The Hershey Story (The New Attraction)


Business Report: TeenNick Chairman Nick Cannon

Cannon on being taken seriously as a young mogul on-the-rise

Multi-talented actor, comedian and entertainment industry executive Nick Cannon shares his story with host Caroline V. Clarke [2] on this week’s edition of the Black Enterprise Business Report [3]. Named to the Black Enterprise 40 Next [4] list of achievers under the age of 35, Cannon is America’s youngest television executive. As the chairman of NickToons [5], he’s charged with guiding the future of the brand from green-lighting programming to promoting shows and boosting ad revenues.

Among Cannon’s successful programming credits is the network’s HALO Awards [6], for which he’s the creator and talent. The show outperformed the network’s average ratings among teens (12–17) by more than 27% and total viewers by 36% in its time slot. The self-professed “Entrepre-tainer” simultaneously runs his own entertainment company and hosts a morning radio show on CBS Radio and NBC’s hit reality show America’s Got Talent.

Master of the Brand: Bernard Arnault

On a crisp late October afternoon in Paris Bernard Arnault, Europe’s richest man, is talking about his upcoming trip to one of the fastest-growing outposts of his LVMH empire: Mongolia, of all places. “I like to see the reaction of the people in the shops,” says the 61-year-old mogul in lightly accented but supple English. Dapper and slim, he wears a navy suit and matching tie made by his flagship fashion label, Christian Dior, and handmade black loafers by Berluti, one of the lesser known but most exclusive of the 60-plus brands in his stable. “I also like to see the competition,” he adds. “I am quite competitive. I want to stay ahead and increase our advance.”

Ahead he is by a long shot, not just in numbers–LVMH stock rose 60% in the last year, vaulting his net worth to $39 billion–but also in global reach. Arnault has long made a crusade of bringing haute couture to the developing world, to places like China, where the first Louis Vuitton store opened in 1992, and India. Now he is staking a claim in central Asia, better known for yurts, nomads and yak milk than Fendi bags and Guerlain perfume. But last year LVMH Moët Hennessy Louis Vuitton, as it is formally known, opened a store in Mongolia’s capital Ulaanbaatar, a metropolis of 1.1 million, 120 miles from the Russian border; weeks ago it set up shop in Inner Mongolia’s Hohhot, within the borders of China. The first store is already profitable.

In early November Arnault visited six Asian cities in seven days in his private jet, accompanied by two close advisers: daughter Delphine, 35, number three at Dior, who oversees the stores; and Dior chief and longtime consigliere Sidney Toledano. At the end of the month Arnault will return to Asia with his son Antoine, 33, communications head of Louis Vuitton. The days will be long and focused on details. “Sometimes he adjusts a bag on a store shelf by 5 centimeters,” says Antoine. “At 10 p.m. he’s still going. He’s got an energy that’s just amazing.”

He will need it. To maintain LVMH’s blistering growth–and its perch as the world’s largest purveyor of luxury goods–Arnault must continue to push into more remote regions of the globe. Among its 2,468 retail stores there are now outposts in Ho Chi Minh City, Vietnam; Phnom Penh, Cambodia; Yekaterinburg, Russia; Macao; and Abu Dhabi. (Under consideration: Lhasa, Tibet.) “Today it’s clear that the world is driven by the growth of Asia and emerging countries,” says Arnault. “Vuitton has always been a pioneer. We were the first to arrive in China. There were only bicycles when we opened there, no cars.” Now there are 35 stores in China. While Asia (excluding Japan) has accounted for 25% of total revenue this year, its growth rate outstrips every other geographic area. Operating profits in places like Brazil, China, India and the Middle East hover between 20% and 25%. That’s less than in Europe and the Americas, where spending power is mightier. But “saturation rates are higher” in the West, points out Allegra Perry, who covers luxury goods for Nomura in London. “So [LVMH] keeps spending in emerging markets, which are on the forefront of growth.”

But they’re also risky territory. Luxury goods follow cycles, and the industry has been in an upswing, despite the worldwide blues. That’s partly because the economies of developing countries–Mongolia, Lebanon, Poland and Vietnam among them–have been on fire. LVMH has been a pioneer in such markets, “starting with the millionaires and going down and down and down,” says Luca Solca, a retail analyst at Sanford C. Bernstein in Zurich. Arnault has enjoyed the fruits of first-mover advantage, planting his brands in the best retail locations at relatively low costs.

