A WOMAN'S TOUCH

By THOMAS McCARROLL

Loida Nicolas Lewis is on a roll. She has just won another $10 in a friendly wager with a colleague. After gleefully waving the crinkled bill in the air as though it were a winning lottery ticket, she ceremoniously places it inside a picture frame with six other flattened, face-up sawbucks. "He didn't think I could negotiate a lower lease, so I told him to put up or shut up," gloats Lewis. "They all second-guessed me, but I haven't lost a bet yet."

As chairman of TLC Beatrice International Holdings, which has the odd distinction of being America's largest minority-owned enterprise without having any U.S. businesses, Lewis has made a habit of defying the odds. Following the death in January 1993 of her husband Reginald (Reg) Lewis--the African-American tycoon who demolished the Wall Street color line in 1987 by buying Beatrice International for $1 billion--it was widely assumed that his widow would remain secluded as majority shareholder and silent partner.

She didn't. In December 1993, two hours before the struggling firm's year-end board meeting convened, Lewis telephoned her brother-in-law Jean Fugett Jr., then chairman and chief executive officer. The message was short and simple: "Jean, I'm taking over." With more than 50% of the stock in her hands, Loida got what Loida wanted, which was a European snack-food and grocery business mired in debt. The smart money on Wall Street thought the inexperienced Lewis would surely flop.

She didn't. Instead Lewis has surprised skeptics, including investors, by guiding TLC Beatrice with just as much spunk and savvy as her high-profile spouse did. Despite zero management experience and little firsthand knowledge of the global food business, this immigration lawyer and mother of two led the money-losing conglomerate through a perilous economy and a painful downsizing. She recharged Beatrice's slumping operations, restored its credibility--and credit rating--on Wall Street and returned the company to the black. After reporting its first significant profit in three years in 1994, TLC Beatrice continues to improve the bottom line, although earnings are still wobbly. "I have no idea how she did it," says David Wells, an investment analyst at Bear Stearns & Co. "Maybe it was hidden talent, or just plain luck, or even some special gene--some kind of Lewis thing."

As it turns out, that "Lewis thing" may be the only business trait she and her husband shared. Reg was a brash Harvard-trained lawyer who became the richest African American in U.S. history through ruthless ambition and sheer willpower; Loida is scholarly and low key, the author of three textbooks, and deeply religious. She is perhaps the only CEO of a multinational company who greets visitors with a hug rather than a handshake. He smoked power-broker cigars, traveled in a custom jet and kept a Louis XIV-style office suite in Paris as a pit stop. She finds little use for such captain-of-industry trappings. After consolidating power, the wealthy widow sold off the limousines and the private jet and dispensed with other perks. While Reg was a master of complex financing, Loida keeps a chalkboard near her desk, on which she writes down the names of individual managers along with their assigned tasks, erasing each entry as the job is completed. Says a Beatrice executive: "I can't imagine Reginald Lewis doing that."

Even more unimaginable, Loida loosened the company's connections with the African-American community, in which Reg Lewis was a legend. She fired most of his confidants, some of them black, and replaced them with her own, some of whom, like her, are Filipino. "I want the company to speak in one voice, and there's no room here for those that don't share that view," she explains. "I know where I want this company to go, and I know how I want this company to get there." Honest dissent is fine, she says, "but my motto is, 'I don't take any crap.'"

Despite sales of $2.1 billion and 12 companies in 20 countries, Beatrice remains largely unknown to American consumers. It is the leading seller of potato chips in Ireland and a top vendor of ice cream in Spain. Beatrice also owns the largest supermarket chain in Paris. Its problem is that while profitable, the company has to devote a large chunk of its cash flow to covering its debt. In the meantime, bigger and badder global competitors, including Nestle and Unilever, are moving in for the kill.

