Paula Deen is ready to come back, y'all
The celebrity chef has formed a new company and received a whopping investment. She's now looking to make some deals.
A recently formed new company, Paula Deen Ventures, said it has received an investment of between $75 million and $100 million from Najafi Cos., a private-equity company led by Jahm Najafi, who owns BMG Music Service and the Book-of-the-Month Club.
Phoenix-based Najafi Cos. said the cash infusion will be used to help Deen establish new deals and move away from a pure licensing model, in which she sells her likeness and expertise to others. Instead, she hopes to take more ownership and control in partnerships with retailers and other companies.
Steven Nanula, a food-industry veteran brought in to be chief executive of Paula Deen Ventures, said the company is in talks with TV networks, retail chains and other possible partners, but has yet to announce a television contract or a major deal. The company declined to name the TV networks and potential partners it has contacted.
A Food Network spokeswoman said the cable-TV channel hasn't had any talks with Deen about re-appearing on the network.
With her homey Southern drawl and her decadent fried foods, Deen became one of the best known in the crop of television celebrity chefs. But she fell from popular grace last year over her admitted use of racially controversial language. She soon lost dozens of products endorsements and her high-profile perch on the Food Network last June.
By its own description, Najafi Cos. often invests in business that are "out of popular favor." Najafi said he doesn't see investing in Deen to be an extraordinary risk. Despite the controversy, he said, her brand has strong, broad support from core fans across the U.S.
"Our investment allows the Paula Deen brand to expand their relationships and the partnerships that are already in place, and support those partnerships on a go-forward basis," said Najafi, who is also a part owner of the Phoenix Suns NBA franchise.
In an interview over e-mail, Ms. Deen said the deal with Najafi Cos. came together after she and Najafi were introduced through a mutual friend.
She said she draws confidence from the "hundreds of thousands of folks who signed up on Facebook's 'We Support Paula Deen' page," adding that "hundreds of thousands of my fans sent me messages of love and support."
In the coming months, she said, she will work on expanding from that base of support. "I hope one day that everyone can have the opportunity to know who I am, as my family, friends and fans do," she said.
In addition to Ms. Deen being booted from the Food Network in the wake of a controversy over her past use of racial slurs, Smithfield Foods Inc. dropped her, while discounters Wal-Mart (WMT) and Target (TGT) stopped selling Paula Deen products.
Ballantine Books, an imprint of Bertelsmann SE & Co.'s Random House Inc. publishing arm, cancelled the publication of "Paula Deen's New Testament: 250 Recipes, All Lightened Up."
Other high-profile personalities have rebounded after being marred by a crisis, including pro football player Michael Vick, and media personality Don Imus.
Najafi and Nanula said Deen has managed to build her social-media presence and to hold on to relationships with other major companies, including cookware distributor Meyer Foods, furniture manufacturer Universal Furniture and poultry producer Springer Mountain Chickens. Springer Mountain said sales of Deen's products have grown by 35% in the past two quarters.
Deen's in-store appearances in Dallas, Houston and Buffalo have drawn "standing room only crowds," Nanula said.
Her company adds that subscriptions to Paula Deen Magazine have risen more than 40 percent in the past year.
"The important thing to remember is that her fan base is rabid. Her Facebook fan base has more than doubled in the past year," Najafi said. "The Paula Deen brand is alive and well."
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