Talk-show host's battles with sweat shops has big implications for other celebs with clothing lines

By Dana Kennedy
Updated June 14, 1996 at 04:00 AM EDT

Go ahead, call her ugly. Or untalented (remember, she said we could). But whatever you do, don’t call Kathie Lee Gifford stupid.

After the Live With Regis & Kathie Lee host was nailed by the National Labor Committee because her Wal-Mart clothing line had once been stitched by children in Honduras — then busted again because some garments were being sewn at a Manhattan sweatshop — Gifford took affirmative action. By hiring damage-control guru Howard Rubenstein, who remade Gifford into a labor crusader, Reege’s other half turned a crisis into a PR bonanza. Trailed by news cameras, her husband, Frank Gifford, doled out envelopes containing $300 each to sweatshop workers; Kathie Lee also held press conferences with Labor Secretary Robert Reich and New York governor George Pataki to spur action on labor issues. ”She was handed a lemon, and she made lemonade,” says Michael Sitrick of Sitrick and Co., a PR firm that specializes in crisis management. ”This is a very successful turnaround.”

But the celebrity-licensing and endorsement business doesn’t end with Kathie Lee. ”Maybe this was a blessing in disguise,” says one publicist. ”By calling attention to the problems, it’s saving other celebs grief.” For those poised to sign a deal, a primer on selling:

To pitch or not to pitch? Fearful of tarnishing their images, will luminaries stop vending their names? Three words: Are you kidding? According to Gifford, the Wal-Mart line made $300 million its first year (she reportedly earned $9 million). Similarly, Jaclyn Smith’s Kmart fashions brought in an estimated $200 million last year. Even the payoff for merely pitching a product is sweet. ”We’ve not done any commercial deals for less than six figures,” says Rita Tateel, president of the Celebrity Source in L.A. Adds T.J. Escott, president of Cunningham, Escott and Dipene, a talent agency that brokers many such arrangements: ”It’s as if the world is now show business and everything’s for sale.”

The art of the deal The Kathie Lee incident won’t spell disaster for the endorsement industry but will likely influence future contract negotiations. ”There will be a ripple effect,” says Joel Hochberg, a VP at the ad agency Foote, Cone and Belding. Before signing, celebs ”may scrutinize the companies more than ever…to make sure everything’s on the up and up.”

Practicing safe sells What happened to Gifford could happen to anyone. So for stars considering pitching, Noreen Jenney, president of the Celebrity Endorsement Network, recommends digging deeply into company practices. ”It’s not something celebrities usually ask about,” Jenney says, ”but it will be now.” And savvy stars, says Sonjia Warren Brandon, head of Commercials Unlimited, Inc., will stick with ”big corporations.”

Apparel manufacturing is fraught with labor infractions; makeup products are under fire from animal activists; even Carnival Cruise Lines, for which Gifford is a spokesperson, is taken to task in the current Spy for registering its ships in war-embattled Liberia, where safety and labor regulations have come under scrutiny. Is any product risk-free? Insiders say no. ”Who knows where it will end?” asks Brandon. ”You can drink water and choke too.”

Reporting by Jennifer Pendleton and Geoff Williams