Roots of tension: race, hair, competition and black beauty stores

Karen Coffey opened Bella Beauty and Hair in January with lots of optimism and a stylist's eye for hair extensions and other products tailored to African-American women. She thought that would be enough to succeed.

She didn't realize the game would be stacked against her before she even opened her door.

Like black entrepreneurs before her, Coffey quickly discovered that behind the beauty supply storefronts that dot the nation's urban neighborhoods and suburban shopping plazas sits a multibillion-dollar industry for black hair products that's run largely by South Koreans and does not cede its power or market share without a fight.

Korean-Americans cornered the market decades ago by controlling the manufacturing, distribution and retail sale of hair extensions — the moneymaker of the industry. African-American owners believe Korean wholesalers shut them out and only supply Korean retailers.

Coffey says she's seen that firsthand. Some Korean wholesalers, she said, have denied or ignored her requests for products. Meanwhile, a new Korean-owned store that opened across the street a month before her has some brands she can't get.

"All of it is run by Koreans," said Coffey, 32. "A lot of them don't make it easy for blacks to get in. I didn't know it would be this challenging."

Korean wholesalers deny any preferential treatment. Shake-N-Go, which supplies Coffey's nearby competitors, said it works with retailers based on local competition and other exclusively economic factors, and the choices are "far from being discriminatory."

Coffey, though, says those statements run contrary to what she and other black beauty supply owners experience daily.

Coffey's part of a growing number of black women here and around the country determined to persevere even if it means bypassing the Korean supply chain. They're going to extreme lengths, employing innovation and grit, to do so.

"There's been a really concerted effort to get black people to enter the retail side of this business," said Lori Tharps, Temple University journalism professor and co-author of "Hair Story: Untangling the Roots of Black Hair in America."

"There are success stories," she added. "Somehow black people are finding alternative suppliers and moving past this idea that Koreans are keeping them out of this very lucrative space."

'You have to carry hair'

Succeeding, though, means finding a niche and navigating a global system that keeps enough secrets to keep others out.

Joyce Iyawe, owner of Pampered Hair Haven in Columbia Heights, found that success but "it wasn't easy, and it wasn't cheap."

Iyawe paid to learn all aspects of the trade and even traveled to Asia to meet manufacturers. She makes custom weaves and wigs by hand with materials directly from suppliers in India and China. Her clients are all over the country.

In the case of Ebony Dickerson, she had to reach back to her old career in corporate America to launch her new one in the beauty supply industry.

The Minnetonka resident wanted to specialize in authentic Indian temple hair — hair shorn for religious reasons at Hindu temples — but knew no Indian manufacturers.

"But I had worked with executives in India when I worked for IBM," she said. "One of them agreed to do the groundwork for me. He had no idea about the industry but wanted to help me. He and his wife went around to different suppliers and found me one for my business." Her Roseville-based company Le Chic BSB started in 2016.

Black beauty supply has long been a lucrative business.

It made Madam CJ Walker, an African-American manufacturer of skin and hair products, the country's first female self-made millionaire of any race. And that was in the late 19th century.

Today the global industry is pegged at about $9 billion.

In 2015, more than half of black women reported buying hair products compared to about a third of white women, according to a report by Mintel, a market-research firm.

Korean-Americans own more than 70 percent of 10,000 beauty supply stores nationwide where a lot of that spending is done.

"It's been one of those sore spots in the community, where we spend all this money on our hair but we're not reaping any of the benefits from that money," Tharps said.

The perceived economic imbalance has spawned resentment and racial tensions. Complaints about the experience in Korean-owned stores are common — that they're not welcoming or shopkeepers shadow their customers, suspicious of theft.

That issue flared last month in North Carolina, when a Korean store owner accused a black customer of shoplifting and was caught on video kicking, tackling and putting her in a choke hold.

It led to protests and boycotts across the chain, and a call for more black-owned stores to take back the industry.

