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Caribbean Queen

January 25, 2007

*Like Billy Ocean said back in 1984, “She’s so awesome.”   I’m talking about the Caribbean Queen with her flowing hair (whether fake or real).   Did you know that there is a high probability that most of the money spent to make that “look” did not go into the black community; but it sure helped solidify the structure in some Korean community.  

      Aron R anen’s Black Hair documentary is a four-part series; each clip 10 minutes in length. It’s a remarkable sequence of eye-opening information about the black hair care market.   Check it out at http://www.youtube.com/watch?v=p96aaTSdrAE   or http://www.youtube.com/watch?v=LWeLiXHcSyU&mode=related&search(note – in addition to the original four parts, there is a new part 1 and part 2, both updated in July of 2006, and the entire film can be purchased atwww.blackhairdvd.com )

      This project, produced by Aron Ranen (who happens to be Caucasian), shows that this multi-billion dollar industry is controlled by Koreans.   It should come as no surprise.   I can’t remember the last time I saw a black owned hair/beauty supply store.   But it did surprise me.   Here are a few of the “shocking” stats from the documentary:  

§  “Black women make up only 10% of the American population, however, they are the consumers of 70% of all wigs and hair extensions purchased in the United States.” 

§  The Korean domination of the Black hair industry began in the early 1960’s with the help of the Korean and United States government (over 40 years ago).  

§  The Beauty Times is the #1 Black Hair Care/Distributor Magazine in America, and is written entirely in Korean.  

§  90% of black retail hair stores are Korean-owned, yet 99% of the consumers are African-Americans.

      It’s our own fault.   Yes, I’m finally getting to the finance lesson here; well, its also a small legal lesson (after all I’m also a lawyer).   It’s a basic supply-and-demand principle.   Companies who supply the cheapest product, with the best quality and meet consumer demands, win.   Competition is color-blind in this regard.   

      The black hair-care market has always been lucrative.   The world renowned Madame C. J. Walker made her millions back in the early 1900’s with her self-made product, “Madam Walker’s Wonderful Hair Grower,” a scalp conditioning and healing formula; which she claimed had been revealed to her in a dream. In addition, she operated a beauty training school, the Lelia College for Walker Hair Culturists.   (FYI, she didn’t invent the straightening comb, and yes she was the first female self-made millionaire in America.   Seehttp://www.madamecjwalker.com/index.html).   Through the years, there have been powerhouse companies like Dudley, Bronner Brothers, and Kizure.   Amongst great adversity, these companies remain today; however, thousands of others have been acquired or just simply closed down.  

       This brings us to the status quo.   If black companies can’t provide the supply and quality, they will lose.   The documentary discusses the possibility that black companies who manufacture products are being kept from providing beauty supplies (even at equal to, or less than, prices) because the Korean manufacturers, distributors, and storeowners are all in cahoots.   Similarly, the black beauty supply store owners are being kept from getting the best products; again the documentary alleges this is because of collusion from the Korean companies.  

      This is where U.S. antitrust laws might come into play.   Under these rules, anti-competitive behavior and unfair business practices are prohibited.   These laws make certain practices illegal such as those intended to hurt businesses, consumers, or both ; but, the legal route can be slow, costly and can be very difficult.  

      There is some hope.   Black Owned Beauty Supply Association (“BOBSA”) was formed to assist entrepreneurs in owning and operating Black-owned beauty supply stores internationally.  Also, it provides vocational training, job placement, and educational scholarships. Out of the $8 billion dollar Black hair care and cosmetic industry, BOBSA is one of the few organizations dedicated to promoting Black businesses.   It is a 501(c)(6) trade association; so if you are considering supporting their cause, remember, they are not a 501(c)(3) public charity.   Thus, you can’t take a charitable contribution deduction.   You may, however, be able to take a business deduction if you can show that supporting the organization is related to your business ( i.e.,   you are a hair dresser, salon, barbershop owner, etc.) For more on BOBSA, visit www.bobsa.org .

      Even with the possibility of lawsuits and efforts by BOBSA, more can be done.   Consumers need to be better educated about from whom they are buying their products; but, this will only go so far.   Ultimately, as shown in the documentary, consumers are going to decide based on price and convenience.

      Black companies need to do some serious soul searching as to their operations and efficiency. This means a business using “mom and pop” methods will not work.   This is also a call for the Black MBA’s, CPA’s and Esq.’s to unite and help these business owners with set-up, financings, operations and competition.   Focusing on employing cost management techniques, while keeping the product quality high is a must.   Only then can we even begin to make a dent on this issue.  

Originally published for Lee Bailey’s EUR Web

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