Jackie Collins, call your agent. Have we got a script for you! The sharp-tongued wife of a rags-to-riches entrepreneur gets awarded control of her husband's company in a divorce settlement. He lives in a tony Chicago condo, married to a younger woman, while his ex-wife and CEO son run the company. But, apparently, egged on by her glamorous and ambitious daughter, Mom engineers the sudden resignation of her well-respected son.
What a great potboiler--and apparently true for the company that pioneered the African-American hair-care industry. Last week Joan Johnson announced the departure of her son, Eric G. Johnson, as CEO of Chicago's Johnson Products Co. maker of venerable black personal-care products such as Ultra Sheen and sole sponsor of national TV's " Soul Train!' for eight years. The company said Eric resigned to pursue personal interests. Mother, son and daughter didn't return phone calls. But Dad did. "My hope is that some sanity will dawn on some of these people and they'll realize what they've done," said George Johnson. A company spokesman said only that he disputes some press accounts.
Family-run businesses have always been ripe for nasty feuds. This one appears to be disrupting a company that had long served as inspiration for African-American entrepreneurs. George Johnson invested $250 to start Johnson Products in 1954, and 10 years later the company was selling its hair-care products in chain stores--not just in hair salons. In 1971 Johnson Products became the first black-owned firm to be listed on the American Stock Exchange. But by the mid-'70s, when sales had grown to nearly $40 million, the company stalled, in part because Johnson lacked new products--and names like Revlon were jumping in.
The latest turmoil started when Joan and George divorced in 1989 after 38 years of marriage. Looking to avoid a messy court battle and keep the company in black hands, George transferred his stock to his wife (she now has about 60 percent of the total shares) and gave up day-to-day responsibilities. Soon after, Eric Johnson's reign as president began to produce results, as profits rose 50 percent to $3.2 million.
But Eric, 40, didn't show the same finesse with his family. Here's his father's version: Eric made the fatal mistake of offending his 27-year-old sister, Joanie. Eric was piqued that Joanie had put off taking a company job in 1990 to follow her now estranged husband, the Chicago Bears football player Dennis McKinnon, to Dallas, where he had been traded. So Eric named his sister, who held a new M.B.A., director of market research--a title she deemed too lowly. Joanie retaliated by encouraging her mother to oust Eric. Analysts were perplexed. "Eric was doing a good job," one said. George's explanation: " He underestimated the rancor of his sister and how far she would go to get revenge.
Here's an epilogue of sorts. A four-person "office of the president" will run the company, and daughter Joanie has reportedly been moved into one of those slots. Mom remains chairman. Eric could receive severance pay of up to $600,000 plus bonus. Meanwhile, some blacks in the business community are concerned because the company is both role model and employer. Says Eldridge T. Freeman, a management professor at Chicago State University: "If the company doesn't do well, that will be another financial nail in a bleak economic picture for African-Americans." With blood and money at stake, it's doubtful the Johnsons gave that consideration more than a passing thought.