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TOUGH ENOUGH Jean Fugett's toughest job yet: replacing brother Reginald Lewis at TLC Beatrice

Jean S. Fugett Jr. was a big, nice kid. Too nice, the football coach at Cardinal Gibbons High School thought.

So when the 6-foot-3-inch, 230-pound senior asked for a tryout, Coach Robert Patzwall told him not to bother. "I told him he wasn't tough enough to play football, and I wasn't kidding," Mr. Patzwall said.

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Mr. Patzwall was wrong. Mr. Fugett never turned into one of those "nasty kids" who enjoy knocking players down on the field, but he was plenty tough, Mr. Patzwall recalled.

The speedy tight end led the high school team to a 7-1-1 record. Four years later, he became the second Amherst College player ever to turn professional. Once a pro, he overcame odds again, becoming an all-star for the Dallas Cowboys and the Washington Redskins.

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Now, as Mr. Fugett, a 42-year-old lawyer, takes over the leadership of America's largest black-owned company, he again faces doubters. His new job, as chairman of the billion-dollar TLC Beatrice International Holdings Inc., drafts him out of relative obscurity. His first important business venture, a Baltimore law firm, dissolved after a few years. Now, Mr. Fugett, most recently a sports agent and a radio talk-show host, must confront one of the toughest of all business leagues -- the international food and beverage industry.

It would be a challenge enough to replace Reginald F. Lewis, Mr. Fugett's 50-year-old half brother, who died this month of a brain tumor. Mr. Lewis was a high-flying entrepreneur, a skilled negotiator and a role model for millions of Americans, all the more so for being black.

But Mr. Lewis named Mr. Fugett his successor just as TLC Beatrice confronts economic recession and industrywide consolidation overseas. No longer the huge conglomerate that Mr. Lewis bought in 1987, TLC Beatrice is a lucrative but slimmed-down company whose ice cream, potato chip and other businesses face competition from European giants such as Nestle.

Mr. Fugett, however, may have opportunities denied to Mr. Lewis. Three times over the past four years, TLC Beatrice tried to raise cash publicly but was rebuffed by an investment community leery of Mr. Lewis' reluctance to yield control of his company.

Now, with a less obstinate management, some analysts believe, TLC Beatrice may be able to issue stock or bonds to raise money and expand. Or, Mr. Fugett could sell out to a bigger competitor -- as many investors believe he might.

Trans-Atlantic deal-making is heady stuff for the son of a working-class Baltimore family, someone who grew up in the shadow of a remarkable half brother. But those who know Mr. Fugett say that although he lacks Mr. Lewis' intensity, he is up to the task.

They describe him as a friendly and funny companion, able to put strangers at ease despite his size and achievements. And they say he is well-organ- ized, good with numbers and able to make tough de- cisions.

Mr. Fugett, who declined to be interviewed for this arti- cle, has told others that Mr. Lewis was the most influential person in his life.

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It's easy to see the pattern. Both were outstanding athletes and students. While Mr. Lewis was finishing Harvard Law School, Mr. Fugett was entering Amherst College at 16, later to become the youngest member of the class of 1972.

While he was winning football and basketball games at school,his facility with numbers earned him a footnote in Baltimore Orioles history.

In the summer after his sophomore year, he worked in the Orioles' front office, keeping manager Earl Weaver's statistics -- a mind-numbing task of computing the batting average of each Oriole against every American League pitcher.

As the Orioles moved toward the World Series -- and National League competition -- Mr. Fugett left for school, taking the statistics with him because they no longer seemed to matter. But then Mr. Weaver discovered that one Cincinnati Reds pitcher had been acquired from an American League team. So he put in an emergency call to Mr. Fugett's dorm room.

Mr. Fugett dug the papers out of his closet -- where they were buried under his laundry -- did the calculations and called back: Chico Salmon was the man to pinch-hit against that pitcher. Sure enough, Mr. Salmon hit a clutch pinch-single, sparking a five-run rally to lead the Orioles to a 6-5 victory. The Orioles won the series.

