Michelle Singletary
Michelle Singletary
Columnist

Paula Deen’s Food Empire Takes a Financial Hit

Add Wal-Mart to the list of advertisers that have dropped celebrity chef Paula Deen after she recently acknowledged using a racial slur in the past, specifically the N-word.

Former employee Lisa Jackson is suing Deen and her brother, Bubba Hiers, for racial and sexual harassment. During a deposition, the Food Network Southern cooking star said that she had used a racial epithet in the past but not anymore.

The Latest Color of Money Columns

Saying no to a store credit account

Saying no to a store credit account

How to get a game plan to avoid the temptation.

Giving gift cards at Christmas used to feel lazy. Why I have no guilt this year.

Giving gift cards at Christmas used to feel lazy. Why I have no guilt this year.

Spending on gift cards is expected to reach $31 billion, an increase of 83 percent since 2003.

Free money? Try credit with a catch.

Free money? Try credit with a catch.

COLUMN | “Zero percent interest” programs can snare consumers — and if you get caught, it’s expensive.

Since then, her empire has been caving in like a deflated souffle.

On Wednesday, Dave Tovar, a Wal-Mart spokesman, said of the decision to drop Deen: “We will not place new orders beyond those already committed. We will work with suppliers to address existing inventories and agreements,” reports Anne D’Innocenzio of Huffington Post.

Wal-Mart has sold Deen’s products since 2011.

The pullouts are piling up. Ceasars Entertainment Corp., which runs Paula Deen’s Kitchen in four of its casinos, said they will be severing professional ties with the chef.

Smithfield Foods, where Deen has been a spokeswoman since 2006, said in a statement Monday that it “condemns the use of offensive and discriminatory language and behavior of any kind. Therefore, we are terminating our partnership with Paula Deen,” reported the Associated Press.

Late last week, Food Network said it wouldn’t renew Deen’s contract. The 66-year-old is host of the popular “Paula’s Home Cooking,” which specializes in Southern cuisine.

QVC and Sears Holdings Corp. said they were evaluating their relationship with Deen.

Deen discussed the fallout from the lawsuit Wednesday morning in an interview with “Today” show host Matt Lauer, including her admittance to using a racial slur and the effect it’s had on her business empire. During the interview, she became very emotional and appeared shaken. Deen said she used the N-word once after being held at gunpoint by a black man during a robbery at a bank where she worked.

Speculation is high on whether Deen can repair her image so she can keep on making millions.

“If I hear one more nitwit say, ‘She needs to get ahead of the story. . . ,’ ” D.C. crisis manager Eric Dezenhall told The Washington Post’s Reliable Source. “It’s called damage control, not damage-never-happened. You can’t put the toothpaste back in the tube.”

Deen’s empire, which includes restaurants, cookbooks, kitchenware, public appearances and endorsement deals, has been valued at around $6.5 million annually, according to Marshal Cohen, chief industry analyst for The NPD Group.

Will Deen’s tearful mea culpa save her career?

Maybe, but Dezenhall says Deen should stop talking: “Don’t give interviews for a year; then quietly resume work — and be content with less fame. Most people recover, but not at the same level.”

I agree. Stop talking, Deen. The more she tries to defend herself, the more damage she does.

TMZ dug up a video from 2012 in which Deen is being interviewed by the New York Times about racial issues. In the clip, Deen refers to the slaves her great-grandfather owned as the “workers” who helped him operate his plantation -- as if they were the paid help. She goes on to say that she believes the South is “almost less prejudiced because black folks played such an integral part in our lives. They were like our family.”

I like Deen and have enjoyed watching her cooking segments. I don’t think her livelihood should be jeopardized for things she said decades ago and regrets. But, really, they were like family?

If that weren’t bad enough, Deen then tries to make the point that she’s not racist and refers to a good friend who is African American and who came with her for the interview. While the friend is standing offstage, Deen says to the audience that they can’t see him because he is “black as that board.” She then calls to her friend: “Come out here Hollis. We can’t see you standing against that dark board.”

