The Brand Man Speaks

Luxury Watch maker Tag Heuer drops Tiger Woods as endorser

As expected luxury watch maker Tag Heuer has announced it will drop its alliance with now disgraced professional golf phenom Tiger Woods. The company will not be using any image of the golfer in its holiday ads or any ads for the foreseeable future.

Tag Heuer follows Gillette and accounting consultancy Accenture who have in one way or another dropped Woods from their campaigns.

The major hold-out so far is Nike which has the most at stake in this gamble. As reported in numerous retail news stories in the media most Tiger Woods merchandise is being sold at discounted or clearance prices as consumers, especially women, shun the golfer's apparel because of his lies deceit and infidelity.

I believe ultimately Nike is going to have to take a stand by dropping the use of Tiger's image in its stores and by reducing the displays of Tiger's logo'd apparel from main view in its stores. As this saga continues to play out with no honest information forthcoming, Nike will be hard pressed to stand by and wait. If more negative information surfaces the damage will be great to them. This is especially true because they bank on Woods' overall image to enhance the total Nike brand not just Tiger Woods branded clothing.

Watching out for you everyday.

Eli

Tiger woods: This brand in free-fall may significantly impact sports endorsements in the future: Update: Gillette and Accenture put use of Tiger officially in phase out mode

THIS POST HAS BEEN UPDATED. SEE BOTTOM FOR DETAILS

Nearly two weeks after the 2:30AM car crash that has led to the acknowledgment of infidelity by the world's richest Golfer and best known athlete, Tiger Woods, we still don't fully know what happened to cause this to become the most notable celebrity misstep in years maybe decades.

What I do know is that the damage is significant and the Tiger Woods Billion Dollar brand is in free-fall. His agents and handlers are of course saying any loss of endorsements is pre-mature but I'll bet senior marketing management and lawyers at Tag Heuer, AT&T, NIke, Accenture, Gillette among others are up sleepless nights trying to figure out how to manage this PR disaster and discern whether or not they can can him. (I'll bet GMs decision to drop Tiger last year as an endorser of the Buick line because of financial difficulties at the automaker is heralded as "brilliant" somewhere inside that company).

Tiger announced today that he is leaving the game of golf "indefinitely" to figure out his life. A little late for that huh? You should have done some figuring before Thanksgiving and leaving all those emails and voice mails. Was Tiger so naive to think none of these women wouldn't go public for big money?

One TV pundit I saw insisted that he "knew" the contracts with Tiger were "ironclad" and nothing could force sponsors to stop paying him. I find that hard to believe. Virtually all endorsement contracts I have seen or have worked on in my career always had a back door out clause if the celebrity failed to perform or caused the sponsor's company or brand harm by his actions. Even if this were true..that all deals were unbreakable....it doesn't stop sponsors from not using him in their ads (I think all endorsement uses of TW have been stopped to my knowledge as of this point) and I do not expect them to use him in anyway for an indefinite period of time.

Wood's story continues to get worse and the lack of information keeps the story top news and only causes more financial harm. He is the butt of late night comedians and the internet is on fire with "have you heard" jokes about Tiger. Certainly no longer the perfect sports role model.

Speaking of which, because Tiger Woods was the single largest sports endorsement brand on the planet (as far as I know) this completely unexpected incident will certainly make all companies that use celebrities, especially sports stars re-evaluate hiring these folks in the first place. If Tiger can fall so hard and fast it proves the risk/return is becoming too great. My understanding is more companies are sponsoring sports teams or events rather than specific performers to reach their targets with far less risk. It is clearly possible the fall out from Tiger Woods infidelity may change an entire industry permanently. 

The Tiger story goes way deeper. It impacts Television sports, ratings and revenues. Tiger helped build this sport into a more democratic one bringing millions of new fans and dollars to the industry of Professional Golf. When he last left the game for medical reasons, TV viewership dropped dramatically as did ad revenues. This will happen again, except, if and when Tiger does return to televised golf, the ratings will likely soar, at least in the short term and golf on TV will be hot again. It does remain a serious question: Might Tiger give up the game permanently to find "religion, healing, forgiveness and family"?

Watching out for you everyday.

