Photo Courtesy of Bowling Green Houchens Markets

Houchens Industries is a major conglomerate headquartered in Bowling Green, but it didn’t start out that way.

Ervin G. Houchens opened his first store in 1917 in rural Barren County. The company expanded into Warren County in the 1940s and now the company has grocery stores under various names in 16 states. Houchens also expanded the company by purchasing companies related to the grocery industry.

When Houchens retired in 1983, he sold the company. But by 1988, employees bought the company back, and it is now among the largest employee-owned companies in the United States.

Ervin Houchens established a charitable foundation, which he took with him after the sale. That foundation is responsible for helping many church building projects across the region and is credited with making other charitable acts.

The company’s reach these days has extended well beyond the grocery industry, according to CEO Jimmie Gipson. Gipson said there probably are very few people who realize just what Houchens owns outside of groceries.

“We try to run below the radar,” the soft-spoken Gipson said in his Church Street office.

Gipson, who has worked at Houchens since 1965, first as a controller, said he could not have imagined at the time what Houchens has become. Ervin Houchens probably would not have either, he said.

Entrepreneurs such as Houchens prefer a hands-on approach to running companies, but Houchens’ holdings are so varied now, most of its subsidiaries operate fairly independently, Gipson said.

“We generally try not to acquire companies where the management isn’t willing to stay on,” he said. “We try not to run them out of the corporate office.”

One of the earlier purchases completely unrelated to groceries occurred in 1999, when Houchens bought Southern Recycling.

David Bradford, who started Southern Recycling in 1981, said he operated the company for about two and a half years after Houchens purchased it.

“Then I actually went out and found someone for them to run it,” Bradford said. “It was great being purchased by Houchens. I did business with Mr. Houchens for years. They were all just sort of like family. The reason I started Southern Recycling was because of Houchens cardboard.”

Bradford has since gone on to start two other companies: Owls Head Alloys and MetalWorks Recycling.

Buster Stewart, CEO of Stewart Richey, said Houchens’ purchase of his company has been good for employees.

“An ESOP is something we would have never been able to offer our employees,” he said. “And when they buy you out, you just keep running the company the way you have been.”

Gipson said Houchens’ first acquisition after becoming an ESOP was Junior Foods, which had about 40 stores in Kentucky and Tennessee.

Perhaps its most well-known acquisition was the more-than-$1 billion purchase of Commonwealth Brands in 2001. Houchens sold the cigarette company in 2007 to British-based Imperial Tobacco Group. Last year, Imperial moved Commonwealth’s headquarters to Florida.

“That was a big one,” Gipson said of the purchase and sale.

Houchens’ purchase of Commonwealth launched Simpson County native Brad Kelley into the billionaire world. He has purchased land across the Americas, owns animal preserves, thoroughbreds, Calumet Farms, and most recently bought The Factory, a shopping center in Franklin, Tenn., near where he lives now.

But Houchens has quietly made others in Bowling Green and elsewhere well-off, because as its investments prosper, so do employees’ retirement plans. An employee is fully vested in the retirement plan, which owns all of the companies, after seven years.

“It’s been a financial life-changing experience for lots of Houchens retirees,” Gipson said. “And that money will stay in small communities where the retirees live and recycle several times over.”

Gipson, at 71, said he doesn’t plan on becoming one of those retirees any time soon.

“As long as I have my health and can be productive, I plan on being here,” Gipson said.

While Gipson’s job now is much more involved than it was in the early days, he recalls some of the earlier years. “When I first started, Mr. (Roger) Page was CFO and we were all in a big room,” Gipson said.

One of Page’s requirements of those under him in the accounting area was that at the end of the day they had to tear off their adding machine tapes and roll them up so they could use the other side the next day. “I never really quite understood that,” Gipson said. “But Roger was very frugal.”

That frugality has apparently paid off. Houchens now employs nearly 16,000 people at the various companies it owns. Gipson said the numbers working locally varies, but some of the other Houchens-owned local companies include Scotty’s Contracting, Houchens Insurance Group, Hitcents and Pan Oston. It has a joint venture with Hilliard Lyons. Houchens also owns a property management company, tanning supply distribution company, a juice-making company, optical stores and others.

“We are pretty well diversified now,” Gipson said.

Gipson said the company plans to continue with its fairly conservative approach to business and has no acquisitions on the horizon.

“It’s pretty slow right now,” he said. “Most people are struggling to accept the reality of today, and it is difficult to make a purchase in that environment.”

Gipson said Houchens didn’t seek out the purchases it has made. “All of the investment opportunities were brought to us either by friends … or others,” he said.

Even as Houchens has grown, it has maintained its small-town values, primarily because the management of companies it acquires have similar business philosophies, Gipson said.

If you stopped any Houchens employee and asked what they thought about their job, Gipson said the response would be mostly positive. “It’s a good place to work,” he said. “We’re not the highest-paying job, but we are conscious of our employees’ needs and our retirement plan is one of the better ones.”