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EXCLUSIVE: I've learned that the upstart private equity firm Star Avenue Capital is buying a majority stake in J Brand, a denim apparel brand whose signature lines of skintight jeans are a favorite of celebrities with impossibly small waists and thin thighs. But what's interesting here is that Star Avenue Capital is a partnership between CAA and Irving Place Capital, making the talent agency an equity owner in the blue jeans company. I hear SAC, led by Mark Genender, is looking for other consumer brands with growth potential.
When I first heard about this jeans deal which hasn't been announced yet, my sources said that CAA would put money in the venture but have no operational role. *UPDATE: One of Nikki Finke's sources looked at this deal back in November and says the stake being discussed at that time was in the $80M range -- a "big bet on niche premium denim". On the other hand, she hears Irving Place Capital bought Seven Jeans years ago and sold it for "a boatload of a profit".*
What the agency brings to the table, supposedly, are the services of its lifestyle, marketing, trend forecasting, market research, and licensing divisions to grow the brand. It is the first time I can remember that any talent agency has held a stake in a consumer apparel brand. (Though management company The Firm once held a majority stake in the Pony shoe brand.)
The presumption is that CAA clients will suddenly be wearing these jeans. And the J Brand website shows they already were: pictured in J Brand wear are Cameron Diaz, Reese Witherspoon, Victoria Beckham, Sandra Bullock, and Ashley Tisdale.
The jeans biz becomes just the latest example of a talent agency diversifying beyond the traditional commissioning business to create revenue. Both CAA and WME are doing it in the high finance arena, with CAA a co-owner of Evolution Media Capital (with former Merrill Lynch bankers Bob Stanley, Pat Lampe, and Dave Pagoda). While WME is forming an offshoot company with ex-Goldman Sachs banker Joe Ravitch and former UBS Warburg banker Jeff Sine.
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CAA’s ass still looks fat in those jeans.
My first thought was: “What a load of crap.” But as I run it through my head, I really like they idea. It’s pretty innovative and has clear benefits for CAA and J-Brand, but perhaps this is one of those unique combo’s that shouldn’t try to be replicated. I’d be cautious of making this a trend.
Any move outside of your core business should be looked at with tremendous skepticism, especially if the business plan involves getting actors to wear something. CAA has power and leverage, but I doubt even they can control fads.
Its not that innovative – just typical octopussy corporate hegemony. (Vanity Fair mag ruined its reputation by sucking up to all the name brands that have ads in its magazine.) When will they start featuring those jeans in movies and TV shows with CAA clients? A bad precedent.
This already happens, product integrations are nothing new. Big enough talent will also be paid a fee to use the product in the context of the show or film, and smaller talent do this as part of their network/production contract. If that didn’t work, brands would stop doing it.
Where I think you will see a problem is when agencies ill-equipped to finance, market and represent a corporate brand attempt to replicate this. In reality, probably only CAA and WME truly have the resources to do this with any success (and even their ultimate success is still questionable), though it won’t stop those a tier below from trying.
This is nothing new, product integrations have been around for a while. In the case of CAA’s bigger clients, this could turn into extra $$ for them because brands wanting major talent to prominently wear/use their products on-screen will often have to make a separate deal with the talent to do so. Lesser talent will be obligated to take part in the integrations without additional compensation.
The problem will come when agencies without CAA’s resources, or even WME’s resources attempt to replicate this, and everyone knows they will (some already try). CAA’s success will be determined by how well they use their resources, but at least they have them, others just sort of pretend they can offer brands 30 access to the industry. It may well end up a huge $$ drain for a lot of people.
*360 access, sorry!
What is in it for the CAA clients wearing the jeans? Once an association is made, wont this hurt their chances of a campaign in the denim/fashion category?
Agent – “Babe, you didn’t get the part in the new Scorsese film but I’m sending you a pair of new jeans to wear for the paparazzi.”
Client – “You’re fired.”
Ulterior motives in advertising. Not a unique concept. Harvey Weinstein helped put his (now) wife’s fashion line Marchesa on the map by having his A-List actress friends wear the dresses on red carpets. Granted the dresses are beautiful, but the meteoric rise in popularity (and value) of the brand is unquestionably due to the celebrity endorsements. It was only a matter of time before such a practice crossed over to the corporate agencies. Their clients are regularly given luxury merchandise by companies (in gifting suites or sent directly via publicists), in hopes that, in exchange for free clothes, they will be photographed wearing items. If the right celebrity is seen as a “fan” of a certain line, it instantly becomes an “it” item and boosts sales. Now agencies can help steer the demand for products in which they will have a vested financial interest by supplying their products to their clients.
It’s actually a very good idea and makes perfect sense.
CAA can easily get its stars to wear the brand . . .
“Hey, we’ll give you 30 new pairs of jeans” . . .
Wrap in other marketers . . . etc.
It’s a very good and smart synergy.
Execution?
Well, we’ll see . . .
To belabor the obvious – they already represent “brands” so now they’re just putting their money into the game . . .
don’t forget Puma.
Pony was a disaster for The Firm and this will be a similar disaster for JBrand. Having experience working with CAA before firsthand, through licensing via its Lifestyles division, I can honestly say that this department that Kevin Huvane supposedly is so hands on with has really no idea what it is doing whatsoever and definitely helped make once relevant brand a thing of the past (in much the same manner that Dave at the Firm did with Pony).
There is no fundamental difference between selling a cheezy jean brand and selling a cheezy actor brand. Why should they pretend otherwise. The goal is profit and big bonuses. Thats the sine quo non of the agenting and Hollywood business.
If people still cling to the grostesque illusion that agents know anything about acting they are asking for more pain. Agents are about the hustling,packaging and mass marketing of commodity talent. Ergo Shi Leboof a brick plated with gold spray paint and sold as 24 carat.
Let’s hope that CAA has better luck than the Firm did. Pony turned into a timesuck for that company and never netted the results they were looking for.
Double-triple-dipping… at this point the clients are there to service the agency. Ugh.
Any bets on what the “J” stands for in “J-Brand”?