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The Ugly Side Of the Beauty Supply Market

Study: About 9,800 beauty supply business nationwide; but only 300 black-owned.

Frank Mohadou closed the door to the beauty supply business he was struggling to keep, in the slice of space he obtained from his sister.

The still night held no comfort for the African native as he slid behind the wheel of the $250-a-month car he could barely afford.

He ignored the thought of going home; knowing soon he would have to find another place to live since the people he was staying with were drifting apart.

Instead, he sat; his anxiety and frustration combed into a manageable silence as he contemplated ways to grow his business. Just then, a Korean-American stepped up through his thoughts and across his path to stop at his storefront.

They often waited until he was gone to peek inside his store, Mohadou said. He knew he was an outsider. He didn’t speak their language. But he was trying to break into their world – a billion dollar market that primarily services black hair.

For almost 50 years, the Korean-American community has dominated the black beauty supply market by opening large stores, buying out smaller black-owned ones and using the faces of black celebrities on their products and black employees in their stores to grow their businesses in the black community.

Mohadou—who declined to speak further with a Cascade Patch reporter after an initial interview, citing a fear of retaliation—said “The little thing I was doing, they were trying to stop me,” said Mohadou, then a father of two with another child on the way. “There is no way back. I was able to learn English and put a little business together. I can’t quit.”

Mohadou didn’t know it, but things were about to get worse.

The Ugly Side of Beauty

Mohadou left the Ivory Coast in 1997 with the intention of going to school in America and then returning home. But his plans changed.

He learned English through a church group in New York before leaving to attend Georgia State University where he earned degrees in chemistry and finance.

He was unemployed the day he walked into his sister’s braiding salon and discovered a pack of human hair cost $80. Professionals got it for $50.

“I just got laid off, so I said let me find out where the hair came from,” Mohadou said.

What he discovered was a closed market.

Between manufacturing, distributing and selling hair care products, Korean-American entrepreneurs appeared to control all major components of the beauty supply business, he found.

He learned there were four central distributors serving a large portion of the beauty supply stores in the country, all Korean-owned. Aron Ranen,who produced a documentary in 2006 on the beauty supply business, reported that these distributors only worked with other Koreans in order to dominate the market.

Devin Robinson, owner of Atlanta’s Beauty Supply Institute, said about 9,800 beauty supply business existed nationwide; but only a little more than 300 were black-owned.

“The Koreans strategically make it harder for us to get into the business. They have the supplies the customers want,” Robinson said. “They sell it to us at higher prices or they deliver the products late to the black-owned stores. Sometimes they don’t allow orders from us at all.”

Beauty Masters is one of the larger Korean-owned beauty supply stores with seven locations in Atlanta.

Lucien Poko, general manager for Beauty Masters, said 90 to 95 percent of the stores’ customers are black; and so are the store’s employees.

He balks at the idea that Koreans dominate the market.

“It’s just business," said Poko, who is from Senegal. "Everybody is free to open what they want to open. It’s the way you handle your business. Koreans dominating the business, this doesn’t make sense. You can open up your business. You are free to do what you want.”

Making the Cut

Mohadou couldn’t find anyone to sell to him when he first started more than eight years ago. Then he met an American-born Korean distributor in New York who would sell him hair at $14 a pack.

Mohadou traveled by MARTA to deliver the hair door-to-door to his customers. After a while, he established a trust with the owner who increased his orders, decreased his price and sold him hair on credit.

Still, his customers had a preference. They wanted the name brands; the Korean brands. And there were about 25 to 30 of them.

Many beauty salons said they often go to the Korean stores because they can’t find what they need at the black-owned stores.

That's because they can't get the supplies, Ranen and Robinson said.

Mohadou found out that Koreans were getting their hair from Jinny United. But a Jinny representative refused to sell him hair.

“’You can’t be within 5 miles of one of our customers,’” she told him.

Mohadou wasn’t convinced.

When he found several Korean stores less than 5 miles apart from each other, he threatened to sue and attempted to get other black owners to join him.

They recoiled at the idea.

Mohadou went back to Jinny. This time, he spoke to another representative who allowed him to place an order.

Then Mohadou went to a Korean store to sell the hair. When the woman told him to wait a moment, Mohadou thought she was off discussing the price.

But then the woman returned.

“Where did you get the hair? Who sold it to you?”

Mohadou froze, puzzled.

“We all worked together to make this hair, so I know you stole it?”

