Seven businesses that went from black-owned to corporate entities

by Anton Polouektov
Black-owned businesses have not fared particularly well as independent actors in this age of consolidation, having suffered heavy attrition rates due to a surge of mergers and buy-outs over the course of the last two decades. Many of these companies had long histories within the African-American community, becoming household names associated with the fulfillment of black Americans’ business ambitions.
Changing economic conditions, however, prompted business owners across the United States to realign their resources and consolidate their efforts in a drive to increase efficiency and competitiveness. Black-owned businesses could not sit idly by in the face of this profound change overtaking American business – they had to act or risk being left behind.
The Atlanta Post has compiled a list detailing some of the most high-profile acquisitions of black-owned businesses by larger companies during the latest wave of consolidation ventures. Ranging from clothing companies to advertising agencies and everything in between, these enterprises have undoubtedly left a lasting imprint on the modern business landscape.
Rocawear – Bought by Iconix in 2007 for $204 million

Rocawear, a well-established clothing brand belonging to rapper Jay-Z, was bringing in an impressive $700 million a year in sales when it was purchased by Iconix Brand Group in 2007. Jay-Z retained his role in product development, licensing, and marketing. In addition to the $204 million doled out by Iconix, the acquisition contract stipulated that Jay-Z would be paid an additional $35 million if the brand met its targeted sales figures for the next year under his leadership. Iconix aimed to generate $1 billion in sales from the company following the acquisition.
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Beauty Discussion: Can Black-Owned Hair Care Companies Make a Comeback?

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As we all probably already know just from a quick glance at our monthly bank statements, black hair care is big money. And we all know the first black self-made millionaire, Madame CJ Walker, made her fortune selling hair care products. But can we say the same for black-owned hair care companies nowadays? Are there even any black-owned hair companies left?

Let’s get into a little history.

Back in the 80s many black-owned cosmetic and hair care companies dominated the market in products for black consumers—for many it was due to the popularity of theJheri Curl style (that money dripped long all the way to the bank). Large white-owned companies who previously ignored the needs of the black hair community were seeing declines in profits and were looking for new markets to tap. They began to take notice that blacks spent a much greater percentage on hair and skin products than their white counterparts. So they put their heads together and began to employ tactics like buying struggling black owned cosmetic and hair care companies and signing big contracts to have leading African-American celebrities like Anita Baker, Billy Dee Williams, andJayne Kennedy become spokespeople for their products. Soon white owned companies began to dominate the market as black owned companies could barely keep up financially.

Seeing this as a major issue, ten black hair manufacturers founded the American Health and Beauty Aids Institute (AHBAI) and launched a three million dollar campaign urging consumers to buy black. They used the symbol of “The Proud Lady” (shown above at right) as their official logo so consumers could quickly identify products manufactured by black owned companies. This symbol can still be seen today on such products. Sadly, the overly aggressive gestures of white owned companies left many black companies unable to compete.

To add injury to insult, then president of Revlon Irving Bottner told Newsweekmagazine, “In the next few years, Black-owned businesses will disappear. They’ll all be sold to the White companies“. He also implied that black cosmetic and hair care companies made inferior products. He also stated “We are accused of taking business away from the Black companies, but Black consumers buy quality products–too often their Black brothers didn’t do them any good“. #ohnohedidnt

You know what happened next? Reverend Jesse Jackson in all his rhyming glory joined forces with AHBAI and his own PUSH Coalition and staged a mock funeral and boycott of all Revlon products. They wanted to achieve more support of the then 21 black-owned cosmetic and hair care companies, to force Revlon to remove operations in South Africa, and to demand an apology for Bottner’s remarks. With slogans like “Here lies Revlon dead because of greed, couldn’t stand to watch Black business succeed” and “Ashes to ashes, dust to dust, we’ll bury a company we cannot trust” and the support of publications like Essence, Jet, and Ebony who refused to run Revlon ads in their magazines, the boycott was a success.

But then we all know how that wound up—Halle Berry’s smiling face is all over Revlon ads today and all those black-owned hair care companies? Well, there’s about three or four of them left today. Bronner Brothers, Luster Products, and Dudley Products are among the few that still exist today.

And get this—back in 1993 large white-owned company Shark Products makers of African Pride hair care products tried to sue a smaller black-owned company for using the word “African” in their products’ name claiming trademark laws were violated. They believed they owned the exclusive rights to use the word “African” and the African nationalist colors. Whaaat? Three months later Shark Products dropped the suit. Better had.

We were so adamant about buying black back then, what’s the deal now? A hair product junkie myself, I take a glance in my beauty cabinet and of all the conditioners, lotions, and potions in there, I can only count one product made by a black-owned company: a large bottle of Luster’s S-Curl Moisturizer Activator. Hey, it helps manage my new growth.

Do you buy black? And can black-owned hair care companies really make a comeback? What are your thoughts?

~Danielle