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Bernt Ullmann: The 6 Billion Dollar Man: A Day In The Life

Almost everything everyone needs and wants is already out in the market, making it more difficult for businesses to stand out.

This is the reason why branding is very important, and who better to learn it from than “The Man Behind the Brands” himself, Bernt Ullmann?

Arguably the world’s leading expert in branding, Bernt takes us to his learning experiences throughout the years of growing into the success he is now—from slinging pizzas with Pizza Pronto, taking over the fashion industry working alongside names like Donna Karan, Daymond John, and the Hilfiger brothers, to entering the music world with Russell Simmons and through Eddie Lampert.

Learn a lot of great wisdom across Bernt’s career on all things branding such as brand positioning, licensing, and brand equity and recognition in this episode.

Dustin
We are here with an icon, a legend and a WealthFit trainer. He is the driving force behind some of the hottest brands in the world, and those brands are FUBU, Phat Fashions, Donna Karan. He's worked alongside some of the biggest names and negotiated deals with Nicki Minaj, Adam Levine, Daymond John, Tommy Hilfiger and Russell Simmons. He’s “The 6 Billion Dollar Man,” Mr. Bernt Ullmann. Thanks for being here on the show.
Bernt
Thank you, Dustin. It’s a pleasure to be here.
Dustin
It's the early days. The setting is Copenhagen. You see in a deprived market an opportunity where pizza delivery does not yet exist. It blows my mind that it did not exist at one point. You saw an opportunity and perhaps an option to grab the title of Pizza King of Scandinavia. Take us back to that moment in those times. What did you see as the opportunity and why insert yourself into the pizza business?
Bernt
What happened back then was a combination of opportunity and then ability, because at the end of the day, there are a lot of great ideas. If you can't execute, it doesn't matter. I happened to be in a unique situation that I had visibility to what happened outside of Scandinavia. I traveled to the US many times, home delivery pizza was a thriving business here.
As a matter of fact, my very first business trip was to Baltimore to check out a pizza delivery truck, which I can assure you was way too expensive for a student going to Copenhagen Business School. We ended up having to make our own pizza truck eventually. I had an idea that I'm seeing something that looks cool and it's happening in other markets and it's not here yet, the ability to execute the infrastructure.
I was friendly with the guy that owned a very large Mediterranean restaurant. He had the facility, the staff, the infrastructure. Lo and behold, they were already making pizza. It made it a lot more accessible. It was a lot less about, “I want to be the pizza king.” Although I like it a lot, and more about, “Here's a new trend, here's something that's happening in pop culture. This is something that's moving in society and other markets. It looks like a great concept. It's probably going to come here and I am in a position to actually be a first mover.”
As a matter of fact, I went to Copenhagen Business School where I got my Bachelor's degree, but I also got my MBA. I wrote a thesis on fast foods restaurants in general, the concept of Burger King, McDonald's. That was such a new and novel concept. I wrote it with one other guy. We were two students in school. We sold our book. It was the thesis of the school and we ended up saying, “This is a good thesis.” The very first business venture was we sold our book on fast foods to a bunch of restaurants all over Denmark.
Dustin
You have an interesting story around launching that business, Pizza Pronto, which I think is great. You had your first taste of branding, which the world knows you as the chief brand accelerator, but you learned a very valuable lesson early on. Will you share what that lesson was?
Bernt
I didn't know a lot about brand-building back then. Intuitively I knew that it had to have something to do with how you position and build your business and your brand. One small portion of that is how you look to the outside world, the business card and the pizza trucks because all of that has to be consistent in order for it to be strong.
We were starting out and my partner had a Mediterranean restaurant. The Pronto name, where did that come from? Quite frankly, when Italians answer the phone because this was home delivery and you have to call for it, they typically say pronto. Pronto also means fast. Something’s going to happen pronto. We thought, “That's a good double entendre there.” We came up with the logo with the little person on the bicycle holding a pie. The colors were red and green on the white card and we’re stealing it from the Italian flags. We had it made.
That's the setting when I decided, “Not only I’m the first to market, I'm going to corner the market.” I reached out to the largest business paper, bar-none. Back then, there weren't a lot of papers and this was the only paper that came out on the weekend. I present them with the story of region students, Italian pizza and Copenhagen, Denmark. They bought into it hook, line and sinker. We ended up shooting a major interview at the front page of the business section with pictures of the pizza truck, which had our phone number.
