Forbes: Super Model Super Mogul
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POLITICIANS ON SALE đ A NEW WAY TO RETIRE TAX FREE )(%58$5<(',7,21 SUPERMODEL SUPERMOGUL KATHY IRELAND OUTSELLS MARTHA STEWART—AND SHE’S RICHER, TOO. THE STRANGE BUT TRUE TRIUMPH OF A SWIMSUIT ICON. SUPERMODELFORBES SUPERMOGUL The strange but true story of how swimsuit icon Kathy Ireland turned America’s most mundane products into a licensing empire—and became the first lady of flyover country. BY DOROTHY POMERANTZ PHOTOGRAPHED BY MICHAEL GRECCO FOR FORBES t’s staff meeting time for the biggest slapping her name—onto more than 15,000 on what I saw, she would consider Kathy retail brand you’ve never heard of, products, few of which jibe with the image Ireland toilet plungers or Kathy Ireland which at Kathy Ireland Worldwide most people have of her. roach motels if she could argue they help means marching up the hills outside This swimsuit model doesn’t sell swim- busy moms—proves a valuable trait in li- Santa Barbara to the eponymous suits, and while many women may still as- censing, a strict volume business. That $2 Ifounder’s mission-style home for a corporate sociate her name with a clothing line at billion at retail (for comparison, Martha version of “I’m OK, You’re OK.” As the Kmart, she barely sells clothes anymore, ei- Stewart sells about $900 million at retail, coastal air tempers the bright California ther. The bulk of her success comes instead based on industry estimates) translated sun, 15 staffers dressed in casual black sprawl from the kind of stuff that has likely never into about $850 million in wholesale sales on the plush sofas or sit cross-legged on the seen a celebrity’s name adorning it: ceiling last year, of which Ireland got a royalty floor. An Academy Award rests nonchalantly fans, flooring, mattresses. And above all payment of roughly 6%. That’s around on an end table, lending a surreal touch. there’s furniture: desks, end tables, media $50 million in revenue for Ireland’s com- “Don’t ask about the Oscar,” one of Ireland’s centers, beds, ottomans and bookcases. pany, and with a meager staff of 42—the confidants says to me furtively. (It was from There are area rugs, carpets and headboards. beauty of licensing, of course, is that every- another fashion diva with a flair for retail, And lots and lots of windows. One of the one else has to actually make and sell the Elizabeth Taylor.) biggest pieces of the Kathy Ireland empire stuff—the vast majority of that is pure The group’s breathing golden idol sits, is her namesake vinyl and plastic replace- profit, flowing straight into pockets of chin in hand, in the middle of this group. At ment windows, which purportedly insulate Kathy Ireland Worldwide’s photogenic 48 Kathy Ireland is still as stunning as when heat inexpensively; a retail outfit called 100% owner. she appeared in 13 consecutive Sports Illus- Window World moves $400 million of trated swimsuit issues, including three covers them a year. KATHY IRELAND WAS an entrepre- (albeit now with bigger hair). “Thank you,” If there’s any consistency to this grab neur long before she was a model. As a she says in her small voice as the group kicks bag that is Kathy Ireland Worldwide, it’s child in Santa Barbara, she painted off a brainstorming session about social the target audience: Middle America’s stones, and rather than place them on media. “Thank you,” she repeats as ideas fly moms. There’s a certain magic in placing her shelf to admire, she peddled them about ways to gain her company a bigger a glamorous supermodel’s name on mun- door-to-door (her grandmother carried presence on Twitter and Facebook. “Thank dane products aimed at an everyday audi- one in her purse for protection) and you,” the group responds, the only two ence. “I can see your compassion for eventually sold other art projects at words invoked more over the next hour moms,” tweeted one fan. “Can’t wait to weekly crafts fairs. At 11 Ireland noticed than “excuse me” and “please.” read your book!” (Ireland has published an ad beckoning newspaper deliverers: If this isn’t how America’s best-known six.) With three children and four dogs, “Are you the boy for the job?” Ireland licensor, the famously demanding Martha Ireland fronts the brand credibly. When I wrote a note to the editor saying she was Stewart, might do business, so be it. Kathy request a coaster before putting down a the girl for the job, and she got it. Ireland sells more product—some $2 billion glass on a rustic wooden table at her Ireland was earning $60 a month when at retail—and she’s worth