Scalding economies cool. As its GDP galloped along at 9% or 10%, the People’s Bank of China recently raised interest rates to calm inflationary fears; a jolting pullback in consumer spending could hurt LVMH. “If China has a cold,” opines Solca, “luxury goods get pneumonia.”

Arnault is well prepared. He has survived recessions and the consequences of terrorist attacks and SARS scares. He is battle-hardened from many corporate fights. He has put in place a creative management group that thinks long term.

Capturing developing countries is just one piece of LVMH’s strategy. Arnault sees unexploited possibilities in richer countries, too. That insight is driving new store openings or expansions this year in Paris, London and Dusseldorf, in Santa Monica and New York. “They look at pockets of wealth,” says Antoine Belge, who covers LVMH for HSBC in Paris. The company is also keeping its eye on the U.S. immigrant population, Belge says, because “people of Hispanic and Chinese origin spend more on luxury goods.” So, apparently, does the population at large. During the worst of the downturn last year, he adds, “some American women decided they would spend less on food or travel and buy a Louis Vuitton handbag.” Proof : While sales slipped 0.8% from 2008 to 2009, to $23.5 billion, and profits dropped 7.6% to $2.7 billion, net profits and revenue in the first half of 2010 have snapped back 53% and 16%, respectively, as LVMH earned $1.4 billion on sales of $12.6 billion.

Capitalizing on familiar territory, LVMH recently announced it had paid $2 billion for a 17.1% stake in Hermès International, the highly profitable maker of silk scarves, ties and the top-selling Birkin bag–and long a target of Arnault’s acquisitive desires. The investment (at a bargain-basement $112.50 per share, thanks to a derivative contract called an equity swap) is a coup for LVMH; as one of the few remaining stand-alone luxury brands not owned by a conglomerate, Hermès would have been the golden fleece for competitors Richemont and Gucci. Though LVMH quickly denied it would try to take control of the 173-year-old Hermès, the stage is clearly set. It may be a long drama: Three-quarters of the company is still in the hands of 200 Hermès family members. Winning them over could take decades.

That’s okay; LVMH is built to endure. Its dozens of iconic wines and spirits (including Moët & Chandon and Veuve Clicquot), fashion and leather goods (Vuitton and Dior), perfumes and cosmetics (Givenchy and Guerlain), jewelry and watches (including TAG Heuer) and duty-free shops span mid- and high-priced goods, mass and class. Prices range from $12 for lipstick at Sephora to around $2,800 for the popular Lady Dior handbag and $21,000 for a Hublot watch. All divisions have performed well since January, especially the fashion and leather group, where sales popped 20%, and watches and jewelry 29%.

For Arnault these are not just products with plump profit margins (50% for Dom Pérignon, 40% for Vuitton). They are living artifacts of a great nation. “I see myself as an ambassador of French heritage and French culture,” he proclaims. “What we create is emblematic. It’s linked to Versailles, to Marie Antoinette.” And beyond. Among his massive collections are a hat worn by Napoleon and a 1951 fashion sketch by Christian Dior. At the same time Arnault infuses many of his brands with a cutting-edge hipness.

He transformed Louis Vuitton, known as a sturdy, if hopelessly staid, trunkmaker. When Arnault finally took charge of LVMH in 1990, after an acrimonious, three-year-long struggle, he brought in American fashion designer Marc Jacobs, who introduced a ready-to-wear Louis Vuitton fashion collection and collaborated with high-profile contemporary artists like Takashi Murakami. The Japanese artist redid the brown-and-tan LV logo in bright colors and manga cartoon figures, in a special line of bags that scampered off the shelves. At Dior Arnault hired bad-boy Brit John Galliano to shake up the grandmotherly label.

Arnault is said to get along famously with the eccentrics he hires to make over his brands.(“I remember precisely the first time I met [Galliano] in my office. My assistant said, ‘There is a very strange guy in the lobby with rasta hair and a T-shirt.'”) But in an interview he comes across as reserved, preferring to sit in an antechamber rather than inside his more comfortable, spacious corner office on the tony Avenue Montaigne. “The key to success is this duality–timelessness and the utmost modernity,” he says.

