June 28, 2013 10:35:49 AM
NEW YORK -- Paula Deen's multimillion-dollar merchandise and media empire continues to unravel following revelations that she used racial slurs in the past.
Target Corp., Home Depot Inc. and diabetes drug maker Novo Nordisk on Thursday became the latest companies to distance themselves from the Southern celebrity chef.
Home Depot, which sold Paula Deen-branded cookware and kitchen products only online, said it pulled the merchandise off its website on Wednesday. And Target said that it will phase out its Paula Deen-branded cookware and other items in stores and on its website.
"Once the merchandise is sold out, we will not be replenishing inventory," said Molly Snyder, a Target spokeswoman.
Meanwhile, Novo Nordisk said it and Deen have "mutually agreed to suspend our patient education activities for now." Deen, who specializes in Southern comfort food, had been promoting the company's drug Victoza since last year when she announced she had Type 2 diabetes.
These are the latest blows dealt to Deen since comments she made in a court deposition became public. Last week, the Food Network said that it would not renew her contract. On Monday, pork producer Smithfield Foods dropped her as a spokeswoman. Then, on Wednesday, Wal-Mart Stores Inc., the world's biggest retailer, said it too was cutting ties with Deen following a tearful "Today" show interview in which she said she's not a racist.
On the same day, Caesars Entertainment announced that Paula Deen's name is being stripped from four buffet restaurants owned by the company.
Caesars said that its decision to rebrand its restaurants in Joliet, Ill.; Tunica, Miss.; Cherokee, N.C.; and Elizabeth, Ind., was a mutual one with Deen.
The stakes are high for Deen, who Forbes magazine ranked as the fourth highest-earning celebrity chef last year, bringing in $17 million. She's behind Gordon Ramsay, Rachel Ray and Wolfgang Puck, according to Forbes.
Deen's empire, which spans from TV shows to furniture and cookware, generates total annual revenue of nearly $100 million, estimates Burt Flickinger III, president of retail consultancy Strategic Resource Group.
But Flickinger says that the controversy has cost her as much as half of that business. He also estimates that she could lose up to 80 percent by next year as suppliers extricate themselves from their agreements.
"The accelerating domino effect is commercially disastrous for Paula Deen's empire," he said.
It's a dramatic fall from a woman who overcame her humble Southern roots and personal hardships to build a merchandising and media empire.
Deen, who grew up in Albany, Ga., was grappling with a failed marriage, the death of her parents and a prolonged battle with agoraphobia when she started her home-based catering business called The Bag Lady in June 1989, according to her company website.
Then a mother of two teenage boys, Jamie and Bobby, and on the verge of homelessness, she used her last $200 to start the catering business. She describes the business as delivering "lunch-and-love-in-a-bag." Five years later, she opened her first restaurant called The Lady and Sons in Savannah, Ga. Her first cookbook, "The Lady and Sons Savannah Country Cookbook," came out in 1998.
Soon after, she had her first TV appearance on QVC. But it was when "Paula's Home Cooking," began airing on the Food Network in 2002 that she started to hit stardom, according to her site. Deen now has two shows airing on the Food Network: In addition to "Paula's Home Cooking," there's "Paula's Best Dishes," which made its debut in 2008.
Deen's empire has continued to grow over the years as her brand has blossomed.
In addition to her The Lady and Sons restaurant, Deen owns with her brother, Bubba, a seafood restaurant in Savannah called Uncle Bubba's Oyster House. Deen is the author of 14 cookbooks that have sold more than 8 million copies and her bimonthly magazine "Cooking with Paula Deen" has a circulation of nearly 1 million, according to her website. And Deen's product lines span from a full line of cookware to assorted food items to furniture.
Not every company Deen does business with has severed ties with the celebrity chef. Among other stores that sell her products, Kohl's Corp. declined to comment, while Macy's Inc. and Sears Holdings Corp. said they're evaluating the situation. QVC, meanwhile, said it's reviewing its deal with Deen.
And book-buyers are so far standing by Deen. As of Thursday afternoon, "Paula Deen's New Testament: 250 Recipes, All Lightened Up," remained No. 1 on Amazon.com. The book is scheduled for October. Another Deen book, "Paula Deen's Southern Cooking Bible," is now at No. 5, up from No. 13 earlier in the day. Several other Deen books were out of stock.
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