Richelieu Dennis, the 49-year-old cofounder of Sundial Brands, had spent 20 years avoiding meals like this with the U.S. president of Unilever, the $54 billion (2017 sales) Anglo-Dutch consumer goods conglomerate. But he finally caved after Unilever executives began imploring Dennis’ friends to talk him into the meeting. “My whole universe just started to say, ‘Hey, you need to talk to these guys,’” he recalls.
Unilever badly wanted to buy New York City-based Sundial, a $240 million-in-revenue maker of shampoos, conditioners and lotions (under brands like SheaMoisture and Nubian Heritage) targeted at black and Latino customers. But Dennis had a list of terms he wanted, and he figured Unilever would never agree to all of it. Primarily he wanted to keep control of his company with no strings attached. To his surprise, Unilever said yes to everything. Then the Unilever execs laid out their supply chain in Africa—to demonstrate its sustainability—and amid a white-hot M&A market for beauty companies, Unilever offered an estimated $1.6 billion for Sundial, a rich sum. Dennis and his mother, Mary, who had cofounded the company with him in 1991, owned 51% of the company. The two stood to walk away with an estimated $850 million fortune.
Dennis’ move to sell Sundial was the latest act in a career marked by exceptional timing and grit. For the first 24 years of Sundial’s existence, Dennis didn’t take a dime of outside money, as he grew from a Harlem street vendor to supplying chains like Target and Whole Foods. He did it by riding the boom in natural beauty products, a segment that barely existed 30 years ago but is now a $14.8 billion global industry, and by learning how to scale. “It’s like when you make a recipe. It’s different when you’re making it for a family of four or five and when you’re making it for a wedding of 150,” he says. Splitting his childhood between Liberia, where he was born, and Sierra Leone, Dennis was raised by his mother, Mary, an economist promoting economic mobility for women, and his grandmother, a widower who sold her own hair and skincare products using generations-old recipes.
When it came time to apply to college, Dennis chose Babson—a small school in Wellesley, Massachusetts, known for its focus on entrepreneurship. At first Dennis wanted to take his Babson education and return home to Liberia to start a citrus farm. But by the time Mary arrived for Dennis’ college graduation in 1991, civil wars had broken out in both Liberia and Sierra Leone. The mother-son pair had no choice but to stay. He and his mother turned to an art that was ingrained in their identities: making the soaps and creams his grandmother had sold back in Sierra Leone. Along with fellow Liberian Nyema Tubman, Dennis’ college roommate, they went to work, using recipes and ingredients from Africa. The trio worked with raw ingredients like shea butter, essential oils and African black soap, a West African product made from plant ash, to brew up incense and skin and hair products. They mixed the lotions and soaps in the bathtub of Dennis’ cramped Queens apartment and packaged them in Ziploc bags to peddle on the street corners of Harlem.
As word spread of its products, Sundial went from a table at 125th Street and Fifth Avenue to wholesaling its products to natural stores, local shops, fairs and festivals. During the day, Dennis and Tubman delivered the products to those vendors, while Mary kept the books. Carefully managing the finances was crucial: No banks were willing to lend to an African immigrant—not even the few thousand dollars Dennis needed to buy a new truck. “We plowed the money back into the business,” Mary says. She still signs every check that comes out of the Sundial offices. “You can’t make a lot of money if you don’t spend it well.” After an exhaustive search for a place to increase their manufacturing, they moved the operation to a Long Island warehouse in 1992. That meant leaving their apartment at 5 a.m., seven days a week, to make and package product. In the afternoon, they delivered it. “We did that daily, because we didn’t have the resources to build up inventory,” Dennis says. In the early 2000s, natural beauty products started to take off, ignited partly by companies like Burt’s Bees, the Vermont-based maker of cosmetics and skin-care products. Dennis wanted to go mass market, too, but he refused to put his products in the so-called “ethnic aisle” of drugstores—typically a small, poorly lit back section of the store.
Rather than submit to second-class product placement, Dennis chose to wait 16 years for retailers to agree to put his products with the rest of the hair and skin-care products. In 2007, Macy’s became the first mass marketer to carry Sundial. Target followed later that year. Given those figures, it makes sense that Unilever pursued Sundial so hard and was willing to give Dennis the freedom he demanded. Like ice cream maker Ben & Jerry’s, Sundial is a stand-alone business within Unilever with its founder still running the company. As part of the deal, Dennis is free to stay as long as he pleases, avoiding the usual multiyear lockup period that an acquiring company puts on an incoming CEO. Given those figures, it makes sense that Unilever pursued Sundial so hard and was willing to give Dennis the freedom he demanded. Like ice cream maker Ben & Jerry’s, Sundial is a stand-alone business within Unilever with its founder still running the company. As part of the deal, Dennis is free to stay as long as he pleases, avoiding the usual multiyear lockup period that an acquiring company puts on an incoming CEO.