Legendary Capitalist Richard Sharp

COMMENTARY Monetary Policy

Legendary Capitalist Richard Sharp

Jul 3rd, 2014 2 min read
Stephen Moore

Distinguished Visiting Fellow

Stephen Moore is the Distinguished Visiting Fellow for Project for Economic Growth at The Heritage Foundation.

Most of us aspire to score one great achievement sometime in our lives, to change and improve the world and the people around us. For the entrepreneur, it is to build an enterprise that will add value, prosper and live for decades.

Richard Sharp of Richmond, Va., who died Tuesday of Alzheimer's at the age of 67, was one of those once-in-a-generation giants of industry who built not just one world-class, multibillion dollar company and not two or three, but four.

His stunning string of business and investing success led many of his friends and admirers to say that Rick had a magical Midas touch: Nearly every organization he ran or invested in turned to gold.

He is perhaps best remembered as the pioneer of the astounding consumer-electronics revolution of the 1980s and 1990s. After starting a computer company in the early 1980s, then selling it, he was elevated in 1984 to CEO of a small retail firm called Circuit City.

That company's meteoric rise during his leadership is the stuff of business legend: Revenues exploded from $175 million to $12.5 billion by 2000. If you bought a big-screen TV, camcorder, DVD, CD player or cell phone in the 1990s, you probably purchased it from one of Rick Sharp's stores.

He proved to be the Albert Einstein of retailing, locating hundreds of stores in what would become prime commercial locations where sales exploded.

How's this for a financial record: During one seven-year stretch, Circuit City had the biggest runup in its stock value of any Fortune 100 company. He made tens of thousands of shareholders rich.

He used to tell me with his customary modesty that "we were lucky to catch the wave of the consumer-electronics craze." No. It was his vision that launched the wave and brought these products at affordable prices into the living rooms of tens of millions of Americans.

Next came used-car powerhouse Carmax, which he started in the 1990s. He once told me he got the idea because "there was no industry with a lower reputation, other than Congress, than used-car salesman."

His vision was to create a classy nationwide retail seller of used cars without the hassles and the haggling. "Buying a car should be a fun experience," he used to say. Its annual revenues reached $7 billion. Chart topper number two.

In 1992 Sharp served as founding investor and chairman of Flextronics International, an electronics-manufacturing company. Not a household name, but the firm's sales soared to $30 billion during the years when Sharp ran it. Success number three.

Once in the early 2000s, I saw Rick, a longtime colleague in political crusades, walking around in red casual shoes made of plastic. I'd never seen anything like them. These, he explained, are Crocs, and he promised "they are going to be the next big thing in footwear."

I was skeptical they would catch on. In 2005, he partnered with the inventor, and became the chairman of Crocs Inc. Ring up another retail jackpot: Crocs became a $1 billion company overnight.

In his later years Rick would call me despondent about the direction of our political system in Washington. He devoted years of his life trying to tackle the thorniest problem of all: turning our nation away from socialist policies.

"The free enterprise system is what made this nation wealthy and allowed someone like me to become rich," he said. "Why does Washington want to tear down that system?"

I never had an answer.

He and his wife Sherry have been prodigious charitable givers for cancer and Alzheimer's research, Boys and Girls Clubs, and have donated millions of dollars for private-school scholarships and school-choice initiatives.

The question I keep pondering is what was it about Rick Sharp that made him so successful. The answer is that he could somehow see the future ahead of everyone else. He had an innate Steve Jobs-like sixth sense of understanding what American consumers wanted before they realized it themselves. He used those skills to build great companies and create tens of thousands of jobs.

He was, in short, a great American capitalist in the finest sense of the word.

Moore is chief economist at the Heritage Foundation

Originally appeared in the Investors Business Daily