The CEO of Pro-line knew he would be criticized when he decided to sell his hair care company, because as quietly as it is kept, selling a black-owned company to a white one is like abandoning a family member. CBS MarketWatch Correspondent Stacey Tisdale reports.
"I don't see any other opportunities now to get the growth to go public," says Comer Cotrell. "So the best thing I feel is to take my exit now."
Pro-line is just the latest of several black businesses to be absorbed by bigger corporations, following in the footsteps of companies like: Soft-Sheen sold to L'Oreal in 1998; Universal Life Insurance sold to American Capital Life Insurance in 1997; U.S. Radio sold to Clear Channel Communications in 1996.
With black buying power topping $500 billion a year, corporate giants are purchasing black-owned businesses as a quicker route to court minority consumers. Some see smart business, others see sell out.
"[Black businesses] have made a deal and said, 'Yes, we are selling our business to you but we are concerned that you don't forget the community'," says Rev. Calvin Butts of the Abyssianian Baptist Church.
It's an emotional issue among some blacks who have supported these businesses and their products for years. From hair care to life insurance, they worry that with white ownership, economic commitment to their community and consumer awareness will disappear.
John Johnson, CEO of Ebony magazine and Fashion Fair cosmetics, started his business 57 years ago. He has received many offers but refuses to sell.
"It will have a temporary impact on the people losing jobs," Johnson says. "And some charitable organizations losing contributions they've gotten, there's no doubt they'll lose temporarily."
"People sell," he adds, "because they are either tired of the business or they need the money or they feel they can't compete. I know I can compete."
But few companies have resources like Johnson and in a growing global economy, for businessmen like Comer Cotrell, the competition is often too fierce.
"It's taken me 30 years to get here, and I'm not even going to be around that long, and I don't want to stay here and be in a war with these global companies," he says.
Ultimately, the only color that really matters in business is green.
Copyright 1999 CBS. All rights reserved.
CBSNews.com staff CBSNews.com staff