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Monday, October 27, 2014
Professional Solutions At Work
Meet The Faces of B.O.B.S.A. November 16 Detroit
TO ALL BOBSA MEMBERS AND NETWORK VENDORS , FRIENDS
Sunday, October 19, 2014
The Disappearing Black Power Base
MERGERS AND ACQUISITIONS
The Disappearing Black Power Base of Formally African American Owned Manufactures of Afro Designated Hair Care Products
There have been several major
acquisitions as of late involving black owned firms that are now owned by
majority and foreign countries firms.
However, this trend is not new, in fact it dates back to as early as the
60’s. Prior to the 60’s, the black
oriented hair care product business was all but ignored by the general market
product companies. But when market
surveys accidentally revealed that black consumer’s purchase cosmetic and
related products well beyond their proportionate numbers, (meaning that at that
time Afro Americans were only 10% of the total U.S. population, but were
consumers of more than 25% of cosmetic products that included for the most part
hair care items). Also, Afro Americans
paid more for professional hair care services per visit then others. For example, the average black patron paid
about $30.00 for a full service treatment, meaning shampoo, press & curl,
perms, conditioners and set. The
patron’s of other cultures spent about $12.00 for just a shampoo, set and
style. Today the prices are higher, but
the pay scale and trend are the same, only now Afro Americans are 12% of the
population and consume over 33% of cosmetic products and services. The main
factor as to why the Afro Beauty Supply consumer market is so strong is: Afro women spend up to three (3) times as
much money per salon visit then do others.
Most other patrons get shampoos, sets, color and hair cuts per
visit. Afro women generally get a full
service treatment such as Relaxer Perms, Curly Perms, Press & Curl, coupled
with Conditioning treatments as well as all forms of color services and hair
augmentations i.e. Weaves, Braids and Extensions. Many of these services are not even offered
in non Black Salons, plus the Afro patrons return more often than other
cultures.
So armed with this information,
the majority owned firms wanted in on this potential profitable market that
they had formerly ignored and considered unimportant. Note: the majority of Korean owned beauty
supply outlets are directed at that market for this and other reasons,
resulting in the Koreans controlling 80% of professional Afro designated hair
care product, sales and distribution sold in beauty supply stores without
regard as to who the manufactuer may be.
Also because Afro women are the major consumers of commercial hair that
the Koreans have control of, import and distribution for the most part,
resulting in their stores being in the areas where the customer base is. It is
interesting to note that the Koreans are only 5% of the U.S. population, but
control 60% of the nations Beauty Supply sales and distribution.
Revlon was one of the first majority firms to jump
into this market in a big way in the early 60’s. They first acquired a black
owned firm in Chicago (Deluxol) that manufactured a relaxer line and related
products. This product did so well under the original name with Revlon
financial backing for advertising and promotions, that Revlon came out with
another similar line under their own name of Revlon. They have done quite well in that endeavor
ever sense under several trade names.
Revlon was motivated primarily by how well Johnson Products Company (a
black owned product manufacturing company in Chicago) was doing with their
Ultra Sheen line of relaxer products. At
that time, Ultra Sheen was the best selling relaxer line. Revlon’s advertising and marketing and
misleading advertising, “That was addressed by the U.S. Fair Trade Commission”
claims was aimed towards the Ultra Sheen market. With that ploy, they were able to infiltrate
and dilute Johnson market share by 50%.
The reason that Revlon did not introduce their Afro line under their own
name at first, is because they did not want to taint their name and reputation
if the endeavor was not successful or accepted.
Revlon later dropped the Deluxol name in favor of promoting their own
trademark name. After that many other
majority company’s jumped into that market with greater success then anticipated. Company’s such as Alberto Culver makers of
VO5, developed TCB and later the Motions line.
Clairol, acquired an Afro owned line called Summitt Labs out of
Indianapolis, Indiana. After a
successful run, they sold the line to their then Summitt director Clyde
Hammonds who was with the company from the start, who is black and runs the
company out of Harvey, a suburb of Chicago, Ill. Clairol decided to get out of the ethnic
product business because it was distracting from their main focus of hair color
products. However they learned from that
experience how to better serve and market to the Afro consumer. This was the first time that an original
black owned company that was acquired by a majority firm was reclaimed by a
black owned company.
