The Obama factor: First family's favorite things translate into big sales
Filed under: People, Chico's, J. Crew
America's voyeuristic love affair with the rich and famous: what they're wearing, what they're driving and where they play, certainly isn't a new phenomenon. And the obsession is hardly limited to Hollywood -- just look at the First Family.
Since the early days of the campaign trail, the media has reported on plenty of intimate details about President Barack Obama, First Lady Michelle and daughters Sasha and Malia, that have fed the public's seemingly insatiable desire to learn more about the family. Not only have the Obama family's favorite things translated into media buzz, but for some companies they've translated into big, yet short-lived, bottom-line profits.
Just in case you missed it, here's a quick recap of a few items that got plenty of buzz.
"Any positive endorsement from a high-profile individual is advantageous to a company," says Tamara Francois, a senior account director at New York-based marketing firm Escalate, who has managed brand campaigns for companies including Coca-Cola (KO), Chevrolet and Glaceau/VitaminWater. "Their popularity and stamp of approval immediately adds value to their products because these are the people heavily influencing today's trends in society," she says.
When Michelle steps out in style, for example, it might be a good idea for retailers to brace for a sellout. Remember that $298 J. Crew (JCG) hand-beaded cream-colored cardigan she wore in April? It sold out on the company's web site that day. Two days later, eBay merchants put the sweater on sale for $600. It certainly wasn't the first (or last) time Michelle or her girls made a public appearance dressed in J. Crew apparel. When asked if Michelle Obama approached the company or they approached her, J. Crew CEO Millard Drexler said "It was actually an act of God" during an interview with CNBC Friday. "If you think about it both aesthetically and politically... it was incredibly smart for her not to go and pay -- especially during the last year -- high prices for designer merchandise," he says.
Since January (the same month Barack was inaugurated president), the chain's shares have exploded more than 200 percent. On Thursday, the company raised its earnings outlook for the third and fourth quarters, citing stronger-than-anticipated sales and margin trends. Yet, analysts are cautious about giving Michelle too much credit for helping to boost the brand, citing that the company has also aggressively cut costs this year. "Michelle Obama has been huge for them, but in reality normal people will pay for the clothing if it's the right perceived value." says research analyst Jennifer Black, president of retail and apparel research firm Jennifer Black & Associates, in a recent interview with Investor's Daily.
To the relief of J. Crew's competition, Michelle's eye for fashion extends beyond the preppy retailer. Last year, during an appearance on The View, Michelle wore a sleeveless $148 tank leaf print dress from White House | Black Market, a chain of stores owned by Chico's (CHS). When the dress sold out within two days, Francois wasn't surprised. "Short of giving a product away for free, I cannot think of any other marketing effort that would call consumers to action and completely clean out a store's shelves within 48 hours." After being restocked, the dress sold out again.
It's not just Michelle who is causing a stir. During a July 2008 fund-raising event in Seattle, candies nestled in a welcome basket full of goodies, made Barack melt. "Oh my, what were those? Those are phenomenal. I want more," he said, referring to Fran's Chocolates' smoked sea salt caramels wrapped in milk chocolate (Michelle prefers hers covered in dark chocolate.) Since then, the chocolatier has seen a significant increase in sales. Andrina Bigelow, CEO of the Seattle-based company, says even though she can't attribute the company's tremendous growth to one specific event, sales of salted caramel chocolates have risen 20 percent year-to-date. "I think that the press and awareness and recognition has helped to continue to drive growth on our salted caramels," she says.
However, not every company is rushing to highlight its Obama connection. "Politics is a polarizing subject and celebration of that type of endorsement is very likely to discourage a segment of consumers that help make that business profitable," says Francois.
As most analysts point out, however, the Obama effect on a company's bottom-line can only last so long. "All marketers know the benefits that can be gained by celebrity endorsements, whether or not that celebrity is the President, a movie star or entertainer. In most cases, though, these types of unpaid endorsements lead only to short-term gains," says Phil Rist, Executive Vice President of Strategic Initiatives for online market research firm BIGresearch.
But with the holiday season upon us, you can bet retailers are keeping a close eye on the Obama's Christmas list. Whatever toys White House darlings Sasha and Malia request from Santa this year, will likely cause riots in the aisles of Toys R Us.
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Reader Comments (Page 1 of 11)
10-27-2009 @ 6:32AM
joe said...
The Obama's make me want to PUKE!!!!!!!!!!!!!!!!!!
Reply
10-27-2009 @ 8:22AM
Rosemarie said...
DITTO!!!!
10-27-2009 @ 10:52AM
JackT said...
why?
10-31-2009 @ 7:46PM
zytychi said...
