Paula Deen Gets Cash Infusion: Time for a Comeback?
Feb. 12, 2014 — -- It may be time for a "Paula Deen comeback," now that she has an approximate $100 million investment for her business ventures.
Paula Deen Ventures, which includes Paula Deen Foods and Paula Deen Media, announced that it received an investment of between $75 million and $100 million from investment firm Najafi Companies.
Last summer, Deen faced a media firestorm after one of her employees at a Savannah, Ga., restaurant, Lisa Jackson, sued her for racial and sexual discrimination. After Deen admitted to using racial language, companies like the Food Network and Smithfield Foods dropped their deals with her.
Larry Woodard, Graham Stanley Advertising CEO and president, said Deen can "certainly" make a comeback.
"She resonates with her core fans based on the authenticity of her culinary expertise. That didn't go away, and this investment will give permissibility to that audience," said Woodard, advertising columnist for ABCnews.com.
In August, a federal judge in Georgia threw out the racial discrimination claims against the celebrity chef, who then reached a settlement with Jackson.
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"The American public loves the comeback story," said Woodard, advertising columnist for ABCNews.com. "She will have to overcompensate to the audience she slighted in order to gain full credibility, but we forgive our celebrities. Their mistakes humanize them."
Najafi Companies, based in Phoenix, was started by Jahm Najafi, who owns BMG Music Service. Deen was introduced to him through a mutual friend, the Wall Street Journal reported.
Najafi said his company has a "deep respect" for Deen's brand and that has a "loyal fan base," in a statement released on Wednesday.
A spokeswoman for Deen declined to comment about the investment from Najafi, which did not respond to a request for comment.
Deen's empire also includes her hand in restaurants, cookware and home products.
Along with the injection from Najafi, her company is also receiving a new CEO, Steven Nanula, who previously led Paula Deen Food Company. Nanula said the company is in talks with television networks, retail chains and other companies, but declined to name them, the Wall Street Journal reported.
"I couldn't imagine a better partner than Jahm Najafi, with his track record of success. Jahm's vision, attention to detail and entrepreneurial spirit will help us grow to new heights," Deen said in a statement. "Jahm and Steve are both so well respected as leaders. I know this is the right decision to lead my team, as we continue to share quality products with my fans -- whose love and support have built my brands."
Matthew Hiltzik, president-CEO of crisis management firm Hiltzik Strategies, said the marketplace will determine whether the timing is right for Deen's comeback.
"If her core audience is still intact, then she has a chance to potentially engage them in a deeper way, but only time will tell," Hiltzik said. "While her overall universe may be smaller, she will be able to engage more deeply with her core fans."
He suggested Deen might create more digital content online to reach her fans directly.
"I don't know if she will come back stronger, but her company could be better positioned for additional revenue, if she makes the right changes," he said.
