Black-owned businesses have not fared particularly well as independent actors in this age of consolidation, having suffered heavy attrition rates due to a surge of mergers and buy-outs over the course of the last two decades.
Many of these companies had long histories within the African-American community, becoming household names associated with the fulfillment of black Americans’ business ambitions.
Changing economic conditions, however, prompted business owners across the United States to realign their resources and consolidate their efforts in a drive to increase efficiency and competitiveness. Black-owned businesses could not sit idly by in the face of this profound change overtaking American business – they had to act or risk being left behind.
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Top Black Entrepreneurs
#1. Rocawear, a well-established clothing brand belonging to rapper Jay-Z, was bringing in an impressive $700 million a year in sales when it was purchased by Iconix Brand Group in 2007. Jay-Z retained his role in product development, licensing, and marketing. In addition to the $204 million doled out by Iconix, the acquisition contract stipulated that Jay-Z would be paid an additional $35 million if the brand met its targeted sales figures for the next year under his leadership. Iconix aimed to generate $1 billion in sales from the company following the acquisition.
#2 Phat Fashions was founded in 1992 by Russell Simmons as an urban fashion brand with Phat Farm, a men’s urban apparel line, as its flagship venture and expanded to include the Baby Phat women’s clothing line by Simmons’ then wife, Kimora, in 1999. The company’s annual revenue was approximated to be $200 million at the time of the merger. Russell and Kimora Simmons continued in their leading roles at the company following its acquisition by Kellwood. According to Kellwood CEO Hal Upbin, the company had been interested in expanding into the urban apparel market since the late 1990s, but was not convinced of its long-term viability until shortly before the Phat Fashions acquisition.