Essence Communications, Inc. History

Address:

1500 Broadway
New York, New York 10036
U.S.A.

Telephone: (212) 642-0600
Toll Free: 800-ESSENCE (377-3623)
Fax: (212) 921-5173

Private Company
Incorporated: 1969 as Hollingsworth Group
Employees: 150
Sales: $92.8 million (1996)
SICs: 2721 Periodicals; 2741 Miscellaneous Publishing; 7999 Amusement & Recreational Services, Not Elsewhere Classified

Company History:

Essence Communications, Inc. is the publisher of Essence, a magazine catering to the contemporary African-American woman that, in 1997, was reaching an estimated five million readers each month, 30 percent of them male. The company also publishes two other magazines and a mail-order catalogue and has an entertainment division hosting an annual televised award ceremony and four-day music festival in New Orleans.

A Voice for Black Women: 1969-85

Essence Communications grew out of a conference for aspiring African-American entrepreneurs attended by, among others, Edward Lewis, a First National City Bank executive trainee, and Clarence O. Smith, a Prudential insurance salesman. The company that would become Essence was founded in 1969 as the Hollingsworth Group by Lewis, Smith, Cecil Hollingsworth, a graphics consultant, and Jonathan Blount, an advertising salesman, in order to publish the first general-interest magazine aimed at African-American women. Blount was the original publisher; Gordon Parks, a noted photographer and writer and later a filmmaker, was the editorial director.

"It was really Nixon and his talk about black enterprise that helped us get started," Lewis later said, recalling the need felt for action following the urban riots in the wake of the assassination of Martin Luther King, Jr. "Had it not been for a minority bank here in New York City, Freedom National Bank, which lent us $13,000, we may not be here now," Lewis added in 1995. Other money, he said, came from "family, friends, credit cards." The lion's share of funds, however, came from First National City Bank, Chase Manhattan Bank, and several minority venture-capital concerns, which provided a total of $130,000 in start-up money.

Several months later, the initial investors and new ones, including Bancap Inc. and Equitable life Assurance Society of the U.S., invested about $1.87 million, mostly in loans, to get Essence up and running. Playboy Enterprises Inc. later added $250,000. The first issue of the monthly magazine appeared in 1970, featuring a cover photo of a female model with her hair styled in an Afro as well as a promise to "delight and to celebrate the beauty, pride, strength, and uniqueness of all Black women." There were only 13 pages of advertising out of a total of about 100 pages in the first issue of Essence. About 50,000 copies were sold at 60 cents apiece from a press run of 150,000 to 175,000. The second and third issues each had only five pages of advertising.

In the first four years, Hollingsworth, Blount, and Parks all left the enterprise--renamed Essence Communications--because of differing views, leaving Lewis as chairman and publisher and Smith as president. The other founders filed suit in 1977, initiating a three-year-long attempt to take over the company that nearly bankrupted it and ended only after an investor agreed to buy out Hollingsworth. This struggle cost the company much of the $2 million it had borrowed and which it was unable to pay back until 1985. Moreover, Smith later acknowledged, "We had to learn about the business of magazines; we didn't know anything."

Editorially, the fledgling enterprise also was in disarray. During its first year three editors-in-chief came and went in rapid order. "One of the greatest hurdles back in the 1970s," Smith later conceded, "was the lack of professional black magazine talent. Most of the people we had to hire had little experience in the jobs for which they were hired." In 1971, however, Marcia Ann Gillespie began a successful nine-year tenure as editor-in-chief.

Fashion, beauty, food, health, childcare, and other staples of women's service magazines were covered from a distinctly African-American perspective. Essence offered career advice before some other women's publications took up the subject. The magazine also extended its reach to such topics as the criminal-justice system and political crimes. Another controversial stance was the magazine's condemnation, in its first issue, of men who "talk black and sleep white." "Politics, war, religion, sex, you name it, Essence talked about it," Gillespie later recalled, adding, "In retrospective, I think we used too heavy a hand."

Essence also offered its readers original fiction by such black writers as Maya Angelou, Amiri Baraka, Nikki Giovanni, Toni Morrison, Gloria Naylor, Ishmael Reed, Ntozake Shange, and Alice Walker. Their frankness in language and subject matter inspired some angry letters and threats of canceled subscriptions, but the editorial policy remained, "If the word fits, use it."

Susan L. Taylor, who joined the magazine in its first year as the part-time beauty editor and later became fashion editor as well, had the job of creating layouts from a uniquely African-American perspective, without regard to "white standards" of beauty. She made a point of using some models who had strongly African features, displaying, as she said, the "whole range of black beauty--from ebony to ivory." Moreover, some of Essence's models exceeded the fashion industry's weight standards, and the clothing they wore was affordable as well as attractive.

After becoming editor-in-chief in 1981, Taylor reached out to male readers by introducing an annual issue on men and a monthly column by men titled "Say, Brother." In addition to editing the magazine and writing a monthly column, Taylor also, in 1983, became host and executive producer of a half-hour television program that eventually was syndicated to 60 American television markets as well as several Caribbean and African countries. This program, which featured celebrity guests and discussions about black culture and social issues, was the first nationally syndicated African-American magazine program on television and ran for five years.

During speaking engagements at colleges, churches, and seminars, as well as in her column, Taylor conveyed an inspirational message. "The mission of Essence," Taylor told a New York Times reporter in 1995, "is to inspire, inform, and uplift black women, to help our sisters move their lives forward so that they can spread the word and thereby hopefully uplift our race." In the office, Taylor put her philosophy into practice by allowing most editorial decisions to be made collectively through a participatory process in which each staff member was heard. Maya Angelou told a New York Times reporter in 1995, "Her spirituality deepens the mission of the magazine.... I don't know any nonreligious magazine that addresses spiritual health as Essence does."

