Richard A. Smith (businessman)

Richard Alan Smith (November 1, 1924 – September 9, 2020) was an American business executive who served as CEO of General Cinema Corporation.

Richard A. Smith
Born	Richard Alan Smith November 1, 1924 New York City, New York, U.S.
Died	September 9, 2020 (aged 95) Chestnut Hill, Massachusetts, U.S.
Occupation	Businessman
Known for	CEO of General Cinema Corporation
Net worth	$500 million (2006)[1]
Spouse(s)	Susan Flax
Children	4
Parent(s)	Philip Smith
Relatives	Jeffrey Lurie (nephew)

Biography

Smith was born in 1924[2] the son of Philip Smith. His father founded Midwest Drive-In Theaters which in 1941, operated 9 of 15 drive-in movie theaters in the U.S.[3] In 1946, he joined his father's company.[3] In 1947, the company was one of the first to open a theater in a shopping mall in Framingham, Massachusetts.[3] By the 1950s, the Midwest Drive-In Theatres operated 53 drive-ins[4] and branched out into other lines of business including the Richard's Drive-Ins restaurant chain, Amy Joe's Pancake Houses, and several bowling alleys in order to diversify their revenues which were under pressure as more people stayed home to watch television.[4] In 1960, the company changed its name to General Drive-In Corp and went public on the New York Stock Exchange[3] although Smith retained a controlling interest.[5] His father died in 1961 and Richard succeeded him as CEO.[5][3] Smith changed the company's name to General Cinema in 1964 to better reflect the shift in the industry away from drive-in theaters.[3]

Smith diversified and expanded the company through acquisitions.[5] In the late 1960s, General Cinema began purchasing bottling franchises eventually becoming the largest independent bottler in the United States.[5] In 1970, they purchased the Mann Theatres chain (founded by Ted Mann) for $6.6 million.[5] In 1972, they purchased an interest in 47 indoor theaters in Louisiana and Florida from the Loews Corporation (founded by Laurence Tisch and Robert Tisch) for $16 million.[5] Smith's diversification efforts paid off: in 1985, the bottling operations were 70% of operating profits and General Cinema marked its 12th straight year of operating profits (since Smith was appointed CEO, General Cinema had been profitable for 24 of 25 years).[5] Smith also participated in greenmailing: he purchased a substantial interest in Heublein Inc. forcing it to find a friendly suitor earning Smith a substantial profit when he sold his shares.[5]

In 1984, General Cinema purchased a controlling interest in Carter Hawley Hale, the tenth largest clothing retailer in the United States and owner of the Bergdorf Goodman, Neiman-Marcus, John Wanamaker's, Thalhimers, and Holt Renfrew chains,[5] saving it from a hostile takeover from Leslie Wexner.[2] In 1989, General Cinema sold its bottling division for $1.75 billion.[5] In 1991, General Cinema purchased Harcourt Brace Jovanovich for $1.5 billion.[5] In 1993, the company split into two companies: Harcourt General consisted of the publishing business and the controlling interest in the retail group (then called the Neiman-Marcus Group); and GC Companies, Inc. consisted of the movie theater division in which the Smith family retained a 28 percent controlling interest.[5] In 1994, Smith re-evaluated the portfolio of theaters and sold 14 theaters for $14 million and closed an additional 37 theaters in 1994 and 12 in 1995.[5] They also cautiously expanded into megaplexes with sit-down cafes, seat-side service, "loveseats," gourmet food and coffee, and liquor; and associated with top brands such as Starbucks, Pepsi, Taco Bell, and Pizzeria Uno.[5]

In 2000, General Cinema sold Harcourt General to publisher Reed-Elsevier for $5.7 billion and in 2005, they sold Neiman Marcus to private equity firms TPG and Warburg Pincus for $5.1 billion (the Smith family earned $600 million from their interest).[6]

Philanthropy

He and his wife founded the Richard and Susan Smith Family Foundation.[7] Since 1973, the foundation has donated $45.6 million to Boston's Jewish community of which $24 million was given to Combine Jewish Philanthropies of Boston (CJP).[8]

Personal life

In 1952, Smith married Susan Flax who was Jewish.[7][9] They had four children: James Smith (who died in 1970), Amy Smith Berylson, Robert Smith, and Debra Smith Knez.[7] His daughter is married to Brian Knez.[10][11] His son, Robert Smith and son-in-law Brian Knez, served as co-CEOs of Harcourt General until its sale then co-founded private equity shop Castanea Partners in 2001.[6] His nephew is Jeffrey Lurie; in 1994, he and his sister provided collateral for a $185 million loan enabling Jeff to purchase the Philadelphia Eagles.[6]

Smith died on September 9, 2020, aged 95.[12]

References

1. Boston Magazine: "32. Richard A. Smith" March 2006
2. Fortune: "The New Show at Neiman-Marcus - A little-known empire of movie houses and soft drink bottlers, General Cinema, is buying up control of the country's most glamorous retailer." by John Paul Newport Jr. April 27, 1987
3. Los Angeles Times: "General Cinema More Wall St. Than Hollywood : Investments Pay Off Handsomely for Bottler and Theater-Chain Operator" by Kathryn Harris August 11, 1985
4. Harvard Business School Lehman Collection "GC Computer Corporation" retrieved September 25, 2017
5. Funding Universe: "GC Companies, Inc. History" retrieved September 26, 2017
6. Forbes: "(Richard Alan) Smith family" retrieved September 24, 2017
7. Boston Globe: "Susan Smith, 83; philanthropist’s passion transformed cancer care" By Bryan Marquard August 2, 2016
8. "Tribute to Richard Smith". Combined Jewish Philanthropies of Boston. October 13, 2020. Retrieved February 2, 2021. “Because of our Jewish heritage,” Smith said in a letter to his descendants, “we expect Combined Jewish Philanthropies, or another appropriate Jewish philanthropic vehicle, to be a permanent core part of the Foundation’s giving.”
9. Legacy.com: "SUSAN M. (FLAX) SMITH" August 2, 2016
10. Tufts University: "Profiles in Giving - Debra Smith Knez, J82" retrieved September 25, 2017
11. Boston College Law School Magazine: "The Canny Investor - When Brian Knez Sees Opportunity, Companies Thrive" by Maura King Scully" Winter 2015
12. Richard Alan Smith