more, too. If house, Ireland waves her hand dismissively. she decided it was time to get her own Martha Stewart represents WASP perfection Stewart might create a Thanksgiving din- bedroom. She rang up a contractor for an (and those who aspire to it), then Kathy Ire- ner spread worthy of a magazine; at Ire- estimate on what it would cost to add a land rules flyover country (and those content land’s place dogs lounge on the furniture. room to the modest house she shared to stay there), bequeathing her taste—and/or The ex-model’s elastic brand— based with her parents and two sisters. “My mom found me in the driveway showing agreed to pay for manufacturing and dis- running children don’t get hurt falling on him where I wanted my room to be,” tributing the socks that Ireland would de- the edges. recalls Ireland. “I knew exactly what it sign and promote. In return Ireland would The furniture business showed potential, was going to look like, what the furnishing get a royalty on every pair sold. She took and within a year Ireland signed with Berk- would be. Then he gave me his bid, and it out a $50,000 personal loan to launch shire’s Shaw Industries to expand into car- was something like $20,000.” Kathy Ireland Worldwide. pets, flooring and floor tiles. She remains a The room would have to wait—but not Moretz was able to get Kathy Ireland staple for the company. long. In 1980, at the age of 16, Ireland was athletic socks into sporting good stores As the furniture side of her business discovered at a finishing school (where like Big 5. Intrigued, he quickly bought the grew, so did Ireland’s confidence: She took her parents were trying to clean up their rights to license exercise clothes, bodysuits a more active day-to-day role, and Moretz tomboy daughter) by the Elite Modeling and eventually swimwear. Moretz became became more of an advisor, garnering an Agency. Within four years she was featured the master licensor for Kathy Ireland, sub- increasingly smaller cut of her action. In in the Sports Illustrated swimsuit issue, licensing her name to companies that made 2003 she even found the gumption to and in 1989, when she graced the cover for things besides socks and collecting 30% of finally dump Kmart, which had come out the first time, it became SI’s best seller that revenue stream to Ireland’s 70%. His of bankruptcy. “It’s heroic for a busy mom ever. Internationally famous, she was one biggest coup: helping her get an exclusive to go to a store,” says Ireland, always quick of the group, which included Christie deal in 1994 with Kmart, which envisioned to lionize her core customer. “If she goes Brinkley and Cindy Crawford, that spawned turning her into the apparel version of to a retailer and she has a bad experience the term “supermodel.” their star, Martha Stewart. she’s mad and rightly so.” “We joke that there’s still the Kathy Ire- While Moretz did the heavy lifting on The most audacious aspect of the Kmart land standard,” says MJ Day, senior editor her clothing line, Ireland dabbled in fitness decision: She had no immediate plans to of SI’s swimsuit issue. “She’s kind of the videos (like 12 Minute Abs, Buns and Thighs), get back into apparel. Kathy Ireland was complete package.” nonprofit work (March of Dimes and AIDS officially a brand, transcending the products During her modeling period her entre- LA) and acting. She was making good one would expect a supermodel to offer. preneurial side ventures were whiffs, money but was far from a mogul. Accordingly, Ireland has spent the last such as the time she became entranced That changed in 1998, when she decided decade or so moving her company into with making beer with a bunch of gradu- to expand into furniture. Warren Buffett, logical “busy mom” offshoots, sharing her ate students. In 1993 John Moretz, a mar- who appreciated their shared experience aura with field experts, as necessary. Her keter who later bought Gold Toe socks, as newspaper deliverers, once told her ACafe brand, with chef Andre Carthen, approached Ireland with the kind of gig that fashion changes but the home remains boasts kitchen candles, jewelry and kitchen that signals a model’s best years are far more secure. In apparel every celebrity knives. She’s teamed with landscape artist behind her: Did she want to model pedes- with a Q rating above zero either had a Nicholas Walker on Jardin—who also de- trian socks? line or was pitching one. But precious few signed Elizabeth Taylor’s gardens—which “She’s the girl next door who happens celebrity licensors dabbled in home fur- offers budget-minded outdoor products.