Another expression of Arnault’s allegiance to modernity is his vast corporate collection of more than 1,000 works of modern and contemporary art, which he’s decided to showcase in his audacious new museum designed by Frank Gehry and built at a reported cost of more than $200 million. Set to open in late 2012 in the middle of a fabled Paris greenspace, the Bois de Boulogne, the giant glass-encased structure will look like “an iceberg dressed in a cloud,” as Arnault cultural adviser Jean-Paul Claverie has described it (see p. 72). Known officially as the Louis Vuitton Foundation for Creation, the museum complex will also have an auditorium and restaurant and will serve as a monument to Arnault’s role as global arbiter of taste, while telegraphing his corporate brands’ commitment to art and high culture.

How to keep all this going, controlling LVMH’s image and quality along with hundreds of products moving through the vast circulatory system of suppliers, manufacturers, retailers and marketers, keeping 76,000 employees focused on and proud of their work? Force of character–there is a superabundance of that–drives a lot of it. But that’s clearly not enough. “One key element of management of a group like this is decentralization,” says Arnault dryly. “You need the right team of inspired managers.”

For Arnault that means a small group of a half-dozen trusted generals, most of whom head up his flagship brands, augmented by two of his children. They include Yves Carcelle, chief of Louis Vuitton; Toledano, who leads Dior; Pierre Godé, LVMH’s vice chairman; Philippe Pascal, in charge of watches and jewelry; Christophe Navarre, who runs wines and spirits; and Nicolas Bazire, chief of development and acquisitions. All of them, besides Antoine and Delphine Arnault, have worked with their boss since the mid-1990s, some longer. Arnault meets with each member of his inner circle at least once a week, going over performance figures and plotting strategy. It was Arnault who suggested to Carcelle that Vuitton hire Mark Jacobs in 1997 and who chose Galliano for Dior, moving him from Givenchy in 1996.

Arnault likes to see the company “on the ground.” He constantly prowls LVMH retail stores, firing off memos when he thinks the music is turned up too loud or the thermostat is set too low. The memos also include praise of employees he finds especially helpful or solicitous.

“He’s like a helicopter,” says Toledano. “He has a very big picture, but he can also go on the floor and see a product.” Less hands-on with the beverage group than he is with the fashion and retail side of the business, Arnault nevertheless tracks the progress of all the Moët-Hennessy brands, which include wineries in California and Australia. He has daily contact with cultural adviser Claverie. Arnault says he wants all his managers to take charge of their divisions as though they were family enterprises. “Louis Vuitton should be run as if Yves Carcelle owns the brand,” he says.

Ownership certainly applies to kinship. “Our goal for the group is to remain a family company,” Arnault declares. Though Delphine and Antoine say they were never pressured to work for their father, they felt included in the business from an early age. When Arnault was wrestling for control of LVMH in 1989, Antoine, then 12, remembers, “He was always explaining to me what was going on.” After he took over the group Arnault spent Saturday mornings in Paris, taking his son and daughter to visit LVMH-owned shops.

“He always said, ‘If you want to work with me, you have to work harder than the others and do well in school,'” recalls Antoine, garrulous and model handsome and, like his father, clad in a Dior suit, matching tie and Berluti loafers. After earning his M.B.A. at Insead, Antoine spent two years launching, then selling, an Internet venture and toiled for three months as a sales assistant at the huge Vuitton store on the Champs Elysées selling handbags, before taking a management post responsible for 13 stores outside Paris. Delphine also labored in the LVMH retail trenches, as a perfume salesgirl at the Paris Dior boutique. She studied at the London School of Economics and worked at McKinsey before joining her father’s company in 2000. (She is married to Alessandro Vallarino Gancia, who runs his own finance company and serves on Dior’s board.)

Unsurprisingly, both young Arnaults express reverence for their father. “I think he’s a visionary, one of the most visionary of his generation,” says Delphine. A strikingly tall, slim blonde, more shy than her brother, she was still in her office at Dior headquarters at 7:45 p.m. on a Thursday evening. “I feel very lucky to be part of what he is creating.”

Arnault has three other children from his second marriage, in 1991, to Hélène Mercier, a French Canadian pianist: Alexandre, 18, Frédéric, 15, and Jean, 12. These days Arnault does his Saturday morning retail tour with Alexandre, who has already expressed interest in joining LVMH.

