CURTIS L. CARLSON, 84,
FOUNDER OF
TRADING STAMP CONGLOMERATE
For a corporation whose more than 100 separate companies include the Radisson and Regent International hotel chains, T.G.I. Friday’s and half a dozen other restaurant chains, several travel agencies, a cruise line, the nation’s largest marketing services company, vast real estate holdings and a host of other operations in 140 countries, the Carlson Companies had distinctly humble beginnings. So did Mr. Carlson.
Mr. Carlson, the son of a Swedish immigrant who became a neighborhood grocer, had a childhood worthy of a Norman Rockwell painting with highlights by John D. Rockefeller.
He was a golf caddy at 9, had his first newspaper route at 11 and quickly added two others. He also operated a newsstand at a busy intersection, worked his way through college driving a soft-drink truck and engaged in a little light loan-sharking.
In an exercise worthy of selling refrigerators to Eskimos, Mr. Carlson as an 18-year-old summertime bank messenger would lend cash-strapped tellers $5 on a Friday and collect $6 onpay-day the following Monday, transactions whose three-day interest works out to an annual percentage rate exceeding 2,400 percent.
Somewhat redundantly studying economics at the University of Minnesota, Mr. Carlson graduated in 1937 and went to work as a $110-a-month soap salesman for Procter & Gamble. But he did not stay there for long.
At a time when some local department stores were seeking to assure repeat business by giving customers Security Red trading stamps, exchangeable for premiums, Mr. Carlson realized that such stamps would be ideal for grocery stores, whose identical products left them little room to distinguish themselves from the pack.
Acting on his vision, Mr. Carlson created the Gold Bond Stamp Company in 1938, with a $55 loan—and a bit of skulduggery: He paid a department store secretary $10 for a copy of the Security Red Stamp master contract, which became his blueprint.
The idea was that a grocer would pay Mr. Carlson $14.50 for stamps that could be exchanged for products that cost $10 wholesale but had a much higher retail value. That made the stamps attractive to the grocer and to the store’s customers, but not at first glance to Mr. Carlson, whose $4.50 spread would barely cover costs and overhead.
The magic of the business was that while the grocer would pay for the stamps as they were issued, it might be months before customers accumulated enough stamps to redeem them (a fourslice toaster proved to be the most popular premium) and some would not be redeemed at all, leaving Mr. Carlson with the float—the use of the money—for other investments.
The trick was to sell the program to enough stores to create a sizable float. But as a salesman, Mr. Carlson—who married his college sweetheart, Arlene Martin, about the time he started the business—was shameless. To draw attention to his program he had his wife dress up in an eye-catching drum majorette uniform and march through prospective stores extolling the glories of Gold Bond stamps.
By 1941, he had signed up 200 accounts, but shortages created by World War II made sales incentives superfluous, and for a while he had to take a job with his father-in-law’s clothing business.
Once the war was over in 1945, expansion came steadily. Indeed, Gold Bond did well enough to finance a series of important acquisitions. By 1962, the company had major investments in suburban Minneapolis real estate, including the site of what became its $300 million headquarters in Minnetonka, and acquired the downtown Radisson Hotel, which rapidly expanded into a 350-hotel chain.
As a result of the diversification, when the stamp business began to decline in 1968, the company continued to thrive. It changed its name to the Carlson Companies in 1973.
According to company figures, annual revenue, which did not reach $1 million until 1952, had climbed to $100 million by 1968, reached $1 billion in 1976 and topped $10 billion in 1993, with most of the growth resulting from a blistering pace of diversification.
Although he acquired an 85-foot yacht, a luxurious hunting lodge, a family compound at Lake Minnetonka and other trappings of wealth, Mr. Carlson found nothing quite so much fun as business.
Accordingly, he became known as such a hands-on boss that his executives made few major decisions, though they rarely complained. He paid them so well (the top 25 getting new luxury cars every year) that they were said to be bound to the company by golden handcuffs.
Never tempted to sell stock to the public, Mr. Carlson took pains a decade ago to keep his company private—and in family hands—after his death by placing all his businesses in a holding company, which his two daughters, Marilyn Nelson and Barbara Gage, will now jointly own. He also set up trusts to hold nonvoting stock for his eight grandchildren, six great-grandchildren and other relatives.
Mr. Carlson, who is also survived by his wife, Arlene, and by a brother, Warren, was so devoted to his business that after a brief retirement and quadruple bypass heart surgery, he resumed control in 1991 and continued to run the business until retiring again last year in favor of his elder daughter, Marilyn.
A man who gave millions to the University of Minnesota and other charities, Mr. Carlson insisted the lure of money was not what drove him. “You keep score with the money you make,” he once said, “but you’ve got to get a thrill out of doing something that works.”
February 22, 1999