Mark Zweig, a well-known entrepreneur and developer in Fayetteville, has bought, restored and sold more property in the downtown area than just about anyone else in the city.
But recently, he said he’s grown tired of the building and development business.
“It’s just no fun anymore,” he said.
The 61-year-old head of eponymous development and construction firm Mark Zweig Inc. said while he still has a handful of construction and renovation projects in the works in Fayetteville, he is preparing to significantly scale back the company’s amount of work.
With that, his time will be freed up dramatically. Even more so since October when he sold his interests in Fayetteville-based Zweig Group, a media, publishing and consulting company for the architecture and engineering industries. Zweig started the company as Mark Zweig & Associates in Boston in 1988. It later became ZweigWhite in 1994, and then Zweig Group in 2014.
Both businesses Zweig founded have something in common. Their success landed each of them on Inc. magazine’s well-regarded annual list of the 5,000 fastest-growing private companies in America. Rankings for the lists are based on how fast a business’ revenue grew from one year to the next. Zweig Group, in fact, has been on the list three times. Mark Zweig Inc. was on the list in 2014.
The success of the two companies also has another common denominator, Zweig said: Sonya Stout. A lifelong Fayetteville resident and experienced financial executive, Stout was hired as Zweig Group’s chief financial officer in 2010 when Zweig agreed to return to the company he sold in 2004 to a private equity group.
Stout effected a significant turnaround in the business and worked there for nearly five years before joining Mark Zweig Inc., where she manages the firm’s operations, financial management, project management, procurement and design. Her official title is, tongue-in-cheek, executive vice president … of everything.
“No one has a better work ethic or service orientation than Sonya,” Zweig said.
In March, their lives became more intertwined: Zweig and Stout married. Zweig says the combination of personal and professional changes of the past eight months have the newlyweds looking for new business opportunities, something that would combine their strength: Zweig’s out-front marketing expertise that’s built his name into a brand in Fayetteville, and Stout’s strong behind-the-scenes management capabilities that have benefited numerous businesses through the years.
“What we would really like to do is find a business here locally that needs some help,” Stout said. “We like turnarounds. We like businesses that have had no marketing. We like companies that have had bad financial information. We like companies with an owner who is tired and wants out for any reason, or those that desperately need management help to turn things around.”
BACK TO 2010
Zweig, who teaches undergraduate courses in entrepreneurship and is executive in residence at the Sam M. Walton College of Business at the University of Arkansas, has experience with turnarounds. He tackled one in 2010 when he agreed to return to ZweigWhite, at the time still headquartered in Boston.
“He likes taking something and renovating it,” said Will Gladden, Fayetteville market president for Signature Bank of Arkansas, a longtime financial backer of Zweig’s businesses. “Whether that’s a struggling business or a home or other kind of property, he has a great track record of being able to do that.”
Zweig, who is originally from Missouri, moved to Northwest Arkansas in 2005 with his former wife, who was an Arkansas native. Before that, Zweig, who already owned a home in Fayetteville, had been flying in from Boston once a week to teach at the UA.
When Zweig sold the business in 2004, ZweigWhite had been a profitable and respected company.
“At its peak, ZweigWhite was about $19.5 million in revenue, and it was a great company,” Zweig said. “We had no debt, we had audited financials and we had the best Dun & Bradstreet creditworthiness rating you can have. We were privately held. We had 23 or 24 shareholders, and I owned a little bit less than 50% at the time we sold it.”
But the buyer, Cardinal Growth, “grossly mismanaged” the company, Zweig said, taking on debt and eventually defaulting on the loans. Cardinal’s lender, BIA Digital Partners, foreclosed on the company in 2009.
“We didn’t know when we came into it that it was in such poor condition,” Stout said. “There was somewhere around $7 million in debt against [the company] and several judgments we didn’t know about.”
In July 2010, BIA asked Zweig to come back to help turn the business around. A major stipulation of Zweig’s was to relocate ZweigWhite’s headquarters to Fayetteville. BIA agreed, and Zweig returned with a 25% ownership stake. He eventually became sole owner in 2012, and the company appeared for a third time on the Inc. 5000 list the following year.
“From 2010 to 2013 we went from $3.1 million in revenue and $6 million negative net worth to $4.5 million in revenue and profitable,” Zweig said.
He said the improvement would not have happened without Stout, who said the turnaround wasn’t easy, noting that the receiver in the foreclosure had the company’s accounting functions outsourced to India.
“They worked on their clock, not ours,” she said. “I can remember waking up in the middle of the night several times and answering accounting questions and then going back to sleep. It was five years of stress.”
Zweig took a long-term internal buyout from Zweig Group in October from a group of three company principals, led by Zweig’s primary business partner, president and CEO Chad Clinehens.
Financial terms were not disclosed, but Zweig said it will provide him a “certain amount” of income for the next 15 years.
TIME FOR CHANGE
Zweig pointed to a variety of factors for cutting back the operations of Mark Zweig Inc., a company he launched in January 2005 and has averaged, Zweig said, about $5 million in sales annually.
“It’s primarily because of the availability of labor and quality subcontractors,” he said. “Carpenters are key to projects, and there’s just a tremendous shortage of quality carpentry in this area.
“That, and … I don’t want to say the overly burdensome development process in Fayetteville, but it’s not as easy as it used to be.”
Stout said the cycle of being stretched too thin has also been a catalyst for change.
“We had far too many projects,” she said. “We went from December 2017 to December 2018 without selling a single thing. It wasn’t because we had things [listed] for sale, and they weren’t selling. We had nothing for sale. There were days we had two large projects and six or seven smaller ones, and I spent entire days going from one to the other. You feel like you’re spinning your wheels.”
Zweig said two significant projects that should wrap up this summer are a handful of condo units on Church Street near Fayetteville’s downtown square, and the 1950s-era Twin Arch Motel project, a long-vacant property at 525 N. College Ave. that Zweig bought and has been renovating for the past three years into 17 upscale apartments.
Zweig also owns the 20,000-square-foot University Village shopping center on West 15th Street near Baum Stadium in south Fayetteville. He says there are two buildouts underway that will make the development fully leased and complete that project upgrade. Zweig paid $2.25 million for the property in the spring of 2016.
Once those projects are cleared from the books, Stout envisions the company “slowing down” to building/restoring one house at a time and owning a few select commercial properties.
“I’m looking forward to that like you wouldn’t believe,” she joked.