Business According to Paris
Celebutante sets template for turning fame into merchandising empire
June 27, 2011
By Kathy A. McDonald, Variety,
One of the most photographed women in the world, Paris Hilton has parlayed her party-girl persona and tabloid fame into a merchandise and licensing empire. Now, at 30, her image of carefree heiress -- a celebutante who is famous for just being famous -- belies the fact that Hilton has become a lucrative global brand.
She is the model for monetizing reality TV success that many others have followed. Her inspiration? The reigning doyennes of branding: Martha Stewart and Oprah Winfrey. Hilton turns down more offers than she accepts (12-20 per day, according to her manager Jamie Freed, who vets them), opting away from far-fetched and random items and choosing products and placements selectively that align with her taste and personality.
There are now Paris Hilton stores in 31 countries with more to come. Under her name are a slew of products such as fragrances, fashion accessories, scrapbooking craft items, beauty and pet products and in a first for an American femme celeb, a Moto GP motorcycle racing team via Paris Hilton Racing. She was recently pitched the possibility of Paris Hilton canned beans -- that got a no.
Which products get a yes?
"I think head-to-toe," says Hilton, who adds that she is the final decision-maker when it comes to OK'ing endorsements.
"She's different in a lot of ways from all the celebs. She's extremely involved in all aspects from product trending to development to marketing," says Dan Levin, managing director of the L.A. offices of Beanstalk, Hilton's licensing agency. Beanstalk is owned by global giant Omnicom. "Nothing goes out there without her approval; she doesn't extend blanket approvals, she tweaks products before they go out."
Levin sees Hilton as an expert, a tastemaker in fashion and knowing what the consumer wants.
"She approves solution-orientated products," says Levin, noting that her footwear line is "fashionable, affordable and comfortable" -- the line runs under $100 for a pair. "We're actively involved with her footwear, nails and eyelash deals, just signed a new eyewear deal for eyeglass frames," says Levin.
"I always want to maximize exposure," Hilton says as she's moved organically from fragrances and shoes to handbags, watches, sunglasses (with a collection just for China) and beauty products.
Her first product was Paris Hilton, a fragrance that she developed with Parlux Fragrances.
Since 2005 her line has grossed more than $1.3 billion worldwide and Parlux has just released her 14th item. "I'm always involved in every step of the way," says Hilton of the process that begins with scent tests and ends with the marketing campaign.
With the exception of Elizabeth Taylor's White Diamonds, no other celeb fragrance comes close to Hilton's sales.
"Her popularity isn't waning," says Kathleen Galvin, Parlux's vice president, marketing and advertising. Galvin credits Hilton's commitment and ability to please fans. "She absolutely recognizes how important it is to connect with fans; there's no standoffishness ever," says Galvin of Hilton's many in-store appearances on behalf of her collection.
She also cites Hilton's natural instincts when it comes to creating fragrances that consumers buy repeatedly, the bellwether of profits in the fragrance industry.
"No other celebrity brand today sells in as many markets around the world as Paris Hilton," says Retouch Brands' Michael Friis. The company distributes Paris Hilton's handbags and accessories in 36 countries. To date, the firm has sold more than 1 million handbags, grossing $80 million outside the U.S. alone. Per Friis, it's not just her fans that buy the products. "The Paris Hilton brand has known only one direction: forward," says Friis.
Levine notes Hilton's global reach: "The strength of her brand worldwide is enormous and growing at a rapid pace," adding that she's the only personality brand that involves all Beanstalk offices in Los Angeles, New York, London and Hong Kong.
Of major importance to Hilton: her ability to promote those goods. She describes her TV and red carpet appearances as natural product placement.
Hilton credits her family for her business savvy.
"My great-grandfather Conrad, my grandfather Barron and my father were all very ambitious, determined people," says Hilton, who grew up going to business meetings with her father. "I've always looked up to him and as a businesswoman, I've wanted to command a room like that."
These days, she's stumping for her Oxygen skein "The World According to Paris," while advancing a cutting edge digital presence into her businesses. A media-savvy "computer nerd who loves gadgets," Hilton utilizes her iPhone, Blackberry and Droid phones when updating her Twitter (she has more than 4.1 million followers) and Facebook accounts (more than 791,400-plus fans). Her TV appearance at a recent Spanish Moto GP race resulted in her trending worldwide on Twitter.
"She's aggressively entered the digital space," says Freed, who trained at UTA and Mike Ovitz's AMG before moving into talent and music management at the Collective. ParisHilton.com integrates Hilton's Twitter feed and copyrighted photos while her various social media sites help cross-promote her products.
"Social media is an amazing marketing tool," says Hilton, who recently launched an iPhone app, a mobile short code, as well as a robust website (ParisHilton.com) that serves as a global online store. According to Freed, media exposure brings attention to her site that converts into sales under her own domain.
"She's not a flash in the pan, she's been consistently in the business, which appeals to retailers," says Levin. "Her followers and social networking are extremely important to retailers, that personal reach directly to consumers."
There is also a very strategic process when it comes to Hilton's original content.
"We're very conscious of distribution," says Freed. Video, images and other content can go up on Facebook, Twitter or on her premium fan site, Club Paris, where fans subscribe by cell phone rather than credit card. Premium content includes screensavers and ringtones.
Hilton continues to expand her brand identity via new ventures. Another album is in progress, there are ongoing negotiations for a string of beach clubs (think Soho House on the water), possible boutique hotels and a third tome, this one on dating advice. The title is under wraps until it's trademarked -- a subject that Hilton has become expert in as she's continually fighting to protect the rights to her name and image.
As she's learned through experience, "I have to be on top of it all."