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

reps, and catalog sheets are prepared.

By all indications, the line is thriving. The flagship store had sales in excess of $1 million its first year. Now with two additional stores in Norfolk, Virginia, and Atlanta, and a thriving mail order operation, Wu-Wear president and CEO Oli Grant is projecting year-end sales for all three outlets to exceed $5 million. Approximately 40% of 1947 revenues will come from the three retail outlets. Fifty percent comes from WuWear’s wholesale operation. Last spring, the group inked a deal with retail giant Federated Department Stores, owners of Macy’s, Bloomingdale’s, Bon Marche and Rich’s. The clothing is also found in smaller retail chains such as Dr. Jays and Gadzooks. The final 10% comes from the group’s mail order operation.

“At Federated, we’re always interested in the newest product for our stores,” says Allen Zwerner, group senior vice president for men’s, young men’s and kids’ merchandise. “It certainly doesn’t hurt if there is additional exposure to the customer through their music. However, the product must be right for the fashion market. Currently, our stores are carrying their T-shirts, and as we move into spring 1998, they will be expanding their line into a full-blown sportswear line, and we feel good about giving them a shot,” adds Zwerner.

Illustrating the synergy between their music and clothing, Wu-Tang provides mail order information for its apparel inside each CD jacket. In a moment of marketing inspiration, the group released the single and video “Wu-Wear,” featuring RZA, Method Man and Cappadonna. The song urged listeners to abandon their current
clothing in favor of–what else-Wu-Wear.

Mitchell Diggs, CEO of Wu-Tang Productions, is responsible for managing all of the separate and group projects for the Clan. He says once the group attracted mass attention and various offers for projects or investments came along, the decision was made to cut out the middleman and explore business opportunities for themselves. “You start listening to these deals and hearing what they’re trying to offer and you start thinking, `Hey I have access to that same type of money. Why not look and see what we can do for ourselves?’ A lot of artists might get caught up in the hype of it. But we can’t be rappers all of our lives and the show doesn’t pay the rent forever,” he adds. So Diggs says he and members of the Clan decided to make their own deals. “Now we explore all avenues. Instead of always giving the deal to someone else and making them rich, why not keep it for ourselves?”

What’s next for the Wu? Grant says a fourth Clan store is under construction in Philadelphia and plans for a Wu-Mega store in the Melrose area of Los Angeles are in the works for next year.

But can Wu-Tang sustain its momentum? A hot name alone isn’t enough. The inherent dangers in both music and fashion are the relative youth and fickleness of these industry’s consumers. And the transition from music to fashion, say insiders, is a difficult one since

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