Business leader Curt Carlson, 84, dies of stroke

  • Article by: Ann Merrill
  • Star Tribune
  • March 26, 1999 - 10:00 PM

Curtis L. Carlson, creator of Gold Bond Stamps and founder of one of the nation's biggest private firms, died Friday at 84.

For decades, he was the driving force at Minnetonka-based Carlson Companies Inc., a $7.8 billion travel, marketing and hospitality empire with 50,000 employees and holdings such as Radisson Hotels and T.G.I. Fridays. He held the title of chairman, but the company has been run for the past year by his daughter, Marilyn Carlson Nelson.

Carlson, who had predicted in an interview nearly 15 years ago that he would live to age 84, based on his family history, died of complications from a stroke he suffered Feb. 10. After the stroke he was hospitalized at Methodist Hospital in St. Louis Park, where he died around 6:45 p.m.

He grew up in south Minneapolis, the middle child of five born to Charles and Leatha Carlson. He donated $36 million to his alma mater, the University of Minnesota. Much of it went to the university's management school, which was renamed the Curtis L. Carlson School of Management in 1986.

Ranked by Forbes magazine in 1998 as the richest Minnesotan, with a net worth of $1.7 billion, Carlson over the years was involved in many civic causes, such as lobbying to get the Metrodome built in the 1970s.

But above all else, Curt Carlson was a salesman.

"His antennae were up all the time. He was the ultimate salesman," said Harvey Mackay, chairman and chief executive of Minneapolis-based Mackay Envelope Corp., a longtime friend who considers Carlson a mentor.

Mackay said he'll never forget an incident at a black-tie event honoring Carlson as one of the nation's top achievers.

Small groups were chatting before the event, when Carlson arrived. "Before long, he's pulled paper out of his pocket and told one of the other honorees -- who headed a billion-dollar company and had flown in on his own 747 -- that he's checked on his company's account with Carlson Cos.," Mackay said. "Curt told him that they weren't doing much business together and wanted to know what he could do to remedy that."

Mackay saw the bulldog determination close up in his own business dealings with Carlson Cos. "We have 3,000 accounts, but I'd have to say Carlson is the most demanding," he said. "Without question, that's the culture. My relationship with Curt might have gotten me the business, but if we didn't perform, we'd be out the next day."

Those who knew Carlson credit his success to his work ethic, strong sense of family, ability to focus and adaptability.

A natural entrepreneur

Even when he was very young, Carlson saw himself as a businessman. By high school, he had built a network of paper routes that provided pocket money and eventually would pay his tuition at the University of Minnesota.

Busy with studies and Sigma Phi Epsilon fraternity activities at the university, Carlson enlisted family members to help deliver the Minneapolis Journal. "I was about 10 at the time," recalled his younger brother, Warren. "He told me he needed somebody to deliver papers. I told him no and scooted off, but he started running after me. I became an employee of his."

After graduating from the university in 1937 with a degree in economics, Carlson went to work at Procter & Gamble. In his 18 months selling soap and Crisco to grocers, he made a name for himself by persuading drugstores to promote and sell more soap. That bent for finding a way to expand was a hallmark of Carlson's career.

He noticed that a local department store gave customers Security Red Stamps, and began to kick around the idea of creating his own stamp business. About to be married to Arleen Martin, whom he had met in a political science class, Carlson stayed at P&G while building his own business on weekends.

He sold his first $14.50 of stamps in March 1938 to Anfin Odland, a grocer on 12th Avenue S. in Minneapolis. The night before the store began offering stamps, Carlson and his wife stood outside the building and shone a flashlight in to see the balloons and banners. "I shivered with excitement" at the possibilities, Carlson wrote later.

"What I wanted most was, plain and simply, to get ahead, to make something of myself -- to be somebody," he wrote in 1994.

Family ties

But first there were long hours on the road, trying to build up a roster of grocers. An early break came when Supervalu began offering the stamps in 1953 in Minneapolis. A settlement following a short-lived agreement with major grocer Kroger allowed Carlson to buy out his partner, Truman Johnson, setting the stage for Gold Bond Stamps to grow solely as Carlson's baby.

