Population Statistic: Read. React. Repeat.
Sunday, July 16, 2021

Product placement in movies makes good business sense — until it curses your bottom line. Current release The Devil Wears Prada, which as you’d expect is laden with luxury fashion goods, seemingly has put a hex on the financial performances of the featured companies:

The share prices of brands that got placement in the movie have almost all slumped more than the wider stock market in recent weeks — possibly reflecting a new caution about discretionary spending among American shoppers.

Phillips-Van Heusen Corp. (owner of the Calvin Klein brand), jeweler Tiffany & Co. Inc. , coffee chain Starbucks Corp. , steakhouse chain The Smith & Wollensky Restaurant Group Inc. and bookseller Barnes & Noble Inc. all got their moments in the movie — and all have had moments to forget in the stock market…

Among the “Devil” brands, shares of Philips-Van Heusen and Smith & Wollensky have declined about 20 percent since May 1, while shares of Tiffany & Co. have fallen 11 percent. The Standard & Poor’s 500 Index has dropped 5.3 percent in the same period.

Barnes & Noble shares have lost more than a quarter of their value since May 1.

Even a high flyer like Starbucks has not escaped the Prada curse — or at least was not helped by placement in the movie. Shares dropped 11 percent in the past week after it announced June sales growth of 6 percent at coffee shops open at least 13 months, against expectations of as much as 8 percent.

That’s a bitch, huh? Ironically, over a movie about a bitch. At least Anne Hathaway looked cute in it.

This is reminiscent of what happened to some formerly high-flying companies that anted up for facetime in Blade Runner. The situation is referred to as The “Blade Runner Curse” (edited for clarity):

Someone once noticed that a number of the companies whose logos appeared in BR had financial difficulties after the film was released:

- Atari had 70% of the home console market in 1982, but faced losses of over $2 million in the first quarter of 1991.

- Bell Telephone lost its monopoly in 1982.

- Pan-Am Airlines filed for bankruptcy protection in 1991.

- Coca-Cola released their much-hyped “new formula” New Coke, resulting in losses of millions of dollars. (It is interesting to note that since then, the Coca-Cola company has seen the biggest growth of any American company in history.)

- Cusinart filed for bankruptcy protection in July 1989.

Quite the graveyard. Starbucks better hope it doesn’t end up a dearly-departed Trivial Pursuit footnote.

I would present all this as a cautionary tale. But the Blade Runner bad mojo didn’t stop the product placement trend from gaining steam, so I don’t expect this Devil slump to change marketers’ minds.

by Costa Tsiokos, Sun 07/16/2006 09:34:43 PM
Category: Advert./Mktg., Business, Movies
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