Korean merchants didn't usurp black entrepreneurs. Historically, African-Americans have been involved in the manufacturing of products and styling hair at beauty salons and barbershops.

But Korean immigrants innovated the storefront model in the 1960s when they began selling wigs to African-American women. Before then, products were sold door-to-door.

"There was no takeover of this market," Tharps said. "It was a market that was organically grown from wigs to other hair products and it grew into what it is today."

Immigrant groups commonly cluster in a sector of an industry, leading to domination or monopolies, and the black beauty supply store is an example of that.

"This was a low hanging fruit for the Korean community," Tharps said. "And once they started, they helped other Koreans who were looking for a business opportunity."

Their foray into the business was also during a time of white flight and few business owners were willing to establish in black neighborhoods.

"A lot of Koreans were willing to take the risks. They saw a business opportunity that others didn't see," said Sam Hwang, vice president of the National Federation of Beauty Suppliers, a trade group for Korean-American stores. "Koreans embraced those neighborhoods and they control the market today because they took the risk and were first to get in."

The proliferation of Korean-owned stores accelerated throughout black communities nationwide during the late '80 and early '90s when styles with hair extensions became popular, Hwang said.

"The black hair market shifted from chemicals like jheri curls to hair extensions," he said. "More and more retailers showed up, and it benefited the major hair companies that started in the beginning, like Shake-N-Go. They are gigantic. They grew by a hundred-fold, two hundred-fold since when they started."

Plants in South Korea evolved to manufacture more packaged human and synthetic hair produced for Korean-owned, U.S.-based wholesalers that supplied Korean-owned retailers. Even when manufacturing shifted to China to cut costs, the supply chain stayed put.

Today, hair extensions account for at least 50 percent of sales at beauty supply stores.

Coffey, though, says that major suppliers have denied her requests for popular products because stores nearby already carry that company's lines.

"You have to carry hair if you want to survive in this business," she said.

The new store across the street — Bling Bling Beauty Supply — is the fourth location in a Twin Cities chain.

Along with competitive restrictions, wholesalers also weigh creditworthiness and require a minimum initial order.

Even when she meets other requirements, Coffey said some companies are unresponsive.

"You have to keep calling and keep calling," she said. "It's because they won't call you back. They say, 'I have to have my manager call you but he's on vacation right now,' or 'He's out of the country and I don't know when he'll be back.'"

Hwang said being Korean doesn't mean Korean wholesalers will automatically supply you with products.

He started his business nine years ago in Newark, N.J., but said he doesn't carry the leading lines of hair extensions. The major brands already have exclusive accounts with older stores, making it difficult for anyone of any race to get in.

"The market is saturated and the stores who got in first carry the premium brands," he said.

But Hwang said the Koreans fare better because of the support they receive from other Koreans already in the business. They can purchase together to meet the minimums or use connections to get supplied by retailers with accounts.

"If you're Korean, it's easier," he said. "You could get some help — help and knowledge in operational things. There are so many people you could lean on because there are so many people involved in the industry. I say it's easier because of that."

Korean is also the language of the industry.

"Some of them answer their phones in Korean; they're not used to dealing with us," Coffey said.

'Wild, wild west'

Eddie Perlman calls himself a survivor. He owns Variety Beauty Supply Store, the oldest black beauty supply in the Twin Cities.

Perlman, who is white, got his start in the late '70s. He forged business ties with Korean suppliers before Korean retailers entered the local market in the 1990s. Their absence also allowed for some black-owned stores to also establish themselves.

"They were late coming to this market," Perlman said. "A lot of them came from Chicago when that market became saturated."

And in the past 20 years, the Twin Cities' ethnic hair market went from being underserved to saturation. Brooklyn Park, where Coffey's new store is located, is the epicenter.

The arrival of Korean-Americans signaled an uneven competition. They set up shops five times larger than existing businesses, offering more variety, lower prices and trendy urban fashion.

"You can't compete with them. You just can't," Perlman said.

