SheaMoisture Founder Shuts Down Talk He Sold Out

September 15, 2015  |  

For more than 25 years, Sundial Brands, the maker of popular natural skin care and hair care products under the brands SheaMoisture and Nubian Heritage, has been independent, family run, and Black owned. Now, things are a little different.

Private equity firm Bain Capital, LLC has taken a minority stake in Sundial — a move the Sundial’s founder and CEO, Richelieu Dennis, says was about right timing.

“What’s interesting is that we’ve been approached by just about every multinational [company] that is out there over the last year, two years and for us it was, and has always been about being family owned, community owned for the last 25 years,” Dennis said. “We remained independent all that time we had gotten approached. We knew we didn’t want to sell but [the question was] how to compete with all these multinationals focused in on our consumer trying to make similar products. Faced with the dilemma of how to grow without sufficient capital, Dennis said the answer was to take on an investor.

“We had to make some decisions on how we could remain family owned and remain a community focused brand.  When you think about where Black businesses have issues, it has always been [the lack of] access to capital. One of the hardest things to do is to get capital. That’s where we as Black business struggles. And the other place we struggle is scale and because we don’t have an access to capital we cannot scale. We…are not interested in growth for the sake of growing; we are interested in purposeful growth. [The investment deal] had to be with a partner that had a social mission at the core of its business model.”

The new development is a delicate one for Sundial, as its brands have become a favorite, mainly with the African-American consumer looking for natural, certified organic and ethically-sourced ingredients. Dennis launched the company in 1992 with his mother, Mary Dennis, and his college roommate, Nyema Tubman, shortly after graduating from college when he found he would be unable to return to his home country of Liberia because of civil war in the African nation.  Dennis crafted the company by using culturally-authentic family traditions passed down from his grandmother, first making natural bath and body formulations.

Consumers liked the idea of the company being family and Black owned. But Dennis said Sundial customers should not worry that that’s changing. Dennis will continue to provide vision and leadership for the company, and Sundial will remain majority family-owned and operated including board, management and day-to-day operations. The deal was simply a matter of long-term survival.

“As a kid growing up, one of the brands I thought was tremendous was Karl Kani…and I don’t see Karl Kani today. I want to see SheaMoisture tomorrow,” declared Dennis. “Once a company develops out of its consumer base you will often see a well-funded multinational company come in and take over that space. The Black-owned company either stays a niche company or just disappears. This is something we don’t want to happen…Now with this investment, it allows us to make moves that will keep this company in the family for another four generations and beyond. My goal is to have my children take over and their children and so on.”

According to Dennis, the Bain deal for a good fit for Sundial. “We wanted to stay true to our values as a company, true to our community and customers, and true to our mission. Bain has had a history in being interested in helping socially minded companies like ours. We looked at their investment in TOMS shoes (each pair of shoes you purchase, TOMS gives a pair to a child in need); and we knew the business was socially driven,” he said.

Sundial says it will keep its commitment not only to its community in the U.S. but to the African cooperatives it works with to get Shea ingredients. Sundial is a certified B Corp company with a Fair for Life social and fair trade certification.  “Through its Community Commerce purpose-driven business model, the company creates opportunities for sustainable social and economic empowerment throughout its supply chain and communities in the United States and Africa, focusing on entrepreneurship, women’s empowerment, education and wellness,” states its website.

Speaking to that focus, Dennis added, “In Ghana we have over 4,000 women we work with in the cooperatives; we provide them infrastructure, training, education–and we provide these things through the revenue we generate.” In other words, the more money the company brings in the bigger impact it can have on the lives of these African women and their small businesses.

“The investment from Bain will also allow us to have a greater impact on the community here in the U.S. as well. For example, we want to extend the Sundial Community Commerce Entrepreneurs Fellowship at Dartmouth Tuck School of Business to reach 12 women, up from six per year,” Dennis said. “We also want to be able to provide products for our client throughout her life cycle. We have had product ideas but this investment will let us fulfill our vision.  The needs of our customers change as their lifestyles evolve and we want to be able to go through the different life stages with them and provide the products they need.”

Sundial did hit a bump in the road with its client base earlier this year when some perceived SheaMoisture ads featuring white children was a sign the company was turning its back on its loyal consumers. Dennis insisted the campaign was not a planned ad or a marketing strategy. “It wasn’t even a marketing campaign. It was just a social media post,” he noted. Taking a positive spin on the backlash from the company’s Black consumer, Dennis said. “What that incident really showed us was the passion our customers have for our brands. It also showed what a huge responsibility we as a company have to the community.”

Still Dennis is hoping Sundial’s customers realize the need for his company to eventually reach out to the general market. “Black companies, like every other company, have to grow and broaden its customer base. If Black business don’t do this this, they die on the vine.”

Further explaining the company’s reasoning for taking on an investor is Sundial’s “10 Reasons We Partnered with Bain Capital” listed on its website.

 

Trending on MadameNoire

View Comments
Comment Disclaimer: Comments that contain profane or derogatory language, video links or exceed 200 words will require approval by a moderator before appearing in the comment section. XOXO-MN
  • I_am_a_Gladiator/Scandalista

    Be prepared for recipes in your fav products to be changed and cheapened while the prices go up

  • Wdygaf?

    Bain Capital are corporate raiders. They look at a company in totality, and if they see a good investment for stockholders, they make an offer. If company balks, Bain has the money to take over by force.
    Mr. Dennis may need Bain to help Sundial survive & broaden it’s market or product offerings. Small businesses can’t compete with the giants, this transaction is no different than any other.
    Walmart has pushed thousands of small, private, family owned businesses to extinction. Sam Walton’s heirs own more wealth than 70% of the USA population . It’s business & Blacks should stop criticizing other Blacks for doing what’s best for their survival. People spend 100s to see Beyonce in concert & she’s as bought & sold as a loaf of bread. She treats fans like a pimple on her a$$ but fans continue to make her richer. This man uses his reach & profit to empower and benefit women and children in his homeland. This deal will enable him to do beyond what he’s done already & positively impact the lives of so many & make himself wealthier. Nothing wrong with his choice.

