Top CEO - Public Company: Daniel Feehan, Cash AmericaAugust 23, 2013
Daniel Feehan, right.
Business Press Correspondent
By age 21, Daniel Feehan had made a series of decisions that eventually led him to a fledgling Fort Worth firm called Cash America. Today, under his 25-year leadership, it has become the largest pawn shop chain in the world.
As a Texas A&M sophomore, Feehan gave up dreams of coaching football,believing the night and weekend duties would interfere with family life. When he decided to pursue a legal career, a counselor persuaded him to major in accounting instead of prelaw, saying that he could support himself through law school with bookkeeping or tax preparation jobs.
Feehan’s plans changed again after marrying his high school sweetheart the summer between his sophomore and junior years. By the time he graduated in 1972, he and his wife decided that the accounting job offers were too good to pass up for a young couple ready to start a family. Instead of going to law school, he accepted an auditing job at a top Houston accounting firm.
As good as he was at auditing numbers, Feehan admitted he was “not passionate” about his job.
In 1978, Feehan jumped at an offer to manage acquisitions and mergers for a Houston investment firm. Six years later, he co-founded a real estate development firm, which put him on a path that intersected with that of Jack Daugherty, who had been operating pawn shops since he was 20.
Feehan was one of Daugherty’s early investors in Cash America. At the request of his boss at the real estate firm, who was a larger investor in Cash America, Daugherty named Feehan to the Cash America board.
Based on their interactions during Feehan’s four years on the board, Daugherty decided to recruit Feehan for a new role in his firm. In 1988, he asked Feehan to meet him in a Houston airport bar, where – after a short interview – he offered Feehan a job as chief financial officer.
Sensing that Feehan was about to turn him down, Daugherty impulsively offered to put him at the firm’s helm if he’d serve as CFO first.
“He said he didn’t want to be chief financial officer, that that was not what he wanted to do in life,” Daugherty said. “He wanted to get into operations where he could see the whole picture. I spouted off, ‘I’ll make you president.’ And that’s exactly what happened.”
Feehan had never even been in a pawn shop before joining the Cash America board, even though his parents were not unlike other working people who pawn belongings to survive between paychecks.
“I saw a level of service provided to a segment of the population that didn’t have a lot of options,” he said. “They were not welcome in bank lobbies in the 1980s. I saw the need and how pawn shops were serving that need in short-term loan situations.”
As the real estate business “started to tank” in the 1980s, Feehan said, he sensed that the timing was right for another career change.
“I was determined to be an entrepreneur and create things,” he said. “Had this opportunity come five years sooner or five years later, I probably would not have pursued it.”
Convinced that his financial and people skills could turn struggling mom and pop pawn shops into professionally run businesses, as others had done with funeral homes and hardware stores, Feehan accepted Daugherty’s offer.
He wasted no time getting his feet wet and his hands dirty.
“He was like a sponge,” Daugherty said. “He actually went to the stores, worked in the stores, washed mechanic’s tools to put out to sell.”
That’s how Feehan earned the respect of the store operators who buy, sell and lend money in the name of the company, he said.
Upon his promotion to president in 1990, Feehan immediately sketched out his goals: to give credibility to shareholders, establish a team spirit with employees, and persuade other pawn shop owners to sell their stores to Cash America if they decided to go out of business.
With Daugherty’s blessing, Feehan put those goals into practice. Feehan rose to chief executive officer in 2000, when health problems forced the founder to take a less active role in the firm.
“As the guy who started the company, I always hoped I’d find somebody to do it better,” Daugherty said. “Dan was that guy who took it to the next level. He started having team meetings. Everybody was on the same sheet. The right hand knew what the left hand was doing.
“That’s why he was able to do with the company what he did.”
By 1992, Cash America had acquired a 26-store chain in the United Kingdom, its first international operation. In 2008 it acquired Mexico’s second-largest pawnshop chain, bringing the firm’s presence to 500 pawnshops around the world.
As its second quarter 2013 ended June 30, Cash America International operated in 964 locations including 827 lending locations in 22 U.S. states, 90 check-cashing centers in 14 states, 47 pawn lending locations in Mexico, and Internet consumer loans in 32 U.S. states, the United Kingdom, Canada and Australia.
But Feehan has done more than expand Cash America. Under his leadership, the firm has worked hard to dispel Hollywood portrayals of pawn shops as shady businesses by helping legislators write regulations to limit loan fees and discourage stolen merchandise trade, Daugherty said.
“When Dan came, we didn’t have a statewide system for reporting transactions,” Daugherty said. “Today every pawn transaction is submitted to a regulatory authority to match information to a national crime computer. Texas was one of the leaders in that effort and we helped write the laws.”
Feehan’s business and philanthropic activities have earned the respect of business and civic leaders. He serves on several business boards including RadioShack, where as board chairman he helped select Walgreen’s executive Joseph C. Magnacca as the fourth CEO in three years.
Although RadioShack’s second quarter financial performance remains down from a year ago, Feehan insists that even someone with Magnacca’s background can’t be expected to revive the electronics chain in five months.
“He’s a merchant by background and trade, something I thought RadioShack needed, as opposed to the financial background the last two CEOs had,” Feehan said of Magnacca. “I’m very optimistic about the skills and vision he brings to the business.”
Feehan said Cash America’s own second-quarter earnings decline is linked to a dramatic drop in the price of gold. Profits that increase when people pawn high-priced gold jewelry – 65 to 70 percent of Cash America’s inventory – decline when gold prices fall and people hold on to sentimental pieces, he said.
Feehan, now 62, has also kept the company involved in the community.
Mike Moncrief was a state senator when he first met Feehan in the 1990s, but it was when Moncrief was mayor of Fort Worth some years later that he got to know Feehan, after city officials asked him to donate land for the new Seventh Street Bridge.
“He had one question and one question only – how much do you need?” Moncrief recalled. “That’s a reflection of how Dan rolls. It’s not something he had to do. It’s something he chose to do.”
Feehan, his wife, Sharon, and two grown children have given back to their community through a variety of nonprofit groups as well.
Feehan said his parents were too busy earning a living – his father as a newspaper printer, his mother as an insurance office administrator – to do much besides attending their children’s sporting events. Neither parent attended college but they sent three sons to Texas A&M University.
As a result, Feehan said, “I related to people who struggle.”
In college, he mentored children in the neighborhood around Texas A&M. When he moved to Fort Worth, he sought out groups that help disadvantaged youth, including the Lena Pope Home, where he served as a board member and president.
“He understands the value of the next generation,” Moncrief said. “His philosophy is that actions speak louder than word. He leads by example. All he wants to do is what so many people in this city try to do, make the best even better.”