Supermodels claw riches from beyond the catwalk

Sindy-style dolls of fashion's big names look set to be a lucrative business.

Alan Hassenfeld, the chairman of Hasbro Inc, was playing tennis with film producer Jean-Yves Lefur when Mr Lefur asked whether Hasbro would be interested in making a toy doll which looked like his supermodel girlfriend, Karen Mulder.

Shortly after the game Mr Hassenfeld contacted Mr Lefur and told him that Hasbro wanted to follow up the supermodel doll idea. They subsequently agreed that three Sindy dolls should be manufactured that would be modelled on Claudia Schiffer and Naomi Campbell as well as on Karen Mulder. Mr Hassenfeld wanted to see them in toyshops where they could compete with Barbie dolls for the affections of doll-mad schoolgirls.

Yesterday Hasbro's supermodel dolls were unveiled in Paris for the first time, although because of production problems they will only appear in the shops this summer. The supermodels themselves will be entitled to pick up a royalty of at least 5 per cent of the wholesale price for each sale.

It is all a long way from the catwalk where Claudia, Naomi and Karen first made their names. But the deal symbolises the way the modelling industry is rapidly diversifying away from traditional lines in order to exploit the supermodels' growing notoriety.

Modelling is already big business, particularly for the supermodels' agents, who take up to 40 per cent of each dollar earned by their models.

Elite Model Management and Ford Models, the world's largest agents, are private companies that do not disclose their accounts, but industry experts estimate that they together turn over about $150m each year, representing between one-third and half of the entire industry.

That does not mean that their positions are impregnable. Far from it. Ever since supermodels became household names, the conventional model agencies have become increasingly vulnerable to - and touchy about - the cutthroat competition that is closing in on them from all sides.

The models want the agents to take less commission, the leading fashion houses are trying to reduce what they pay top models for appearing on the catwalk, and rival agencies are trying to entice away the larger agents' highest-earning assets, the supermodels.

New income streams from licensing and endorsements and from publishing and television contracts are like manna from heaven for the cash-strapped agents, who will do anything to improve their flagging margins.

Last week, when I talked to Katie Ford, the Harvard Business School graduate who is currently running Ford Models, she initially refused to be interviewed about why she has lost so many models.

But when I asked if it had something to do with the successful diversification strategy being pursued by Mark McCormack's IMG modelling agency, she immediately launched into a withering attack on the agency which has lured 10 models away from Ford. The defecting models include stars such as Lauren Hutton, Ralph Lauren girl Bridget Hall, Almay girl Vendela, Patricia Velazquez and Elaine Irwin. So far only Ms Velazquez and Ms Irwin have returned to Ford.

Ms Ford criticised IMG, saying it had failed to find exclusive cosmetics and fashion contracts for the top models it had hired, and she claimed that IMG was boasting excessively about its endorsements and licensing capabilities.

"They are very strong when it comes to pitching to our models, but so far they have not delivered what they have promised. They may have obtained a sunglasses licensing deal for Lauren Hutton, but we've done just as many licensing and endorsement deals for our models. For example, Christie Brinkley has had a sunglasses and a jewellery deal, and Veronica Webb has had a contract for Conway Stores, [the clothing chain based in the US]. I'm in the process of negotiating ownership licensing deals where our models will end up with equity in the licensor. Don't let IMG tell you that they are the only ones who are proactive. We are proactive too. We don't just wait for the deals to come to us."

In spite of all this criticism, Mr McCormack's IMG Models, backed as it is by the $1bn-per- year IMG group, is, in theory at least, better equipped than any other agency to dominate the industry as it changes.

"No one else is totally global," Mr McCormack says. "It is not easy for the other agents to challenge us. We have 70 offices in 29 countries, which is very expensive. They are manned by experts in merchandising, publishing, licensing and sales and marketing." Licensing alone earns IMG's celebrities royalties in excess of $120m per year. Mr McCormack also has a television production company and an events division that is trying to set up a series of a mobile catwalk tours, and IMG is trying to sell the exclusive right to film the catwalk shows to television companies.

Chuck Bennett, the head of IMG's modelling division, believes that Ms Ford's comments on IMG are mis-conceived. "The last time I looked, Ford did not have a staff of 28 full-time licensing specialists around the world - as we do - to generate opportunities for their clients. It is true that we have so far only completed one licensing deal for our models apart from the more commonplace calendar deals. However, you should not judge our success in licensing by the number of deals we have done."

Mr Bennett said there were many reasons why his models have turned down licenses: "Two years ago one of our stars refused Mattel's request to lend her name to a supermodel doll because she needed to consolidate her position in the fashion industry first. On other occasions, I have advised top models not to license their names because I felt they would obtain more income if we were able to develop their images first by setting up endorsement deals for them. Licensing is not just something to add on as soon as she becomes well known."

That explains why IMG is currently specialising in setting up a string of endorsement contracts for its top models. Stephanie Seymour has recently endorsed Diet Coke on a television commercial and Tyra Banks has done the same for Nike Shoes.

"You will only be able to tell whether we are the best licensing company for models in five years' time," Mr Bennett said. "For the moment, we have to rely on our models having confidence in our ability to maximise their income through licensing programmes when the time is right because they know our track record with other celebrities."

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