Eli

UPDATE: As of late today, both Gillette and accounting consultancy Accenture have announced they will put their marketing efforts behind Tiger Woods on hold indefinitely with Gillette indicating it will phase out use of the golf phenon relatively quickly. $$$ signs are dropping. I'm expecting more fallout within days. Word also has it that Tiger's yacht "Privacy" docked at Miami Beach Marina is being prepped for departure. Access to its dock has been restricted/keys changed even name on boat is being covered up. Privacy at sea shortly? Likely

Playboy brand coming to South Beach, Miami linking with Sagamore Hotel

Playboy, the male oriented iconic sexual fantasy brand from the 60s, has been struggling to survive on revenue from its magazine alone these days given strong competition from the internet and a changed culture in America.

So, it may be surprising to learn that the "bunny" brand is trying to team up with lux hotel Sagamore in famed South Beach Miami to get back into the hotel business.

Years ago Playboy was a fixture around the globe with hotels and lounges extending the magazine into three dimensions. As a kid I remember how cool it seemed to know someone who had access to a Playboy "key" to gain admittance to one of the famed locales to see the bunnies up close and personal. It was the era when the old James Bond character and his bed hopping swinging lifestyle was the envy of most men.

The brand has suffered as culture changed and competition increased.

The Sagamore Hotel, known as the "Art Hotel" in South Beach for its prized art collection, boutique size and more low key orientation than its grand neighbors such as the Delano and Shore Club, is unable to pay its mortgage. The recession has hit lux hotels around the US including in popular South Beach hard. Once rooms were easily fetching $400 or more a day. This past year many lux hotels in this market were lucky to get $200 and were losing lots of money.

It is reported that to "save" the Sagamore, a hotel I found very comfortable and highly enjoyable when I stayed there 7 years ago, the owners and loan holders are talking with Playboy about a brand merger. There would not be a casino, like Playboy would like to have and is associated with at the Palms in Vegas, but it would have all the rest of the Playboy trimmings, bunnies included.

Can the Playboy brand work in South Beach and at the Sagamore? I actually think yes. I think the retro nature of the Playboy brand albeit an updated one (culturally) which is more PC has a strong appeal and would attract audiences who come to South Beach to party hard and to see and be seen. The Sagamore was overshadowed by so many higher profile hotels in the area....new ones opening every year...(the W South Beach is the "it" hotel of the moment and booked) that it seemed lost among the frey. The Playboy association would give it new life.

Thus, I feel the Playboy brand is NOT dead just in need of a bit of retooling but its 60s/70s feel is consistent with other retro things happening in this country to a time of yore perceived to be more care-free and stable than today.

Watching out for you everyday.

Eli

Spirit Airlines "uses" Tiger Woods to sell cheap tickets; in bad taste?

I just came across the new TV ad for Spirit Airlines promoting their usual low low no frills fares. The unusual element is they are "using" the Tiger Woods car crash in an animated way to sell low fares titled "Eye of the Tiger".

In bad taste or is Tiger open for such abuse of sorts?

Watching out for you everyday.

Eli

Brand "Tiger Woods" put to its biggest challenge; Will sponsors stay on or bail?

The recent car "incident" involving the biggest richest branded athlete Tiger Woods is the first real test of the golfing greats ability to manage his brand (worth billions) under extreme stress beyond the course.

Brand Tiger Woods has become the biggest athlete brand in history primarily due to his squeaky clean beyond reproach family man/super athlete identity. There have always been rumors here and there about women coming on to Tiger...quite frankly I am amazed he hasn't been the target of more damaging rumors earlier kudos to his extremely well oiled PR and management machine.

But now comes the real test. Had the incident occurred during "normal" hours of the day or even evening I would bet silence without deviating from "full speed ahead" would have made this matter disappear and Tiger would be completely unscathed. However, the time frame of 2:30AM (or thereabouts) really won't allow this matter to be just ignore and pushed aside. Everyone knows it was a very odd hour to be out and about and to be "unnerved" (for a guy with nerves of steel) enough to smash his SUV leaving him unconscious within a few feet of his own home spells big trouble.

Tiger is going to have to come clean one way or another with the public or at least with authorities. Unwillingness to talk in our culture equals hiding something.

A brand like Tiger's worth more than 1 Billion Dollars has a lot to lose so his crisis management team must not make any mistakes.

