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

the audience for both is often looking for the next fad or trend.

But the fashion industry is attractive to hip-hop artists wanting to branch out because it can be a gold mine, says Alan Millstein, editor and publisher of the Fashion Network Report. According to Millstein, the average life span of most clothing lines is five years or less, but “if you hit, there’s a ton of money to be made.” Designers such as Tommy Hilfiger, Calvin Klein and BE 100s CEO Karl Kani have long embraced and financially benefited from hip-hop’s influence on fashion. Touted in rap lyrics for the past decade, these designers have reaped millions off the urban hip-hop market. According to a recent report in Forbes magazine, Tommy Hilfiger reported a 40% jump in sales to $491 million as of its current fiscal year with earnings climbing 47% to $64 million. How much of that increase can be directly attributed tO the hip-hop market is unclear, but many black artists believe the time is overdue to start going after that market for themselves.

Carl Williams, CEO of Karl Kani Infinity Inc., believes Wu-Wear has found the right niche to hit by attacking the urban market. “The fact that groups like Wu-Tang have the ability to sell a million albums means something. There are people out there listening to them, watching them. And a lot of the kids who see their videos are going to want to dress like them,” says Williams. “Marketing their clothing through their music and CDs is creative and unique. And it won’t hurt the sales of their next album to have everyone walking around with a big Wu symbol on their backs,” he adds.

Diggs says the group is simply trying to take control of their own image and marketability. “It’s really just understanding what makes money from you,” he says. “You have to understand how your product makes the larger industry so successful and make sure that you get more than just a penny of the proceeds.”

CAN MUSIC SUCCESS TRANSLATE INTO BUSINESS ENTERPRISES?
The main problem is most artists’ general lack of knowledge about the fashion industry. “Most musicians are simply naive about the production cycles and complexities of design,” says Millstein. “Apparel is a totally different world from being in the production studio and making a CD.”

But not all rappers with outside business interests are into apparel. Percy Miller, a New Orleans native who goes by the handle “Master P,” purchased a Tenneco Gas Station and signed on as an Athlete’s Foot franchisee earlier this year. Miller, who’s also owner and president of No Limit Records, says the start-up costs for both of his Baton Rougebased concerns ($500,000 for Tenneco and $250,000 for the Athlete’s Foot) are expenses well spent, as he plans to branch out into the business arena. “When you get in this business, you have to think ahead if you want to stay around. You don’t want to just get a few dollars, and next year there’s nothing happening,”

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