Broadening Its Base: 1985-97

By 1975 Essence had a circulation of 450,000. Annual advertising pages increased from 455 in 1974 to 884 in 1979, when circulation reached about 600,000. The magazine became profitable during 1975-76 and its parent company saw profits around 1980, according to Lewis. When rival publisher John M. Johnson (founder of Ebony and other magazines) took a 20 percent stake in Essence Communications in 1985, Lewis and Smith were faced with having to match his price in buying stock from other selling investors in order to assure themselves majority control of the enterprise. Another investor, Pioneer Capital Corp., raised its interest to 20 percent at that time.

Essence Communications, which had sales of nearly $25 million in 1985 (compared to $14 million in 1980), invested in the company that purchased Buffalo television station WKBW that year, making it the largest black-owned television station in the nation. By 1984 Essence Communications was also producing a mail-order catalogue in collaboration with Hanover House, Inc. The catalogue featured moderately priced apparel, other soft goods, jewelry, and art objects. The company also created a licensing division in 1984, lending the Essence name to intimate apparel, eyeglasses, hosiery, and a collection of sewing patterns by Butterick Co. In 1987 Essence Communications purchased part of Amistad Press, a black-owned publisher.

Advertising support remained a major challenge to the prosperity of Essence. To make a sales pitch, the magazine's representatives had to persuade prospective space buyers to overlook the low household income of the typical reader. "A $20,000 household income doesn't stop a black woman from spending $40 on a fragrance," Smith insisted. Avon, a longtime advertiser, confirmed that black women spent relatively more for beauty products than white women, yet for most cosmetic companies, Smith told the Wall Street Journal, "it's as if black women don't count as consumers."

Some companies also were reluctant to commit time and money to create advertising for a publication like Essence, which preferred that models used in its ads be black. Certain advertising executives privately admitted that they were afraid a product identified with black consumers would do poorly among white consumers. One company that proved ready to engage African-American models, however, was Estée Lauder. When that company began advertising in the magazine for the first time in 1993, some of its ads were tailored for the magazine and cited the benefits of the product for women of color. A marketing executive for Estée Lauder said in 1995 that when one of her company's products was advertised in Essence "we can really see the results because we see consumers with a page of the magazine coming in to ask for it."

By 1990 Essence was exploring some creative endeavors to raise its advertising base. In what was said to be the first program of its kind among minority publications, thousands of readers were to sit in focus groups and provide detailed survey results to the magazine's clients. The research results were expected to validate the publication's argument that advertisers would do better in the $250 billion black consumer market with specially created and positioned advertising. And readers of Essence's 20th anniversary issue were subjected to the publication's first commercial use of ink-jet messaging, in which Coca-Cola sent personalized messages detailing a sweepstakes promotion to all readers. Subscribers were singled out by name, while newsstand copies were labeled "Dear Essence Reader."

Essence also was raising its profile in the mid-1990s by hosting free mall tours around the country, offering information, sample products supplied by co-sponsoring advertisers, and discussions about fitness, health, beauty, and spirituality. Most of these events were attended by Taylor.

In 1992, Essence Communications acquired Income Opportunities, a magazine with a circulation of 400,000 aimed at people who had been let go from their jobs and wanted to start their own businesses. The company's revenues reached $77 million in 1994, the year the circulation of Essence passed one million. Also by 1994 a subsidiary, Essence Television Productions, Inc., was producing an annual prime-network special hosted by Taylor; the Essence Awards honored achievements of African-Americans.

In 1995 the parent company, along with Alegre Enterprises, launched Latina, a magazine aimed at Hispanic women 18 to 45 years old. Also that year, Essence joined with Golden Books to establish a line of children's books featuring characters created by African-American authors and illustrators. The first dozen appeared in a variety of formats, among them hardcover storybooks, paperback activity books, Golden Naptime Tales, and Golden Super Shape Books.

Essence celebrated its 25th anniversary in 1995 with a 300-page May issue featuring Oprah Winfrey on the cover. The company capped its anniversary party with a three-day music festival in New Orleans, over the Fourth of July weekend, that was described by USA Today as the largest gathering of black performers ever. This event--which included appearances by such entertainers as Bill Cosby, Aretha Franklin, Luther Vandross, Patti LaBelle, and Boyz II Men and was attended by more than 150,000 people--contributed an estimated $75 million to the city's tourist industry. As part of the admission price, visitors also had the opportunity to attend empowerment seminars during the day.

Plans to make the Essence Music Festival an annual event in New Orleans almost foundered when Louisiana Governor Mike Foster issued an executive order the following year banning affirmative action in state government (although the state had no such program). Essence was planning to pull out in protest until Foster agreed to issue a new executive order announcing a program to help disadvantaged businesses, under which the state could consider race and gender as criteria for awarding contracts and other benefits. By 1997 the annual festival, being held in the Louisiana Superdome, had expanded to four days.

Essence appeared in 1997 with a comprehensive redesign that added several sections and increased beauty, fashion, and home coverage; introduced a flat-spine binding for more advertiser inserts and coupons; and made four-color advertisements available throughout the magazine. The newsstand price rose from $2.50 to $2.75. Also that year, Essence Communications and Time Inc. were considering a joint venture to produce a black lifestyle magazine to be called Savoy.

Principal Subsidiaries: Essence Television Productions, Inc.

Essence Communications, Inc. History

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