2021 Top 49ers Special Section

Accounting for the

Double Counted

Top 49ers’ dominant subsidiaries deserve recognition
By Isaac Stone Simonelli

n recognition of Alaska-grown and Alaska-owned businesses, Alaska Business publishes the Top 49ers. Each year it gives a rundown of Alaskan-owned industry players based on gross revenues. Most of the Top 49ers qualify for the list year after year, adapting to changes in markets, resource access, and investment opportunities. But occasionally, staple names that Alaskans have seen year after year on the list disappear.

One such company is Alaska Industrial Hardware.

“We were part of the 49ers for years,” Alaska Industrial Hardware President and CEO Terry Shurtleff says. “Before BSNC [Bering Straits Native Corporation] acquired us.”

Had it not been brought in under the umbrella of BSNC, Alaska Industrial Hardware would have made the 2021 Top 49ers List through its own revenue alone. But its parent company already made the cut, ranking number 12.

To avoid double counting gross revenue, Alaska Industrial Hardware is ineligible to be ranked in the Top 49ers. But, like other subsidiaries that would otherwise qualify based on revenue alone, Alaska Industrial Hardware still embodies the spirit of the Top 49ers.

Top 49ers are important in Alaska because they are companies that create jobs and drive the economy while directly supporting their communities. Additionally, they often have a presence in the Lower 48 and worldwide, resulting in revenue being drawn back to the Last Frontier and invested locally.

Alaska Industrial Hardware was acquired in August of 2015 by BSNC and has continued to prosper under its control with the guidance of BSNC President and CEO Gail Schubert, Shurtleff says.

“I give Gail Schubert all the credit for shepherding us into the BSNC family of companies,” Shurtleff says. “She said early on, ‘Don’t mess up a good thing. This is a company that has a great culture and has a great track record, let’s only add to it.’”

That track record was part of why Alaska Industrial Hardware consistently ranked in the Top 49ers and was in fact counted among the first Top 49ers cohort in 1985. Between 1985 and 2015 (the last year Alaska Industrial Hardware qualified), it only didn’t rank three times.

Even in a rapidly evolving retail environment, Alaska Industrial Hardware continues to draw in revenue by offering a vast array of products from hardware and hydraulics to power tools and plumbing.

“We’re a company that when somebody needs something that we sell, they don’t have time to wait,” Shurtleff explains, noting that usually contractors and other customers can’t afford to be paying employees to stand around while things are flown up from the Lower 48.

At any given time, the company has an inventory of about $20 million on the ground in Alaska, Shurtleff says.

“It’s either the summer construction season or it’s the winter construction season and both are compressed and both are high stakes,” Shurtleff says. “That’s why I think we’ve been successful in this market. We understand that and so we have the materials and the product here when people and industry need them.”

The stand-alone company has four locations in Anchorage, as well as stores in Wasilla, Juneau, Kenai, and Fairbanks.

While many legacy retailers have floundered in recent years, especially in the Alaska market, Shurtleff says that Alaska Industrial Hardware has succeeded for several reasons.

“We have been investing in Alaska: having the inventory here, having the appetite to put the inventory on the ground where Alaskans need it, when they need it,” Shurtleff says.

As a regional company, the geographical isolation of the Last Frontier has also played a part in allowing Alaska Industrial Hardware to succeed, Shurtleff notes.

With many of its 200 employees born and raised in Alaska, the company’s connection to the state runs deep, which played a significant role for why it was sold to BSNC instead of a publicly traded company that was also interested in acquiring it in 2015, Shurtleff says.

“Culturally, the acquisition has been a great fit,” Shurtleff says. “BSNC is a mission-driven company. During the acquisition process, we at AIH appreciated that BSNC is Alaskan-owned with a greater purpose than your typical company. AIH is proud to serve the communities we live and work in. That’s a deep part of our company culture that I think may have been lost under a publicly-traded company.”

Shurtleff says that the acquisition by BSNC allowed the company to remain an Alaska brand, which was important.

“By doing it the way we did it, we were able to keep jobs in Alaska—keep Alaskans employed,” Shurtleff says.

The deal has worked out well for both Alaska Industrial Hardware and BSNC, Shurtleff explains. One of the significant benefits for Alaska Industrial Hardware has been tied to the economies of scale, which has opened the door for the company to work with BSNC sister companies on government contracting opportunities.

There have been opportunities for Alaska Industrial Hardware employees, as well, including access to more reasonably priced health insurance, which were created by being part of a larger organization.

BSNC is also benefiting from the acquisition, Shurtleff says.