He would use his accounts to order for black-owned shops who were shut out. But as more Korean-owned stores arrived, there were brands he couldn't get, too.

"All the time people come in here saying I'd like to open a business. I tell them you're crazy," he said.

"Would I get into this business today? No. Look, if you're not Korean today, it's an extremely tough business to get into," he added. "They've built a dynasty. I don't know if that's a good thing or bad thing."

The internet is gnawing at that dynasty, giving consumers direct access to manufacturers in China. African-Americans nationwide have started e-commerce businesses selling extensions.

"It's like the wild, wild west now," said Sam Ennon, president and founder of Black Owned Beauty Supply Association. "So many people are getting into the business. The Chinese manufacturers want direct access to the U.S. market; they don't want to go through the Korean wholesalers."

Brick-and-mortar establishments still reign, Tharps said, even with the rise of e-commerce because consumers want to see and feel products.

The natural hair movement has also driven black ownership by creating a new market for black women to sell the products that addresses their specific hair needs, she added.

"These new stores are unique and different from what exists and are run mostly by Korean Americans," Tharps said. "We're doing it our own way with our own spin."

Specialized business training programs have also surfaced to improve African-Americans' market share. The Atlanta-based Beauty Supply Institute offers courses and workshops to get blacks into the business. It helped Coffey and Dickerson get their ventures off the ground.

"It would've taken a lot longer to get started if I didn't go to the Beauty Supply Institute," Dickerson said. "They take care of a lot of things and have a lot of resources. You pay them to deliver your store with products, and they teach you how to do research, treat customers and run your business. They're in it to win it, so they want you to win."

Coffey is also a part of Ennon's group, which offers support and hard-to-get brands to members.

Ennon recently visited China and struck a deal that created a new brand of hair exclusively for black-owned shops.

He said it's no longer a fight to break into the Korean system but more of a move to create a separate supply chain for African-Americans.

"Hopefully, another black-owned company will start another brand of hair," he said. "That's what we need, we need to help each other."

Iyawe, a native of Nigeria, made that move in 2003 when she launched her business. She'd relocated from New York City and noticed a gap in the Minnesota market for unpackaged, premium raw hair. She began sourcing it from New York.

"After a few years, I wanted to control of all aspects of my business — from A to Z, 100 percent, so I had to learn," she said.

She also had to pay. She paid to get supplier contacts in Asia and to learn the tedious steps of manufacturing of hair, from sewing wefts to custom blending of colors. Iyawe solidified relations in China with a visit.

"This is a very secretive business," she said, "so I had to pay each step of the way."

When the doors open, black entrepreneurs find they can succeed.

Iyawe, for instance, has the skills to turn bone-straight tresses into Afro kinky. Her customers pay $250 and up for her custom bundles of hair.

She said there are opportunities for more black women in the industry and the Koreans could be an inspiration.

"This not about black, white, green. It's called business," she said. "You're stronger in numbers. Sometimes it's the same company of people opening beauty supply stores all around the same state. When black women learn to work together, that's what the Koreans have done or the Asian markets have done that none of us have been able to do."

Coffey's now heavily promoting the lesser known hair lines she could get on social media. And some major Korean wholesalers have been receptive. One supplied her with shelves of wigs that are hot sellers.

"We're finding that people love wigs and there are no restrictions on wigs, so that might be my niche," she said.

She's also finding community support.

"People want to support black-owned businesses," she said. "People are very positive, they come back they bring people with them."

That includes Zabrina Watkins, who drove across the metro from Woodbury, passing many similar stores, to patronize Bella Beauty.

Coffey was attentive, hands-on and generous with her knowledge.

"I can ask these questions here. I don't know if I can ask these questions and get honest answers from someone who doesn't wear or know about lace-front," Watkins said.

After trying on numerous styles, Watkins finally settled on a close-cropped, Beyonce-esque blond wig.

Said Watkins: "It's nice to see a black woman doing her thing, owning a business, because it's rare."