Moments In Black Business: Johnson Products Sells To White Owners
By Ryan Velez
Over the course of this year, Black Enterprise has celebrated its 45th anniversary by profiling great moments in the nation’s largest Black-owned businesses. On December 28th, the company discussed the 1993 sale of Johnson Products Co., the haircare company known for Ultra Sheen and Gentle Treatment.
Many find the $67 million sale as a controversial turning point for Black business, as it marked the first major haircare manufacturer bought by a majority company. Other companies following suit would greatly reduce Black ownership within the Black haircare industry.
While Johnson Products chairman and CEO Joan B. Johnson hailed the transaction—a stock swap valued at $67 million—as a deal that “creates synergies for marketing opportunities with our haircare products,” the event unleashed fury in many quarters of Chicago’s Black community.
Mark Allen, then-president of the Black Leadership Development Institute, a local nonprofit training group, told BE at the time: “A lot of community leaders felt betrayed because we would we would have liked to check the resources in our own community first.”
Jeanette C. Wilson, then-executive director of Chicago-based Operation PUSH, called for a boycott of IVAX, asserting at the end of the organization’s 1993 convention: “We object to the purchase and sale of Johnson Products to white-owned IVAX because the wreckage the acquisition would leave in our community in terms of the loss of jobs and to the decreased commitment to our economic empowerment.”
The loudest voice of dissent was from within, JPC founder George E. Johnson Sr., who lost the controlling interest to his ex as part of a 1989 divorce settlement. He told BE at the time: “You can’t tell me anything that can justify what is happening. From the time that deal is consummated, money made at Johnson Products will no longer remain in the black community.”
However, in 2009, the company reverted to Black ownership, P&G sold it to RCJP Acquisition Inc., a partnership formed by husband-and-wife team Eric Brown and Renee Cottrell-Brown and private equity firms Rustic Canyon/Fontis Partners LP and St. Cloud Capital. The deal was valued at over $30 million. There is some change on the horizon, though.
In May 2012, Dallas-based Johnson Products announced Eric Brown will leave as CEO and become executive chair as the company restructures and gets ready for future growth. Financier Gabrielle Greene was named his successor as CEO.