Divorce Pact Changes Leadership at Johnson

George E. and Joan B. Johnson started one of the nation’s largest black-owned companies together with $250 in 1954, but the family ties that bound the company and the couple have come undone.

Johnson signed the company chairmanship and the bulk of its shares over to her this week in their divorce settlement.

Johnson Products Co. makes hair care and cosmetic products under such brand names as Gentle-Treatment, Ultra Sheen and Classy Curl.

“This is a family company and she wanted to preserve the company for the family, the children. And she obviously feels that she can make this company into something even better than it is today,” Bernard Rinella, Joan Johnson’s divorce lawyer, said Tuesday.

She and the couple’s eldest son, Eric G. Johnson, will seek to guide Johnson Products back to profitability after eight straight years of losses, he said.

Former Company Treasurer

The company’s stock closed up 12.5 cents Tuesday at $2.50 a share on the American Stock Exchange.

George Johnson, 62, who had been the company’s principal shareholder, turned his stock over to his former wife and resigned as chairman and chief executive on Monday, when the divorce was granted.

Joan Johnson, 60, formerly the company treasurer, replaced him as chairman and now owns or controls 61% of the personal-product company’s common stock.

Eric Johnson, who has been president of the company since December, was named chief executive.

George Johnson will stay on as a consultant. He also is chairman of the holding company that owns Independence Bank of Chicago and Drexel National Bank in Chicago.

The changes were approved Monday by Johnson Products’ board.

Alvin J. Boutte, chairman of Independence Bank of Chicago and a member of the Johnson Products board, declined to elaborate on the move.

“This was strictly a family affair. They amicably agreed to do it this way,” said Boutte.

He added that he did not expect radical changes at the company.

“Eric has really been running the company on a day-to-day basis,” Boutte said.

Other terms of the settlement were not disclosed, and Rinella said the divorce records were impounded and not available to the public.

George Johnson’s attorney, Robert Hirsch, did not return telephone calls to his office.

Neither George nor Joan Johnson could be reached through the company on Tuesday.

Rinella said Johnson Products, which is completing an internal reorganization begun 18 months ago, would benefit from the management change.

“I think she can turn it around,” he said.

Founded in Chicago

The divorce action had been pending for more than a year while the two sides discussed terms of the settlement, including the change in ownership of the company, Rinella said.

Asked whether George Johnson had considered selling the company instead of turning it over, Rinella said it “could have been an option . . . but that never developed.”

The Johnsons founded the company in Chicago, and it became the first black-owned company traded on the American Stock Exchange in 1971.

While the company has lost money for the past eight years, it posted small gains in the past two quarters.

The company reported a loss of $3.7 million on sales of $29.1 million in fiscal 1988. The company registered a $2.2-million one-time gain in the first quarter of its 1989 fiscal year after selling land near its headquarters.

Johnson Products was 17th on this year’s list of the nation’s 100 largest black-owned companies, compiled by Black Enterprise magazine.