Mr. Fugett graduated cum laude from Amherst at age 20 and deviated from his brother's path by passing up law school to try out for the Cowboys.

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At training camp in 1972, recalled Roger Staubach, Mr. Fugett wasn't expected to make the team. "He came from a small school. . . . The odds were against him."

"But," Mr. Staubach said, "Jean is very smart, and he can catch the football."

So well, in fact, that he won a starting spot as a rookie, alternating at tight end with Mike Ditka. He soon became a star, catching a career-high 38 passes for three touchdowns and 488 yards in 1975.

But the grind of practice and the threat of injury took a toll. When he moved to the Redskins, he began to prepare for life after football. In the off-season, he worked as a Washington Post reporter, a television sportscaster and eventually signed up for night classes at George Washington University's law school.

Career as a lawyer

By 1979, he was out of the league, his knees battered and scarred from two operations. But within two years, he had finished law school and had thrown himself into a new career as a lawyer for Mr. Lewis' Wall Street law firm. There, he learned the art of the deal and was in on Mr. Lewis' first big move: the purchase and sale of McCall Pattern Co.

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Although he loved the excitement of business in New York, Mr. Fugett returned to Baltimore in 1985, telling friends that his apartment had been broken into three times and that he wanted to settle down where it was safe to raise his family.

And it was here, in his hometown, that he suffered his first real failure.

Mr. Fugett wanted to create the kind of top-notch corporate law firm his brother had started in New York. "He wanted to be very upscale," recalled Jan Marshall Alexander, a lawyer at Mr. Fugett's firm. "The offices were very nice -- first class."

Mr. Fugett brought in some important clients early on, using his friendly manner and self-deprecating stories about pro football to forge links with even the stuffiest Baltimore law firms.

Meanwhile, he trained his attorneys in the tough, savvy negotiating style he learned from his brother. After sitting in on negotiations between his associates and clients or opposing lawyers, Mr. Fugett would criticize the associates for failing to note key details or for not maintaining eye contact, Mr. Alexander said.

"He loved Baltimore, and he really wanted to be a success here, but he had a New York attitude," Mr. Alexander said. "He would always remind us: 'You can't be slow in New York. You've got to move quickly. You've got to be precise.' "

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Mr. Fugett tried everything to bring in clients: attending political fund-raisers, working for big retailers as a lobbyist to repeal Maryland's blue laws and taking small jobs to prove himself to local business executives. And the firm grew -- to about a half-dozen lawyers at its peak.

Law firm is dissolved

But by 1989, Mr. Fugett realized it wasn't working. Federal cutbacks had eliminated the need for his firm's expertise in handling urban development grants and city bonds. Real estate work had dried up. And one of the firm's biggest clients, Inner Harbor Ford, went bankrupt.

So, he quietly dissolved the firm.

He handled the painful failure with grace, recalled Allan Rifkin, a lawyer who hired Mr. Fugett in 1990. "He had taken great pride in creating something. And then he had to make a difficult decision."

Mr. Fugett served on the board of Beatrice and started a sports agency that represented several Dallas Cowboys. He has also been co-host of a five-nights-a-week sports talk show on WTEM in Washington.

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On the radio, his friendliness, hard work and mental acuity shine through, said his co-host, Ira Mellman. "He's got a mind like a steel trap. He knows every obscure player, their height and weight and whether they move better right or left."

Mr. Fugett also gets high marks from many TLC Beatrice watchers.

His education as a lawyer, years of experience on the company's board and his skills in handling people can only help him in his new job, said Leonard Teitelbaum, a food and beverage industry analyst with Merrill Lynch & Co. in New York.

"The management team they have in place is very, very strong," he said. "They're not going to miss a beat."

TLC Beatrice's triumvirate includes two executive vice presidents chosen by Mr. Lewis: Dennis Jones, former head of the company's European grocery products division, is in charge of operations; Albert Fenster, a New York lawyer, will oversee financing issues.

Stiff competition

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But the team faces increasing competition. Trade borders in Western Europe are falling, prompting a concentration of the region's food and beverage industry.