Patrimony has deep roots. Arnault was raised to go into the family business, a construction company called Ferret-Savinel in the northern industrial city of Roubaix. At age 7 he visited building sites with his grandfather, learning the importance of hard work and giving Arnault “the flavor of entrepreneurship.” After earning an engineering degree at Paris’ prestigious Ecole Polytechnique in 1971, he joined his father, taking charge of the company at age 25. In the early 1980s he spent three years in the U.S. trying to establish a branch of the family business as a developer of Florida real estate. The venture didn’t work out, but Delphine and Antoine learned flawless English. Arnault brought home an aggressively American approach to taking over and running businesses. It has made him a terrifying competitor.

In 1984, when the French government was looking for someone to take over a bankrupt textile and disposable-diaper business called Boussac, Arnault convinced Lazard Frères to add $80 million to his $15 million of Arnault family money. The bedraggled company included one jewel, fashion house Dior, and Arnault quickly stripped away the other businesses. Dior had earlier sold its perfume brand to Louis Vuitton Moët-Hennessy (the result of a 1987 merger). Arnault coveted the label, so he used the $400 million from selling off Boussac’s assets and, backed by Lazard, took advantage of dissent within the Louis Vuitton Moët-Hennessy ranks, siding with Vuitton Chief Henri Racamier to oust Moët-Hennessy’s Alain Chevalier. Then, buying up sufficient shares and exploiting the courts to amend corporate bylaws, Arnault deposed Racamier and seized the entire company in 1990.

He took charge immediately, sweeping much of manufacturing and distribution under his control. In order to extend LVMH’s reach across a range of high-end brands, Arnault turned into a binge acquirer. Throughout the 1990s he paid billions of dollars for fashion labels that included Fendi, Kenzo and Thomas Pink; jewelry and watchmakers Chaumet, Zenith and TAG Heuer; and retail chains like DFS and Sephora. He also bought a handful of ultrahaute boutique companies like Berluti, which makes custom men’s shoes.

There have been spectacular busts. After failing to bag Sotheby’s, Arnault paid a reported $97 million for Phillips, a distant number three auction house, in 1999. Hurt by the plunge in business following Sept. 11, Arnault dumped Phillips in early 2002. His one attempt to create a fashion brand ended badly. Founded in 1987, Christian Lacroix–an eponymous label whose strategy was to start with couture items to grab attention, then introduce a ready-to-wear line–never quite clicked. Arnault unloaded it in 2005; it filed for bankruptcy last year. Most dramatically, Arnault tried and failed to turn a minority stake in fashion house Gucci into control of the company but lost to French billionaire François Pinault’s Pinault-Printemps-Redoute–setting up a rivalry on several fronts (including fashion and art collecting) that persists today.

Until his latest move on Hèrmes, Arnault contented himself with emphatic and creative brand extensions, infusing classy labels with a sense of contemporary cool, carefully controlling quality through his trusted aides. At corporate headquarters on Avenue Montaigne, which houses Paris’ biggest Dior boutique, Delphine oversees the haute couture atelier on the top floor, where three dozen seamstresses stitch triple silk organza, hand-painted with purple flowers, that will adorn a one-of-a kind gown designed by John Galliano that might cost $35,000. Each dress is fitted to its own custom-made white muslim dressmaker’s dummy, labeled with the client’s name, many of them the wives of Middle East oil barons.Though the prices for these creations seem high, the labor costs are astronomical. It can take several hundred hours to produce a single garment. A loss leader for LVMH, haute couture underscores Dior’s image as the ne plus ultra in French fashion. It also supplies the costumes for the twice-a-year catwalks in Paris that generate excitement and new customers.

Antoine has made his own splash by convincing his father to run an arresting series of ads with luscious photographs shot by Annie Liebovitz of such familiar but surprising faces as Mikhail Gorbachev and Keith Richards. Arnault père resisted at first. After Antoine explained that Gorbachev would be shown with the Berlin Wall, he won over his father. “When I said, ‘It’s almost an homage to what he did,’ then he’s like, ‘It’s your business,'” recalls Antoine. Keith Richards was a tougher sell. “He didn’t know who he was,” Antoine smiles. An accomplished classical pianist whose favorite composer is Chopin, Arnault hadn’t heard the name of the Rolling Stones’ guitarist. The latest campaign, featuring rock star (and Forbes Media shareholder) Bono and wife, Ali Hewson, disembarking from a plane in the African bush, was also Antoine’s idea.

