Tags: Paula | Deen | Merchandisers | Bag

Paula Deen Merchandisers Are Left Holding the Bag

Thursday, 04 Jul 2013 03:06 PM

By John Morgan

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Paula Deen is not the only one feeling the heat as her world of cooking shows and merchandise implodes.

CNN Money reported that the merchandisers who make or distribute her products – everything from pots and pans to dishes and scented candles – could end up seeing those wares on remainder aisles.

“The suppliers will feel the real impact of her brand being dropped,” predicted Marshall Cohen, chief retail analyst at market researcher NPD Group.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

The suppliers may lose valuable contracts with some of the largest store retailers, including Wal-Mart, Target, Home Depot, Sears and J.C. Penney.

There are plenty of Paula Deen goods still piled up in warehouses and factories, according
to CNN Money. Her lineup of 17 different licenses, in addition to food-related products, also includes a furniture line and greeting cards.

Two key suppliers of the merchandise, which is often made in Asia, include cookware distributor Meyer Corp. of Vallejo, Calif., and Michael Stores Procurement Co. Inc., a subsidiary of the crafts retailer Michaels Stores.

NPD Group’s Cohen said he expects at least some supplies will get stuck with unsold Paula Deen products.

"Some of this excess inventory could end up in deep discount stores. Some will be sent back to factories to rebox and sell under some other brand," he said. "Some of it could even end up in overseas markets."

Deen's food empire has been in free-fall since a legal deposition last month, in which it was revealed that she admitted using the “n-word” in the past and considered throwing a 'plantation-style' wedding. The deposition grew out of a discrimination lawsuit brought by a fired manager at one of her Savannah restaurants.

USA today reported crisis-management professionals believe it is not too late for Deen to turn things around, but that her problem is difficult. Although style maven Martha Stewart was able to rebuild her empire after a prison stint for insider stock trading, racial missteps are some of the hardest to smooth over, the experts said.

"She made a fundamental mistake in the beginning by not getting in front of the story," said Jim Joseph, the North American president of Cohn & Wolfe, a communications firm.

"I think it's going to be a long time before she gets big national endorsement deals again— if ever," predicted Nat Ives, AdAge.com's senior editor of media and innovation

Many of her fans, meanwhile, have been petitioning the Food Network to bring her show back to the air. Joseph said such fan support may be Deen’s best chance for redemption.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

© 2014 Moneynews. All rights reserved.

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