This man took a bank loan for vacation but it was seed money for the first Black-owned firm on the American Stock Exchange

BY Preta Peace Namasaba April 4, 2024 1:04 PM EDT
George and Joan Johnson. Photo credit: Chicago Tribune

George Johnson had one dream and it was to start a hair company specifically catering to Black consumers. But when he applied for a $250 business loan in the 1950s at a local Chicago bank, his request was denied. Determined to turn his dream into reality, Johnson went to a different branch three days later and requested the same amount. This time, he told the bank that the reason for the loan was to take his family on a vacation to California. The loan was approved.

With the $250 bank loan and another $250 borrowed from a friend, Johnson and his wife grew the business to a multi-million company generating over $40 million in annual revenues. Johnson Products Co. became the first Black-owned company traded on the American Stock Exchange, the securities exchange platform now subsumed by the New York Stock Exchange.

Looking back, Johnson said he was “most proud of the impact that my success has had upon the Black youth in our community.”

Johnson had humble beginnings. He was born in a three-room sharecropper’s shack in Mississippi and moved to Chicago with his mother following his parent’s separation. At the age of eight, Johnson began working shining shoes while attending elementary school. During high school, he worked during the day as a busboy and set pins in a bowling alley in the evenings. He eventually quit school to work full-time.

He went to work for S.B. Fuller, a self-made Black man who became a millionaire through his establishment of a cosmetics firm. For Fuller’s business, Johnson was made a production chemist in 1944. After ten years at the company, Johnson was encouraged by a German-born chemist to start his own company. He left the company and founded Johnson Products, focusing on the African American male hair care market. However, accessing funding proved to be a challenge. By misrepresenting the intent of his loan, he ultimately managed to get $500 in seed money for the company.

At a time in history when little attention was paid to Black consumers, the Johnsons built Johnson Products to cater specifically to Black consumers. They teamed up with a hairstylist who had an idea for a hair straightener and came up with their first product, Ultra Wave, a hair relaxer for men. The company initially focused on the African-American male hair care market as the majority of Black-owned cosmetics companies targeted Black women. Three years into the business, Johnson Products developed Ultra Sheen, a revolutionary hair straightener that could easily be used in the home, and found success in the women’s hair care market.

By 1960, the company was dominating nearly 80 percent of the Black haircare market in the United States. Its sales hit over $1 million ten years after the Johnsons launched it. Soon, they were reporting $12.6 million in annual sales, Johnson Products became the first African-American-owned company to be listed on the American Stock Exchange in 1971. As the company grew, it focused on not only creating quality products but also on training cosmetologists on proper usage.

In 1964, Johnson founded Independence Bank and also became the exclusive sponsor behind the nationally syndicated dance show Soul Train during the 1960s.

While George Johnson was the face of Johnson Products, his wife Joan actively ran the day-to-day operations. She handled the books at the company’s inception and served as the treasurer and comptroller as it grew. When the Johnsons divorced, 49.5 percent of the company went over to Joan as a part of the divorce settlement. In 1993 the company was sold to Ivax Corp for $67 million with the Johnsons retaining ownership of 54% of shares.

Johnson Products has since been bought and sold by other companies. In 2009, an African-American investment firm bought the company back from Proctor & Gamble to keep it under Black ownership.