Hip-Hop Preneurs

A new breed of hungry hip-hop artist are using hit records as a stepping-stone from the recording studio to the boardroom

Holdings Inc., Rush Communications (No. 54 on the BE INDUSTRIAL/SERVICE 100 list) is now the second largest black-owned entertainment company in the United States. But there’s a host of young, hungry hip-hoppers eager to follow in Simmons’ entrepreneurial tracks. Whether they succeed will not depend on how well they rap or rhyme, but how well they manage the bottom line.

The midtown Manhattan office of Razor Sharp Records is used to a frenetic pace. It’s where the Wu-Tang Clan work. Earlier this year, the multi-platinum-selling act released their sophomore album, Wu-Tang Forever. Despite weak radio air-play, album sales had topped $4 million by late September.

This particular evening the group will introduce several acts at Radio City Music Hall for the MTV Music Awards. Various members of the ninemember Clan are rushing in and out,of Razor Sharp getting their artist credentials for the evening and going over last-minute routines. In the midst of the confusion, Clan member Lamont Hawkins, a.k.a. U-God, says while Wu-Tang may be the flavor of the moment among rap music fans, each member is very aware of the need to think beyond the moment.

“Everyone here is concerned with getting into something more than rhyming because we realize that what we have here is a vehicle that gets you from one step to the next,” says Hawkins. “This is a business where one day you might be in and the next day you’re out. So it’s up to you to take it to the next level.”

The first sign that Wu-Tang wasn’t your run-of-the-mill rap group came in the innovative way the Clan structured its individual projects on separate music labels. Spearheaded by group member Robert Diggs/RZA, most members have distinct solo deals including Clifford Smith/Method Man (Def Jam), Russell Jones/Ol’ Dirty Bastard (Elektra), Corey Woods/Raekwon (Loud Records), Gary Grice/GZA (Geffen) and Dennis Coles/Ghostface Killah (Razor Sharp/Epic). Each has a 50% partnership deal with Wu-Tang Productions, and a solo deal also contributes 20% of their earnings to Wu-Tang Productions. Their arrangement is a feat nearly unprecedented because it gives the group ties to nearly every major label in the music industry.

But that was just a start. The Clan’s first vehicle to extend their brand name beyond hip-hop has been the apparel industry. As with Simmons’ Phat Farm, the Clan sees a synergy between hip-hop music and clothing. With start-up costs of $50,000 for a storefront and merchandise, the group launched its apparel line, Wu-Wear, and opened its first Wu-Wear clothing store in Staten Island, New York, in 1995. The clothing, produced abroad in China and domestically in Massachusetts, is made at Wu Manufacturing L.L.C.

The Clan is targeting urban teens and college students ages 12-28. WuWear apparel includes sweatshirts, headwear, socks, underwear; bags, wallets and mugs. After the designs for Wu-Wear are approved for different clothing, product samples are made. Following the Clan’s approval of the actual product, inventory is ordered for the flagship store in Staten Island. Samples are sent to wholesale and mail order

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