Black Owned Hair Care Brand Adwoa Bankrupt After Lawsuit From Lender Black Millionaires Podcast

Added: 2026-05-13

[00:00:01]Speaking of though, there's a blackowned beauty brand. Yes.

[00:00:06]>> Uh that was really popular in Sephora. I don't think I'm going to say this right, but it's called Ottawa.

[00:00:13]>> Yes, >> I think. Um and they filed for chapter 7 bankruptcy and will have to shut down over a lender dispute due to unpaid debts.

[00:00:23]>> Yes. It's unfortunate because um I think repeatedly we have talked about blackowned beauty brands filing for bankruptcy. Yeah.

[00:00:33]>> It seems to be a trend and I and let's just be clear, >> luxury >> like overall sales are down. Yes.

[00:00:43]>> And make no mistake, makeup is luxury.

[00:00:45]>> Yes.

[00:00:46]>> Like makeup is something that you do not need.

[00:00:49]>> These expensive shampoos luxury. Yeah.

[00:00:51]Um, so these type of things are kind of like, you know, you'll go to the drugstore before you'll go to Sephora if you don't have >> These are the first things to go. These are the first things to go. You bet you get tight.

[00:01:03]>> Exactly. Um, so Ottawa Beauty, the blackowned textured hair care brand founded by Julian Adu Adu is facing a major legal and financial crisis that could force the company to shut down.

[00:01:17]Yes. Yes.

[00:01:17]>> The Dallas based brand known for their clean, genderneutral hair care for curls, coils, and kinks was founded in 2017. Very recent.

[00:01:25]>> Yes.

[00:01:25]>> And Liberian uh >> Liberian is >> Oh, sorry. Did I say librarian? Liberian uh Gana >> Ganaian. Yeah, >> Ganaian. She's from Ghana, y'all. Um entrepreneur with decades of experience in the hair care industry. The brand built a strong following in the textured hair care space and became a Sephora exclusive brand. So that's a big deal.

[00:01:49]Yeah.

[00:01:49]>> Um with Sephora currently listing the beauty brand as clean at Sephora crueltyfree designed for a wide range of hair textures.

[00:02:00]>> Yes.

[00:02:00]>> So I mean 2017 is 2026 10 year run.

[00:02:05]That's not bad. Well, nine years.

[00:02:07]>> Yeah. So, so let me give a little more kind of the background of what's going on. So, a lot of people been seeing a chapter 11 bankruptcies where they had to do a restructure. So, she did a chapter 11 >> and >> you mean seven?

[00:02:24]>> No, no. So, let me So, she did a chapter 11.

[00:02:28]>> That's what she originally filed as a chapter 11. And things got so bad with the legal dispute that the judge said, "This is going to be a chap. We're just going to liquidate this whole thing. Shut it down."

[00:02:43]>> So the judge made her convert this over to a chapter 7. Liquidate all the assets and shut it down. So, one of the big legal dispute, one of the big disputes they had with their lender was she went online and said, >> um, hey, we're having some financial issues, so can you, you know, can y'all basically kind of seeking donations like >> kind of like >> we're going to shut down if y'all don't donate to us or buy the product or help us out? And then the lender was saying like that violated something that they were doing. I don't know. To me, it sounds like the lender did really didn't have their best interest at heart.

[00:03:23]>> That's what I was going to say.

[00:03:24]>> Um, and they already had a traumatous relationship, so this was kind of the the the the nail in the coffin. But yeah, the the courts converted this over to a chapter 7 and they liquidating the business. So, yeah, it was up in the air like if they may shut down, but now it's basically ruled that they have to shut down because you're doing a liquidation.