But the baby had a lot of uncles.

Carlson turned to his brothers for help. "Curt was harder than hell on us and used us to get the messages to the rest of the guys," Warren Carlson said. "But we understood that role. There was a lot of trust there."

Carlson also relied on his wife, who in the beginning even helped promote the stamp business dressed in a Gold Bond drum majorette uniform. "Make sure your spouse is with you 100 percent on your venture before you begin," he later wrote in "Good As Gold," one of two books about his life.

"Arleen has been a great influence on him. They've been a team," said Stanley S. Hubbard, chairman of St. Paul-based Hubbard Broadcasting Inc. and a longtime friend. "His legacy will be more than his name on the business school or even what Marilyn and the family make of the business in the coming years. His legacy is his family. That's what really matters, to live a good life and do the best work you can . . . Curt's the American dream."

Like many successful entrepreneurs, Carlson had difficulty handing over the reins, which caused some stress within the family. For years he groomed his daughter Barbara's husband, Edwin (Skip) Gage, as the next-generation leader. On Sept. 19, 1989, when Carlson was 75, he named Gage president and chief executive officer. But less than two years later, faced with softening business, Carlson resumed more direct responsibility, which created a difficult situation among Gage, Carlson and Marilyn Carlson Nelson, who was anxious for a more active role.

Gage left in 1991, buying three Carlson marketing companies and setting up operations as Gage Marketing Group. Nelson was named Carlson's chief operating officer in 1997 and chief executive officer in March 1998 in a celebration marking the company's 60th anniversary.

Nelson's son, Curtis Nelson, heads the company's hospitality unit and is being groomed as the third-generation leader of the family-owned business.

Although the first generational hand-off proved difficult for Carlson, "his daughter and grandson have exceeded his expectations," Mackay said, adding that Carlson had "a gleam in his eye" when they were around.

The Carlsons' two daughters and their families still live at the multi-home Carlson compound on Lake Minnetonka, and family gatherings have been common on his boat, the Curt-C, and at the family lodge in Wisconsin.

The emphasis on family at times extended beyond his own. When Nils Hasselmo was finishing his term as president of the University of Minnesota in 1997, Carlson flew in Hasselmo's family, including a grandson he hadn't seen, for a celebration.

Love for the U

The university was very close to Carlson's heart, representing "a monumental influence in his life," said Luella Goldberg, a trustee of the University of Minnesota Foundation, who watched Carlson lead the drive to raise $350 million for the school in the 1980s. "In my mind, there hasn't been anybody who has had a more significant impact on the University of Minnesota. His efforts at strengthening the school certainly are part of his legacy."

Carlson, a trustee since 1966, often took out his own checkbook for the university over the years, and he used his sales techniques to put the squeeze on others.

"It was amazing to have Curt make a phone call," said David Kidwell, dean of the university's Carlson School of Management. He recalled trying to get one businessman to consider a donation of more than $2 million. Then Carlson called the man and got the money. The new donor phoned Kidwell to say, in essence, that it was a pleasure to be hit up for money by such a pro.

Kidwell had gotten to know Carlson well after coming to the school in 1991. He said Carlson at times grew impatient for the school to improve its ranking, but he said Carlson resisted the urge to meddle. In their years of working to improve the building, faculty and curriculum, Kidwell said he learned to appreciate Carlson's ability to focus.

He described a trip when a group of business leaders flew to several schools in other states to examine their facilities. They left St. Paul at 4 a.m. "After we did our last school, we got on the plane at 7 p.m., exhausted," Kidwell recalled. "Everyone got themselves a beer or cocktail and plopped down for the ride home."

Everyone but Carlson, that is. He told the chief executives they needed to analyze the trip immediately and pull together the lessons learned that day. "This is why this guy is worth millions, billions," Kidwell said. "He had a tremendous capacity to cut through the issues."

Kidwell also saw examples of Carlson's ability to focus on his own business.

