Today’s Post

  • 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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