  • Wdygaf?

    Bain Capital are corporate raiders. They look at a company in totality, and if they see a good investment for stockholders, they make an offer. If company balks, Bain has the money to take over by force.
    Mr. Dennis may need Bain to help Sundial survive & broaden it’s market or product offerings. Small businesses can’t compete with the giants, this transaction is no different than any other.
    Walmart has pushed thousands of small, private, family owned businesses to extinction. Sam Walton’s heirs own more wealth than 70% of the USA population . It’s business & Blacks should stop criticizing other Blacks for doing what’s best for their survival. People spend 100s to see Beyonce in concert & she’s as bought & sold as a loaf of bread. She treats fans like a pimple on her a$$ but fans continue to make her richer. This man uses his reach & profit to empower and benefit women and children in his homeland. This deal will enable him to do beyond what he’s done already & positively impact the lives of so many & make himself wealthier. Nothing wrong with his choice.

  • Van

    If you use the term “sold out,” you don’t know anything about business. Get out of your Pookie mindset.

  • Sheamoisturefanforlife

    I get what people are saying but only to a point. They did not sell out, an investor is something different than selling the company. At least they are still trying to remain majority owners. And all these women saying they are going to stop using their products need to grow up. Holler at me when you stop buying tresemme, suave, vo5, herbal essences, cantu, aussie, dark and lovely, and all the other companies that are white owned but sell you your natural hair “staples”. So please save me the holier than thou attitude about not patronizing them, when y’all should have been buying more so they could have avoided this. Oh yeah and PS umm the white man is still getting your money when you buy your stuff at their stores such as Walgreen’s, Walmart, Sally’s, and target. If you didn’t know. Shhhh it’s a secret though

    • louise_1

      Yes but the founders usually get voted out. This poor man will eventually be put out and will have no parts of his own creation. Just wait. The writing is on the wall. I hope I’m wrong!

      • too_real

        you are so right. Bain is certainly setting the stage for a takeover. This is how it works: start off with a little capital infusion, then you will need more capital…which leads to more ownership….which leads to the founders eventually being pushed out. This happens to small and especially successful black businesses all the time. This guy is delusional if he doesn’t think this is his future. Just look at Lisa Price and Carol’s Daughter….

        • Van

          This happens to white businesses on a regular basis (just to add, I hate corporate raider types as well). Can we stop with the backwater, evil white man hysteria now and act like rational individuals?

          • too_real

            No we can’t.

        • Terietta M. Ingram

          Carols Daughter expanded to far and too fast. They couldnt afford to keep their business afloat (ie retail shops). Based off of the article he going in this with a long term plan. We dont know the future yet, but I want to believe he will maintain control of his company. I am an optimist, black folks have had their business taken over based on 2 things. 1. Lack of knowledge of the business world 2. Lack of support of the community. I hope he has the knowledge, but he still has my support.

  • louise_1

    This is so sad. Everytime there is a successful black owned business, the white villains are just parked outside waiting for a loophole to jump in and grab. Look what happened to Amos cookies, Carols Daughter and the list goes on. Its disheartening to say the least.

    • CaribbeanGlow

      Yes, the lightening of Carol’s Daughter was a shame. What happened with Amos cookies? This guy is minimizing the first pictures of children or anyone representing the company being white. “Just” a social media post? Social media is like everything.

      • louise_1

        It was taken from Amos and he isnt even allowed to use the full name. I guess business is business but its a sad happening.

        • CaribbeanGlow

          So the Famous Amos in the stores isn’t him? He has his own cookies now called Amos??

          • too_real

            It’s his likeness but it was bought from him. The real Famous Amos has NO dealings in the company he started. Shame.

            • louise_1

              Real shame!

          • louise_1

            No they are not his and he’s not allowed to use it. All that was robbed from him. He can use Amos and he makes muffins also. Hope he’s real careful from now own. Blue eyed devil is lurking.

            • CaribbeanGlow

              Thanks for the info. Yes, always lurking. I bought “the cookies” recently after eons and they were nothing special. Maybe this is why.

    • Van

      There’s no conspiracy by evil white men, companies go through this all the time. Just another person who doesn’t know what they’re talking about.

      • louise_1

        Thats you as you have no idea whats going on. For every successful black company “White Investors” have stolen them. They come in and force the founder out saying we can still be the face of company. Gee thanks! Only with Amos they took that too. Not to mention Essence-all gone. I do not buy anything w/o reading label to see ownership. We’re not allowed to have anything let them say it.

        • Akuba Torvikey

          You’re treating these companies like victims and not companies able to make what they believe to be sound business decisions.

  • Faith

    There are going to be some changes. Since he now has “investors”. Anytime you sell, get white investors, or sell the company, there are some changes sadly.

    • too_real

      Yes, and usually those changes mean change of leadership. He has masters now a la investors, so he’s delusional if he thinks its going to be business as usual.

    • Van

      That’s how it is with investors of any color. Wow, the corporate literacy here is so low.

      • sansra

        @ Van , If anything , you are the one with the low corporate literacy. Are that naive to believe that Mr Sundial, will still ownership of his own company? He ll just be the mere face of the brand to makes US this , that this is black own. This is how it has always been with black own businesses. Once they reach a certain level of notoriety, white investors come in, and take over little by little. So please inform yourself before boasting your unintelligent remarks.