published Friday, June 28th, 2013

Sears, J.C. Penney and Walgreen sever ties with Paula Deen

NEW YORK — Paula Deen’s media and merchandising empire is collapsing.

Sears, J.C. Penney and Walgreen said Friday that they’re cutting ties with Deen, adding to the growing list of companies severing their relationship following revelations that the Southern celebrity chef used racial slurs in the past.

Meanwhile, Deen’s publisher has canceled a deal with her for multiple books, including an upcoming cookbook that was the No. 1 seller on Amazon.com and Barnes & Noble.com.

Ballantine Books said Friday it would not release “Paula Deen’s New Testament: 250 Favorite Recipes, All Lightened Up,” which was scheduled for October and was the first of a five-book deal announced early last year. Interest in it had surged as Deen, who grew up in Albany, Ga., and specializes in Southern comfort food, came under increasing attack for acknowledging she had used the N-word.

Ballantine, an imprint of Random House Inc., said it decided to cancel the book’s publication after “careful consideration.” It had no comment beyond what was in its brief statement, spokesman Stuart Applebaum said.

Sears Holdings Corp. said it will phase out all products tied to the Paula Deen brand after “careful consideration of all available information.”

“We will continue to evaluate the situation,” said the parent company of Sears and Kmart stores.

Both Sears and Kmart sold Paula Deen products.

In an email statement to The Associated Press, J.C. Penney Co. Inc. said it will stop selling Deen-branded products.

Walgreen Co. said it was phasing out Paula Deen-branded products, which include tortilla chips and a selection of soups.

QVC took a more gentle approach on Friday and said that it has decided to “take a pause” from Deen. The home shopping network said that Deen won’t be appearing on any upcoming broadcasts, and it will phase out her product assortment on its online sales channels over the next few months.

“We all think it’s important, at this moment, for Paula, to concentrate on responding to the allegations against her and on her path forward,” said Mike George, QVC’s president and CEO in a letter posted on the company’s website.

But QVC left the door open for Deen to return. “Some of you wonder whether this is a ‘forever’ decision — whether we are simply ending our association with Paula,” continued George. “We don’t think that’s how relationships work. People deserve second chances.”

Deen issued her own statement that was posted on QVC’s webpage. “As you know, I have some important things to work on right now, both personally and professionally. And so we’ve agreed that it’s best for me to step back from QVC and focus on setting things right

The developments are the latest blows dealt to Deen since comments she made in a court deposition became public.

Earlier this week, Wal-Mart Stores Inc., Target Corp. and Home Depot all announced that they plan to stop selling cookware and other items with Deen’s brand.

Meanwhile, on Thursday, Novo Nordisk said it and Deen have “mutually agreed to suspend our patient education activities for now.” Deen had been promoting the company’s drug Victoza since last year, when she announced she had Type 2 diabetes

On Monday, pork producer Smithfield Foods dropped her as a spokeswoman.

Caesars Entertainment also announced that Paula Deen’s name is being stripped from four buffet restaurants owned by the company. Caesars said that its decision to rebrand its restaurants in Joliet, Ill.; Tunica, Miss.; Cherokee, N.C.; and Elizabeth, Ind., was a mutual one with Deen.

Last week, the Food Network said that it would not renew her contract.

The stakes are high for Deen, who Forbes magazine ranked as the fourth highest-earning celebrity chef last year, bringing in $17 million. She’s behind Gordon Ramsay, Rachael Ray and Wolfgang Puck, according to Forbes.

Paula Deen Enterprises, which spans from TV shows to cookware and furniture, generates total annual revenue of nearly $100 million, estimates Burt Flickinger III, president of retail consultancy Strategic Resource Group.

But Flickinger estimates she could lose up to 80 percent of her business by next year as suppliers extricate themselves from their agreements.

Not every company Deen does business with has severed ties. Among other stores that sell her products, Kohl’s Corp. declined to comment, while Macy’s Inc. said Thursday that it continues to “monitor the situation.”

Hoffman Media LLC, the publisher of “Cooking with Paula Deen” magazine, announced Friday that it will continue publishing her bi-monthly publication.

“Hoffman Media has worked closely with Ms. Deen since 2005,” said Eric Hoffman, executive vice president and chief operating officer for Hoffman Media in a statement. “The recent images portrayed by the media do not reflect the person we know on a personal or a professional level.”

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