Business magazines and social media were buzzing this past week with news about the purchase of Essence Magazine by a company headed by Liberian-businessman Richelieu Dennis. The magazine had been owned by Time, Inc. since 2005.
The deal to purchase Essence came together quickly, after he read an article in the Wall Street Journal about Time Inc.’s intention to sell the company, Dennis told the National Newspaper Publisher’s Association.
“The stars aligned. We started to think about the implications of what this would mean if Essence were truly bought back into the community and the impact it could have on the audience and on the industry to be able to create our content and to monetize our own content,” said Dennis.
While financial terms of the Essence Communications purchase weren’t disclosed, Dennis told several major publications he’s not only retaining Essence President Michelle Ebanks, who will continue to run the company, but Ebanks will also join the organization’s board of directors and lead an all-Black executive team at Essence, who will have equity stakes in the business.
“This acquisition of ESSENCE represents the beginning of an exciting transformation of our iconic brand as it evolves to serve the needs and interests of multigenerational Black women around the world in an even more elevated and comprehensive way across print, digital, e-commerce and experiential platforms,” said Ebanks in a statement released to the press “In addition, it represents a critical recognition, centering and elevation of the Black women running the business from solely a leadership position to a co-ownership position.”
The Legacy
Essence magazine, a marquee lifestyle brand for African-American women, originally launched in 1970 under Essence Communications, Inc. The publication became a hallmark for black women and maintained its status as a black-owned publication for decades.
Back in 1997, Ed Lewis, Essence Communications co-founder, told Black Enterprise that he never ruled out the possibility of selling the publication. “Anything is possible, but we have to see how the world is conducting business and be mindful of our shareholders’ interest.”
It was just three years later when Essence sold 49% of the publication to Time, Inc. and sold the balance of the company’s assets to Time in 2005.
According to the Alliance for Audited Media, circulation of the fashion, beauty and culture publication tops 1 million, down just 2.6% from 2007, and the company reaches about 16 million people through digital, video and social media, including TV specials like “Black Women in Hollywood Awards on OWN.”
Ebony Magazine, owned by Clear View Group, is down about 9% over roughly that stretch, according to the Alliance for Audited Media.
The company also owns the annual Essence Festival, which attracts about a half million people to New Orleans each July for music and food. Tickets start at $159, and in 2015 Time’s CEO told the Wall Street Journal it earned more money than the magazine made in a year.
The New Owners
The magazine’s new owner is Essence Ventures LLC, a group led by Dennis, the chief executive officer of the hair- and skin-care maker Sundial Brands. Dennis built at $240 million-a-year business with product like SheaMositure, Nubian Heritage and Madam C.J. Walker.
Dennis, 48, started the business by carrying on his grandmother’s enterprise of making handmade shea butter soaps. He co-founded the company in 1992 shortly after graduating college. Sundial, backed by Bain Capital, agreed to be bought by Unilever in November for undisclosed terms.
“There’s something about Essence that we more than like, that we really love,” said Dennis in an interview. “The history of the community, the forward-thinking leadership. This is about serving women of color deeply.”
Dennis said that the purchase of Essence Communications comes with a deep-seated passion and commitment to making sure that, “we are doing everything we can to leverage the power of the business to impact our community in a positive way and to demonstrate that we can run highly-profitable organizations.”
Dennis continued: “We can also leverage the impact and the resources that those businesses generate to drive economic empowerment and social justice in our communities for ourselves and by ourselves.”
Dorothy Leavell, the chairman of the National Newspaper Publishers Association (NNPA) and the publisher of the Crusader Newspaper Group, said that it was good news to hear that ownership of Essence magazine has returned to the Black community.
“I hope it’s a trend,” said Leavell. “We do need strong Black ownership in our industry, even as I’m expecting that our Black newspapers will prosper in 2018.”
Leavell added: “We need more and more publications that depict us in a positive way and that’s certainly what Essence has done in the past and I hope they will continue.”
Before the Time acquisition, Essence was a perennial on the Black Enterprise BE 100s list. BE Chief Content Officer Derek T. Dingle, however, applauded the new acquisition and welcomed Essence’s return to the “roster of The BE 100s – the nation’s largest black-owned businesses – after an absence of more than a decade.”
Dingle added that the “groundbreaking” transaction “demonstrates that a number of African American entrepreneurs can execute with vision and wherewithal to return valuable institutions to African American ownership – a rare event in contemporary black business history.”