LVMH’s management team and family strategy are working well for now. One day, Arnault hopes, his three younger sons will step into the business. Who will succeed him? Whoever turns out to be best suited for the job, he always says. Don’t look for Dynasty-like intrigue. “I think we’re smarter than that,” says Antoine, leaning back in a leather chair. “We have a good 20 to 25 years to think about our future. He’s not going to step down anytime soon.”

The immediate future isn’t quite as clear. While an October Bain & Co. luxury market report forecasts continued growth in the sector of 3% to 5% in 2011, so much depends on the global economy. LVMH’s expansionist approach in markets like China holds huge prospects–and some peril. A significant slowdown means fewer customers for Lady Dior bags (that brand’s bestseller in China). Other hurdles loom. While China is the number one market for Hennessy cognac, Moët-Hennessy managers say they must contend with a feeble distribution system and prohibitive import taxes that can run as high as 50% in China and an astronomical 200% in India.

The puny recovery in Europe and the U.S. is another worry. There will be no more stimulus plans to hand extra dollars to consumers, as there were last year. The West still feeds LVMH two-thirds of its revenue. Arnault shrugs. “Right now we have a good equilibrium,” he says, referring to the three-legged revenue stool of Europe, the Americas (Brazil is a big growth market for the group) and Asia.

Economic calamity, corporate battles, self-made setbacks–Arnault has lived through them all before and emerged stronger than ever. As Vogue Editor in Chief Anna Wintour puts it, “I think he’s pretty much unstoppable.”

By: Susan Adams and Hannah Elliott (Forbes)

John H Johnson: The man behind Ebony Magazine

John H. Johnson, who used his mother’s furniture as security for a $500 loan to start the business empire that eventually included Ebony and Jet magazines and that made him one of the nation’s richest and most powerful black businessmen, hear his story….

John H. Johnson

Mr. Johnson had major holdings in book and magazine publishing, cosmetics, television and radio and in 1982 was the first African-American on Forbes magazine’s list of the 400 wealthiest Americans.

He sometimes said he was in the business of inspiring people, heralding achievements like the first black woman to become a Rhodes scholar or the black man who sent three daughters through medical school. But his publications could also bristle with indignation over the sting of racial discrimination, as reflected by a 1965 cover: “The White Problem in America.”

As the magazines that Ebony used as models, Life and Look, slipped away, Ebony maintained a large presence in black households and last year had a circulation of 1.6 million. Mr. Johnson also published other magazines, including EM (Ebony Man) and Ebony Jr. His company’s Fashion Fair Cosmetics brand is among the leading makeup and skin-care companies for women with darker skin.

John Harold Johnson, the grandson of slaves, was born in Arkansas City, Ark., on Jan. 19, 1918. He was a boy when his father, Leroy, a sawmill worker, was killed in a mill accident. His mother, the former Gertrude Jenkins, married another mill worker.

He attended a segregated school, but the town lacked a high school for blacks. He repeated eighth grade rather than dropping out. In 1933, he and his mother visited the World’s Fair in Chicago and decided to stay. His stepfather later joined them.

The family lived on welfare, and then on what his stepfather earned in a New Deal public works program. Mr. Johnson got part-time work in the National Youth Administration, another New Deal initiative. He also starred academically at an all-black high school and was president of his class and editor of the school paper.

When he graduated in 1936, he spoke at a dinner held by the Urban League. Harry Pace, president of the Supreme Liberty Life Insurance Company, was so impressed that he offered him a job and a scholarship to attend the University of Chicago.

Mr. Johnson dropped his studies at that university, though he later took course at Northwestern University’s School of Commerce. He became editor of Mr. Pace’s internal company magazine. Since the insurance company catered to blacks, Mr. Johnson spent much time culling and digesting articles on blacks from other publications.

He married Eunice Walker in 1941. She and their daughter, Linda Johnson Rice, president of Johnson Publishing, survive him, along with a granddaughter. His son, John Harold Johnson Jr., who had sickle cell anemia, died at the age of 25 in 1981.

In 1942 while Mr. Johnson was still an employee at Supreme Life, he persuaded his mother to help him borrow $500. He asked 20,000 of the company’s policyholders for $2 to subscribe to what was still a nonexistent magazine. About 3,000 people did so. That June, he published Negro Digest, modeled on Reader’s Digest.

To get the magazine on newsstands, he got 20 friends to ask for it. The newsstands then called distributors and requested it. After his friends bought the magazines, Mr. Johnson resold them.

