Hard Times : Black-Owned Cosmetic Firms Finding the Going Tough


Like a beehive in the age of sophisticated bobs, Frank Davie found that as the 1990s approached, his once lucrative line of African-American hair care products was out of step with the times.

When sales of products designed to maintain a curly perm--popular among blacks in the 1980s--plummeted, Davie’s Carson-based W.O.C. Products in 1990 launched a line of cosmetics for dark-skinned women to be sold in drug, food and general merchandise stores.

“The cosmetics were going to stabilize that bleeding” from the decline in the Worlds of Curls hair product sales, Davie, president of the black-owned firm, said in a recent interview. “It was going to be another niche for us.”


However, the strategy didn’t work, and W.O.C.’s Simply Satin makeup is no longer sold in stores. Moreover, Davie said the time and expense put into developing the new product set the family-owned company further back because it took too much focus away from the hair products segment of the business.

The company’s revenue peaked in the 1980s at $35 million when the “curl” style was hot, but has fallen since. Davie declined to be specific, but said the company has lost money in recent years.

W.O.C.’s problem began when it sunk more than $3 million into launching the Simply Satin line, large general market hair care and cosmetics firms were also rolling out lines of cosmetics to take advantage of the $500-million-a-year market in products for blacks, said Ken Gurin, vice president of marketing at Towne-Oller and Associates, a unit of Information Resources Inc. that monitors retail purchases in food, drug and mass merchandise outlets.

Thus, W.O.C. became another of the black-owned firms that pioneered personal care products and services for blacks only to have the market pulled out from under them.

The large general market companies simply rolled over the small black-owned firms and others competing in the ethnic market with their huge advertising budgets and command of shelf space in retail outlets, Gurin said.

By 1992, Simply Satin had gained 2.1% of the market, compared to 75% of the market controlled by large general market companies Posner Laboratories and Maybelline, according to the Towne-Oller survey.

But despite the formidable competition, another black-owned firm, convinced that the market has room for them, recently launched a line into the drugstore category. Johnson Publications, the nation’s second-largest black-owned firm, which publishes Ebony and Jet magazines and owns the Fashion Fair cosmetics sold in department stores, introduced Ebone for dark-skinned women last year.

Johnson officials said it’s too early to say how the line will do. But Johnson has an advertising vehicle--its magazines--not available to other black-owned firms.

“(The) shifting from the traditional cosmetics to the mass marketed brands . . . is really a function of the heavy advertising and promotion” by the giant cosmetics firms, Gurin said.

Maybelline, for example, has spent between $2 million and $3 million every year since launching its cosmetics line in 1991, said Phillip Smith, Maybelline’s vice president of account development. Currently, their Shades of You line is the No. 2 selling brand of cosmetics available in drugstores for women of color, Towne-Oller reported.

Davie said he knows all too well the impact of a big ad budget: “Our advertising dollars are not as aggressive as some of the majors,” he said. “We’re not a Fortune 500 company.” He added that Simply Satin was forced off the shelves because “we simply couldn’t do the promotions and advertising” the stores demanded.

Besides a weak advertising effort, Davie said Simply Satin was hurt by poor positioning on store shelves. He said the line got about a foot and a half of space in drugstores on the shelves marked “Ethnic Products,” although general market companies such as Maybelline and Revlon--the maker of the ColorStyle brand--mingled their ethnic products with more prominently shelved cosmetics for white women.

The problem of product segregation exists as well in the hair care industry, where black-owned companies are also in tough competition with large, general market firms, said Comer Cottrell, chairman of Dallas-based Pro-Line Products, a private, black-owned company.

His company sells perm repair treatments and shampoos that white women would buy in drug stores if the supplies weren’t placed in the ethnic products section, Cottrell said, adding that his products sell well in military stores where there is no product segregation. “My concern is not that they’re in our market, but that we can’t get into theirs,” he said.

Similar to W.O.C. Products, Pro-Line also had to deal with the shift in black hair fashions, Cottrell said. The curl faded in popularity in part because of changing styles, particularly among men who adopted variations of closely cropped styles favored by athletes. But the decline was also attributed to increasing ridicule of the wet-look perm in black popular culture.

Cottrell said Pro-Line survived the fashion shift by boosting advertising dollars and swiftly creating other products for new hair styles popular among blacks.

Pro-Line has maintained about 8% of the ethnic hair care market by spending about $4 million a year on advertising, he explained, adding: “This is a fashion and fad industry.”

Despite the decline in popularity, Davie said his company still sells products for the curly perm and survives with sales of other hair care products as well.

But Davie said W.O.C. has cut its staff to 25, from 350 at its peak, and is looking for another distribution channel for Simply Satin.

“We get calls every day from customers looking for the product,” Davie said. “The product met the needs of the consumer. It just didn’t fit the needs of the stores.”

BLACK COSMETICS COMPETITION W.O.C Products’ drugstore cosmetic line gained a small share of the market for cosmetics aimed at black women before disappearing from the shelves. Market share has shifted dramatically in the category with the introduction of more products from large, general market firms. 1993 Posner Cosmetics: 14.6% Mabelline Shades of You: 22.8% Revlon’s ColorStyle: 17% Cover Girl: 24.2% W.O.C.’s Simply Satin: -- Others: 22% 1991 Posner Cosmetics: 52.5% Mabelline Shades of You: 35.4% Revlon’s ColorStyle: -- Cover Girl: -- W.O.C.’s Simply Satin: 1.9% Others: 10.2% Source: Information Resources Inc.