David Perdue hopes his business experience will distinguish him among the crowded Republican field running for a U.S. Senate seat. But his boardroom background poses challenges that will test his campaign like no other this election cycle.
He’s known on Wall Street as a turnaround specialist who helps revive brands and reap rewards for investors. But his rivals will try to depict the former Fortune 500 leader as out-of-touch with regular citizens. And he’ll face questions about his business setbacks.
Perdue also will confront the same problem facing Michelle Nunn, the only big-name Democratic contender running for retiring Sen. Saxby Chambliss’ seat: Not since Mack Mattingly’s victory in 1980 has a candidate without public electoral experience won a Senate seat in Georgia.
He’s put together a formidable team of strategists, made up of some people who worked for his famous first cousin, former Gov. Sonny Perdue. But competition looms large from veteran politicians: Reps. Phil Gingrey, Paul Broun and Jack Kingston and former Secretary of State Karen Handel.
Perdue welcomes the scrutiny of his boardroom experience, even his brief leadership of the troubled North Carolina textile firm that went under shortly after he left. He said it’s what will help him plot a course to cut federal spending and spur job growth if elected.
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“My experience in business, good and bad, has prepared me to focus on the economic crisis and not the noise around it,” he said.
Perdue, who grew up in Warner Robins as the son of two schoolteachers, built his career as a marketing expert. He established Sara Lee’s first Asian headquarters and, while CEO of Reebok, cleared debt from the company’s balance sheet and revived the brand’s sneaker line.
What he’s most remembered for, though, is negotiating for Reebok a high-stakes contract with the NFL that former Reebok executive Paul Harrington called “revolutionary” for the way it positioned the shoe brand.
Perdue was poached by Pillowtex, a North Carolina textile giant, in July 2002 with the goal of renewing its popular brands. But he soon realized he was in for a stiffer challenge than he imagined.
The company, which had just emerged from bankruptcy, struggled with a $200 million outstanding bank loan and mounting competition from a flood of low-cost imports. After he arrived, he also discovered a festering problem with an underfunded pension plan.
As he attempted to drum up a potential buyer for the plant, some company workers accused him of disappearing. The Charlotte Observer reported that some staffers referred to him as “Oz” in a nod to the elusive wizard. Ed Hosack, a former plant manager, recalls a rocky atmosphere.
“He came in during a really tumultuous time. It was tumultuous for me, and I was only a manager,” said Hosack, who now runs a nonprofit Christian ministry. “I can’t imagine what it was like for the chief executive.”
The experience still weighs heavy on Perdue. Speaking publicly for the first time about his tenure there, he said he appealed to the company’s owners at Oaktree Capital to amp up their investment but that his request was declined. He spent much of his time at the firm’s helm traveling the globe seeking a buyer.
“It was a trying experience. I thought I could help,” he said. “They were some of the best workers I’ve ever worked with. I would have done anything to salvage the situation. But, without further capital, it just wasn’t going to happen.”
He added: “What would I do differently? I can be criticized for not doing the due diligence on the front end.” Even if he knew the full extent of the company’s financial problems, he said, he may have still taken the job.
He resigned in March 2003 after seven months on the job. Months later, Pillowtex shuttered. The 4,000 people it laid off in North Carolina was the largest single job-loss in the state’s history at the time.
Perdue knew what he was getting into when he became chief executive of the Dollar General retail chain, which he took immediately after leaving Pillowtex. It was reeling from the resignation of its former leader after the acknowledgement that the firm overstated profits by $100 million. It also had recently paid another $162 million to settle shareholder lawsuits.
He revamped the firm’s inventory line, overhauled its logistics network and updated its marketing strategy. Analysts then complained he had an overly aggressive expansion strategy when new competition and shifting demographics forced him to shutter hundreds of other stores. But, by the time the chain was sold in 2007, the stock price had more than doubled and some 2,600 new stores were opened.
That’s where Perdue first started seriously weighing a run for public office, and his friends and colleagues say his time there was a defining experience.
“He never let us lose sight of the fact that our customer was going in there to feed their family and that, if they’re expecting to pick up canned green beans, they better be there — and they better be affordable,” said Lloyd Davis, a retail executive who worked with Perdue at Reebok and Dollar General.
Perdue returned to Georgia to start a financial venture and later joined his cousin and two others to start an Atlanta-based global trading firm in April 2011. His next challenge is bucking history.
The U.S. Senate is dotted with millionaire businessmen who have invested their personal fortunes in expensive political races, but Georgians have been more skeptical. Guy Millner, Michael Coles and Cliff Oxford all lost Senate bids here despite formidable financial muscle.
Political analysts say discontent with veteran lawmakers and Perdue’s famous pedigree could help him succeed where others failed. Said Kerwin Swint, a Kennesaw State University political scientist: “He’s an outsider yet his name has so much power to it.”
Expect rivals to portray him as a jet-setting globetrotter with a Sea Island mansion and a checking account sizable enough to float his campaign. And expect Perdue to counter with stories of his Middle Georgia upbringing and homespun wisdom from his 87-year-old mom, the now-retired teacher.
“I’m not embarrassed by my success as a business person,” he said. “And I won’t run away from it.”