The same strategy was applied in other cities, and within a year, Negro Digest had a circulation of 50,000.

Inspired by his success, Mr. Johnson began planning a magazine with flashy covers like those of Life. He said that his goal was to “show not only the Negroes but also white people that Negroes got married, had beauty contests, gave parties, ran successful businesses, and did all the other normal things of life.”

His wife came up with the name Ebony. The first 25,000 copies immediately sold out.

Its advertising was distinctive among black publications at the time because it promoted general merchandise, as well as products like hair straighteners aimed at blacks. Ebony strove to glamorize consumption, at first with cover girls, and some suggested the effect was to play down serious issues at a time blacks were still excluded from many areas of American life. But many readers were glad for the uplift.

Mr. Johnson started Jet in 1951 to highlight news of African-Americans in the social limelight, politics, entertainment, business and sports.

In 1973, Mr. Johnson started the Fashion Fair Cosmetics line after models in the Fashion Fair touring fashion show, his wife’s project, had trouble finding dark makeup.

In 1990, Mr. Johnson told The New York Times that he was not altogether happy that 12 percent of the readers of Ebony and Jet were white.

“This is more than I would like to have,” he said. “I want to be king of the black hill, not the mixed hill.”

He also advised young blacks against joining a white-owned corporation unless they were satisfied with being vice president.

“But if, like me, you’re temperamentally unsuited to that and want to reach the top, do something else,” he said.

Source: The New York Times

NEWBOS: The Rise of the New Black Overclass



It’s an American success story. Self-made black multimillionaires, many of whom grew up poor,
have made vast fortunes in the sports, entertainment and media industries.

The new moguls made their millions under the age of 40, primarily by taking more ownership and control over their brands than their predecessors. Collectively, black athletes in the NFL, NBA, and in Major League Baseball earned nearly $4 billion last year and the nation’s 20 highest-paid hip-hop entrepreneurs brought in more than $500 million.   Now, with their newfound wealth come responsibilities to their family, friends, and community.

Based on Lee Hawkins’ forthcoming book of the same title, NEWBOs: The Rise of America’s New Black Overclass examines the growing responsibilities of black celebrities in the Obama age. The project features personal stories and interviews with some of the biggest names in sports and entertainment.  It’s an inside look into how each successful NEWBO surmounted challenges to achieve the American Dream.

Diddy: The Modern Mogul

It was another day in the life of the mogul variously known as Sean Combs, Puff Daddy, P. Diddy and now just plain Diddy — a man of many names and plenty of products.

He already has his own clothing and fragrance lines, a restaurant and a lucrative deal with Ciroc premium vodka. He’s talked about opening a business school. And that’s not even to mention the main attraction — the music.

Amid a promotional orgy for the Diddy product du jour, a new line of headphones, the hip-hop star greeted me with enthusiasm.

“Whas up, how you doing man!” he said. “I’m such a fan of yours, I got a little bit nervous when I found out you were interviewing me.”

In a lengthy interview on an oppressively humid day in his hometown, New York City, Diddy expounded on the arts of self-promotion and self-preservation, aging, parenthood, acting and more.

Click here to watch the interview

Source: ABC News

The Fresh Prince of Streetwear

Jonathan Koon, auto-pimping mogul and designer, wants to be a billionaire by 30

Wearing red Hermès sneakers, a gray smoking jacket-cardigan hybrid of his own design, and five pounds of pure gold draped around his neck, Jonathan Koon walks around his Midtown Manhattan showroom inspecting his new line of high-end denim. Nearly a dozen pairs of hand-washed, uniquely distressed and abraded jeans from his spring 2011 collection are laid out on a coffee table. Koon picks up one pair and turns a pocket inside out to reveal his signature sartorial touch—an ancient Chinese poem, “Bringing in the Wine,” by the scholar Li Bai, inscribed in the fabric. “It basically says, ‘If there’s a chance to be happy, or a chance to drink, drink and be happy to your heart’s desire,’ ” Koon translates.

It also describes Koon’s philosophy. The precocious auto accessories mogul and ghetto-fabulous branding guru wants to be the Mark Zuckerberg of Asian streetwear couture. With the Jan. 3 launch of his Private Stock clothing line, Koon, 27, is hoping Americans will go as gaga for his Hong Kong-inspired jeans as they once did for Italy’s Diesel brand. Maurizio Marchiori, Diesel’s former U.S. marketing chief, is already a believer. “Jon has great potential,” says Marchiori, who mentored Koon through the design process. “This guy’s not a designer, he’s a visionary.”

