Reese puts star power to test

- Advertisement -

By Sharon Lam

TORONTO – Reese Witherspoon is putting her star power — and business acumen — to the takeover test again. Two years after Blackstone agreed to back a buyout of her female-focused Hello Sunshine media company at a $900 million valuation, the “Legally Blonde” actor is selling a majority stake in her Draper James clothing line. Some celebrity-studded deals work out well, but many turn fame to shame.

Reese Witherspoon

Private equity firm Consortium Brand Partners said on Wednesday it had bought 70% of Witherspoon’s “steeped in Southern charm” apparel company for an undisclosed sum. There are precedents to help justify such attraction. Six years after Diageo agreed to pay $1 billion for George Clooney’s Casamigos tequila, it was the fastest-growing tipple on the distiller’s shelf in North America for the year ended June 30, with a 26% increase in net sales. Apple used the $3 billion acquisition of Dr. Dre’s Beats in 2014 to power its music streaming service and popular AirPods.

- Advertisement -spot_img

Not all A-list acquisitions live up to the billing, however. After relinquishing control of her cosmetics line to Coty in 2019, Kylie Jenner is now mulling buying back the $600 million stake, according to Bloomberg. Her sister Kim Kardashian is in talks to do the same with her company, SKKN. Pop singer Jessica Simpson reclaimed ownership of her namesake fashion brand a couple years ago after the company that bought it went bankrupt.

Honest Company, the consumer goods company backed by “Dark Angel” star Jessica Alba, has lost more than 90% of its market value since its 2021 initial public offering. Even a Delaware judge said as part of a broader ruling that Block’s purchase of Jay-Z’s Tidal “seemed, by all accounts, a terrible business decision.” It’s unclear how Hello Sunshine has fared under new ownership. For all the attention A-listers now command in deal-making, however, the financial stars often don’t align.

Author

Share post: