He founded an empire with a college roommate based on his Liberian grandmother’s beauty products, sold the company last year to one of the world’s largest consumer goods firms, and now he has restored full Black ownership to one of the U.S.’s most iconic media brands.
We’re shining the spotlight on the mogul who recently bought Essence Magazine — Richelieu Dennis, founder of hair- and skin-care products maker Sundial Brands.
Soon after the New Year, an announcement ended months of speculation over who would buy Essence Magazine.
A privately held venture, Essence Ventures LLC announced its acquisition of Essence Communications Inc. from Time Inc. for an undisclosed amount.
The independent African-American owned Essence Ventures is focused on merging content, community and commerce, a press release said. What exactly does that mean? Anyone can put out a press release and say anything. Well, for starters, the all-Black female executive team at Essence will have an equity stake in the business.
In an environment of consolidations among African American media assets and declining advertising sales for all print media, Time Inc. announced in July 2017 that it would sell a majority stake in Essence Magazine — probably the No. 1 buy for people trying to reach black women.
The announcement set off robust speculation about who would/could/should buy the leading African-American women’s lifestyle publication.
Essence was originally Black-owned. Time Inc. bought 49 percent of Essence Communication Inc in 2000, and the remaining 51 percent in 2005, putting Essence under white ownership.
“We are excited to be able to return this culturally relevant and historically significant platform to ownership by the people and the consumers whom it serves and offer new opportunities for the women leading the business to also be partners in the business,” Richelieu said in a prepared statement.
Essence has a global audience of 16-million-plus on platforms including a print magazine, digital, video and social platforms; and TV specials. The annual Essence Music Festival debuted in 1995 and is now the largest annual gathering of African-American musical talent in the U.S. It’s been ongoing for 23 years, and earned more money than the magazine made in a year, former CEO Joe Ripp said in a 2015 Wall Street Journal report.
The acquisition of Essence marks the beginning of a transformation “of our iconic brand as it evolves to serve the needs and interests of multigenerational Black women around the world in an even more elevated and comprehensive way across print, digital, e-commerce and experiential platforms,” said Michelle Ebanks president of Essence. “It represents a critical recognition, centering and elevation of the Black women running the business from solely a leadership position to a co-ownership position.”
News of Richelieu’s Essence acquisition came a month after Time Inc. agreed to sell parts of itself in a $2.8 billion deal with Meredith, the publisher of female-skewing publications and owner of 17 TV stations. That transaction is backed by an affiliate of Koch Industries, headed by conservative billionaire brothers Charles and David Koch, Variety reported.
Time Inc. continues to sell off parts of the company that were not included in the sale to Meredith.
Born in Liberia, Sundial Brands CEO Richelieu came to the U.S. to attend business school at Babson College. When he graduated in 1991, civil war in Liberia prevented his return. He and his best friend and college roommate, Nyema Tubman, embarked on an entrepreneurial journey to address skin and hair care issues traditionally ignored by mass-market companies. Using recipes passed down from Richelieu’s grandmother, they began a line of natural bath and body care products, co-founding Sundial with Mary Dennis, Richelieu’s mother.
Widowed at age 19, Richelieu’s grandmother, Sofi Tucker, began making handmade shea butter soaps, salves and other products and selling them to missionaries and villagers to support her family in her native Sierra Leone. She eventually became known as a village healer.
Sundial was inspired by Tucker. Now there are plans are for a Sofi Tucker Foundation. “It was his family’s heritage and home recipes for natural hair and skin care that Dennis turned into his first brand, Nubian Heritage, and sold on the streets of Harlem as a Liberian immigrant in the early ’90s after he and Tubman graduated from Babson College. Dennis and Sundial were given their inspiration by strong women of color, so it makes sense that they and the Sofi Tucker Foundation would want to pay it forward to the next generation,” wrote Jay Coen Gilbert in a Forbes report.
With SheaMoisture as its most recognizable brand, Sundial is now a certified B Corp company. That’s a private certification issued to for-profit companies by B Lab, a global nonprofit. Companies must receive a minimum score on an online assessment for “social and environmental performance” to be certified. Sundial has Fair for Life social and fair trade certification, and manufactures its natural and certified-organic ingredient products in Long Island, NY.
In September 2015, Sundial sold a minority stake for an undisclosed amount to investment firm Bain Capital Private Equity to accelerate its growth. At the time, Bain valued Sundial at $700 million, Fast Company reported.
Bain Capital Managing Director Deval Patrick — former governor of Massachusetts — played a role in the partnership discussions and joined the Sundial board of directors.
Bain was co-founded by conservative Mitt Romney, something that later became a problem for some critics. Richelieu’s Bain Capital partnership was not universally welcomed by critics who connected a deal with “the pursuit of mainstream dollars”, according to Fast Company.