Mohadou then realized: “I was a little black boy trying to sell hair to Koreans. That was not possible.”

He handed the woman a business card and left.

He obtained the space in his sister’s salon and started selling the hair. Now, Koreans were popping up at his store front, hoping to find out where he got the hair.

He later discovered that someone complained to Jinny that he was selling the hair at gas stations.

Mohadou never got a chance to defend himself.

When he returned to Jinny, the representative who thought he was working for a Korean store when she allowed him to place his orders, would no longer sell to him.

Then the New York distributor, who he now called brother and to whom he often sent presents, told Mohadou he was leaving the business.

Mohadou had seen it happen before. Another Black owner had to close her store when her contact went out of business. And still, many others closed because they weren’t able to buy quality hair, he said.

“It’s a very ugly business,” Mohadou said.

Making It Grow

About six years earlier, Jinny United also refused to do business with for the same reason, Owner Robbie Conwell said.

A manager with Jinny United declined to comment on their policies in selling to beauty supply stores.

Poko with Beauty Masters said he has never had any problem getting supplies from Jinny.

“They have their own rules. I don’t know what their rule is, but I don’t have any problem with them,” Poko said.

The Korean president of the Georgia Beauty Supply Association said through an interpreter he didn’t know anything about the issue. The 12-year-old association has 50 members who are all Koreans.

When Jinny turned down Conwell, she found an Indian company that would sell her human hair. She urged other black owners to find a different path.

“They have to do something different,” Conwell said. “Show (the customers) something the Koreans don’t have.

“The biggest money is in hair. They are not going to succeed if they don’t make contacts the Koreans don’t have.”

Robinson said Korean stores dominated the business because they do better at business than Black owners.

“They do better as a group. They live together. They live their lives frugally and they are committed to long and intense labor, which is necessary for success.”

And, there was one other reason: “We give power to the owners instead of power to the customers,” Robinson said.

As a result, “There are 96 percent Black customers and only 3 percent black owners," he said.

They find the Koreans’ control intimidating, he said.

If Mohadou was intimidated by their control, he didn’t let that stop him. And eventually, he found a way inside the network.

His New York contact didn’t forget about his loyal customer who relied so heavily on him; who often asked about his family and had befriended his girlfriend. He had another contact for Mohadou.

 “How much money do you have?” he asked Mohadou.

Mohadou had $7,000. It wasn’t enough. His contact told him to get more money and don’t worry about the $900 he owed him.

Mohadou started Sou-sou, an informal savings plan popular in the Caribbean, to raise more money. He asked 12 people, including his sister, to provide $1,000 a month with each person collecting $12,000 monthly. His sister gave him her share and Mohadou was able to send the $24,000. Normally, it took about $400,000 to open an account, Mohadou said.

A week later, a sales representative confirmed the receipt of the money. They would work with him. But he had to create his own line.

“They couldn’t sell me the same brand name. So I had to think of a name, find a picture, come up with my own graphics and design.”

Mohadou, who went on to open on Lee Street with the help of two partners, designed African Poney, Compassion and Carmen.

But not many customers were willing to take a risk on an unfamiliar brand. He sold his first brand for $40 a pack and gave away the second pack.

“I had to work on the hair for a year before I made a profit,” he said.

Then, Mohadou saw a change.

“People would come to the store, sit and wait or they would come back,” Mohadou said. Some drove from as far away as Marietta. They wanted to support the Black-owned business.

 When a woman in Conyers wanted to drive to the store, Mohadou drew the line. She would be spending more in gas than on the product, he said. Still, Mohadou was touched by the support.

“I wish things work well so I can come back and help,” Mohadou said.

Gordon Rivers July 27, 2013 at 09:09 PM
The products in question come in quantity mostly from China and Indonesia. NOT Korea. If anyone wishes to establish relationships there, contact gordon@pacificbridgepartners.com I am based in Virginia bu make regular visits to Asia. FYI I would take a % commission from whats imported but can help anyone get their own supply chain if they are funded and dedicated...
Gordon Rivers July 27, 2013 at 09:13 PM
One further comment. I noted someone discussing discrimination suits. As Koreans who are US citizens qualify as "minority or diversity business owners" I don't think anyone of any race/gender will have much luck. Going around the US based wholesalers is the Key.
Stefan Bland August 24, 2013 at 09:21 PM
my name is david i would like some help i'm trying to start a hair Distributing company here in Raleigh N.C
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