The industry is dominated by giants such as Switzerland's Nestle SA, with more than $36 billion in revenues and 100,000 employees, and Holland's Unilever N.V., with $40 billion in revenues and 300,000 employees.

By comparison, TLC Beatrice's $1.5 billion in 1991 revenues and 5,000 employees -- scattered in fields as widespread as Irish potato chips, Spanish ice cream and Parisian convenience stores -- are little more than an annoyance to the big players.

"They're not really a name that comes up at all when analyzing the European market," said Jean L'Home, an industry analyst in Barclays de Zoete Wedd Ltd.'s Paris office. "They're not really strong here."

Room might exist for a relatively small food distributor and producer such as TLC Beatrice, analysts say. But they also believe that several trends are working against the New York-based company.

The most significant: Its retailing operations probably have hit a peak. Its Franprix minigrocery stores, which account for up to 20 percent of retail grocery floor space in Paris, are well-run, but they buck the trend toward giant supermarkets, or "hypermarkets." Although rents in Paris are too expensive for many hypermarkets, the sprawling stores are starting to dominate grocery sales in the rest of France.

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TLC Beatrice once owned a chain of hypermarkets in eastern France but sold them -- as part of a plan to reduce the huge debt Mr. Lewis accumulated in the $985 million buyout of Beatrice Co.'s international operations in 1987.

TLC Beatrice's other operation, food production, is similarly lucrative, but limited. In the ice cream market, for example, TLC Beatrice has a 2 percent market share, according to statistics from the British brokerage house UBS Phillips & Drew. The industry leader, Unilever, has a 33 percent share.

TLC Beatrice's one dominant brand is Tayto potato chips, which make up 80 percent of the market in tiny Ireland.

In need of capital

The company could probably coast along, but to grow significantly, it needs capital, analysts believe. That fact was tacitly acknowledged by Mr. Lewis' efforts to issue stock in 1989 and 1991 and to issue debt in 1991.

All three efforts failed, partly because of Mr. Lewis' refusal to relinquish control over his company.

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In 1989, he proposed selling stock at about $10.50 a share but dropped the offer after investors objected to the money he made. Government and company documents show that Mr. Lewis awarded his investment and law firm millions in consulting fees, in addition to his $1 million salary and stock options.

In 1991, he again tried to sell stock -- at $50 a share -- but backed away as investors questioned his control. That issue resurfaced later that year, when Mr. Lewis considered issuing $200 million in bonds. He dropped the plan after Moody's Investors Service gave it a junk-bond rating, noting concerns about his control.

Now, with Mr. Fugett in charge,the company could try another public offering to build up a war chest for the battle brewing in Europe.

But most speculators are betting that the untested Mr. Fugett and the Lewis family -- his widow and two daughters -- will sell at some point, maybe in a year or two, when the European economies pick up and the company's revenue growth doesn't look so lethargic.

Speculation of a sale abounds. When junk bonds were issued in 1987 to pay for the Beatrice buyout, Mr. Lewis also issued some equity that is traded privately. Traders at Jeffries & Co. in Los Angeles say the share price rose from $52 to $55 after Mr. Lewis died -- and to $60 last week -- on such speculation.

At a memorial to Mr. Lewis last week in New York, however, his family and friends pledged to continue TLC Beatrice as a legacy to a hard-driven man who fought his way into a previously all-white domain.

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"We have in place Reg's hand-picked team led by Jean S. Fugett," said W. Kevin Wright, TLC Beatrice's senior vice president. "These are seasoned executives wholly capable of facing the challenge -- and Reg, in your words, we're going to do a number for you."

TLC BEATRICE

TLC

CHAIRMAN: Jean S. Fugett Jr.

HEADQUARTERS: New York City

LINES OF BUSINESS:Food production,included ice cream,potato chips and beverages.

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K? Food distribution,including stores and wholesale operations

KEY MARKET: Western Europe

1991 SALES $ 1.5 billion

1991 PROFITS: $51 million

1991 NET WORTH: $153 million


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