“We’ve been continually profitable in terms of business within their portfolio,” Shurtleff says. “BSNC, under Gail’s leadership, has continued to allow us the autonomy to move and adjust and do what we need to do in order to be relevant and competitive.”

“Culturally, the acquisition has been a great fit… During the acquisition process, we at AIH appreciated that BSNC is Alaskan-owned with a greater purpose than your typical company… That’s a deep part of our company culture that I think may have been lost under a publicly-traded company.”
Terry Shurtleff, President/CEO, Alaska Industrial Hardware
Back to Alaskan Ownership
Liquor Stores USA North, better known as Brown Jug, is another company that under different circumstances would qualify for a spot on the Top 49er list. Though, despite its gross revenue, Brown Jug has never made it on the list. Before its acquisition by Afognak, the company was owned by Alcanna—a Canadian-owned business.

With its acquisition in 2020, Brown Jug qualified as being Alaskan-owned and met that criterion for the Top 49er List. But, because of the same issue of double-counting revenue, Brown Jug still couldn’t be included. Nonetheless, it too falls in line with the spirit of the accolade.

“Brown Jug is a heritage Alaskan brand and is now owned and operated by Alaskans. Afognak management lives in the communities where we operate, shop at our stores, and are emotionally connected to the success of the business and to our staff and customers,” says Matt Thorpe, president of Brown Jug and COO of Afognak Commercial Group. “We are passionate about supporting not just local brands but also local charities. Because of this connection, Brown Jug is getting the kind of vision and commitment it deserves.”

Afognak, which ranked number 9 this year in the Top 49ers, has reorganized its corporate structure over the last year to separate subsidiary companies based on their primary operations: government and commercial.

“Afognak had already operated in the commercial sector for many years, and it was a great opportunity to diversify that portfolio further,” Thorpe says. “We are fortunate to have an executive management and operations team with the right skillset, work ethic, and leadership to incorporate the Brown Jug business easily into our current operations.”

Afognak took over Brown Jug in mid-2020 and hasn’t hesitated to make changes to bolster the revenue of the already profitable company.

“We have invested heavily in upgrading the store equipment, from security cameras to our point-of-sale system to our staff computers and telecommunications,” Thorpe says. “We are slowly remodeling existing locations and investing in the areas we operate in as community partners. We recently completed a renovation of our location at Spenard and Northern Lights.”

Since the takeover, the company launched its Wine Club, which connects customers with exquisite brands from vineyards across the world. Members are updated about new releases and notified of opportunities for tastings, among other benefits.

There have also been changes made with the goal of improving the lives of Brown Jug’s employees.

“Most employees were offered access to health insurance, and all employees now accrue PTO so they are less impacted when they need to take time off or can schedule vacations to create a better work/life balance,” Thorpe says.

Part of bringing Brown Jug under its umbrella, Afognak felt that it was important to ensure that their corporate values were in alignment.

“All of Afognak Native Corporation’s subsidiaries share the same values. Our commitment to harmony, appreciation and respect, efficiency, communication, Elder knowledge, heritage and culture, and commitment to community are all the same,” Thorpe says. “We were thrilled to fold in the hundreds of employees of Brown Jug and welcome them to the Afognak family of companies.”

Thorpe explains that he was happy with the “incremental” changes made at Brown Jug to make it a better place to work.

“We value our customers’ and employees’ safety and are committed to being community conscious,” Thorpe says. “We are only getting started and will continue our mission to bring the best products, best prices, and best customer service to our patrons. This includes launching new locations in the coming years and staying committed to supporting local brands and partners.”

Thorpe credits the marriage of the staff and management team at Brown Jug—with their decades of experience in the retail industry—with the executive management style of Afognak for the continued success of Brown Jug.

“We are grateful for the opportunity to bring the heritage brand of Brown Jug under Alaskan ownership once more. Our team looks forward to continuing investing in the business and taking pride in the communities where we operate,” Thorpe says. “Dollars spent at Brown Jug stores go right back into the hands of Alaskans, and we are so grateful for our loyal customer base.”

Part of Great Whole
While for recording keeping purposes it’s vital to not double-count gross revenue of important Alaska corporations and their subsidiaries, it’s also important to recognize companies in the Last Frontier that support the core values of the list. Among others, Alaska Industrial Hardware and Brown Jug do exactly that by creating jobs, investing in the state, and supporting local communities.

Shurtleff says, “It was always kind of a feather in our cap to see us within the 49ers, but we still feel good about being part of a 49er and being an Alaskan brand serving Alaskans.”