If anyone is headstrong enough to go it alone, it is Lewis. Although a best-selling biography of her husband portrays her as a devoted and dedicated wife, Lewis has always been independent. Born well-to-do in a rural province of the Philippines, she bears an uncanny resemblance to former Philippine President Corazon Aquino, which is no accident. From her occasional horn-rimmed glasses to her fondness for bright yellow clothes, Lewis has purposely modeled herself after her personal hero and close friend. Like "Cory," she tries to avoid confrontation, but she won't back down, as the brotherhood at Beatrice has learned.

Loida Nicolas had just graduated from an elite law school near Manila when she met young Reginald Lewis on a blind date while visiting New York City. She still recalls their romance--from courtship and marriage to dinners with heads of state at their palatial apartment on the Seine--as "breathless, magic." As Reg built his financial empire, first with the leveraged buyout of a radio station, then the McCall Pattern Co. and finally Beatrice, she put her job aside to raise their two daughters. The magic ended when he was stricken by brain cancer.

Like many of the junk-bond wire walkers of the 1980s, Reg Lewis was so obsessed with "doing another Beatrice" that he left the company's core operations adrift. Jean Fugett, a former pro footballer who was Reg's half brother and his handpicked successor, continued the hunt for deals. In the meantime Beatrice was hit by a roiling European recession in 1992 and a rapid erosion of market share, profits and cash. In the middle of this tumult, Fugett hatched a takeover bid for the Baltimore Orioles baseball team. With Beatrice's big shareholders in revolt, Lewis made her move.

To stave off creditors, Lewis shut down unprofitable operations, including a dairy plant in Switzerland, and she accelerated the divestiture program started by her husband and Fugett. She quickly jettisoned eight businesses, including ice-cream companies in Denmark, Belgium and Germany. In addition to eliminating the corporate toys, Lewis cut 500 jobs, including half the corporate staff.

Her defining moment came with the shutdown of TLC Capital, the autonomous, sharklike unit whose roots went back to her husband's go-go years. Run by his Harvard roommate and best friend, W. Kevin Wright, it had as its purpose the pursuit of takeover targets. But the renegade unit had become a constant source of second-guessing of the new CEO. Wright, to Lewis' irritation, would continually ask whether "Reg would do it this way." After months of jousting, Lewis finally fired the entire department.

Lewis has been less adept in handling the issue of the company's racial identity. Beatrice had topped Black Enterprise magazine's list of African American-owned businesses every year. But Lewis set off a howl in the black community when she completely dropped financial contributions to more than 50 charitable foundations and organizations that her husband had supported, including the N.A.A.C.P., the Abyssinian Baptist Church, the Boys Choir of Harlem, the Urban League and the Alvin Ailey American Dance Theater. Only a last-minute call from the Rev. Jesse Jackson's wife Jackie spared Jackson's "rainbow coalition." Lewis, who points out that she also cut off new donations to Harvard, public television and the Girl Scouts, says the decision to "suspend" the gifts was business, not personal. The racial identity of the company is a nonissue, she says, adding, "Reginald Lewis never looked at Beatrice as an ethnically oriented business, and neither do I." Board member Anthony Fugett, Jean's brother, disagrees. Beatrice, he says, "is owned by an African-American family, so it's an African-American company."

It's also a company with no operations in America, although Lewis hopes that will change. She sees global expansion as the path to new growth, especially for the company's Franprix and Leader Price supermarket businesses. With 420 stores in the Paris area, Franprix is one of the largest grocers in France. Lewis is betting the house, however, on the leader price discount chain, which sells merchandise for 30% to 40% less than the competition and is growing by 50 to 60 outlets a year. Beatrice plans to have 500 leader price stores open by 2001, perhaps several in the U.S. to pay for that expansion, say insiders, the company may have to dispose of its remaining food-manufacturing assets.

Lewis will not discuss the specifics of a possible sale of all or part of TLC Beatrice, but the company has taken its first step toward making TLC Beatrice a publicly traded firm. When, and if, she does sell equity on the stock market, Lewis will finally be positioned to complete the deal cycle her husband initiated and to cash out big time. Says she: "I guess you can say I didn't exactly follow in my husband's footsteps." No, but she has done a good job of filling his shoes.