H3 Enterprises Inc (HTRE)

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Today's Article - St. Pete Times

Hip-hop school of business

HipHopSodaShop aims to teach socially responsible capitalism to youth.

By Paul Swider, Times Staff Writer
Published June 14, 2007
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A long-delayed plan to make St. Petersburg the launching pad for a new hip-hop concept is getting new life under a new boss with some national clout.

Dr. Benjamin F. Chavis, former head of the NAACP and longtime social activist, has taken over as chief executive of H3 Enterprises, the parent of HipHopSodaShop, which plans to open its first store in St. Petersburg later this year.

"I'm here to indicate a sense of urgency," Chavis said Wednesday about the store at 8901 Fourth St. N that was to have opened last year but has lagged. "This is the prototype. I want to do it right."

The St. Petersburg store, which is being built on the site of a former Chinese restaurant, is intended to be the first of a worldwide chain, Chavis said. The shop will bring together hip-hop music, gaming and healthy food with an ethos of community investment.

Chavis said several hundred thousand dollars will be invested in the first location, without being more specific.

H3 hired Chavis and his firm, CEF Management, as the company's board gets serious about its novel business model. Pitching itself as the first publicly traded hip-hop company, H3 is planning to use HipHopSodaShop as a vehicle to promote sound business, teach investment to hip-hop youth and incorporate social responsibility into what Chavis describes as a unique business concept.

"This is a model development," said Chavis. "We hope the rest of corporate America will look at this."

The St. Petersburg location will include the name of one of its earliest supporters, former Tampa Bay Buccaneer Warren Sapp. The shop plays on endorsements and involvement from others in pro sports and hip-hop music.

Chavis is a co-founder, with hip-hop mogul Russell Simmons, of the nonprofit Hip-Hop Summit Action Network, an organization aimed at recapturing the social consciousness of original hip-hop and using its popularity to effect social change.

"For the last three years, Russell and I have been talking about teaching financial literacy to young people," Chavis said. "This is the perfect teaching tool. We're going to put it into practice."

After a career that started with Dr. Martin Luther King Jr. and moved up through the Nation of Islam, Chavis said he's culminating in concepts of business success driving cultural development.

H3 and HipHopSodaShop have garnered attention in the two years since the company was formed by 25-year-old Brian Peters and a partner. They've gone through several iterations of management, put forth numerous plans for rollout and attracted notice from the hip-hop and sports communities, but have yet to put a store together. H3 has launched BG7, a white-tea energy drink being test-marketed in Chicago and named for Bulls guard Ben Gordon.

While the concept of monetizing the popularity of hip-hop has been attractive, the pink-sheets stock has rarely traded above a dime recently, though it did get a bump last week when Chavis took over. Still, others are waiting to see how the concept plays out.

"If they really want to reinvent the soda shop and make it a cool, positive place for kids to hang out, that'd be great," said University of South Florida marketing professor Carol Osborne. "But they really need to pull off a unique one."

Osborne said tapping into a community of interest has worked before, noting the popularity of ESPN Zones that cater to sports fans. She said something like hip-hop might be tougher because youth trends can change so quickly.

Osborne wondered why the first store would be in St. Petersburg, but Chavis said the demographics were ideal and Sapp's influence would aid the launch. He said the next location will probably be in Harlem at a site near the Apollo Theater.

Stores are also planned in Jamaica, South Africa and the United Kingdom, among other locales.

Chavis said he'll continue to work out of his New York office, but will be a regular visitor to St. Petersburg while the store is being built and after.

"In hip-hop terms, this is not a drive-by," he said. "I'm going to invest myself."

Fast Facts:

HipHopSodaShop
Parent company: H3Enterprises Inc., based in New York.
Concept: A hip-hop-themed healthy-food-and-beverage store that also offers hip-hop music, merchandise, live HD sportscasts and cybergaming.
Origin: Founded in 2005 by entrepreneur Brian Peters, 25, and a partner.
CEO: Dr. Ben Chavis
Financials: Though publicly traded, H3Enterprises has reported limited financial information. It has a market cap of $4.7-million. Its stock, which closed at 9 cents a share Wednesday, has traded between 4 cents and 44 cents.

Here's the link:
http://www.sptimes.com/2007/06/14/Business/Hip_hop_school_of_bus.shtml


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