When Kidwell was a candidate for dean of the business school, he made a luncheon presentation to the business community. Carlson, who by then had built his hotel, marketing and travel empire, was in the audience. After the session, Carlson called Kidwell over. "He put his arm around me and said he wanted to talk to me privately. I expected that he was going to tell me what a great presentation it was," said Kidwell. Instead, "he looked at me and said, 'David, what hotel are you staying at?' "

The early days

Like many entrepreneurs, Carlson flew by the seat of his pants in the early days. Unable to afford a lawyer to draw up a standard contract, he slipped $5 to the secretary at a department store that offered trading stamps to let him copy the stamp contract. He got his landlord to defer the $55 rent for an extra 30 days to pull together money needed to start the business.

Big on setting goals, Carlson knew the heavy demands on his staff meant that their spouses needed to feel appreciated. Top performers were treated well, earning rewards their spouses could share, such as gold Cadillacs and round-the-world travel.

"We went on fantastic trips" to places such as Egypt, Australia, India and Monte Carlo, recalled Kurt Retzler, who began his nearly 34-year stint with the company in 1963. "It's one tough task to prove yourself to Curt," but those who did were treated well, said Retzler, who was controller and then for many years headed acquisitions and development.

Although the Gold Bond Stamp business built Carlson's wealth, by 1960 he began to fear the market was saturated, having grown from four stamp companies in 1938 to more than 400 in 1958. With diversification in mind, Carlson began acquiring land in the western suburbs for an industrial park. At the same time, he was approached about taking a small stake in the Radisson Hotel in downtown Minneapolis.

After making the investment, Carlson quickly realized that it would be difficult to get a good return on one hotel, so he started expanding. In the late 1960s and early '70s, he bought a range of businesses, including a candy and tobacco distributor, a wholesale grocery house, an oil company and even a builder of prefabricated homes. He stuck to a strategy that any new business must allow him to get his money back in five years. By the end of the decade, the company focused on four segments that Carlson referred to as the "happiness business": hospitality, travel, marketing and promotion.

Carlson's ability to think big and adapt to the marketplace were the secrets to his success, said Bill Norman, president and chief executive at Travel Industry of America, a trade organization that named Carlson to its Hall of Leaders in 1998. Norman described Carlson as "a pragmatic visionary who saw the value of integrating different segments way ahead of others. He was the first to successfully build a huge integrated travel company and take it global."

Carlson Cos. has become a massive organization, with a major legacy as a responsible corporate citizen, said the business school's Kidwell. "Curt's put an enormous amount of money, time and effort into making Minnesota a better place to live. It's been a fabulous ride."

Survivors include Carlson's widow, Arleen; daughter Marilyn and her husband, Glen Nelson, who is vice chairman of Medtronic Inc.; daughter Barbara and her husband, Edwin (Skip) Gage; eight grandchildren; six great-grandchildren; and brother Warren. Carlson was preceded in death by his parents, two brothers, a sister and a granddaughter.

There will be a reviewal from 5 to 9 p.m. Monday at Hennepin Avenue United Methodist Church in Minneapolis. The funeral will be at 3 p.m. Tuesday at the church. Both will be open to the public. Carlson Companies also plans to set aside a space in front of the company's Minnetonka headquarters for well-wishers to leave flowers, cards or other mementos.

The Carlson Companies Empire Minnetonka-based Carlson Companies Inc. is composed of several operating groups in the hospitality, travel and marketing sectors.

Carlson Hospitality Worldwide Lodging -Radisson Hospitality Worldwide -Regent International Hotels -Country Inns & Suites -Carlson Vacation Ownership -Carlson Lifestyle Living

Restaurants -T.G.I.Friday's -Italianni's -AquaKnox -Star Canyon

Cruises -Radisson Seven Seas; includes ships Radisson Diamond, Song of Flower, Hanseatic and Paul Gauguin

Gold Points Plus -Called the electroni trading stamp, the card is offered to consumers to encourage loyalty.

Carlson Travel Group Carlson Wagonlit Travel -Business travel

Carlson Leisure Group -Carlson Wagonlit Travel Associates/Travel Agents International -Neiman Marcus Travel Services -Carlson Travel Academies -Newly announced Thomas Cook merger

Carlson Marketing Group -Provides marketing expertise designed to build brand awareness, improve performance and/or increase brand loyalty.

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