[00:03:46]So, you know, a lot of the products, a lot of the receivables that they probably are getting from Sephora, a lot of the cash on hand, whatever they got is going to um make some of their vendors and make some of their creditors whole. And um this is a very unfortunate situation because um she wrote a whole substack on what happened and what's going on and she gave a lot more detail on >> you know the ins and outs and what quote unquote happened from her end and her perspective. I'm I'm just going off the the court documents because what you put on Substack or Instagram or what the lender says don't matter unless it's in court. Like this that's what I go off of. What you told the judge. You see what I'm saying? So, um it's a very unfortunate situation. However, the real conversation that needs to be had is black brands going into retail >> not having enough access to capital to operate. So, let me give you guys a web of what needs to happen before you go into retail and why going into retail can be one of the worst decisions you make. It's a great decision from a marketing standpoint. It's a great decision from a branding standpoint. And it seems like you're doing the right thing, but when you go into retail, you have to fund products. So, that's one thing. You need money for products. You need money for operations. You got to pay your people. You got to pay your staff. You need money for marketing. But it's multiple marketing campaigns going on that are con contradicting each other. One is shop online because >> we make more money as the founder if you buy it directly from us than buying it from Sephora. But then Sephora like, "Hey, if we're gonna put you in 30 stores, 50 stores, whatever, do a roll out on the East Coast or the Midwest or whatever, well, you got to send your your your loyal people to us.

[00:05:49]>> And if I can go get it out of Sephora or you can go get it out of Sephora."

[00:05:54]>> Yeah.

[00:05:55]>> You don't really have an incentive to buy it online.

[00:05:57]>> Yeah.

[00:05:58]>> So now you need two marketing campaigns.

[00:06:00]So think about this. We got four things that takes priority.

[00:06:05]>> It's true. Also, what people don't realize about retail is even if you're doing good in retail, that don't necessarily mean anything because they pay you on a 90day or sometimes 180day turnaround. So now you got to have enough cash flow in your business in a cash in the bank to float for 30, 60, 90 days without receiving payment for the products that you just paid to develop and market and push out there. And you got to pay your employees, your vendors, and all of these people. So, everybody has to get paid.

[00:06:40]>> And they're getting paid every two weeks.

[00:06:41]>> And they're getting paid every two weeks. And this is the predatory aspect of it. So, what the big box stores are to do is say, "I owe you $150,000, Mecca." Sure. But we we agreed on a 90-day turnaround.

[00:06:58]>> 15 days in, you need >> 15 $20,000 for payroll. I'mma lend you your money back.

[00:07:06]>> I'mma borrow against my own money.

[00:07:07]>> You're borrowing against your own money shortterm. So you're paying four to 5%.

[00:07:12]>> Oh no.

[00:07:12]>> Just to get access to your money. So it's like a basically a corporate payday loan on your own receivables that you receive.

[00:07:20]>> That should be illegal.

[00:07:21]>> It should be, but these are that's the terms that people agree to.

[00:07:25]>> That's a 360. That's a that's a retail 360.

[00:07:28]>> That's a retails 360 because it don't matter. Think about it. The company is making their profit on lending you the money.

[00:07:36]>> Yes. But you're also making the profit on the products as well. So it's >> And they're not putting up no money cuz they're they're not putting up no money.

[00:07:46]>> You got to put up all the product.

[00:07:49]>> And they own the customer data.

[00:07:52]>> Yeah.

[00:07:52]>> You don't own a relationship with the customer when you shop at Sephora.

[00:07:55]>> They get the email. They get the birthday because they do give you the free little trinkets on your birthday.

[00:08:01]mine coming up. So, I'm get my free trinkets here, there, everywhere. Um, I think also I want to say now I don't know I know it's Dallas based. I don't know if it was only in like different Sephoras like maybe you know down south.

[00:08:16]Um, but I haven't I go I like purchase makeup. I haven't necessarily heard of them. So, >> Well, so it's it's that's the thing.

[00:08:26]It's Sephora. So, Sephora is known for makeup.

[00:08:29]>> Yeah. It's a hair care brand in Sephora.

[00:08:32]So Sephora just recently started embracing like hair care brands.

[00:08:36]>> Yeah.

[00:08:37]>> In Sephora. So that was more >> but even more I I mean hair makeup like but true I said makeup hair care brands clean hair care brands. This has all the workings of something that should be profitable should you know be able to pay their debts. Um, I'm wondering too like what did that marketing budget look like? Exactly. You know what I mean?

[00:09:01]What did those marketing campaigns look like? Because you have to break through the noise um on Instagram. You have to break through the noise. Um, even like with Google ads and things like that because >> I've seen more and like this is no shade obviously like you know who like not everybody has the budget of like Beyonce's hair care line.

