Virginia Business 20th Anniversary

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Fortune list shows the toll of time
Few Virginia companies from 1986 ranking still operate in the state

READER RESOURCES Related stories: • Reaching a milestone • Agents of change • Economic trends • Fortune list shows toll of time • Shaping 20 years of politics • 20 years of Virginia fact • 20 years of history

by Paul Levengood
for Virginia Business
March 2006

Each year the Fortune 500 list provides an opportunity to discover which companies have risen to the top and which have slipped down or even off the list. It is only human nature that when the Fortune 500 list comes out, we tend to look and see how businesses in our state fared.

Readers of Virginia Business probably already know that in 2005 18 Virginia companies ranked in the Fortune 500. That is good enough for second place among Southern states (behind only Texas) and ninth place nationally. Northern Virginia is home to nine of these companies; the Richmond area, six; and Norfolk, Roanoke, and Smithfield each claim one. While the Fortune 500 can be a useful yardstick of how a city or state ranks among its peers, if one looks at the lists over time, they can also provide historical insight.

Since this publication is celebrating its 20th anniversary, I thought it might be interesting to compare the most recent Fortune 500 list to that of 1986 (see chart below). Historians like to look at change over time. (It is important to keep in mind that for several years, including 1986, Fortune actually published two 500-member lists, one for industrial companies and one for service companies. So the list of Virginia businesses from 1986 was drawn from a larger pool.)

Few companies made it onto both lists. In fact, only five can claim spots in 1986 and 2005: Dominion Resources, Norfolk Southern, Smithfield Foods, US Airways and Gannett. (US Airways will not be on the 2006 list for Virginia. The company shifted its headquarters to Arizona after a merger with America West Airlines.) What happened to the others? Some, like A.H. Robins, Reynolds Metals and James River were involved in mergers or acquisitions, and their headquarters left the state. National trends took a toll as well. Take, for example, the curious case of banks. In 1986, Virginia was a fairly important regional banking center, with five Fortune 500 banks calling the state home. None of those five exists in their current form today.

Four (Sovran, Signet, Crestar and Dominion Bankshares) became subsumed in the bank merger mania of the past two decades and are now part of the consolidation of the industry in a handful of cities — mainly Charlotte. The fifth, Perpetual Savings Bank, went out of business in 1992 as part of the fallout from the S&L crisis. Today, one Virginia bank, Capital One Financial Corp., makes the list, and it is not a traditional retail branch organization.

Another reason that companies slip off the Fortune 500 is that they go out of business. Such was the case with Best Products, which ceased operations in 1997. The company, started by Sydney and Frances Lewis in the mid-1950s, was a pioneer in catalog showroom retailing. Best Products was noted for the avant-garde architecture of its stores, which eventually numbered about 200 nationwide. With the wealth generated by their business, the Lewises became prominent art patrons and philanthropists. Many Virginia institutions bear lasting marks of their generosity, including the Virginia Museum of Fine Arts, Washington and Lee University and Virginia Union University.

Much has changed in Virginia business in 20 years: consolidation, relocation and a shift to technology-based businesses are all trends visible in the comparison between the Fortune 500 lists of 1986 and 2005.

Paul Levengood is managing editor of the Virginia Magazine of History and Biography at the Virginia Historical Society in Richmond. This column initiates a new monthly feature, “Looking Back,” which will examine events in Virginia’s business history for the next 12 months.