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Ilitch, Michael - Overview, Personal Life, Career Details, Chronology: Michael Ilitch, Social and Economic Impact

pizza detroit team little

(1929-)
Little Caesars Enterprises

Overview

Michael Ilitch, Chairman of Little Caesars Enterprises Inc., worked with his wife, Secretary-Treasurer Marian Ilitch to build their pizza business into a 4,700-unit chain. The company is a conglomerate that has a variety of entertainment holdings, which have included the Detroit Redwings, a professional hockey team, and the Detroit Tigers baseball team.

Personal Life

Ilitch was born in July 1929, in Detroit, Michigan. His father was Sotir Ilitch, an immigrant from Macedonia, who was employed as a tool-and-die worker at the Chrysler Corporation. As a youngster in Detroit, Ilitch showed athletic promise and played baseball in high school. He had a dream of one day playing professional ball and, in fact, he was recruited to play shortstop for the Detroit Tigers during his senior year. The team offered Ilitch $5,000 for the season, but he refused, asking instead for twice that amount. The Tigers turned him down.

At that point, Ilitch joined the Marine Corps., serving for the next four years. He had hoped to join the Tigers after his military stint, willing to play for the amount of their initial offer, but the team was no longer interested in him. As Ilitch said in an interview reported in 1993, “I was so excited to play baseball again that I signed with the Tigers for the same money they had offered four years before. But I was 22. I wasn’t a hot prospect anymore.” For the next three years, Ilitch played on several of the Tigers’ farm leagues. It was during this time that, on a blind date, he met an airlines reservation clerk named Marian; the two would marry a year later, in 1955.

Ilitch was 25 when he left baseball and entered the work force. With only a high school diploma, he sold aluminum awnings door-to-door and had a variety of odd jobs, including working at a bar on the west side of Detroit. It was there Ilitch learned how to throw a pizza.

During this period, Ilitch and his wife managed to save $10,000, which they used as capital to open a pizza parlor in Garden City, Michigan.

The couple started a family that eventually grew to seven children; the family would all become involved to a greater or lesser extent in the pizza business.

In addition to his business and sports interests, Ilitch was an avid promoter of his hometown, and in many ways, the feeling of Detroit residents was reciprocal. Ilitch bought and began renovating a historic downtown theater, The Fox, which is now a top-grossing enterprise. He continued to purchase a variety of restaurants and Olympic Arenas, Inc. (OAI), a sports management company. He also became involved in Detroit politics, making generous donations to Coleman Young, the longtime mayor of that city. One magazine ranked Ilitch the most powerful person in Michigan, placing him above the governor as well as Chrysler president, Lee Iacocca.

A number of Ilitch’s contributions have been philanthropic. In 1988, he started a food program to feed the hungry. For his efforts, he received the Presidential Citation for Volunteerism from the George Bush Administration. His other charities have included adopt-a-school programs, The Special Olympics, the March of Dimes and the Muscular Dystrophy Association. In his spare time, Ilitch enjoys lifting weights and working out.

Career Details

Ilitch and his wife opened their first pizza restaurant in 1959 in a strip mall with $10,000 they had saved. He suggested they call the restaurant “Pizza Treat,” but it was Marian who insisted on “Little Caesar,” the nickname she had given her husband when they were first married. Ilitch baked the pizzas, while his wife handled the finances. Business was brisk, encouraging the couple to open a second store two years later. A short time after that, they sold their first franchise.

Because carry-out food was still an innovative idea, the Ilitch’s had little competition; still, the business grew slowly. By1969, they had opened 50 stores. It was in the 1970s that the business really flourished, increasing to 300 stores by the early 1980s.

At that time, Ilitch had significant savings and began searching for a major sports franchise he could purchase. He originally hoped to buy the Tigers. The team went up for sale in the early 1980s, but pizza competitor Tom Monaghan, founder of Dominos, was given an exclusive bid on the baseball team. Instead, Ilitch turned to hockey. He purchased the Detroit Red Wings for $8 million in 1982. Over the next five years, the Red Wings became one of the sport’s most valuable franchises, capturing three division championships and nearly taking the national title. Ilitch brought his marketing savvy into the sport by giving away free cars during the Red Wings’ games. He also recruited. The efforts paid off; ticket sales jumped from 2,100 to 16,000 over a five-year period. In 1992, Financial World Magazine tagged the Red Wings the most valuable franchise in the NHL and estimated the team’s worth at $70 million.

Ilitch worked with the team to develop a family spirit. When the NHL players went on strike in 1992, he said in an interview reported in Newsmakers that he had approached the players and had “…pitched my heart out in there. I suggested we be entrepreneurs together, that we come up with something new, that we make sure no players had to do what I did when their sport was over—go door to door …. I said the same thing to our players the night before the strike vote. I said the biggest reason I owned a team was the overused word, ‘family.’”