As with other athletes, sponsors have so far said they are behind their man. However, I believe, many will reduce their use of Tiger, even eliminate it, for a period of time hoping for a positive resolution soon. The longer nothing is said and public opinion creates its own spin on the events, the more damage to the brand and the more likely sponsors are going to suspend their relationship with him or even drop him altogether.

Since Tiger was so "clean" this event only magnifies the circumstances and every move is being watched and monitored by the press and public alike. We, the public, want to believe in his fairy-tale life and career and unlike some other athletes or entertainers who get into trouble, we really do want everything to be ok with Tiger and for him to still be the gold standard among athlete/celebrities. If anything, we can accept that he is human, as long as we are told some of the truth versus nothing that is believable right now.

One thing in his favor; he didn't (it appears so far) do anything illegal just possibly (if rumors pan out about an affair) something questionable to negatively impact his perfect very moral family values posture.

Come Clean Now Tiger, show us you are human, seek forgiveness and get back to what you do oh so very very well...play golf.

Watching out for you everyday.

Eli

Lack of Civility cuts across occupation, race and political affiliation...is the end of the empire near?

I just felt compelled to write a short piece on what appears to me and many others to be an rapidly approaching end of any type of civility in this country....maybe the world....that reminds one of the decline of the Roman Empire....

Between Serena's  unsportsmanlike/unladylike behavior at the US Open that cost her the match, Kanye West's selfish and inflated ego stage stealing from Taylor Swift at the MTV Video Awards to Congressman Joe Wilson's outrageous outburst during a Presidential speech to congress, ("You lie")....what has become of us, our cultural...more importantly our future? We are in deep trouble and it doesn't look too promising for things to get better.

Watching out for you everyday.

Eli

Michael Jackson: a small personal memory

As the world prepares to mourn and celebrate the death of musical talent extraordinaire, Michael Jackson, millions of people have started to share how he impacted their lives and the lives of a generation. Me included. Not since Elvis does the world have an entertainment legacy brand that will be much greater after death than during life...as long as it is managed well, (let's hope, since so many people have had their hands in his life I imagine more will want a piece of him in death).

I grew up with the gloved-one's music finding it irresistible and mesmerizing...finding it impossible not to learn nearly all the words while marveling at his dance skills...(which I sadly tried to but unsuccessfully mimic). I along with millions got to know Michael from a far until I had a short very personal experience a few years back.

Before Lionel Richie became a client, I had the opportunity to meet him for the first time with some friends over brunch at the celeb packed restaurant The Ivy. Lionel arrived very late to our small gathering on the cell phone intently listening to "someone" at great length. Even after Lionel sat down with us...some 15 minutes later...we still hadn't been formally introduced because he was still on the phone.

Noticing our growing discomfort with what appeared to be the "rudeness" of staying on the phone as food arrived, Lionel put the phone on mute and handled it towards me...but saying first..."it's Michael he wants my advice and I have to listen". Michael? I inquired. Michael Jackson he responded. And with that Lionel handed me the phone for a very brief time. I listened as the King of Pop sadly and soulfully expressed his love for people and how he was misunderstood. This was the time of his first court case for child molestation and those close to Michael like Lionel were making themselves available to be there for him in his time of need....as many wouldn't listen to him as the world began to shift their opinion of the K.O.P. from honor and worship to disdain and disgust.

Lionel, who had co-written and produced "We are the World" the hugely successful charity song with Michael,  was very worried about him self-destructing at that time, understandably. There were so many people in his life trying to tell him what to do, we all talked about how difficult it might be for him to get out of this situation unscathed. He settled out of court with his accuser but public opinion was not favorable.

After that time Michael seemed to become a Howard Hughes type and the world became further confused by his behaviors and his popularity waned. Additional litigation and money woes didn't help his image either.

But alas on the eve of his highly touted come-back tour he leaves us for good. Now, despite his many behavioral and money issues, which will never go completely away, the world has shifted its opinion and now is taking the time to celebrate the genius that he was and the impact his work has had on the world for the past 50 years.

Thank you to Lionel Richie for giving me a memory like no other.

Watching out for you everyday.

