Corporate pledges made by large retailers, including Walmart, to direct more money to Black-owned businesses have led to a new mix of products on shelves and a significant increase in dollars for Black entrepreneurs .
Macy’s says it has increased the Black-owned brands it carries by five-fold after signing the Fifteen Percent Pledge. Sephora has doubled the number of Black-owned brands in its stores after making the same pledge.
However, as retailers continue to work with Black-owned businesses and entrepreneurs, some are realizing there aren’t a lot of large-scale Black-owned businesses that can immediately fill big orders from large U.S. chains.
Shelley Stewart III, who leads McKinsey & Co.’s Institute for Black Economic Mobility, told Bloomberg the reason for that is these same large retailers are coming “to the realization that these businesses need additional capital and support—not just shelf space.”’
Many of these retailers are addressing the needs of Black entrepreneurs by launching and expanding business accelerators or incubator programs to provide mentorship and feedback on the products they sell.
Megan Graham, the owner of Ries, which sells face and beauty products in reusable travel-size bottles, was among a group of entrepreneurs selected by Sephora for its accelerator program last year.
Despite the good news, one specific area Black-owned businesses and entrepreneurs are still significantly struggling with is raising capital. Large banks are still apprehensive about giving capital to small Black businesses, which Graham knows all about.
“Raising [capital] is difficult and raising as a Black woman, we know, is that much more difficult,” Graham said, adding when she pitched to Sephora, its group of diverse executives immediately understood her capital raising problem.
Venture capital firms, seeing the Black businesses boom, are trying to get in and support black brands that need an infusion of cash.