When Gwen Stefani decided to design shoes, big-name footwear companies Adidas-Salomon AG, Nike Inc. and Reebok International Ltd. all vied to land the Orange County-bred pop star and fashion plate.
But Stefani, the No Doubt frontwoman who's known for her rocker edge, rejected the more recognizable brands and elected to go with Royal Elastics, an under-the-radar K-Swiss Inc. subsidiary with roots in Australia's skateboarding scene.
The choice was a monumental coup for the Westlake Village-based company that's yet to turn a profit since K-Swiss acquired it in 2001 for about $3 million. The company has been peddling slip-on sneakers created for skateboarders to avoid tripping on unwieldy laces, while Stefani's L.A.M.B. shoe collection for women, priced at $125 a pair, includes four versions of shoes named Love, Angel, Music and Baby (the initials of which spell L.A.M.B.) available in gold, white and black, frequently decorated with splashy lettering.
"It is very significant," said David Nichols, the company's president and son of K-Swiss chief executive Steven Nichols. "Gwen is very unique in many ways in terms of the size and diversity of her audience. She brings fashion credibility."
The shoes are another entrant into the crowded field of apparel products attached to celebrity names rapper Sean John "Puffy" Combs, teen titans Mary-Kate and Ashley Olsen and actress and singer Jennifer Lopez are among those who have jumped into the apparel business. For companies, it's a chance to spotlight a brand that might be struggling to gain notice and, for the stars, it's another venue to expand their empires.
But like Hollywood careers, celebrity-spawned products often disappear from the market as quickly as they enter. Marshall Cohen, an industry analyst at the NPD Group, estimated that celebrity fashion lines typically fade two years after they crop up, leaving companies scrambling to replace the revenues.
Yet for all the risks, the collection could mark a turning point for Royal Elastics. With the company's branded shoes not performing up to K-Swiss' expectations, Stefani brings a needed buzz. "Any time you have a celebrity link you are always subject to some degree to what happens with that celebrity," said Jeff Van Sinderen, an analyst with B. Riley & Co.
Royal Elastics' second-quarter domestic revenues tumbled 14 percent, to $695,000, compared to the like quarter a year ago. U.S. sales of parent K-Swiss' products increased 7.7 percent, to $94.4 million during the period.
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