Eli

Ralph Lauren brands and stores struggling in recession economy

Ralph Lauren brands and its retail stores including well-known Polo by Ralph Lauren are continuing to struggle in this deep recessionary economy not unlike other luxury retailers.

Many analysts have used Ralph Lauren as a barometer of how affluent consumers react to changes in economic climates. Historically, Ralph Lauren has weathered recessions fairly well but this time even the very rich are pulling back their spending along side the middle class "aspirational" consumer.

One notable issue facing Ralph Lauren and virtually all luxury goods companies and retailers is the impact this economic downturn has had on the aspirational consumer this time around. Whether you call it greed or business development strategies, most luxury companies encouraged middle class consumers to "reach" for entry level luxury products when the economy was robust. Lauren, Vuitton, Prada, Gucci and their like created and sold lower priced entry level goods to these aspirational consumers who longed to live like the rich and famous.

This strategy worked well for the past decade enriching these luxury goods companies. To keep the ball rolling these companies added more and more entry level products to entice middle and upper middle class consumers to stay loyal. The hope was that once they "tasted" the entry level fine wares they would trade up and buy the more expensive (and more profitable) products.

By depending on these consumers for strong revenue gains, luxury goods companies were creating a high risk situation for themselves...albeit few thought the economy would drop off this greatly. Today, they are all suffering enormously from the loss of revenue from the aspirational consumer who is not likely to return to spending on unnecessary high priced status goods for some time to come.

As reported in a previous post, few companies followed the path of French luxury goods company Hermes who chose not to introduce lower priced entry level goods to reach a lower income customer. They did not benefit from the boom times and are weathering the recession quite well. Possibly a lesson to be learned by luxury goods companies for the future.

Watching out for you everyday.

Eli

Toys R Us acquires venerable FAO Schwarz toy retailer

Since the late 1880's FAO Schwarz has been the toy store to the rich and famous. However, as toys were heavily discounted by retailers like Toys R Us and WalMart, FAO struggled to stay alive. The retailer went through various reorganizations and bankruptcies over the past few decades rarely making money.

Toys R Us has announced it is acquiring the venerable toy retailer and pledges to build the brand back to its historic glory. The retailer has two stores; It's flagship in New York City and one in Las Vegas.

FAO built its brand based on offering unique often quirky toys few of which were inexpensive. Given how frequently kids go through toys, most parents couldn't imagine spending lots of money for one toy and found the discount chains allowed them to shower their kids with toy choices at a fraction of the price.

FAO Schwarz last hurrah occurred when the movie "Big" with Tom Hanks featured the store and its over sized walk-on piano keyboard.

There should be room for a unique high end toy store as long as Toys R Us management finds a way to offer experiences that are both meaningful and valuable to parents and their kids. However, given this economy in which there has been a cultural shift towards less consumption and reusing what you already have, it may be a long time before a store like FAO Schwarz can re-establish itself.

When the economy was robust, I could see a Toys R Us operating FAO at break even or even a loss like Corning Glass did with Steuben Crystal. Not so today.

It will be interesting to follow the re-brand building effort.

Watching out for you everyday.

Eli

Woody Allen protecting his image and brand successfully sues American Apparel

American Apparel the LA based clothing chain that is known more for lawsuits against its founder Dov Charney that its apparel settled a lawsuit for $5 Million with Woody Allen.

Woody Allen one of the most well-known movie personalities over the past several decades...he has directed, written and starred in many films....sued American Apparel for using an image of him as a Rabbi from the classic movie "Annie Hall" which earned Allen an Oscar as best movie. The image was used to suggest that Mr. Allen endorsed Mr. Charney's clothing line in an off-beat way. Mr. Allen objected to the use of his image and the association with American Apparel which was used in billboards in LA and NY without Mr. Allen's permission (or any payment for his likeness).

Charney is known for using very racy ads with good looking but not model perfect people. He is also been sued frequently (vs. other apparel manufacturer's for sure) for sexual harassment among other questionable behaviors. He just "moves" to a different vibe than most.

This is an important victory for people brands against the unlawful and uncompensated use of their images for commercial gain. The settlement occurred just before the lawsuit was to go to trial.

Mr. Allen originally was seeking $10 Million. Mr. Charney says he wishes it had not settled ....an action taken by his insurance company...so he says.

Watching out for you everyday.

Eli