Dustin
This is free advertising.
Bernt
I was like, “I am set. I have barely launched and I'm done. I am going to retire.” The day the paper came out, I couldn't have been more excited. I was ready. I'm going to bring this home. We opened normally at 3:00. The phone started ringing at 6:00 AM when the first couple of people picked up their newspapers.
Dustin
They want a pizza at 6:00 AM?
Bernt
By 10:00 AM, we had no more phone system, it had broken down. By 12:00, we had gotten it back up with emergency lines. We had two pizza trucks. Truck number one breaks down and then truck number two breaks down. We ended up delivering cold, soggy pizzas three to four hours after people called for them.
Honestly, if it wasn't for the fact that pizza is such a good idea rather home delivery pizza is a good idea, we would have been out of business before we even started. As it was, we survived a major hiccup. To your point, it was a pretty important lesson. The lesson is simply you have to be ready. It's all well and good to get that disability. If you're not ready, it doesn't account for anything because you get only one shot at making a first impression. You might as well make it a good one.
Dustin
When I've started businesses, I have not had that experience where things blow up. I felt like I had to hustle. You hear these stories from time to time where it’s like, “If you do get that big opportunity, you make that big deal, you better be ready.” I think a lot of people are grateful to get the business and they're not thinking like that. It is a good reminder that you've got to think it out because you're right about first impression.
Bernt
It's staggering as we say. A vision without execution is a hallucination.
Dustin
I love that line. I want to fast forward a little bit. As much as I'd like to stay in pizza, I'm very curious to understand. Here you are, you're the Pizza King. Fast forward a couple of years, you find yourself in fashion, you find yourself working alongside Donna Karan, an icon. How do you go from slinging pizzas, Bernt, to be working alongside one of the biggest fashion names in the industry?
Bernt
I can sum that up with one word. It was life. I don't tell this story very often. I stayed and ran Pizza Pronto in Copenhagen and got my Master's. One of my other friends from Copenhagen went to the University of San Francisco and got his Master’s. We met up at dark nights in the bar on the island of Ibiza, which is outside of Spain. Towards the end of that night, it would been an enjoyable night.
Dustin
It’s an enjoyable night and a pizza.
Bernt
We’re staying away from the pizza. What happened is we have come to the point where we were saying, “Everyone that we went to school with has started their own businesses.” We were at that stage where we were like, “If we go into business together, we would be unstoppable.” He dealt the first blow. This is what happens. He says, “That's awesome, but I don't want pizzas.” I was like, “The horror.”
I could do the less and his business was home improvements. I was like, “I don't want to do home improvements.” We had a dilemma. We knew the pizza and home improvement was off the table. We needed to find something else, a compromise. We were like, “We’re both wearing clothes. Clothing business is.” I got back from Ibiza and we have decided to go into business together in the clothing business.
We founded the company called Nor Partners because we were Norwegian partners and because my new partner wasn't ready to leave the US yet. He loved the West Coast. It was determined that I was moving to LA and we were starting our partners and that’s what happened. That was at the beginning of my career in the fashion industry.
Dustin
How does that parlay into working with Donna Karan? Were you acquired? Did that thing fizzle out and you had to reinvent?
Bernt
What happened is at the start of the company, we had a phenomenal run. We made some spectacular mistakes along the way as well. There is something out there called factoring. It's a way of financing inventory. Those boring factoring companies, they have a way of putting a damper on your personal style if you are young, wild and living in LA in the mid-‘80s.
We thought it was a good idea because we knew so much that we didn't necessarily introduce all of the orders to the factoring company. We started to do what's called carrying our own paper. Some of the orders went to the factoring company plus we wanted to make them happy. Short order, we are carrying 50% of the volume ourselves without any backing.
The strength of the factoring company is they have a whole infrastructure. They vet your clients. They make sure that the order book is healthy. 50% of our order book was like, “He's cool.” The market turned. We had an LC for all the goods. We had millions of dollars’ worth of orders. Our supplier drew down on the LC.
Those boring factoring guys, they did everything right. That 50% volume that we decided to carry ourselves, that cost a big hiccup. I circled back to Norway for a couple of years to regroup. I moved back to the company. I worked with a large Scandinavian company. It’s a $250 million company. They had operations in the US already. They asked me. I was lucky I came in at a good time.
