“If our success depended on my celebrity in the last century,” says Kathy Ireland of her design and marketing company, “we’d all be unemployed.” (kathy ireland Worldwide)
Former supermodel Kathy Ireland learned about facing down adversity on the first day of her newspaper route at age 11. The job’s ad had called for a boy to deliver the heavy papers by bike, but she insisted that she could do it.
“One man was standing in his driveway as I came up and started yelling that it was a boy’s job and I’d never last,” Ireland told IBD during a break on the set of one of her TV shows in Los Angeles. “I was determined not to let him see me cry and to prove him wrong.”
She was named her delivery district’s Carrier of the Year three times in a row. Later, she learned to develop a thick skin as a model who didn’t fit everyone’s idea of perfect. This lifetime of building resilience came in handy when she launched privately-held kathy ireland Worldwide (kiWW) in 1993. (“The lowercase k and i are intentional, because the company isn’t all about me, it’s about our team and the customers,” she explained.)
The former runway star became a runaway success, with over 17,000 products now carried in 50,000 stores across 50 countries, ringing up $2.6 billion in retail sales last year, giving her a net worth of $360 million (just under that of Barbra Streisand on Forbes’ list of self-made women).
Ireland, 54, was born in Glendale, Calif., and at 3 her family moved to Santa Barbara, Calif. (where she still lives with her physician husband, three children and four dogs). At 4, she was selling painted rocks out of her wagon. An indifferent student and shy tomboy, her parents sent her to a finishing school where the Elite Modeling Agency discovered her in 1980 at 16.
Four years later, she was featured in the first of 13 consecutive Sports Illustrated swimsuit issues, and when she was put on the cover in 1989, it became the best-selling edition of all time. (She also appeared on the cover in 1992 and 1994.)
Knocking Their Socks Off
Ireland tried to diversify her career without much success until 1993 when, pregnant and 30, she launched her first product: socks. Everyone told her she’d fail because she should have started with a swimsuit, but she believed she could design a better foot-warmer. In partnership with marketer John Moretz, and after taking out a $50,000 personal loan, she took the first step to selling over 100 million pairs.
The following year, she signed an exclusive agreement to sell her expanding clothing line at Kmart (now part of Sears Holdings (SHLD)). By 1999, the growth of kiWW was so impressive that she was named Businesswoman of the Year by the National Association of Women Business Owners. When Kmart filed for bankruptcy three years later, Ireland refused to abandon it as they worked through the enormous challenges, even when her bank threatened to seize her family’s assets.
“I learned from Warren Buffett, when we worked with him on our carpet line, that you need to find stores which can deliver a great customer-service experience, so we began shifting our distribution to independent specialty retailers, which have been the key to our success,” said Ireland. “We had lucrative offers from chains to be exclusive, which would have given us much more visibility and fast growth, but also would have put a ceiling on our potential. We could see that brick-and-mortar would be increasingly challenged and our new strategy avoided being entangled in more bankruptcies.”
She and Stephen Roseberry, kiWW’s president, often begin their day with sales calls while she uses her time efficiently by being driven to one of her offices.
“If we’re getting rejected, I want to know what we can do better,” she said. “If there is a misconception about our brand, we want to clear it up. It still shocks me that some people think I would just slap my name on a product. If our success depended on my celebrity in the last century, we’d all be unemployed. To make a product move, you need much more than an autographed photo, you have to have all the right design elements, infrastructure, a sales team, and creative marketing.”
Developing True Partnerships
Ireland says kiWW has a unique business model that starts with licensing products. (The magazine License! Global ranks her No. 26 among the most powerful brands, just behind Ferrari and ahead of Ralph Lauren.)
“We carefully vet everyone we work with to be sure we share the same values,” she explained. “We have thorough contracts, but then we put them in a drawer to work together like a family, hoping for the best. Our aim is to become full, formal partners so that we have a powerful relationship in which we are mutually invested. Probably close to 90% of these work out well and we’ve had some partnerships for 15 to 24 years, compared with an average of just a few years elsewhere.”
The hybrid of licensing and partnerships covers a vast array of products and services, stretching from the NuGene line of stem cell-based cosmetics to offering insurance customized for entrepreneurs. As part of this boundary-stretching business model, she is the chief creative officer for virtual reality company Endeavor One and lifestyle brand I’M1, part of Level Brands — doing everything from producing music festivals to making films.
Roseberry says that her fierce dedication to combining innovative quality with affordability has enabled kiWW to successfully enter new markets, like diamond jewelry (hers has a patented design), that would otherwise be virtually impossible to penetrate. He said that Ireland’s brand also helps one of her primary target audiences, busy moms like herself, simplify the choices they face by knowing they can trust her judgment.
Ireland says she’s very careful about picking the right “brand ambassadors” and is especially excited by Katie Meade for the Beauty & Pin-Ups line of hair care products.
“She’s the first person with Down syndrome to be the spokesmodel for a beauty brand and she’s turning the industry on its head,” said Ireland. “Beautiful people come in every size, color and age, and I rejected the idea from my early career that everyone should have the goal of unobtainable sameness in their appearance.”
Helping Business Talk To Customers
After working her way up in an industry that told her to just “shut up and pose,” Ireland expresses a passion for enabling companies to get their messages out.
“Too many aren’t covered by mainstream media or, when they are, what is said or written about them is garbled or inaccurate,” she explained. “All TV is sponsored — we’re just more transparent about helping leaders and experts talk about what they do.” Her “Worldwide Business” interviews are broadcast on Fox Business on Sundays and are available in 50 countries, while “Modern Living,” aimed at consumers, is on E! Thursdays and airs via Bloomberg International and other networks.
Perhaps the best evidence that Ireland is recognized as one of the top living entrepreneurs is that each year she’s invited to the Berkshire Hathaway (BRKA) annual shareholder meeting with Bill Gates and Warren Buffett. Since she and Buffett delivered newspapers as kids, the three of them compete with attendees to see who can throw them most accurately.
“From the people cleaning the warehouses to the CEOs of the global companies we work with, Kathy believes everyone deserves the same amount of respect,” said Roseberry. “She doesn’t tell us what to do, she shows us what must be done. She doesn’t believe in making excuses and is always an inspiration. Kathy’s business proves that for her, love is a verb.”
Ireland’s Eight Lessons
“Never compromise your character to achieve any goal.”
“Don’t think less of yourself, think of yourself less.”
“It takes years to build trust and respect, but a moment to destroy it.”
“When someone tells you no, ask why.”
“It’s great to have goals, but don’t forget to enjoy the journey.”
“Own money; never let it own you.”
“Discover, live, and practice your boundaries and beliefs.”
“Your amazing spirit is strong enough to overcome any obstacle.”
Former supermodel became a supermogul branding everything from flooring to wedding destinations.
Overcame: Bankruptcy of Kmart, the exclusive outlet for her products, in 2002.
Lesson: When you put your name on something, be sure you have hands-on control of its quality.