflicted with their own judgment.

So, if Polly Peck was demanding sales growth, my family would get it for them. The company today has double the units on the Hunts Point Market that it had when my family sold it to them. Polly Peck wanted growth in imports, so contracts would be signed and advances made to growers throughout the Caribbean.

But in truth, this all rubbed my father the wrong way. He never worried about sales, only about profits. It didn’t matter to him if the company was big or small as long as it was profitable. None the less, Polly Peck’s mad pursuit of growth was the marching order and so my dad marched.

The truth is my family did not intend, or even particularly want to buy the company back. In the end, Polly Peck sold the company to them because no one else could run it. My family’s employment contracts ended the end of 1991. So it was fish or cut bait.

It became clear that the trustees, however well meaning they might be, just didn’t know the produce industry well enough to know what to do with the company or how to sell it.

There were longtime employees at risk, a proud name, and a good business for someone willing to work hard. And now, the company is my dad’s and brother’s to do with as they choose.

“Free at last, free at last. Thank God Almighty, we’re free at last,” sang my father when asked how he felt about buying the company back. He meant free of the pressure to answer to others.

Janis Joplin once sang that freedom is just another name for nothing left to lose.

Psychologically, I think that’s true. Now if a division doesn’t work, it may have to go; if sales aren’t there, then cuts have to ensue; and if opportunities exist they can be pursued.

My father built a business from scratch, sold it for a small fortune and bought it back again. He has nothing to prove. He can just do what makes sense and what’s fun.

The funny thing is that this strategy may very well wind up making the best profits as well.  pb