HEY MR. PUKER.....IS IT TOO EARLY TO SUGGEST THE IMPEACHMENT OF OUR NEW LEADER?????If not I suggest someone tell the Obama's to pack up all of the popular gift items that they have and go back to the Corrupt State of Illinois where they came from............PLEASE......
11-01-2009 @ 12:26AM
zytychi said...
HAUNTED HOUSE STORY: Once upon a time in the Hauted State of Illinois there was a Wizard that flew towards the East on a broom stick and landed in a big White House. The Wizard was surrounded with Witches and Warlocks that were evil and cursed. The Wizard in the Big White House wanted to cure the evil and cursed Witches and Warlocks, so he began passing out Billions of Unregulated Tax Dollars to the Evil Corporate Dragons in a House called Wallstreet. After the evil Corporate Dragons wasted all the Wizards Treasures, the Wizard flew home to the evil State of Illinois that he came from in the Year 2012. The Wizard again was surrounded with Creepy Crooked Witches and Warlocks. And the Wizard sat on his throne of stolen Treasures and said....When everything else fails...there is always Greed Greed Greed and Greed.....The Wizard, His Queen and His two little siblings lived Happily Ever After in Prison.
11-01-2009 @ 1:17AM
Dan N said...
So Puke!!!!!
10-27-2009 @ 6:49AM
Testing said...
The green background color in in the President's photo is not especially flattering.
Reply
10-27-2009 @ 6:42AM
b said...
Hurry 2012!
Reply
10-27-2009 @ 1:24PM
SunFire said...
Yes hurry!!! So we can all have a good laugh at your candidates once again.
DimwitPalin/Batt-sh-t Bachmann 2012!!!!!
11-01-2009 @ 12:24AM
bj said...
Amen to that. $600.00 sweater? And people are going to bed hungry and others are homeless due to foreclosure. Obamas are a bad joke. Can't wait till 2012.
10-27-2009 @ 6:46AM
heaven said...
I have no interest in what the Mrs. Obama is wearing either it be some writers opinion on if it's tasteful for a presidents wife to wear or not, nor do I have any interest on why Sasha woke her parents up in the middle of the night, or pictures of their family vacations. Only thing I want to hear about is how this ecomony is going and how were going to fix it.
Reply
10-27-2009 @ 7:10AM
Annette said...
Excellent comment, I totally agree with you!!!!
10-27-2009 @ 8:45AM
Brenda said...
Ditto
10-27-2009 @ 12:05PM
Jessica said...
Whine...whine...whine! Who the hell wants to hear about the economy everyday. Stop being so freaking negative and learn to have some light-hearted moments!
10-31-2009 @ 6:55PM
chuck said...
did you have the same concern about the economy when bush was in office those eight years..?? of course you didnt,because if you had had them the economy wouldnt be screwed up like it is. you allowed this former president to do whatever the hell he wanted and where was the outrage then like you have now? bush started wars all by himself,didnt care if the world or even the country he said he was trying to save didnt want his help,did it anyway.thats part of why the economy is screwed..i am making a time capsule for my kids and grands and great grands so they can read for themselves just what our current president inhereted and the racism he had to deal with and how his white country america was against him simply because he was black..i want them to read for themselves and not rely on the history book like i had to do. i am making cd;s of news casts,radio,i want them to really see america the beautiful for what it turley is...i am leaving them proof...something i didnt have..
10-27-2009 @ 6:52AM
FalloftheRepublic said...
The treasonous Obama and Bush are complicit to the biggest swindle in history on the American people. Our Country is lost. Please view this youtube presentation,
Fall of The Republic by Alex Jones:
http://www.youtube.com/watch?v=VebOTc-7shU
Reply
11-01-2009 @ 1:59AM
Deb said...
To FalloftheRepublic; Thank you so much for posting the link, http://www.youtube.com/watch?v=VebOTc-7shU . I encourage everyone that loves the USA to watch this video because we have so much at stake, as a people, as a nation... We are too easily distracted by those that condition and manipulate us. I, for one, am tired of being manipulated by those that have not one iota of concern for me nor my fellow hardworking, patriotic American citizens nor our futures. We American's have worked so hard, given so much of ourselves! Our efforts should not be, cannot be, in vain.
10-27-2009 @ 6:53AM
Roe said...
I agree heaven. The only information I want to know is that United States is getting back on it's feet. That is why I voted for Obama not because of Mrs. Obamas style in clothes or race.
Reply
10-31-2009 @ 1:19PM
CF said...
the Obama's are really prospering...$1.4 million for the NPP, and lots of trips to NY, London, etc.....too bad the rest of us non-bankers, non-union are hurting.
10-27-2009 @ 6:57AM
joe said...
Act of God? How stupid can she be?
Reply