Arrow Electronics 5 Years Out
Heike Fallago
Arrow Electronics was founded in 1935 when a retail store named Arrow Radio opened on Cortlandt Street in the heart of lower Manhattan's "Radio Row," the birthplace of electronics distribution. Arrow Radio, established by Maurice ("Murray") Goldberg, sold used radios and radio parts to retail customers. Other industry pioneers with businesses nearby were Charles Avnet and Seymour Schweber.[5]
In the early 1950s, with additional franchises and a small field sales organization, Arrow began selling electronic parts to industrial customers. A second storefront/sales office was opened in Mineola, Long Island, in 1956. By 1961, when the company completed its initial public offering and listed its shares on the American Stock Exchange, total sales amounted to $4 million, over half of which came from the industrial sales division, with the remainder from the traditional retail business. During the 1960s, Arrow moved its headquarters to Farmingdale, New York (Long Island), and opened additional branches in Norwalk, Connecticut, and Totowa, New Jersey. The company relocated its headquarters office to Centennial, Colorado, in 2011.[6]
In 1968, Glenn, Green & Waddell, a partnership formed by three recent graduates of the Harvard Business School, B. Duke Glenn, Jr., Roger E. Green, and John C. Waddell, led a private investor group that acquired the controlling interest in Arrow. The investors saw an opportunity to consolidate the fragmented electronics industry. Duke Glenn served as chairman.[citation needed]
The company took on high levels of debt through frequent public bond offerings, to fund its growth strategy. Additional growth capital was provided through the 1969 acquisition of Schuylkill Metals Corporation, a lead recycling company. (This business, having served its purpose, was sold in 1987 amidst problems associated with being designated an EPA Superfund site contaminated with lead and chromium.[7])
On December 4, 1980, the Stouffer's Inn Fire killed 13 members of Arrow's senior management, including Glenn and Green. Waddell assumed leadership and, in 1982, recruited Stephen P. Kaufman, formerly a partner of McKinsey & Company, to join Arrow as president of the company's electronics distribution division. Kaufman succeeded Waddell as CEO in 1986 and as chairman in 1994.[8]
In 1988, Arrow adopted a growth strategy by acquiring Kierulff Electronics. According to Forbes, the company closed down all four Kierulff Electronics warehouses and within a year it experienced "miraculous" growth that went from a bottom line of $16 million loss in 1987 to operating profits of $10 million.[9]
During his nearly two decades with Arrow, Kaufman led the company's consolidation of the U.S. electronics distribution industry as well as the company's expansion into Europe and the Asia Pacific region. Under Kaufman's leadership, Arrow completed over 50 acquisitions of electronics distributors, including such prominent names as Ducommun (Kierulff), Lex (Schweber), Zeus, Anthem, Bell, and Wyle (all in the U.S.), Spoerle (Germany), Silverstar (Italy), and CAL (Hong Kong and China). Kaufman also led the company into the national distribution of commercial computer products, initially through its acquisition of Gates/FA Distributing. Arrow entered the 21st century with global electronic component sales of $9 billion and $3 billion of sales in its computer products business.[5] In 1998, Arrow Electronics established a 50/50 joint venture with Marubun Corporation [ja] of Japan called Marubun/Arrow in order to augment and support each other's operations in Asia and North America.[10]
Kaufman stepped down as CEO in 2000, retired as chairman in 2002, and was succeeded by Daniel W. Duval, a 15-year Arrow board veteran. In 2003, William E. Mitchell, former president of the global services division of Solectron Corporation, joined Arrow as chief executive officer and,[11] in 2006, became chairman. During Mitchell's six years at Arrow, sales climbed to $17 billion as the company increased shareholder returns, improved operating efficiencies, and completed 17 acquisitions.[5]
In 2009, Michael J. Long succeeded Mitchell as CEO, and in 2010 took over as chairman.[12][13] A long-time Arrow executive, Long joined the company in 1991 through the merger with Schweber Electronics and served in various senior management positions before becoming CEO. During Long's tenure, Arrow completed over 40 strategic acquisitions that further expanded its global components and computer systems businesses. In 2015, Arrow acquired United Technical Publishing from Hearst, adding properties such as Electronic Products and Schematics.com.[14] In June 2016, UBM reached agreement to divest its electronics media portfolio to an affiliate of Arrow Electronics Inc. for a cash consideration of $23.5 million. The portfolio comprises the U.S. and Asian versions of EE Times, EDN, ESM, Embedded, EBN, TechOnline and Datasheets.com.[15]
In 2019, after being a minor sponsor of the team, Arrow became the title sponsor of Schmidt Peterson Motorsport (SPM) IndyCar team to become Arrow Schmidt Peterson Motorsport.[24] In the same year, Arrow signed a sponsorship deal with McLaren Racing.[25][26] McLaren would later announce that they will be entering the IndyCar Series with SPM as a joint entry for the 2020 season as Arrow McLaren SP.[27] Arrow and McLaren signed a sponsorship extension in 2021 which sees Arrow continuing as a sponsor for the McLaren F1 Team and the title sponsor for Arrow McLaren SP. The title sponsorship deal will end after the 2028 season.[28][29]
Steve Kaufman is the retired Chairman and CEO of Arrow Electronics, Inc. (NYSE), which he joined in 1982. During his tenure, Arrow completed over 60 acquisitions in 35 countries and grew from a $500 million US-centric corporation to a $12 billion global enterprise ranking within the top 200 companies on the Fortune 500 list. In 2005, Electronics Business magazine named Steve one of the ten most influential executives in the electronics industry over the past 25 years.
Prior to joining Arrow, Steve served in executive capacities with Midland-Ross Corporation and for ten years was with McKinsey and Company, where he was a Principal in their Cleveland office focusing on strategy and operations issues for industrial clients. Following his retirement from Arrow in 2002 he joined the faculty of the Harvard Business School where he has taught for the past 20 years.
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