In the mid 60’s, a new look that was a draw back to
the original Afro hairstyle called the NATURAL.
This was to allow the hair to grow out naturally then groom and comb or
“fork” it out to a neat round appearance and cut to a well rounded shape. The first company to offer a product that
conformed to this style was Magnificent Products in Los Angeles. Two barbers Dennis Taylor and Wilber Jackson
founded the company. The product and the
style it was related to became a nation wide phenomena. Other companies tried to capitalize on this
success, but none over came the pursuit.
Later a majority owned firm J. Strickland of Memphis, Tenn. at that
time, the makers of Royal Crown and Dixie Peach products made the Magnificent
Products an offer that they could not refuse, and bought the company. But instead of furthering and enhancing the
sales and popularity of the products, they withdrew it from the market and shut
it down. The speculated reason for this
was because the Natural look was interfering with the sales of Royal Crown,
Dixie Peach and other similar products produced and sold almost exclusively to
Afro Americans. People wearing the
Natural did not need or use petrolatum-based products. Johnson Products picked up the slack with a
product called Afro Sheen, that did quite well until the fad was replaced by
the so-called Jeri Curl.
In the early 1980’s Worlds of Curls a black owned
company in Compton, Ca. became financially strapped due to diversifying into
endeavors outside of their niche market and the declining curl market. Worlds of Curls had the best selling curl
maintenance products for both professional and retail. The company is now owned by the J. Strickland
Company the makers of Royal Crown Products, as eluted to above, concerning
Magnificent Products.
Johnson Products of Chicago that was mentioned
earlier in this article, was acquired by a majority holding and investment firm
a few years ago, and has changed ownership four more times sense then including
the Walla Corporation of Germany with U.S. headquarters in New Jersey. Walla’s major niche market is hair color
products (the best selling hair color line in Europe). Later Walla was acquired
by Proctor & Gamble, and now Johnson has new owners (more about that later
in this article).
Soft Sheen Products of Chicago was the next product
line to be acquired by a major majority firm.
L’Oreal of Paris with U.S. headquarters’ in New York. Soft Sheen manufactured the best selling Afro
Curl products, plus the Optimum and Mazoni line. At the time of the acquisition Soft Sheen was
the largest Afro owned hair care firm in the world, with assets well over
$85,000.000.00. This acquisition was the
largest one of its kind ever recorded and put L’Oreal in the Afro Hair Care market
big time, plus they also own the Dark and Lovely line. Prior to this, L’Oreal was the largest
manufacturer of hair care products to the general market in the world, along
with Bristol Myers (who also owned Clairol), that is now owned by Proctor and Gamble. This acquisition also gave L’Oreal the
distinction of owning the largest Afro hair care company in the world. L’Oreal later attempted to acquire the
Johnson Products Co. from the investment company, but was stopped by the Fair
trade Commission because it would have given L’Oreal an unfair monopoly in the
Afro hair care market. This opened the
door for Walla to purchase Johnson.
Proctor & Gamble who also acquired Clairol from Bristol Myers
acquired walla later.
Pro Line products of Dallas,
Texas were acquired by Alberto Culver (mentioned earlier in this article) in
2005. Pro Lines niche was strong in the
retail market for Afro hair care products.
Alberto-Culver was already strong in the Afro professional market, with
TCB and Motions, plus the fact that they were at that time the parent company
of Sally’s Beauty Supply Stores. This
acquisition gave them a strong position in the Afro retail market. In the latter part of 2010, Alberto Culver
was purchased by the Unilever Company head quartered in the UK, Pro-line and
the other Afro centric products (TCB & Motions) were a part of the
deal. This made Unilever the third
largest manufacturer of ethnic related products.
A non-Afro firm in Chicago (JF
Labs) now owns Hawaiian Silky, originally home based in Shannon, Miss., owned
by Mr. Harry Green. Mr. Green passed
away in mid 2010. Leisure Curl was also
Afro owned and is now also owned by JF Labs.