The Scandinavians are very progressive. The guy before we had to come out of the cake industry, he may have been good at cakes. He was nothing good at fashion. It was relatively easy to have great results. They were excited and they thought, “These were great results. Could I please move back to the US and do the same for the US as I had done in Norway? Because they needed great results in the US.” I moved to the US.
I stayed with them for a little while I realized that they were fundamentally broken vis-à-vis the markets. The message to us working in this Scandinavian company into the US is to teach the Americans how to go about managing their fashion business. Do the buyers want to call me in in October? No. You teach them to come in September.
If you don't adopt it in the market, and this was not culturally that they didn't understand. They simply had no interests adopting. At that point, I knew that there's no longevity. I started to look at alternatives and I ended up having some interesting meetings over at Donna Karan and low and behold, I was recruited to join the Donna Karan Company.
Dustin
To give people some context, there were no international flagship stores or distribution and you were responsible for that. You helped them open 85 stores internationally. What did you learn in that? What was the challenge opening internationally there?
Bernt
Obviously, I had some credibility coming in with my accent. It's like, “The guy speaks with an accent. He must be good at international.”
Dustin
“He must know what he’s doing.”
Bernt
The reality is it is interesting. We did open 85 flagship stores. When you have a strong brand, which the Donna Karan brand was already strong, the challenge isn't necessarily to find potential takers. The challenge is vet out and find the right partners because opening a store but then watching it close really quick, that's a huge problem.
That damages the credibility of a brand. From my vantage point, the issue was how do you vet out that this perspective partner in Zagreb is the right partner and have the necessary resources, understand the brand and have the ability to open and operate this store successfully? We had a whole team, hired a team and we worked very diligently. That was one of the biggest jobs. We scout the location, meet with the people, check references, do due diligence to know that we were partnering with the right type of operator.
Dustin
Did you have a couple of false starts with that or do you do pretty good in vetting?
Bernt
It was a little bit of both. One of the things that I would say is a very easy mistake to make is to go with the lowest hanging fruit. I’m from Norway and I was in this position. There is a smaller city in Norway called Bergen. I had a great guy in Bergen and he wants to open the store. It would've been very tempting to go, “Let me have Donna Karan fly me home to Norway and meet with the guy in Bergen and open the store here.”
The reality is that would have been the wrong move because it defines who you become as the brand. If you open in Bergen before you opened in London, Paris and Rome, it says a whole lot about your brand and your brand positioning. I think it was more being not only diligent but disciplined in having a vision and sticking to the vision for the betterment of the brand. It’s opening in those key cities first because that sets up the whole rollout after
Dustin
Bernt, I'm so grateful that you're having this conversation with me, but with everyone reading because a lot of education out there is like, “Let's make that sale. Let's get it up and going.” I wish I had learned earlier brand consideration where are you open. It’s forcing us to be thinking long-term. Obviously, cashflow is important, but also at the same time one of the things that you teach is thinking about protecting that brand and thinking down the road.
Bernt
It is critical. I can give you another example. I don't know if it holds true but I can tell you it's held true for many years. A very successful brand is Calvin Klein. They ran into some trademark issues early on in Brazil where some local guys had gone in and filed for a lot of the trademarks. As we know, Calvin, in addition to being a great big brand, they had a very strong underwear business. Whoever did this did not file for the underwear category. Calvin corporates procured underwear rights in the country.
I think they were doing that for a while but eventually they were like, “Let's get to the markets. We are after all the Calvin Klein big important brand.” They went to Brazil as an underwear brand. Honestly, it was years later after they had gained back all of the rights to all of their product categories, and they were still viewed in Brazil first and foremost as an underwear brand because that's how they went to market. There's a lot to be said for that.
Dustin
You're with Donna Karan and Daymond John enters the picture and gets you to come on board where you help take his business from essentially $100 million to $400 million. How did he get you to come on board? You’re working at Donna Karan. What’s that pitch like?
Bernt
Honestly, it wasn't exactly like that. In fairness, Daymond never pitched me. The way it worked was that I had spent five years at Donna Karan and I watched the company change from being very entrepreneurial in the beginning, which lends itself to my personality to becoming more and more corporate and being about a steady handling the tiller.
