Chef Marcus Samuelsson's Recipe To Help Minority-Run Businesses Flourish

A paltry 3% of businesses in the U.S. are owned by African Americans, a statistic that has prompted a celebrity chef to throw his weight behind an initiative aimed at changing the type of leases minority-owned retailers and restaurateurs sign to help them get off the ground and thrive.

Many minority-owned businesses experienced a surge in support after the murder of George Floyd in 2020, but the barriers to scaling up are still high, and the economic realities of a looming recession, a tough lending environment and skittish retail landlords are not kind to fledgling businesses.

Jay Norris, the CEO of Guesst, a software company that provides data analysis to help landlords and retailers agree to performance-based leases rather than flat rent deals, has launched a specialized program called Open Doors that will focus entirely on getting minority-owned businesses into performance-based deals.

“They've never had access to certain Class-A centers,” Norris said in an interview. “The main thing is exposure … This program is to open up the awareness that these opportunities exist to minority businesses.”

The program, run in partnership with chef Marcus Samuelsson — who owns Red Rooster in Harlem and has judged on numerous TV cooking competitions — is aimed at providing these kinds of operations access to physical locations where the opportunities have not existed before.

Samuelsson, who was born in Ethiopia and raised in Sweden, has partnered on the initiative because he feels a responsibility to support the next generation of minority retailers and restaurants. He told Bisnow that landlords need to adapt to the country’s increasing diversity as a business imperative.

“Now I am established, people come to me all the time for different types of rent structures … Now that I'm successful in the food space, it's my job to figure out how to make it easier,” he said. “Getting financed through institutional banks and finding money is very, very difficult for minority business owners … [but] there's no lack of ideas, no lack of work ethic.”

During the pandemic, creative leases and percentage deals became more popular as landlords fought to keep spaces leased and retailers afloat. But as the crisis eased, lockdowns lifted and shoppers returned, creative deals have become a taller order.

In New York, for example, where the brick-and-mortar retail market was devastated by the double whammy of e-commerce and the pandemic, retail rents are up 8% from last year. 

“It's becoming harder to position deals where they're sharing of profits or percentage rent, unless it's an addition to a healthy base rent, as a perk,” Compass retail broker Robin Abrams said. “Now that the market has changed, the landlords are not willing to take that risk.”

But Norris said the market's improvement means landlords are still willing to sign up for performance-based leases, chiefly because they want to reap the benefits of a flourishing retail environment.

Guesst runs a program called The Guesst List, which essentially acts as a matchmaking service for retailers and restaurants seeking landlords who will take on a performance-based lease. Right now, he said, there are 11 major mall owners with locations in over 50 markets around the country in the service.

This month, Guesst launched the Open Doors initiative, which sets aside space entirely for minority-owned retailers and restaurants that are hoping to find a performance-based lease. The idea, Norris said, is to provide those kinds of companies specialized space so they don't have to compete with national chains and have less chance of being overlooked by landlords.

The landlords owners he expects to access the specialized Open Doors list, he said, are those who trying to make sure their properties have adequate representation from people of color. Taubman, Nuveen, Fairbourne and North American Properties are all among the seven owners that have already signed up, he said.

“Wherever these malls are located, they are trying to reflect the communities around them. The consumers are demanding to see some proprietor that look like them,” he said.

He added that the pressure for companies to embrace diversity isn't going away.

“It's important for I would say, especially mall owners, or any property owner on a local or regional level to have some type of minority participation,” Norris said. “We've all kind of been through what I call the DEI chapter that happened during Covid and when George Floyd's situation occurred, and then everyone said, ‘Listen, we want to make a mandate that we're an equitable, equitable organization.” 

The Open Doors initiative, Samuelsson said, provides a tool for both businesses to start from scratch and for communities to have more vibrant, attractive retail communities.

“We obviously know that the online space is going to grow, but how do you get your customers back to stores? By having diversity in your stores, you're going to reach a larger audience and have a rent structure that is flexible, that helps out everybody,” he said. “Only 3% of all businesses in America are Black-owned, so if you want to increase that number, and make a fairer society, you really need to work collectively with landlords to create a structure that is more attractive."

Samuelsson said he advises fledgling businesses to start out doing pop-ups or test kitchens — anything to test their product and find ways to tweak it before going to market.

That is the approach that Shelley Worrell has taken. She is the founder of caribBeing, a Brooklyn-based business that aims to amplify Caribbean talent and brands. She has been running a retail pop-up in a shipping container but is now opening her first physical location on Nostrand Avenue. Her landlord, she said, was flexible and saw the value it would bring to the Brooklyn neighborhood, known as Little Caribbean.

"Our community, we're unique, where we have sort of a cluster of Black-owned businesses," she said. "So there's a lot of intentionality around our community sort of supporting and sustaining the businesses here."

The big challenge, Worrell said, is the capital-intensive nature of setting up a store.

“It's a huge commitment to enter into a five- or 10-year lease. I think people want to make sure that they have a level of financial stability so that they can actually sustain that,” she said. “I'm hearing a lot of expansion and a lot of second locations for those who are already in brick-and-mortar. You know, people taking a deep dive into a space whether it's shared or just with one brand — there's definitely a shift to be in community and meet consumers in real life.”

From a landlord perspective, easing the pathway for minority-owned brands into stores makes business sense, said Lori McGhee-Curtis, the vice president of specialty leasing with mall owner Taubman, which Simon Property Group acquired in 2020. Her role is to oversee a sales team that leases spaces facing a vacancy when a permanent store leaves.

Taubman has been involved with Guesst for some time, and McGhee-Curtis said she believes the Open Doors initiative will be a success.

“We need new businesses to come forward,” she said. “Whether they're restaurateurs or they’re retailers, we need them in our shopping centers. Because these are our future. You think about all the businesses that are filing for bankruptcy.”

This year already, Bed Bath & Beyond, David’s Bridal, Party City and Tuesday Morning are among the scores of big-name retailers that have filed for bankruptcy. These older spaces provide an opportunity for not only upstart retailers, but also to landlords looking to inject new life into their malls.

“A lot of the legacy brands, they don't remodel, they don’t freshen their look,” McGhee-Curtis said. "These web-based [direct-to-consumer] brands are now starting to experience what it would be like to have a brick-and-mortar store and it doesn't take away from their DTC, but it gives another door for them to have another opportunity.”

While supporting Norris’ and Samuelson’s initiative, she is also continuing to develop her company’s in-house pop-up incubator called “Emerge with Taubman” and its offshoot, “Emerge in Color,” which specializes in offering space to Black-owned fashion designers.

She is right now in the process of reaching out to large businesses to see if they will help with funding these initiatives, in light of the fact that so many make pledges on diversity and inclusion.

“I'm reaching out to them to see if they will help support this initiative … to see if they would help fund this, put their money where their mouth is,” she said. “When you look at the models on the runway, when you look at the designers you know, during Fashion Week, there aren't that many faces of color. And I'm not just talking about African American, I'm talking about Latino, Asian, there just aren't that many, so we're just trying to bring more to light … What better way to do that than support them?”