The Making of Harcourt General: A History of Growth Through Diversification, 1922-1992

The Making of Harcourt General describes the transformation of a small movie-theater proprietorship, formed in the early days of the industry, into a major diversified firm with businesses in publishing (Harcourt Brace), retailing (Neiman Marcus), and insurance as well as theaters (General Cinema). As Mid-West Drive-In Theatres, Inc., the company was a pioneer in its industry, first with family-oriented drive-ins and later with shopping-center theaters. From early on, however, driven by the cash-generating power of the theater business, it pursued a strategy of diversification, navigating the conglomerate era, the junk-bond-fueled "merger mania" of the 1980s, and the more painful period of restructuring in the early 1990s. This book offers a unique inside view of the evolution of Harcourt General, but also places that evolution in a broader context, illuminating the dramatic changes that have occurred in the business environment in those years.
Harcourt General's diversification strategy has taken the company through an exciting series of acquisitions. In the late 1960s, as General Cinema, it entered soft drink bottling, gaining an early lead in the consolidation of that industry. From a "white-knight" rescue of Carter Hawley Hale in 1984, it emerged in 1988 with a new specialty retail chain, the Neiman Marcus Group. In 1992, General Cinema extricated the publisher Harcourt Brace Jovanovich from a heavy burden of junk-bond debt that threatened to drive it into bankruptcy - the deal that led to the renaming of the company Harcourt General. Throughout, the founding family has retained a controlling stake in the company and an active role in management.
In The Making of Harcourt General, Bettye H. Pruitt examines important issues confronting all diversified firms - the relationship between business and financial strategy, the assimilation of acquired businesses, and the tension between company divisions and the corporate office - as well as issues important to owner-managed companies, including succession and professionalization of management. Readers interested in diversification, family business, the movie exhibition and soft drink bottling industries, or simply the history of a successful company will find The Making of Harcourt General a remarkable tale of American enterprise.

Bettye H. Pruitt is vice president of The Winthrop Group, a company specializing in the historical analysis of institutional development.