Celebrity-Store Partnerships Run Risks

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  • NEW YORK (AP) — When big-name celebrities pair up with big businesses, customers often believe the adage: You are the company you keep.

    Rap artist Jay-Z is learning that firsthand. He has complained this week that he’s been unfairly “demonized” because he hasn’t backed out of his collaboration with Barneys New York after the luxury retailer was accused of racially profiling two black customers.

    Jay-Z, whose real name is Shawn Carter, has said he’s waiting to hear all the facts. Meanwhile, Barneys said on Tuesday that its initial investigation showed no employees were at fault in the two incidents in which customers complained that they were detained by police after making expensive purchases.

    The controversy illustrates the problems that can arise when celebrities and companies team up.

    The deals are lucrative: Companies like having big names on their roster and celebrities are always looking to expand their brand. Revenue in North America from celebrity merchandise lines, excluding products linked to athletes, was a $7.8 billion business last year, according to figures available from trade publication Licensing Letter.

    But when either side is accused of wrongdoing, the negative publicity can cause damage to their partner’s reputation.

    “It literally shows you how vulnerable the celebrity business is on both sides of the equation,” said Marshal Cohen, chief retail analyst at The NPD Group, a market research group.

    More often, it’s the celebrities — not the stores — who are accused of bad behavior.

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