Word: amexco
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Dates: during 1960-1969
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...Amexco has also bought a 15% share of Club Mediterrannée, a chain of sea and ski resorts for the budget-minded, and it hopes to acquire a larger interest...
Unlike some executives who take a paternal pride in diversification moves. Clark has not hesitated to shed businesses as well-including some that made money but not as much as he would have liked. Amexco acquired the Uni-card credit business in 1965 and expanded it, but sold it last January-for a $16.6 million profit. Early last month, it agreed to sell its freight operations to Pacific Intermountain Express...
...other hand, Clark has been willing to suffer through initial disappointment with a business that gives signs of eventually becoming a major profit maker. He nursed the American Express credit-card operation through years of losses while Amexco was spending heavily to promote it. The company now has 3,000,000 cardholders, who charge purchases of $1.3 billion a year, and is by far the biggest factor in the field, though it is being increasingly challenged by the many cards issued by banks...
...Amexco's growth enabled it to survive a blow that might have shattered another company. In 1963, an obscure subsidiary, American Express Warehousing, was duped into issuing warehouse receipts for the nonexistent salad oil of Speculator Anthony De Angelis. American Express in 1967 agreed to pay $60 million to settle creditors' claims, half immediately, the rest in annual installments of $5,000,000 each year through 1973. The payments do not reduce Amexco's current reported profits because they are charged against earnings retained from prior years, and the company's growth has given it enough...
...growth has created an unusual demand for young executives, and Clark has developed an equally unusual method of training them. Every year Amexco assigns six or seven new graduate-school alumni to be management consultants within Amexco. Each one studies a particular new business opportunity or competitive threat and develops a program to deal with it. By the time they are through, says Clark, "they know the company inside out," and are usually enthused about it and ready for major operating responsibility. Meanwhile they save American Express a consultant...