Founders of Black-owned brands adapt their hopes and business plans for a post-DEI era

NEW YORK (AP) — The co-founders of a company that makes lip products for darker skin tones no longer hope to get their line into Target. A brother and sister who make jigsaw puzzles celebrating Black subjects wonder if they need to offer “neutral” images like landscapes to keep growing.

Pound Cake and Puzzles of Color are among the small businesses whose owners are rethinking their plans as major U.S. companies weaken their diversity, equity and inclusion programs. The initiatives mostly date from the end President Donald Trump’s first term and entered a new era with the dawn of his second one.

Some Black-owned brands suspect big retail chains will drop partnerships they pursued after the police killing of a Black man in 2020 reignited mass protests against racial injustice. In today's anti-DEI climate, other entrepreneurs worry about personal repercussions or feel pressure to cancel contracts with retreating retailers.

“It becomes a question of, are the big box stores going to be there? Do we even make any attempt to talk to these people?" Ericka Chambers, one of the siblings behind Puzzles of Color, said. “We are really having to evaluate our strategy in how we expand and how we want to get in front of new customers.”

A fighting chance for Black-owned brands

Chambers and her brother, William Jones, started turning the work of artists of color into frameable puzzles the same year a video captured a white Minneapolis police officer kneeling on George Floyd's neck. Amid the Black Lives Matter protests over Floyd's death, a fashion designer challenged large retailers to devote 15% of their shelf space and purchasing power to Black businesses.

The Fifteen Percent Pledge helped bring Puzzles of Color's creations to Macy’s and Nordstrom’s websites in 2022. Last year, they made it into select Barnes & Noble stores. Chambers said she's confident in the companies' commitments but recalled a backlash after news outlets covered the brand, which is based in Texas.

“It does make us think about how we envision ourselves as far as the safety of not wanting to be attacked, because some people are very vocal about being anti-DEI,” Chambers said.

Vibrant depictions of Black women account for many of her and Jones' puzzles. The pair figured they needed to provide more abstract designs for certain Barnes & Noble locations to give Puzzles of Color “a little bit of a fighting chance.”

Discontent over corporate diversity

The first prominent names in U.S. retail to end or retool their diversity programs surfaced last summer amid threats of legal challenges and negative publicity from DEI critics, who argue that setting hiring, promotion and supplier diversity goals for underrepresented groups constitutes reverse discrimination.

After Trump won a second term in November, Walmart joined the corporate pullback. Target's suspension of its comparable DEI targets in January stung Black and LGBTQ+ customers harder, largely because they regarded the Minneapolis-based company as more of a natural ally.

The company said it would continue working with a diverse range of businesses. Philadelphia-based Pound Cake's co-founders, Camille Bell and Johnny Velazquez, said they don't think they would agree at this point if the retailer offered to stock their lipsticks and lip oils.

“Target would have been a great boost to our business’s growth,” Velazquez said. “We’ll just find it elsewhere.”

To boycott or not?

Target's stance has created a dilemma for brand founders with existing distribution deals. One is Play Pits, a natural deodorant for children that Maryland resident Chantel Powell launched in 2021. The product is found in about 360 Target stores.

The retailer's DEI program “allowed us to employ amazing people, give back to our community, and exhibit Black excellence on and off the shelves,” Powell wrote on LinkedIn as civil rights leaders talked about boycotting Target.

She and some other product creators highlighted the impact boycotts might have on their businesses. They urged upset customers to intentionally limit their purchases to items from Black-owned enterprises. Some activists understood; others pushed the brands to join the protest by cutting ties with Target.

“The conversation around Black brands, that they should pull out of the retailers that they’re in, is unrealistic,” Powell said this month as a 40-day, church-organized Target boycott was underway. “We signed up to be in business. I understand why people are having that conversation of boycotts. As a Black founder, I also understand the side of how it can be detrimental.”

Navigating the post-DEI landscape

The owner of a Black-owned sexual wellness business with its own line of condoms has a slightly different take. Target started carrying B Condoms in 2020, and founder Jason Panda said the company told him late last year that it didn't intend to keep the prophylactics in the 304 stores that stocked them.

Panda says he isn't worried. The product is available through Amazon and in more than 7,000 CVS stores, he said. What's more, contracts with non-profit organizations and local governments that distribute condoms for free are the cornerstone of the business he established in 2011, Panda said.

“My money has never really come from mainstream,” he said. “We're going to be protected as long as I can maintain my relationship with my community.”

Brianna Arps, who founded the fragrance brand Moodeaux in 2021, notices fewer grants available to Black brand creators these days. She used to apply for 10 to 15 every week or two; the number is down to five to seven, Arps said.

“A lot of the organizations that had been really vocal about supporting (Black businesses) have either quietly or outwardly pulled back,” she said.

Moodeaux was the first Black-owned perfume brand to get its perfumes into Urban Outfitters and Credo Beauty, which specializes in natural vegan products. In the current environment, Arps is looking to expand her brand's presence independent shops and to support other Black fragrance lovers.

“The resiliency of brands like ours and founders like myself will still exist,” she said.

Accentuating the positive

Aurora James, the founder of the Fifteen Percent Pledge, said nearly 30 major companies that joined the initiative remain committed to it, including Bloomingdale's, beauty retailer Sephora, J. Crew and Gap.

Ulta Beauty, another pledge signatory, and Credo Beauty carry Pound Cake products. Velazquez and Belle want to use social media to direct their followers to support retailers like Ulta and to bolster their online sales.

“It’s going to be fostering the community that we have and growing that,” Velazquez said.

While making a strategic decision “to appeal to a broader audience” when selecting puzzles for Barnes & Noble, Chambers said she plans to introduce Black faces and experiences to the chain's bookstores over time, in boxes of 500, 750 and 1,000 pieces.

In the meantime, Puzzles of Color expanded its “Pride” collection as a response to the DEI backlash. The subjects include Harriet Tubman, a mother and daughter tending a garden, and a little girl in a beauty supply store gazing up at hair accessories.

“Do we lean in all the way?" Chambers asks herself. "Part of why we started this was because we didn’t see enough Black people in puzzles.”