- Bennett Raglin/ Getty Images
Earlier this month, the private equity firm Bain Capital LLC took a minority stake in the family-owned company Sundial Brands LLC for an undisclosed amount. Sundial’s commercial products include Shea Moisture and Nubian Heritage, hair and beauty lines targeted at black consumers.
“We worked for 25 years on the streets of New York to build this business,” Sundial CEO Richelieu Dennis told INSIDER.
Dennis and his family started Sundial in 1992. Using his grandmother’s soap recipes as a foundation, Dennis successfully built two product lines with complete control over their free-trade manufacturing.
The Wall Street Journal estimates Sundial’s annual revenue at $200 million, but Dennis has ambitious plans to take the brands worldwide and appeal to more people across ethnicities who have similar hair and skin issues.
After many offers from major companies to buy out their business, Dennis decided to accept Bain Capital’s offer for a minority stake in the company. Under the deal, Dennis and his family would maintain control over the brands, and Bain would help provide them the funds to support global-scale marketing and production.
“Often other companies don’t have access to the same level of resources that we now have with this deal, and therefore, they can’t reach their full potential.” Dennis said.
But when the deal went public, many long supporters of Sundial slammed the company for selling out on social media.
So Bain Capital (of Mitt Romney fame) is working in partnership w/ Shea Moisture. So *deep shuttered breath* they’ve lost a customer in me.
— TheBlackDorianGray (@QueeringPsych) September 11, 2015
Just dang on wow! So all these folks to ask to invest in your business Shea Moisture chose Mitt Romney. Wow! http://t.co/yioH1ubWq7
— TheHipHopLifestyle (@_thehiphoplife) September 10, 2015
— afrobella (@afrobella) September 10, 2015
One major concern for consumers was Bain Capital’s past. Onetime presidential nominee Mitt Romney co-founded the firm in 1984, but retired in 2002, according to The Boston Globe.
“Mitt Romney has nothing to do with me. Nothing to do with us,” Dennis said, calling the alleged involvement one of the most ridiculous rumors his company has had to deal with. “It’s not fair to characterize us or judge us based on an individual that’s got nothing to do with us.”
Dennis said one of the major reasons they accepted the deal with Bain was the firm’s dedication to mission-driven businesses, and that their values and purpose coincided with their own.
Consumers were also concerned about whether Sundial’s ingredient sourcing would change. Many took to social media asking Sundial if the worldwide expansion would lead to cheaper ingredients for mass production. Dennis explained why that’s not the case.
“The reason we’re successful is because we spend every day to make the best products we can make,” Dennis said. In addition to Bain’s investment funding time-efficient equipment and higher quality labs, the money supports fair wages for the women who source the company’s shea butter in African countries. According to Dennis, this deal will help double the women in the Ghanaian cooperatives from 4,000 to 8,000 or more.
“If anything, this only makes us stronger,” Dennis said.
Dennis also said the move from a primarily African-American consumer base to a multinational consumer base would not be a shift, but an expansion. The market place currently focuses on segregating consumers based on ethnicity, Dennis said, and he’s hoping to open the box to all types of consumers, especially demographics that are underserved.
Dennis said that even with the expansion, the company would not abandon its African roots.
“[We] are going to continue to serve our core,” Denis said. “If we all of a sudden became something else, my grandmother would turn over in her grave.”
Sundial plans to relaunch its website this fall.