While Koon may dress like a rapper and talk like a quant, he’s already thinking like a mogul. “We’ll be the next big denim company,” he says. “A billion-dollar company.” The first generation Chinese American has invested $2 million of his own money in Private Stock, which he’s soft-launching with 11 denim styles (priced between $110 and $325) and roughly the same number of polos and button downs along with lightweight jackets, bracelets, and watches—all befitting a modern adaptation of West Side Story set in the streets of Hong Kong. Certain limited-edition styles will be sold for up to $1,195 per pair.

Unlike many aspiring fashion designers, Koon is already a multimillionaire, having made a fortune tricking out cars. While attending Manhattan’s prestigious Stuyvesant High School, he and a friend launched Extreme Performance Motorsports with $10,000 of their personal savings. They opened wholesale accounts with Asian auto distributors and started importing custom body kits, aftermarket wheels and rims, floor mats, stereo systems, and all manner of specialized accessories that—in the age before MTV’s Pimp My Ride—helped usher in the blinged-out car craze. “It was almost like a virus that spread,” says Koon. “We struck a fair amount of success very quickly.” Koon says he made a million dollars within a year.

After shuttering the business while attending Georgetown University, Koon struck gold again, in 2004, by patenting Dubz, a hugely successful air freshener designed like a spinning car rim. He subsequently launched Sparkz (a lighting accessory), Klipz (a cell phone holder), and Ionik (an air ionizer), which helped establish his brand among record label executives and rappers. In 2008 hip-hop star Young Jeezy made Koon the exclusive partner in his apparel line, 8732. The clothing company now falls under the umbrella of Tykoon Brand Holdings, which is based in his native Queens, N.Y. The 27-person, privately held company, Koon claims, is worth $80 million.

Soon after joining 8732, Koon’s obsession with car parts was replaced by a fixation on street fashion. He traveled through Europe and Asia to scrutinize local styles and learned how to distress jeans at a denim washing house in Japan. Koon’s curiosity soon led him to start creating one-off trousers for what he describes as “big-time pop stars in Hong Kong and Tokyo,” though he declines to divulge their identities—”I don’t wanna name-drop,” he demurs.

Koon also caught the attention of Italian luxury goods designer Domenico Vacca. The two teamed up to create the Domenico Vacca Denim Collection, which landed in the designer’s boutiques last May and now falls under the Tykoon umbrella. “It looks like an unlikely partnership, but each is bringing something to the table,” says David Lipke, who covers menswear and denim for Women’s Wear Daily. “Domenico Vacca has a base of loyal clients that like his approach to somewhat fashion-forward gentleman’s tailoring, and Jon Koon brings a youthful attitude and some expertise in sportswear manufacturing.”

Breaking into the premium denim market on his own, though, will be a tougher challenge. It’s a highly competitive field, says Lipke, since it’s an attractive starting point for upstart designers and entrepreneurs. “There are a multitude of brands in the denim category, and the ones that thrive have dedicated, astute people behind them who live and breathe denim,” he says. Newer companies such as Hudson, J Brand, and AG Adriano Goldschmied were built from scratch and have come to saturate the marketplace. It’s a constant battle to stay on top of the trends that can quickly swing sales each season.

Bearing the harsh reality of the dungaree trade in mind, Koon is planning a slow expansion. He’s sinking an additional $3 million in Private Stock’s fall 2011 collection, which will expand to 40 bottoms, including 16 variations of jeans, plus an array of cashmere, bamboo, and poplin coats, shirts, and knitwear. In the meantime, his spring collection will make its debut in about 75 boutiques in the U.S. with the hope of eventually landing in trend-setting department stores. “The company, especially in this market, needs to grow organically,” says Marchiori. “It will be a long process, but if [Koon] follows his intuition and makes something that is really different and new, he will be able to do it.”

While that process might undermine Koon’s ultimate goal of becoming a billionaire by the age of 30, he’s still preparing himself with the trappings of moguldom. In a stunt that would make even The Donald proud, Koon had his business cards custom made from 18-karat gold. Why this marriage of stationery and bling? Says Koon: “So that nobody would ever forget me.”

By: Joe Pompeo (Business Week)

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