Others thought the private equity firm partnership was a smart move that could help Richelieu later down the road with bigger M&A deals, bringing Bain’s networks and experience to big-dealmaking that was in Sundial’s future.
While we have been presented several opportunities to be acquired by multinational corporations, we are most excited that our collaboration with Bain Capital fulfills our commitment to remain an independent family-owned and operated company with a purpose-driven business model that puts community at our core,” Richelieu said at the time in a press release. “Our consumers have always been partners with us, and now they can continue to walk with us on this journey.”
Ryan Cotton, a managing director at Bain, credited Richelieu and his family with building a business and community “centered on the idea of the New General Market, (consumers influenced by the ‘millennial mindset’) an idea that is very well aligned with where we as consumers and as a country are headed. We could not be more excited to partner with Sundial Brands to continue to enhance this differentiated approach to innovation, social entrepreneurship and community engagement,” Cotton said.
Sundial earned an estimated $200 million in revenue in 2015 — 31 percent more than the previous year, Fast Company reported. The company benefited from the trend in “the explosive rise of multicultural beauty”:
Natural is now becoming the norm. Over the past six years, the natural beauty market has seen double-digit growth; it’s currently worth $33 billion globally, making up 13 percent of the overall beauty market. Sundial has benefited from this trend and the explosive rise of multicultural beauty: A third of the U.S. population, after all, is not white, and this group has historically spent more on beauty products.”
In November 2017, Unilever agreed to acquire Bain Capital-backed Sundial Brands for an undisclosed amount. The deal is expected to close in the first quarter of 2018.
Unilever is a British-Dutch consumer goods company based in London and Rotterdam, Netherlands. Its products include food, beverages, cleaning agents and personal care products. It was the world’s largest consumer goods company as of 2012 revenue, and Europe’s seventh most valuable company.
Worth $176 billion, Unilever has attempted to build a reputation for corporate responsibility: “Unilever is the world’s biggest experiment in corporate do-gooding,” according to an Aug. 31, 2017 headline in The Economist.
Unilever will be acquiring Sundial brands including SheaMoisture, Nubian Heritage, Madam C.J. Walker and nyakio.
“Since its founding in 1991, Sundial has championed inclusive beauty and has served the unmet needs of consumers of color through its robust innovation pipeline, product offerings and purpose-driven business model,” Unilever said in a press release.
Sundial will operate as a standalone unit within Unilever with Richelieu staying on as CEO and executive chairman.
As part of the agreement, Unilever and Sundial are creating the New Voices Fund with a $50 million initial investment to empower female entrepreneurs of color. The intention is to scale the fund to $100 million by attracting investments from other interested parties.
The New Voices Fund is an atypical, if not unprecedented part of the deal, wrote Forbes contributor Coen Gilbert, co-founder of B Lab and the movement of Certified B Corporations:
“It is encouraging that there are an increasing number of funds focused on scaling businesses led by women and people of color (Reinventure, Impact America, The Harriet Fund, Digital Undivided, Backstage Capital, and Force for Good Fund are just a few examples) and I hope this necessary trend continues to grow. However, I have never heard of entrepreneurs negotiating the terms of sale for their business and including in the negotiation a deal point that requires the buyer to put tens of millions of dollars into others people’s pockets. That’s groundbreaking.”
The Essence deal reestablishes Essence magazine as a fully Black-owned independently entity. It came a week after Richelieu was knighted in his native Liberia by President Ellen Johnson Sirleaf.
Sirleaf reportedly described Dennis as an “awesome hero,” Washington Informer reported.
“Talk about surreal,” Richelieu said in an interview with NNPA Newswire. “I can’t even bring myself to say (knighthood). It’s been a phenomenal week.”
With the Essence acquisition, Richelieu said he wants to “super-serve the interests of Black women locally and globally”. He said he plans to make sure that Essence reaches its full potential using technology, products and touch points that provide opportunities for “other culturally-rooted entrepreneurs and businesses.” He said he wants to “further our culture and create economic opportunities for our communities.
It’s good news that ownership of Essence magazine has returned to the Black community, said Dorothy Leavell, the chairwoman of the National Newspaper Publishers Association (NNPA) and the publisher of the Crusader Newspaper Group.
“I hope it’s a trend,” said Leavell.
The deal to purchase Essence came together fast after Richelieu read an article in the Wall Street Journal about Time Inc.’s intention to sell the company.
“The stars aligned. We started to think about the implications of what this would mean if ‘Essence’ were truly bought back into the community and the impact it could have on the audience and on the industry to be able to create our content and to monetize our own content,” Richelieu said. “There was never a waiver in the commitment on what ‘Essence’ means to our community.”
Essence magazine is a treasure of Black America, said Dr. Benjamin F. Chavis, Jr., president and CEO of the NNPA. “This is a very timely and an important milestone for the Black Press in America and throughout the world,” Chavis said.
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