The Money Makers
Ten Chicago entrepreneurs who have recently found success talk about how they did it.
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Founder and CEO, Club Libby Lu
Making it: Mary Drolet was driving her daughter to yet another of her friends' birthday parties when she had her eureka moment-an idea for an interactive combination playroom and retail store where young girls could play princess, make their own bath gel, buy glitter-covered clothes, and, of course, throw birthday parties. Drolet's epiphany dovetailed with her desire to start her own retail business, using her more than 20 years of experience with Montgomery Ward and Claire's Stores. In 2000 she founded Club Libby Lu, named for her childhood imaginary friend. Just three years after opening the first store, Drolet was again a corporate employee: Saks bought the chain from Drolet and her partners for $12 million and left her in charge. "I think if you talk to any entrepreneur who divests or sells, the number one concern is losing control," she says. "But it is all part of growing a business." The partnership has allowed Club Libby Lu to expand to 57 stores nationally (not including 26 kiosks inside Saks-owned department stores), with $30 million in sales last year.
On being an entrepreneur: "I never felt so stupid in my whole life. Having been a merchant and a marketer, I had to learn about insurance and store buildouts and point-of-sale systems. That first year I pushed myself to learn everything I did not know."
Grooming princesses: Some have knocked the idea of encouraging girls to aspire to be princesses, but the critics miss the point, Drolet says. "We hope that girls walk out of the club feeling ten feet above the ground, feeling that they are the cat's meow," she says. "That's what this concept's all about." Drolet says trips to the club can be used to celebrate a good report card or other achievement, in addition to birthdays.
Kids count: Drolet, 42, doesn't care to dwell on the impact her success has made in her life, preferring instead to focus on her family. "When you come home after a tough day and your daughter gives you a big hug and tells you about her knee socks, it helps keep your priorities in line," she says. While Drolet's daughter has been a big part of the club's business model, her son has a different take on Mom's place of work: "He runs into the store, straight to the candy section, and runs out as fast as he can."
Quintin E. Primo III
Chairman and CEO, Capri Capital Advisors L.L.C.
Making it: Quintin Primo was disappointed when the first real-estate investment company he founded went belly-up in the late-eighties commercial bust. "Failure is not something they teach you about at Harvard Business School," he says. But rather than slink back to the corporate ranks-he had spent a decade at Citicorp early in his career-Primo decided to try entrepreneurship one last time. Capri Capital Advisors, the company he cofounded in 1992, is now a blazing success, with more than $2.7 billion in real-estate assets under management. The company has prospered, he says, by "seeking opportunities that our competitors do not." That means investing in apartment buildings, shopping malls, parking garages, and other properties in markets that are undervalued. In February, for example, the company bought Baldwin Hills Crenshaw Plaza, a shopping mall in Los Angeles's crime-ridden South Central district. Although the mall caters to a lower-income clientele, sales there average $500 per square foot, Primo says, compared with a national average of $350. "I as well as many in my organization grew up in communities like Baldwin Hills," says Primo, 51. "We are not afraid to go to Crenshaw and Martin Luther King [Jr.] boulevards. We understand that these communities are underserved and that there is significant demand [for retail]."
Giving it away: "One of the most important reasons to make money is that it gives one the ability to give more," Primo says. The Lake Forest resident and his wife, Diane, who recently retired as CDW Corp.'s chief marketing officer, support causes ranging from Roosevelt University and Luna Negra Dance Theater to Episcopal Charities and the African American Legacy Initiative. Primo is also on the board of the Chicago Community Trust and the University of Chicago Hospitals. But he is most proud of the Primo Center for Women and Children, a West Side transitional homeless shelter founded by his minister father 25 years ago. "We are changing lives one family at a time, and we are doing it in a very spiritual, supportive, nonjudgmental fashion," says Primo, who is overseeing a multimillion-dollar fundraising campaign to expand the shelter. "One of the smartest things they ever did was put my family name on it, because I cannot ever leave."
Keeping perspective: Primo isn't concerned about wealth spoiling his nine-year-old daughter and four-year-old son. "Being African American, you cannot escape poverty," he says. "It is part of the culture. There is not a single African American in this country who does not have a relative who is poor."
Cofounder and CEO, OptionsXpress Holdings Inc.
Making it: Six years ago, David Kalt and his two partners founded a company that Barron's has rated as the best online brokerage in 2003, 2004, and 2005. As its name suggests, OptionsXpress specializes in options trading rather than offering it as a sideline, as most of the older brokerage houses do. That focus and a catering to "the sophomore investor"-neither novice nor professional-have attracted 160,000 customers and generated pretax margins of 64 percent. Last year, Kalt and his team took the company public. Kalt's 5-percent stake is currently valued at $80 million.
Passions: Music is not just a hobby for Kalt; it permeates his work life as well. "When I think about my DNA, it is hard to separate my personal and my business interests," says the 38-year-old. "I have long been a proponent of jazz and bebop, and so has my partner Ned [Bennett]. When you think about music structure, there are four beats, but within that structure you are able to improvise. Each of our employees has an instrument to play in that structure. We try not to micromanage." At home on the city's North Side, Kalt is building a recording studio for use with his three young daughters. Jam sessions include piano, guitar, and drums.
Perks: "One thing really nice about this business is that we were able to get our families to invest," Kalt says. "There was tremendous wealth creation for our investors." With his father-in-law, Kalt is using some of the windfall to establish the Simon Family Professorship in Orthopaedic Surgery at the University of Chicago. "As you have success, it is really easy to write checks," Kalt says. "It is more challenging to find ways to add value. I'm trying to find places where I can have influence, not just for my check."
Having financial security: "Things that you used to stress out about, [like] focusing on the next paycheck, become less burdensome. Then you have more time and mental resources to apply to other things. There is also an obligation to find ways to expand this business, to help other entrepreneurs, to give back in that regard. That is the fun part."