Ilitch became known throughout the NHL for the generous bonuses he would give his players. One night, he handed everyone on the team $5,000 in thanks for their play, and awarded Steve Yzerman a $50,000 bonus after exceptional play one night. Team members were flown to games in a private jet, and one Christmas Ilitch left VCRs on the locker room benches for everyone on the team.

Hockey was not the only sport in which Ilitch became involved. In 1992 he made sports headlines for the second time when he offered $85 million cash to purchase the Detroit Tigers, which Monaghan, his longtime Domino rival, had offered for sale. The offer was quickly approved by the National League owners. For Ilitch it was the realization of a childhood dream, and it also put this usually shy man into the spotlight.

At the time of the ball club purchase, Ilitch had an estimated net worth of $280 million. Along with the two sports teams and the theater, Ilitch’s portfolio also includes Olympic Arenas Inc., the management company for Joe Louis Arena, which is the home of the Red Wings; Glen Falls Civic Center, home of the Wings’ farm team, and Cobo Arena, home of the Rockers. There are Little Caesars’ concessions in all three arenas.

Within the business world, however, Ilitch was becoming as well known for his marketing expertise as he was for his pizzas. It was a natural ability Ilitch seemed to have from the time he and Marian opened their first pizza parlor. On opening night of Little Caesars, Ilitch kicked off the festivities by giving the first customer a free meal. He was so delighted with the response that he did the same for the second customer and was on his way to the third when his wife intervened and asked the customer to pay. “That’ll be $1.99,” she reportedly told him. In the 1990s, Ilitch came up with the advertising campaign and marketing strategy that would cause the pizza chain to stand out from the rest of its competitors: “Pizza! Pizza!” and “Two great pizzas; one great price!” Ilitch spent $55 million on advertising in 1990, and he continued to far outspend his competitors, with the exception of pizza giants, Dominos and Pizza Hut. The results paid off. In five years, the number of Little Caesars’ stores escalated, from 300 to 4,500. The store became international, with outlets opening in England, as well as Puerto Rico and Canada. In 1992, sales increased 25 percent over that one-year period, topping $2.1 billion at the year’s end.

Ilitch and his wife Marian have been partners in all of their enterprises. Even while raising the couple’s seven children, she continued to retain her position as chief financial officer of the company. In fact, it was she who drafted the deal with the Tigers as well as managed the couple’s numerous investments and acquisitions. USA Today ranked her the most powerful executive in the NHL in 1991. The Ilitch children were also involved with the business; when they were young, during business discussions at meals and other family times, and as they got older, in executive positions. At one time or another, all of the Ilitch children worked for Little Caesars; five stayed with the company and have held executive positions. Chris Ilitch, group vice president, and one of the couple’s sons, described his father in a 1995 interview with Nation’s Restaurant News : “My father has a tremendous marketing sense, an ability to build sales, and a vision of what consumers want. My mother has the ability to handle the accounting.”

Chronology: Michael Ilitch

1929: Born.

1952: Played on Detroit Tigers’ farm system.

1950s: Sold aluminum awnings. 1959: Opened first Little Caesar’s Restaurant.

1962: Sold first Little Caesar’s franchise.

1982: Purchased Detroit Red Wings.

1992: Purchased Detroit Tigers.

Social and Economic Impact

Ilitch made a number of business decisions which, in many ways, paved the way for pizza to become one of the largest food enterprises in the United States. He was one of the first restaurateurs to attempt a food enterprise that was solely carry-out. At the time he opened his first store, most restaurants were sit down, with only a few even offering their food to go. In the 1970s, however, women began entering the workplace in larger numbers than ever before. That decade coincides with the take-off of the Little Caesars chain. Women suddenly had less time to cook and began to search for meal alternatives that were both simple and inexpensive.

Ilitch and his Little Caesar pizza shops met the need on both fronts. Certainly, there was nothing simpler than carry-out pizza. Ilitch had raised a large family himself and was well aware of how much it could cost to feed everyone. From the beginning, he would undercut the pizza prices of his competitors, often reducing the cost as much as $.50 per pizza. Then in the 1990s, Ilitch introduced the two-for-one deal for which the company became famous, and in keeping with his goal of feeding a family for less than $10.

Throughout the years, Ilitch has engendered the same loyalty from his employees as he does from his family and his hockey and baseball players. It’s clear to everyone that he is a man who earned the things he has achieved primarily through hard work, and he rewards those same efforts in the people who work for him. Many start off as hourly employees, and ultimately rise through the ranks to management positions.

Ilitch makes a point of keeping up with his stores—engaging not just the employees but also the customers in conversation. In 1994, the company introduced a subsidized day care center, understanding, first-hand, how difficult it can be to earn a living and still care for a growing family.

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