Last week, Deen released two video statements apologizing for her behavior, but that attempt at damage control failed to save her jobs.

“Paula Deen’s celebrity isn’t simply about her food. It was also about her being the loving mom/grandma people admired,” Eric Martin, a partner at branding firm Boost Partners, told Courtney Reagan of CNBC. “She had celebrity for being a nice, decent, giving person. Using racial slurs, no matter where one is from, but particularly in the South, strikes at the very heart of that image.”

Deen’s sons have weighed in defending their mama, asserting that she’s not racist but rather the victim of a former employee who wants to score a huge settlement. “I’m disgusted by the entire thing, because it began as extortion and it has become character assassination,” Bobby Deen told CNN.

When asked by Lauer if she wished she had lied about using the language, Deen said no, she didn’t want to lie under oath. Deen tearfully challenged that if there is anyone out there who has never said something that they wish they could take back that person should pick up a stone and throw it at her head. “I is what I is,” she said. “And I’m not changing. . . There’s someone evil out there that saw what I had worked for and they wanted it.”

Color of Money Question of the Week

Was it fair for some of Paula Deen’s business partners to drop her for racial slurs made in the past? Send your responses to colorofmoney@washpost.com. Put “Paula Deen’s Food Empire Takes a Financial Hit” in the subject line, and include your full name, city and state. You can also tweet your responses to @singletarym or @moneyquest.

Just Surviving

As you probably know, many people are living paycheck to paycheck. According to a survey by Bankrate.com, that’s a too common scenario for American households.

Of the 1,000 adults surveyed, 76 percent said that they don’t have an emergency account to cover necessities such as mortgage and medical needs. Fifty percent have less than a three-month cushion and 27 percent had no savings at all, reports Angela Johnson and CNN Money.

“It’s disappointing,” said Bankrate.com senior financial analyst Greg McBride. “Nothing helps you sleep better at night than knowing you have money tucked away for unplanned expenses.”

If you are having trouble figuring out how to save, here are some tips from MSN.com.

Ban the Box

As I wrote in a previous column, I’m particularly interested in the outcome of lawsuits filed by the Equal Employment Opportunity Commission against BMW and Dollar General. The companies are accused of violating Title VII of the Civil Rights Act by using information from criminal justice histories to screen employees, which has had a disparate impact on black and Hispanic workers and job applicants.

For last week’s Color of Money Question, I asked: “Do you think the questions about criminal convictions should be removed from job applications?”

“I believe that the ‘box’ should be removed from job applications,” wrote Stacey Thomas of Chambersburg, Pa. “Everyone deserves a second chance; my husband has a record, but he has changed, been looking for work for about three years now. Every time he puts in an application he marks it. He hardly ever gets a call for an interview, and if he does, after the interview he never hears back. It’s ridiculous. This would make an ex-criminal go back to committing crimes because they need to live somehow. We have four children, and it’s hard for me to do it all alone. The ‘box’ needs to go.”

“As a middle-class white dude living in one of the wealthiest counties in the country, I support banning the box. Decisions made from inexperience, naivete, or irresponsibility at an early age should not haunt someone for the rest of their life,” said Dan Larsen of Reston, Va.

Wrote Eunice Dixon of New Orleans: “I am in favor of employers conducting criminal background checks. Though I feel that this should encompass a question where individuals self-report past offenses, I do think judgments made based on those responses should be thoroughly considered before denying an applicant employment.”

Rhonda Gaines wrote on Facebook: “If everyone had an honest and thorough excavation of their past, they might acknowledge choices that could have earned them a conviction. If we don’t fix our broken systems, we all suffer! Allow people the chance to change. No one was convicted on Wall Street. Oh, that must mean they are good honest people…”

Tia Lewis contributed to this report.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

 
Read what others are saying