Namiste’ makers of ORGANIC ROOT STIMULATOR (the most imitated product
line on the market today) in Blue Island, Ill. (southwest of Chicago), was purchased
by an India owned firm called Dabur towards the end of 2010. This was the largest such transaction of a
Afro owned hair care company in history, (over 100 million dollars) the owner
of Namiste’ Mr. Gary Gardner is the son of Edward Gardner the former owner of
Soft Sheen Products, prior to this transaction Soft Sheen acquisition by
L’Oreal was the largest such
transaction.
When Proctor and Gamble acquired
Walla, Johnson Products were a part of the deal. Due to the fact that Johnson (Ultra Sheen
& Gentle Treatment) was NOT the
major reason for the acquisition (the Wella line was the main consideration for
the acquisition), it made Johnson vulnerable for acquisition by any one
interested. Johnson was purchased in March of 2009 by a majority owned holding company and headed by Eric and Renee Brown, a husband and
wife team that are the son in law and daughter of the former Afro owner of Pro
Line Mr. Comer Cottrel. In mid 2013 Johnson Product Company (JPC) under went a
merger with the makers of Dr. Miracle’s (DRM) to become the DRM-JPC BRANDS.
The
company founded by Ernest Jhosua, JM Products was headed by his son Michael
after Mr. Jhosua’s death in 2005. In October of 2009 the company went into
receivership. The company had several
divisions that include production of the ISOPLUS and other trade name “Wet
Goods” products, and an aerosol plant.
The Isoplus line and other wet goods are now owned by the majority owned
Murray Products Co. in Detroit, MI.
It is note worthy that many of
the manufactures mentioned in this article are home based in other countries,
for example, L’Oreal (France), Wella (Germany), Debar (India) and Unilever
(England). It appears that many of the
American based hair care and cosmetic companies are being dominated by foreign
interest, especially in products directed to the Afro market. Three of the five largest manufactures of
Afro designated hair care and cosmetics products are foreign owned.
A few of the hair care manufactures that are still
Black owned as of this writing are: Luster products of Chicago, Ill. Producers
of the Pink Moisturizer, Kizure Iron Works of Gardena, Calif. (just south of
Los Angeles). Manufacture of Curling Irons, Pressing Combs, Stove Heaters and
several other related items, Summit Labs
in Harvey, Ill. Also a suburb of Chicago, Lloneau Products in Los Angeles, Ca.
makers of Liquid Gold Hair Bonding and Lace Front Adhesives, Bronner Bros. Of
Atlanta, Ga. with a complete line of hair care products. Bronner Bros. Also are the publishers of
Upscale Magazine and the producers of the most successful multicultural
Cosmetology Trade Show in this or any other country. Dudley Products of Kernersville, N.C. one of
the few Afro owned direct sales organization to the professional cosmetology
industry in this field. Dudley also owns
a chain of Cosmetology schools in several states. . Fashion Fair Cosmetics, owned by Johnson
Publishing (Ebony & Jet). Clentex of
Chicago, Ill. owned by Mr. Steve Luster the brother of the founder of Luster
Products. Research Labs in Atlanta, Ga.
owned by Mr. Cornell McBride with a line called Design Essentials. Mr. McBride was one of the original owners of
M&M Products, now majority owned.
E.F. Young Products of Meridian, MS is now being run by a third
generation of a family owned business.
Mixed Chicks in Woodland Hills, Ca.,
Professional Products Unlimited headed by Mr. Cyrus Jackson in
Fayetteville, GA., Clear Essence by Bluefield Associates a skin care product
line made especially for Afro Centric skin care needs.Taliah Waajid in Atlanta,
Ga.
The preceding is a partial listing of Afro owned
firms, but does represent most of the major Afro owned players still in the
game.
So if you were curious as to who’s who in regards to
ethnicity in the ownership of major ethnic directed product company’s you now
know part of the story. This story is
still unfolding as you read this article.
By Dr. Edward Tony Lloneau
(310) 283-7118
Liquidgoldbondng@aol.com
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