Ulta Beauty has doubled the number of black-owned brands it carries.
Big beauty retailers are promoting small minority-owned businesses as black women entrepreneurship helps bridge the employment gap.
As of last year, 17% of black women in the United States were in the process of starting or running a new business, according to the Harvard Business Review. This beats the 15% of white men and 10% of white women who reported the same.
However, only 3% of black women reported doing mature business.
and traditional workforce Unemployment rate It remains high among black women, at 5.5% in March, compared with total US unemployment at 3.6%, according to the Labor Department. The unemployment rate for Hispanic women during the same period was 4.2%. For white women, the rate was 2.8%.
In an effort to help small businesses and boost black entrepreneurship opportunities, major retailers such as Ulta, Sephora, and Target have set up startup incubators and various programs, offering mentorship, financial support, and new business opportunities.
This month, Ulta Beauty It has partnered with incubator Rare Beauty Brands and Black Girl Ventures, a business that funds and expands businesses founded by Black- and Brown, in the group’s second pitch competition for minority-owned beauty startups. The competition is a crowd-funded live event where founders create a three-minute presentation in hopes of advancing their business.
The first place winner will receive accounting advice, $10,000 and a place on Ulta product shelves for at least six months. Winners are chosen based on public vote. Voting among the seven candidates closed on April 14. The winner will be announced next week.
The competition also promises a master mentoring opportunity. Black Girl Ventures offers training to applicants before the pitch, and Rare Beauty Brands works with business owners after they win.
“We already know that in the beauty industry, black women are consuming more than their fair share of beauty products, however, funding for black women entrepreneurs is far behind compared to where it needs to be,” said Chris Hobson, CEO of Rare Beauty Brands. . “It’s not about adding brand value to us but more about correcting a mistake and a way of saying ‘thank you’ to a large portion of our customers and trying to be part of the solution here.”
Kim Roxie, founder and CEO of Lamik Beauty, the first black-owned cosmetics brand to be shown in Ulta, won the ballpark competition last year from Rare Beauty Brands and Black Girl Ventures. She said the partnership with Rare Beauty Brands was transformative for her business.
“It has changed the rules of the game for me as a founder, and it has changed the rules of the game for my company,” Roxy told CNBC. “They let me use their team in a way that I would have had to try to hire all these different people and that was just out of my reach.”
“They sort of settled in and closed that gap for me.”
Ulta Beauty has pledged to spend $50 million this year on diversity initiatives, including the launch of Accelerated Program To support black founders and invest money in marketing their brands.
In February, the company said it was about halfway toward meeting its target of 15% minority representation on shelves as part of its broader business. Diversity initiatives.
Sephora runs similar accelerated programs for entrepreneurs, aimed at improving brand representation from BIPOC founders – black, indigenous and people of color. The company’s Accelerate program, launched five years ago, received more than 600 applications from small business owners this year.
“The Accelerate Program serves as a springboard for emerging brands to become visible, viable, stable and financially solvent,” said Rauvan Dulay, Vice President of Global Marketing, Business Development and Strategy at Sephora. “Business growth in communities of color creates jobs, opportunity, stability, and generational wealth – with the potential for positive impact for decades.”
Target Takeoff, the big-box retailer, launched Target Takeoff in 2016 with similar goals but aimed at more mature consumer packaged goods companies. Five years later, the company added Forward Founders to its portfolio, an incubator initiative designed to engage black entrepreneurs very early on in their startup journeys by helping them navigate critical stages, such as thinking, product development and expansion to mass retail, accordingly. to the company.
The incubator announced its second batch in January.
“Target has a proven and successful track record of Accelerator programs and we saw an opportunity to do more, and think differently about how we support underrepresented entrepreneurs,” the company said in a statement to CNBC.
The company said Target’s Forward Founders program has received about four times the number of applicants expected this year. Tripled the annual pool size and created an entirely new virtual program so that all applicants can benefit.
CNBC’s Melissa Rybko contributed to this report.
Correction: The Black Girl Ventures competition is a joint effort with Rare Beauty Brands. An earlier version of this story misidentified the parties involved.