Grocery, oil, real estate, and aviation—what do these four industries have in common? John Catsimatidis is a magnate in all of them. If you wonder how one man can find success in diverse industries, it becomes clearer once you look at his American-dream background.
Born on the island of Nissyros, Greece, Catsimatidis’s parents moved to West Harlem when he was an infant. His father, who’d been a lighthouse operator, found work as a busboy. John attended high school at Brooklyn Tech and received a congressional nomination to West Point. But instead of becoming a cadet, he studied engineering at New York University. Before graduation, he bought into a grocery store. A year later, he left school and purchased another grocery store and named it Red Apple.
Red Apple stayed open seven days a week, offered free delivery, cashed lots of checks, and passed on manufacturers’ discounts to customers—pioneering perks in the mid-1970s. By the summer of 1981, Red Apple had grown into a 27-unit chain operating in the Bronx, as well as Manhattan, with annual sales of about $40 million. The chain continued to grow and reached sales of $110 million in fiscal 1985. In 1986, Red Apple acquired 36 Gristede Brothers supermarkets and 11 affiliated Charles & Co. specialty-food emporiums from the Southland Corp.
Despite his success in the grocery business, Catsimatidis always wanted to be a pilot. In 1980, he started a corporate jet management company and subsequently acquired other aircraft management companies. He sold the business to Richard Santulli, owner of NetJets, in 1990. Catsimatidis also had larger aircrafts that operated under the banner Capitol Air.
Castimatidis made other acquisitions in the 1980s—some profitable, and some less successful. In 1984, he sold the Capital Air management company and retained aircraft assets, which served as basis for his aircraft leasing company. In 1986, he acquired United Refining Co, which owned gasoline refineries in Pennsylvania and Alabama. He rescued the company from bankrupt Coral Petroleum with $110 million in financing.
Now age 60, he is owner, president, chairman, and CEO of the Red Apple Group, United Refining Company, and Gristedes Foods. In 2008, he was ranked 215th on the Forbes list of the 400 Richest Americans. His main holdings include 50 Gristedes supermarkets, 371 gas stations in three states, $500 million in real estate, and an expanding oil business. The Red Apple Group employs 7,800 people. The serial entrepreneur spoke with NY Report editor-in-chief Robert Levin about how he chooses his investments and why he’s a successful CEO.
Robert Levin: How did you get your start as an entrepreneur?
John Catsimatidis: When I was in college, my friend Tony’s uncle was running their family’s grocery store. His uncle was from the old school and didn’t know much about running a business; he was just there as a caretaker. Tony and his uncle would fight over everything and Tony couldn’t take it anymore, so he sold me his half of the store while I was still in college. I put in some good old American know how, and within six months I doubled the sales of the store.
RL: When you bought your friend’s share of the grocery store, did you have to get rid of a lot of employees from the “old school?”
JC: No, I’m a firm believer in trying to save people and not getting rid of them. I believe in putting your arm around somebody and saying, “This is what you’re doing wrong, if you do it a different way, it’s going to be better.” I’d rather teach than just say “Get out.” I think that’s a better way to do things.
RL: In 1971, you were able to open your own store without any bank debt. How?
JC: In those days, I was doing a lot of business with the first store and I developed great relationships with my vendors—the people that would sell me ice cream, bags, frozen foods, dairy, and so on. I developed such good relationships that I convinced them that if they extended me more credit to open more stores, their money was safe.
The vendors looked at me as a way to expand their own business. By the time I was twenty-four years old, I built up ten stores and the business was doing $25 million a year, and I was personally earning a million dollars a year.
Convincing the vendors to extend credit was my big first success. Being convincing is part of leadership. You need to convince your employees that if you do well, they’re going to do well. You have to convince your vendors that if they help you, they’re going to benefit. You have to say, “Okay, guys, this is the direction we’re going in. Follow me.” And they will follow.
RL: What were the biggest challenges in growing from one to ten stores so quickly?
Robert Levin is the Editor-in-Chief and Publisher of The New York Enterprise Report. Levin has extensive experience with midsize and small businesses, having previously held CEO, CFO, and COO positions with companies in several industries. He is also a contributor for The Huffington Post. Levin can be reached at email@example.com and (212) 307-6760.