Celebrities Cash In On Their Names

From amusement parks to table wine, celebrities are rushing to become mini-conglomerates.

Jennifer Lopez has a fragrance and two clothing lines. Country star Reba McIntyre is also getting in on the action. "Charlie's Angels" star Jaclyn Smith has one of the oldest and largest brands, with 300 units of clothing sold at Kmart since 1985. Even though it has been decades since Elizabeth Taylor beguiled audiences in films like "Cat on a Hot Tin Roof," in the marketplace her star still burns bright with her fragrance, "White Diamonds."

Marshall Cohen, chief industry analyst for the NPD Group, which tracks retail sales, says consumers will pay up to 25 percent more for celebrity branded products, and fashion is where you'll often find them.

"Celebrity business has grown in the past decade tenfold," Cohen told Sunday Morning correspondent Tracy Smith. "Years ago, there was less than 100 celebrity brands in a multitude of different industries. Today, there are well over 1,000 brands that have celebrity ownership and/or partnerships that cross all kinds of industries."

Elizabeth Arden CEO Scott Beattie says Taylor's fragrance has sold more than $1 billion in the 15 years since it was launched. He said it is still the No. 1 celebrity fragrance in the United States.

Beattie said fragrances are significant income streams for many celebrities, even those who make a lot of money with other lucrative ventures. It's also profitable for fragrance manufacturers. Celebrity scents are now the leading driver of growth for the entire fragrance industry. Even Britney Spears, for all her troubles and hair experiments, is launching her fourth Arden scent.

"We sold over $300 million globally in fragrances with Britney Spears over the last 2 1/2 years," Beattie said. "We sold over 10 million pieces of product around the world."

With that kind of money to be made, fragrance houses and all kinds of stars are rushing into each other's arms. From actress Sarah Jessica Parker to New York Yankees star Derek Jeter, whose fragrance, "Driven," is Avon's best-selling male fragrance ever. Donald Trump even had a cologne — but It was fired.

Sean "P Diddy" Combs' scent, "Unforgivable," was the fastest-growing fragrance of 2006. But that's only part of his success. Combs' Sean Jean clothing line raked in more than $400 million in retail sales last year. He's the poster boy for the latest star-powered trend, the celebrity business.

Actress and singer Beyoncé Knowles is just getting her start. The star of the Oscar-nominated film "Dreamgirls" has gone into business with her mother, Tina Knowles, to form the House of Dereon.

"The line is very body conscious," Tina Knowles said. "It's very curvy. It's very fitted."

Fashion comes naturally to Knowles. She designed outfits for Destiny's Child, the best-selling girl group that propelled Beyoncé to fame. Her daughter, she says, is the inspiration.

"We wanted a line that Beyoncé would totally be involved in," she said, "and that she would wear the clothes — not just stamp her name on something and not believe it."

The House of Dereon, named after Beyoncé's seamstress grandmother, is just two years old. In these early days, Beyoncé's fame is a key factor.

"She's the marketing plan for us," Tina Knowles said. "Because we don't have these big huge budgets, we've had to be creative. Like, for instance, our launch was on the Oprah Winfrey show — you can't get better than that."

But better still for business is the interplay between Beyoncé's fashion and music careers.

The hoodie that Beyoncé wore in the video for her No. 1 one song "Irreplaceable" happened to be available in stores — and Knowles said they sold out. The company reprinted the sweatshirt and sold out again.

The payoff between celebrity and business is clear, but Knowles also thinks about the down side.

"I always worry that if anything is not great, that it will reflect on Beyoncé personally – because people are not going to say, 'Oh well, that's House of Dereon,'" she said.

But Kathy Lee Gifford's fate supplies a cautionary tale in the celebrity apparel business. Her Wal-Mart clothing line was a success — until it faced charges of unfair labor conditions.

"Her brand basically created a major downfall and affected her celebrity status in total, because of the fact that she was, her brand was implementing sweatshop rules," Cohen said.

But sometimes a change in celebrity status is what starts a second career in business. Comedian Joan Rivers is serious about her reasons.

"It was right after my husband's suicide," Rivers said. "And I wasn't getting booked. And I was ice cold in the business. And I had a lot of mouths to feed."

In 1990 QVC, the home shopping channel, approached her about starting a celebrity line. She decided that she might like to try designing jewelry — and Rivers now sells nearly 2 million pieces of jewelry a year on QVC. In the 17 years since her jewelry line began, Rivers has sold more than $500 million worth.

Rivers stays in the public eye with standup performances and her red carpet commentaries on the TV Guide channel. But she says her celebrity only takes her so far in business.

"At this point I don't think the Joan Rivers name means a damn thing," she said. "We have a track record now. It's all about quality. Nobody comes back twice because they like you."

The most important thing, Rivers said, is trust.

"When you see me show you something on television, you can't touch it, you can't feel it," she said. "So I'm really saying, 'I think this watch is fabulous. Trust me.'"

Cohen said people who relate to the star will want to use the products they use. If the star believes in it, they will, too.

Consumers believe in George Foreman. The former heavyweight boxing champion is the most trusted celebrity businessman in America. He's sold more than 70 million of his George Foreman Grills.

"When you go to the airport, sometimes people stop me and say George! We love the grill," Foreman said. "That's greater than them telling me, 'George you did a good job becoming heavyweight champion of the world.'"

Foreman has also added a clothing line at Casual Male to his business empire and even has a "knockout cleaning system."

"My mother told me early, if you learn to sell," he said, "you'll never starve."