Quite frankly, what happened was I was like, “At this point, it's five years later and I feel that it's time to make a change.” I aimed to do that with the example I gave, Calvin Klein and I spoke to their CEO. We met the number of times, we had breakfast at the Four Seasons and lo and behold, here came the offer. I walked in there and I had the one last meeting. I almost ran screaming out there because all of my meetings up until then had been very clandestine.
Walking in and seeing the same uptight people, the same furniture and the same lilies. The only thing that was different was everything at Donna Karan was either black, white or gold and everything at Calvin was beige. I was like, “I can't do this again because it's the exact same feeling.”
I need to make something that's a more dramatic change. What happened is I ended up going to Macy’s and I spent two days on the floor of Macy’s watching people's behavior. I'm still working at Donna Karan at this time. I had an executive advertised what I was doing. I'm watching what's happening and there was a store from this brand called FUBU and it was directly next to the DKNY store.
As great as DKNY was, I noticed that for every one piece that left the DKNY store, two, three or four pieces left the FUBU store. There was something incredible going on. I also noticed that there was not one unique or singular demographic that was buying. It was all kinds of people, ages, Europeans, South Americans, Americans. It didn't matter. I was like, “There's something powerful going on with this new brand.”
At the same time, it’s very coincidental, the longstanding friend reached out to me and said, “Have you heard of this brand FUBU?” I was like, “Yes.” He said, “I think they are looking to strengthen and they need a senior executive. I think you would be perfect.” That's how it happened. He made the introduction and through his introduction as to say, the rest is history.
Dustin
I want to ask you then because you made such an impact in that organization, Daymond John on stage publicly in front of tens of thousands of people and I'm sure that got distributed out to millions of people via video said “This man is a genius. This man is a powerhouse.” Here's a guy that doesn't have to reveal and say nice things about people. Why do you think he said such great things?
Bernt
I think that has a lot less to do with me and a lot more to do with him because he's a great guy. He's someone that honestly, takes pleasure in paying it forward and gives credit where credit is due. Also, he's the one that likes to uplift people. I was fortunate that I certainly had great results and I enjoyed my time as president of FUBU International, but I don't know about genius and powerhouse. Those were certainly nice things for him to say.
Dustin
What do you take away from that time? What did you learn? What did that environment teach you?
Bernt
We didn't talk about it in terms of teachings, but I think some of the bigger takeaways are some of the innovation that I watched. For instance, let me give you an example. Daymond and his partners, they again partnered up with another group. They were backed by Samsung. It’s like the UN over there. There were a lot of people involved, but Daymond and his partners overseeing the creative vision, the brand. It was all them.
When it was time to go to markets under the new umbrella, they now had salespeople because they had partnered with a group that had six salespeople. They told every single salesman who each and every one of them probably had 100-plus customers to go out and invite every one of their customers to the trade show. It's a trade show called MAGIC in Las Vegas.
They said, “It's the first day of the show and we want you and all of the salesmen bring in every single one of your customers at 9:00 AM on the first day of the show.” Each and every one of them complained like, “I can’t do that. I can’t service all of those guys. It's going to be a mess.” They're like, “Just do it.” They did.
Come the first day of the show as all the other buyers walked onto the floor, there was one boot that was completely mobbed with buyers. That was the FUBU booth. Fear is a very strong motivator. All those other buyers were walking in and seeing this one booth surrounded by people and they’re like, “What's going on? I might be left out.” It was a very powerful launch. They left the show with literally millions of dollars in orders.
Dustin
It blows my mind. I love that. There are countless stories I've heard like that of innovation. I think that's important. If we're in a time machine, fast forward, life is good though for you. $100 to $400 million, hottest brand in the world, but a music mogul enters the picture, Russell Simmons. I'm curious, how do you go from yet another hot brand over to Russell Simmons? I got to imagine it was hard to say no. That's in your corner. What does that transition look like from FUBU over to Phat Fashions?
Bernt
It was one of those things where yes, FUBU was great. It wasn't so easy to walk away, but what happens is that the guy that hired me at Donna Karan, their CEO is at a new company called Kellwood. He is the one that calls me and says, “Bernt, we're looking at an acquisition. I think you should come over and talk to us.”
