Finally, a smart review that isn't just bashing celebrity lines like what I see from Caroline Hirons and Angela Caglia. Why do you think celebrities are creating their own lines rather than investing in someone or a team that is actually in the industry to do a more legitimate line?
Thank you! As for why celebrities are more inclined to create their own lines rather than investing in people with a background in the industry, two thoughts come to mind right away:
1. Most of the time, the celebrities are in fact the party being approached, usually after the concept and business has already progressed to a certain extent, led by teams that specialize in creating products in the space. The celebrities are part of the equation, and the deal is often giving the celebrity a co-founder title and equity in the company, in return for anything from exposure and continued support, all the way to input on brand direction. This is the type of deal we see with Bella Hadid and Kin Euphorics. Even Rihanna's Fenty is similarly structured, where Kendo Holdings basically ran the entire operation, and was the majority shareholder until LVMH restructured the deal to a 50/50 split with Rihanna later on. So in this way, it doesn't make sense for celebrities to actually invest their own money, when they are often the party being given the deals and are able to capitalize off of their fame to have equity in a business that predominantly requires them to leverage their fanbase (something they'd do anyway if they were getting paid a spokesperson fee).
2. Celebrities take the best deal. At least that is what their business managers should be doing for them. Which option do you think is preferable to them: be a silent investor in an unlaunched/unproven business that uses their money to fund the entire thing, or be a value-add with no capital investment and equity in a new company that further promotes them? End of the day, the brands are primarily developed by people who know what they're doing (even Kylie and KKW products were developed and made by a manufacturer/incubator partner prior to Coty) and if they're just looking for capital, there are more suitable partners like incubators, private equity, venture capital, and angel investors who have resources and connections that celebrities don't. Celebrities typically fit a specific role, and it's typically not in the investor/brand strategist role.
Finally, a smart review that isn't just bashing celebrity lines like what I see from Caroline Hirons and Angela Caglia. Why do you think celebrities are creating their own lines rather than investing in someone or a team that is actually in the industry to do a more legitimate line?
Thank you! As for why celebrities are more inclined to create their own lines rather than investing in people with a background in the industry, two thoughts come to mind right away:
1. Most of the time, the celebrities are in fact the party being approached, usually after the concept and business has already progressed to a certain extent, led by teams that specialize in creating products in the space. The celebrities are part of the equation, and the deal is often giving the celebrity a co-founder title and equity in the company, in return for anything from exposure and continued support, all the way to input on brand direction. This is the type of deal we see with Bella Hadid and Kin Euphorics. Even Rihanna's Fenty is similarly structured, where Kendo Holdings basically ran the entire operation, and was the majority shareholder until LVMH restructured the deal to a 50/50 split with Rihanna later on. So in this way, it doesn't make sense for celebrities to actually invest their own money, when they are often the party being given the deals and are able to capitalize off of their fame to have equity in a business that predominantly requires them to leverage their fanbase (something they'd do anyway if they were getting paid a spokesperson fee).
2. Celebrities take the best deal. At least that is what their business managers should be doing for them. Which option do you think is preferable to them: be a silent investor in an unlaunched/unproven business that uses their money to fund the entire thing, or be a value-add with no capital investment and equity in a new company that further promotes them? End of the day, the brands are primarily developed by people who know what they're doing (even Kylie and KKW products were developed and made by a manufacturer/incubator partner prior to Coty) and if they're just looking for capital, there are more suitable partners like incubators, private equity, venture capital, and angel investors who have resources and connections that celebrities don't. Celebrities typically fit a specific role, and it's typically not in the investor/brand strategist role.