DALLAS -- Pro-Line Corp., a 24-year-old manufacturer of ethnic hair care products based here, figures it has nearly maximized its business in the U.S.
So, the company is looking across the ocean for growth -- to Africa.
The company contracted a manufacturer in South Africa to begin producing its goods in July, opening a new distribution channel within the continent. Within three years, the African unit is expected to generate $40 million in sales, according to Comer Cottrell, founder and president of Pro-Line.
"The new market for us is global," Cottrell asserted, noting the firm already sells to seven countries in Africa, five in Europe, and other markets throughout the Caribbean and North America. "We still haven't touched the South American market, but we're talking about it."
Pro-Line did $6 million in sales to Africa last year, but business there has been stifled because import duties and shipping charges pushed prices into the luxury goods realm.
The hair relaxers, shampoos and styling aids that are sold in thousands of U.S. mass market outlets for $2.50 to $10.95 have been costing African consumers up to three times as much. When production starts in South Africa, prices there will drop to the same level as in the U.S.
"When we begin to manufacture in South Africa, we can produce at even lower costs than here," Cottrell pointed out. "Prices will be 60 percent lower than they are now in Africa. The market size will increase."
The company currently manufactures everything except aerosols at its factory here.
Pro-Line's 1993 volume was $40 million, mostly through its U.S. distribution to such chains as Wal-Mart, Eckerd Corp. drug stores, Sally Beauty Supply and the Army and Air Force Exchange Service.
Chief among its 40-plus products are Soft & Beautiful hair relaxers and conditioners, Just For Me children's hair-care products and the Perm Repair group, which is used by whites as well as blacks, Cottrell noted.
Domestic sales, however, have reached a plateau, he asserted.
"We could do much more sales in the U.S., but the incremental sales increases aren't that profitable because of the high costs," Cottrell reasoned.Boosting sales through most chains here would require footing the bill for additional shelf space, freestanding displays and co-op advertising that would slash profit margins, he explained.
"For an off-shelf display, they might want $300 a month," he noted. "Those are the costs of incremental sales that eat you up. They lose money. Or you have to buy co-op advertising that [retailers] prefer to manage, which becomes a profit center for them."
Still, Cottrell is forecasting growth this year. He's expecting a 10 percent jump in domestic sales, mostly in Just for Me and Soft and Beautiful products.
To capitalize on the emerging trend toward retro-styling, Cottrell is repackaging the same products with which he founded the company in 1970: Oil Sheen and Afro Shaper. They will be introduced in August at the Barber and Beauty Supply Institute convention in Las Vegas.
"The Afro is coming back because the rappers are into it," Cottrell asserted. "In earlier years the Afro was widespread with men and women of all ages. This time it appears to be more limited to young men. Older men are still keeping their hair in short, conservative styles.
"I don't expect to see big sales because it's a limited market and the trend isn't strong yet," he continued. "It's coming, but it's not strong yet."
Pro-Line does a hefty 30 percent of its sales with the Just For Me children's line, which is less than three years old. The line includes a hair straightener, hair moisturizer, detangler, shampoo and conditioner.
The key to its success has been promotions targeting kids, Cottrell said. Cooperative marketing ploys have included a Disney sweepstakes, a promotion involving photographs with the Easter bunny, and a hair-curling version of the product used with a Tyco doll named Kenya.
In addition, Pro-Line has awarded prizes such as bicycles to children who submitted rap songs describing how they like the products.
Cottrell got the idea for Pro-Line while working as a merchandise manager at a Sears in Los Angeles. A salesman suggested there was a need for hair-care products for African-Americans, and Cottrell knew from his experience managing a store in the Air Force that base stores lacked such goods.So he called his Congressman, who got him an interview with the general in charge of the Army and Air Force Exchange Stores. The general told him he'd buy the hair-care products if Cottrell made them.
With only $600 in capital and a borrowed typewriter to print business cards, Cottrell contacted a chemical company to develop an aerosol hair spray for African-American hair styles. He asked hair salons to test various formulas, getting their feedback for what worked best.
Once he had the formula, Cottrell hired a contractor to produce Oil Sheen under 90-day payment terms. The sprays sold out within 20 days, providing enough cash flow to sustain the business.
But Cottrell still didn't have enough money to rent an office. So he made a deal for a six-month lease in a building in the Watts area of the city in exchange for renovating the property. In that first year, sales hit $86,000.
"We bought out the manufacturing company in 1973 and were able to expand distribution," Cottrell recalled. "Servicemen were taking home the product, and people would ask where they got it."
In 1980, Pro-Line moved its headquarters from Los Angeles to Dallas because 90 percent of its customers and most of its suppliers were in the East.
The company has made its mark by being an innovator with styling products that were on top of fashion trends. Curly Kit, introduced in 1980 to create the hair style popularized by Michael Jackson, sold $1.4 million worth of product the first day and $11 million in 10 months.
A decade later, the curl market vanished, and men cut their hair short. So Pro-Line introduced Comb-Thru to smooth and groom hair.
Now, with the company bringing back its original products, it is coming full-circle in a 25-year cycle of hair styles. Said Cottrell of the re-introductions, "We just want to be first."
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