For Superior Group of Companies CEO Michael Benstock, managing growth at a company with a wide spectrum of product and service offerings is a welcome challenge—and provides his team and the company’s investors with great opportunities.
Superior Group of Companies provides products and services to some of the world’s most respected brands with call center support, custom promotional products and uniforms via seven signature brands within its three divisions: Superior Branding Solutions, Superior BPO Solutions and Superior Uniform Group. The publicly-traded company delivers more than 12 million promotional products each year, communicates with more than 10 million consumers annually and outfits more than 5 million American workers each day.
Since being named CEO in 2003, he’s increased stock price 228.7% (approximately 8.9% compound annual growth rate), championed taking calculated risks with 7 acquisitions since October 2003, doubled SGC’s revenue from $134.3 million in 2003 to $266.8 million in 2017 and created 1,340 full time jobs (from 897 employees in 2003 to 2,237 in 2017). By driving the company to be more entrepreneurial, Benstock envisions Superior Group of Companies will be a $460 million company by 2022.
Benstock spoke with Chief Executive about the benefits of taking calculated risks and growing the business through acquisitions, the challenges of rebranding the company earlier this year and how he keeps on top of three diverse business units in the SCG family. Here’s what he had to say:
Taking calculated risks and closing acquisitions
I think a calculated risk is extremely important. And as I’ve grown in my role, my risk tolerance is different, and how I look at risk is much different. And I realize that most of my responsibility today is managing risk. My early years—part of that would be before I was CEO and even some after I became CEO—we bought some broken companies and fixing them was the goal. And the amount of time and effort going into broken cultures, broken companies, and fixing them, I finally realized about 10 years ago, that that’s not what I wanted to do anymore. If we’re going to find a broken company, we’re basically going to roll it up right under our company and close it down.
And we did that during the recession with a company called Boyd, and that was pretty easy—within one day, we were the supplier to their customers and really, it was quite smooth. But along the way I realized that deepening the talent within the organization and finding other great entrepreneurs who viewed things as we did, and maybe even had a more holistic view of the world so that they can contribute more, and even enhance our culture, was more important than just adding revenue.
So I would say every acquisition we’ve done since then, and there have been four of them since then, has been with great operators. Really, really smart, dedicated, long-term thinking entrepreneurs, who had built wonderful businesses from scratch. Still had a ton of energy and motivation to work side by side with us, following those acquisitions for years and to grow those businesses and extend the platform of offerings that we as Superior Group of Companies have.
“I realize that most of my responsibility today is managing risk.”
The process of rebranding as Superior Group of Companies from Superior Uniform Group earlier this year
We had done it 22 years ago, in 1996, when we changed the name of the company from Superior Surgical, to Superior Uniform Group. So I at least had the benefit of having gone through that. That was something that, having seen it, I knew what it felt like, I knew what was done right then, I knew what we could do better now and I knew that through the use of social media and many other outlets we could get the word out there a lot faster than we were able to in 1996.
It was really a collaborative effort between all of our divisions, and all the presidents of each of our divisions, to come up with a name. We said, “What do we want to do in coming up with the new name?” So the company that better represents who we are, because it was confusing. But we were going a call center a client, and we would present the office gurus to say they’re part of Superior Uniform Group. And they’d say, “How does that make sense? You’re part of the uniform company. But it makes a lot more sense for you to be part of a branding company because that’s what you’re doing—brand enhancement.”
So we finally did settle, with all of our marketing people, from all the divisions collaborating, on the name Superior Group of Companies and its acronym SGC, which has actually been our symbol on the Nasdaq since 1968. It all fit very nicely. And I can tell you, it’s a much easier story today to tell the customers and to tell to investors, because the first part of most discussions with either of those before was, “How does it make sense that you’re part of the uniform company?” Unless you were actually going in as the uniform company.
But today, looking at our business nearly $100 million or more of our annual business is not uniform related. It does make sense that this is the name. The rollout challenge was coming up with what’s our signage? What’s on our business cards? What’s our email sign off going to be? All the different parts of that, being publicly traded, we needed shareholder approval. We had to field a lot of questions from shareholders as to why this was necessary. Some of these shareholders have been shareholders of ours and institutional owners since 1968.
Why does this makes sense? They saw the first name change 22 years ago, and were wondering why we’re doing it yet again. But I think it’s part of the constant evolution of a company. So, yes, there have been some costs, and fortunately, we’re in the branded merchandise business, in the branding business, so rebranding our new name has been pretty easy. We are able to develop our websites very quickly and have been ready pending shareholder approval. And literally that day, we did an employee event. The day we got shareholder approval as well, a live streaming event across 11 countries where we have employees—in India, China, the U.S., El Salvador, in Belize.
That was a wonderful event where everybody was wearing company clothing. Everybody had a chance to say how they felt about the new company name, and be part of the rebranding of a company that has been around a hundred years, nearly. And it was very, very, heartwarming.
We’re a very tight organization that gave everybody in the organization the opportunity to see that we’re really one company. And we had 2,500 employees around the world, and we forget sometimes how important some of them are to our success. So we did great events, we did employees events, did customer events, we did an email blast. We certainly hired a PR firm to help us get the word out there and they made a lot of phone calls to customers. They would understand it in each of our divisions, but it’s gone over very, very well. And really, I can say only positive things about the outcomes.
Managing the three different service areas under the SGC umbrella
I’ve been in business 40 years, and I came up with the operational side. One of the things I learned, is sooner or later you have to start loosening the reigns. You know, there are just so many direct reports anybody can have and be effective. And about 2013, it really changed me. I had two presidents reporting to me at that time. Yes, two presidents. One on the healthcare side, a uniform side, and one on the non-healthcare, everything else. And as we began to acquire more companies, I would have the presidents reporting directly to me. I mean most of them insisted on honoring their employment contracts as well, which I felt was a good thing.
And you know, we get to learn the culture. You get to find out what’s right about this, what’s not right about it, eventually, you make some changes to all that. And as I stand back, I’ve taken more of my direct reports. Promoted my CFO, as well. He’s handling most of the administrative reports at this point, are reporting to him instead of to me. And so you know, my central responsibility today, is making sure each of these business units is functioning 110% of what they’re capable of doing.
I have a very direct relationship with each of the presidents. They actually meet either by video or by phone every single week or in person. I travel extensively. I process that we have, where they expect to be before the year, what each of them is going to accomplish both quantitatively and qualitatively. Each year, those are monitored every single quarter. We’re all on the same page, but that doesn’t mean that goals can’t lead to change as priorities change. But we all start out every year saying, “This is what’s going to happen this year that’s going to make us better for the long term.”
And most of these goals that we come up with, sure, some of them are sales goals or earnings goals for that year, but most of them are related to projects they’re working on. They’re extraordinary, that are going to require a real stretch on our part to make them happen, that will have an impact on the organization in the future. And the future could be two years, five years, 10 years. And amazingly, we’ve been doing this process since I’ve been CEO. And the kind of impact that some of these very small changes from different managers, and directors, and VPs, are in our company, have had an impact that has been so long-term on our business.