Colorado's Best

Starting months ago with 82 entries in nine industry categories, judges of the 2005 ColoradoBiz Top Company competition narrowed the field to 27 finalists, who we profiled in our September issue. Now we present the nine winners of the state's most competitive business award.

As the profiles on the following pages show, some winners are icons of Colorado business, like retail/wholesale winner Jake Jabs of American Furniture Warehouse and real estate/construction winner Larry Mizel of MDC Holdings. In other cases, the winning companies boast less visible business visionaries, like ADA Technologies' Cliff Brown, a scientist-turned-entrepreneur who has quietly built a stellar operation in Littleton turning innovative technologies into commercial successes.

Companies were judged by a panel of leading business figures and longtime Top Company sponsor Deloitte in three areas: financial performance, excellence in one or more operational aspect of their business, and community involvement.

Well-known or simply well-run, the winning companies and their stories should serve as inspiration for businesses across the state.

American Furniture Warehouse

The mega-store and warehouse that doubles as American Furniture Warehouse's corporate headquarters has been described in company literature as a building "of almost science-fictional dimensions," and anyone who has visited the massive facility, especially with colorful furniture magnate Jake Jabs serving as tour guide, can tell you that's not hyperbole.

Off Peoria and E-470 in Englewood, the American Furniture Warehouse headquarters occupies 17 acres, with an interior of 635,000 square feet. There's a showroom big enough to warrant its own Starbucks and Subway sandwich shop, and behind it a warehouse four football fields long with racks as far as the eye can see holding plastic-wrapped furniture stacked at least 100 feet high. There's an in-house doctor's office to treat sick or sore employees, a fleet of 270 delivery trucks, and 14 mechanics to service the trucks in-house.

This is the centerpiece of the furniture empire Jabs launched 30 years ago.

Back in Colorado's troubled economic times of 1975, Jabs had his pick of failed stores along nearly vacant Furniture Row on Interstate 25. He settled on the old American Furniture Co. for $80,000 because he liked the one-story warehouse layout. Today he has nine other furniture warehouse stores - all but the Glenwood Springs complex situated along the Front Range - and all the complexes boast at least 100,000 square feet of space.

This year's ColoradoBiz Top Company in the retail/wholesale category, American Furniture Warehouse has posted 20 straight years of revenue growth, including $313 million last year. Jabs projects revenues in 2005 to reach $350 million.

That would be more than a 20-fold increase over the company's revenues of $17 million in 1979. Jabs has done it by sticking to a simple principle: Sell furniture cheap enough, and people will buy it. By focusing on sales volume over per-unit profit, he's been able to buy from factories in great volume, and this volume buying has made it financially viable for Jabs to import.

Jabs buys furniture from 30 overseas countries and 500 different factories - traveling to places like Vietnam, Malaysia, Hong Kong and China to inspect the goods himself. He offers no apologies for embracing overseas products, primarily from Asia.

"Furniture has become a globalized business today," says Jabs, 75. "It's no longer in North Carolina or Michigan or Jamestown, N.Y. That's all history. Furniture's made all over the world. Anybody that really knows the world economy knows that free trade and globalization is where it's at. The idiots we send to Washington who are unlearned people and have never been out of the country ... think that we're giving up jobs. It's that sick union mentality that we're going to lose jobs. In reality, you create jobs by free trade."

Jabs figures his global viewpoint and disinclination to denounce cheap labor comes from his upbringing. He was the fourth-oldest of nine children (a brother died at 2), and the labor that the Jabs children provided wasn't merely cheap, it was free. His parents, both of German descent, emmigrated to the U.S. from Russia and Poland in the 1920s after World War I and settled in Lodge Grass, Mont., where they made a living as sharecroppers on a Crow Indian reservation. Jabs grew up with two sets of clothes - one set he wore while his mother washed the other set. His mother made all their clothes, and the family subsisted on the crops from a huge garden they cultivated on the side.

The Jabs siblings knew two facts of life: hard work, and music. All eight children and the parents played together at different times in a band, with Jake mastering guitar, horns and the tin banjo. When it came time for each of the five boys to go off to college, their father took each aside, gave him $50 and wished him luck. All five boys paid their way through school as musicians on the side and graduated from Montana State with education degrees.

Jabs' prowess as a country-western musician landed him a gig in the Grand Ol Opry, playing lead guitar for Marty Robbins on a tour of northern U.S. cities and Canada. Later, he opened a music shop and guitar-teaching studio in Bozeman, Mont., which gave him his first experience in retail. Along the way, there was a stint in the military and an eight-year stretch when he worked as a sales doctor of sorts, helping troubled stores get back on their feet and satisfy creditors by putting on sales for the retailers. While most consultants in this line of work charged retailers 10 percent, Jabs charged 3 percent for his services - 5 percent at most.

"If you'd run furniture cheap, people would respond," Jabs says. "And that was part of my success. If I charged them 10 percent, they couldn't sell cheap because they were paying too much to the sale guy. I wanted them to make money to accomplish what they needed to do. I made a lot of friends in that business and gained a good reputation.

"That was my education, my 'college' on-the job training in business," Jabs continues. "If these people were doing everything right, they didn't need my services. So I made mental notes. If I ever went back in the retail business, I wasn't going to make the same mistakes."

Jabs opened Mediterranean Galleries in Denver in 1968 and at the same time opened a small furniture factory in Montana to help satisfy the demand for Mediterranean furniture that had quickly become the rage. The store thrived the first few years but fizzled when that Mediterranean style declined in popularity. Rather than declare bankruptcy, he sold all his merchandise at cost, paid back creditors and returned to Montana to run his factory, which he still owns today.

He gave furniture retailing another shot in 1975, and hasn't looked back. In 30 years, American Furniture Warehouse has lost money in only two years - the recessionary times of 1984 and 1985. As with his previous store, Jabs eschewed bankruptcy as an exit strategy when several of his nine stores began to bleed money. Instead, the man known all these years for his animal-augmented TV ads produced the most important TV commercial in his life.

"I came that close to just throwing in the towel. Just that close," he says today. "What saved us is, I got on TV and said, 'Things are tough in Colorado right now. And when things get tough, the tough get going. I'm going to close half of my furniture stores, and I'm going to sell my furniture at half price until my inventory reaches the proper level.'

"So we did. We marked it right down to cost. And man, it worked. I guess that's one thing I like about furniture. If you sell furniture cheap, people buy it.

"I owed the bank $1 million," Jabs recalls. "They were jerking the noose. I paid the bank off and have never borrowed from a bank since." American Furniture Warehouse hasn't had a money-losing year since, either.