[00:09:22]>> Yeah. Yeah. Right. But like those things are everywhere. Like where are the event parties? Where are the where where are all the things >> activations?

[00:09:32]>> Yes. Where are all the things that make sure that ensure that your brand is going to at least be able at least I'm not even saying profitable at least be able to pay its bills.

[00:09:44]>> Well, I think you brought up an extremely good point about the Beyonce's of the world. So, she's been in business since 2017. What was happening in 2017?

[00:09:55]Everything but what's happening now.

[00:09:59]>> It wasn't as many hair care brands >> in 2017 that are funded and pushed by celebrities. There were hairare brands.

[00:10:08]>> Yeah. Yeah.

[00:10:08]>> But you didn't dream of competing with Beyonce.

[00:10:12]>> You didn't think you were going to be competing with Rihanna. You didn't think you were going to be competing with Taraji. You didn't think you were going to be competing with um >> Tracy Ellis Ross.

[00:10:20]>> Tracy Ellis Ross. You didn't think you were going to be competing with now Cardi B.

[00:10:25]>> Oh my god.

[00:10:26]>> Think about all of these brands that have all these big celebrities that has hair care brands. So think about >> You think they're pushing them out?

[00:10:34]>> Yes. If I'm coming there, I'm I want to get sacred. I don't want this.

[00:10:40]If I don't know nothing about >> If I don't know anything about anything about it, who got the Beyonce is doing?

[00:10:46]She got the budget, she got the money, she got the marketing dollars to be right in front of me. So brands like this are >> are going to be pushed aside because of the Beyonce's of the world be and they serve the same customer.

[00:10:59]>> They do serve this. But here here's the thing, too. Like >> even if you're not a sacred a a pattern beauty um and I'mma stop because they're not sponsoring us, but you know, if you wanted to. [laughter] Even if you're not one of those hair care brands, 2017, I want to even say it even before that, the natural hair community had a very loyal fan base, too. And I think that's why these celebrities are getting into it because loyal fan base. Like, if you're a Myel girl, you're a Myel girl.

[00:11:31]If if you're if you're a you know, again, they not sponsoring us, but if you are uh one of those girls, you pretty much stick to the brand.

[00:11:40]>> Yeah. Um, and I'm wondering if that piece was missing here because even before the celebrity brands, you had those big brands, right? That, you know, all of those. So, I think that um >> it's great that they've been in business so long. I can see what because even even like bigger brands had to find ways to insert themselves into like BET like commercials after the Grammys or even bigger brands had to figure out like okay how do I like you said get in front of you like uh commercials after you know whatever >> I'm not seeing this brand but I can see a Camille Ro if if if if a Camille Rose can find the budget >> to have who is it? Um I put that on my mama on my hood.

[00:12:33]>> Uh I forgot her name, but >> um Victoria Monae. Yes. If they could find the budget for Victoria Monae to put that commercial in front of me, you got to come you got to come with it.

[00:12:44]>> But I mean it's Yes, I agree. But that's kind of not fair though. That that that's the part of this that we talk.

[00:12:52]Well, business isn't fair. Life isn't fair. But if you got Victoria or Monae money, >> Yeah.

[00:13:00]>> then this brand doesn't stand a chance because this brand probably really built its core following and founding just off of being good. And that is what we're telling our entrepreneurs that being good is not good enough.

[00:13:16]>> You know what I'm saying? Now you got to go get a celebrity. You need a But this and then I said >> it's good plus budget. I said, "If you don't if you don't raise at least $10 million, don't go into retail." That was my thing. You say that.

[00:13:30]>> That's what I said. Don't go into retail. If you're not raising at least five to$10 million, just don't do it >> because it just it costs so much money >> to do it. And and if you have a good product, just either do like a do like a a kiosk or do like a tour where you can go around and do popups and stuff like that. do activations like you talked about.

[00:13:55]>> Don't go into retail. I know it sound good and your mama g, you know, brag about you being on target and all that, but your mama only going to have a few years to brag because you eventually going to be going out of business because >> you give away control of your company um and your own destiny. So,