They were looking to acquire Phat Fashions. They were not necessarily certain. It was early on in what you would call urban or streetwear. They knew it was an important space. They had many commitments, they wanted to be in the space. They didn't necessarily have executives that had been successful in the space. They made me one of those offers that I couldn't refuse. I joined them and we completed that transaction, acquired Phat Fashions and I became president of the company and ran it for five years.
Dustin
The numbers from your time at Phat Fashions was $80 million to $800 million.
Bernt
That's what some people have told me.
Dustin
The point is that it seems very similar to the journey at FUBU, obviously a little bit more on the backend of course. Was it a very similar journey or was it different to grow that brand versus FUBU?
Bernt
It was similar but different. At the time, Phat Farm was the leading brand and that was the excitement, but it had begun to struggle a little.
Dustin
Why?
Bernt
It's like with everything that's new in the beginning. It’s up and high and at one point, a form of market saturation that sets in and if you're in the space that's highly successful, a bunch of competitors sees, “These guys are raking it in.” One, two, five, ten brands are now direct competitions. All of that was happening.
It’s very normal stuff, but all of a sudden that puts a lot more pressure on streamlined operations and some of the things you had gotten away with in the past you no longer could allow yourself. It was different in the sense that you had some of those challenges. We hadn't had challenges before but then it was similar in the sense that everything that happened in the men's wear piece of the business repeated itself in the women's business.
Dustin
What do you mean?
Bernt
That meteoric growth, the emergence of a new demographic that took pride in the product and felt that the product stood for something and it was a form of self-realization and presentation, that's what fueled the early young men's brands like FUBU and Phat Farm. We got to relive it in the women's space a few years later.
Phat Fashions had two brands, Phat Farm and Baby Phat. Baby Phat saw meteoric growth and became dominant on juniors or young women's brand, bar none. We got the benefit of all of those great results coming out of Baby Phat and then we tinkered with and greatly enhanced and fixed Phat Farm along the way.
Great brands have the ability to license because they establish what we call brand equity and that interesting value in the mind of the consumer allows you to go out and do other businesses. We ended up ultimately, and it wasn't easy, but I closed down the Phat Farm wholesale business.
I walked a lot of people out through there, which was sad, but it was the right thing to do for the business. We've changed the whole company into a licensing model. We in short order signed literally a ton of licensees overnight and went from losing a couple of million dollars to being immensely profitable very quickly.
Dustin
If you have a bunch of people under one house, you can manage expectations. You can manage the brand, you can manage certain things but when you roll it out to licensees, is it a little tricky keeping them in line and keeping on-brand because you've got a vantage all these people outside of the house?
Bernt
It is one of the challenges of licensing. However, I feel there are relatively easy tools available for you to navigate that. All of these deals are managed by big books of contracts. The first thing you do as a licensor, which is what you're called if you were to brand, is that you retain full creative control. That means that no licensee can bring any product to market without you signing off on it and approving it.
You establish your own in-house team and their job is to work closely with the licensees at the beginning of every season. You provide inspiration, colors and theme, so they're all working, marching to the same drama and following the same playbook and building the collections in the same spirit and based upon the same ideas.
You are exactly right, that is one of the things that you have to mitigate. The reality is if it's an expensive license and you give someone a short window, then you are in essence incentivizing them to cut corners because they're going to say, “This is very costly. I need to back my investment. I need to make sure that I make my money back. I'm going to be very aggressive with this brand.”
If you give them a longer horizon instead of doing a short-term deal, you do a longer-term deal. They would feel a lot more comfortable that they have a runway to invest in and build the brand properly and they will reap all the benefits. You can also build an automatic renewal. After a certain amount of time, if they're otherwise in good standing, they've checked certain performance criteria and hit certain volumes, they have an automatic right to renew. It does the same thing, and it takes some of the incentives of being very exploitative off the table.
Dustin
I want to go further into licensing here and I think it parlays into your journey in this world. Your next big venture was with Hilfiger brothers, Andy and Tommy Hilfiger. You did licensing and brand management. I'm curious, what did you see in the marketplace as the opportunity with this deal that you put together?
Bernt
The big advantage of licensing versus operating a brand yourself is that obviously, the cost of bringing a new product to market is very different. It's a very big risk and cost mitigator. The traditional way of bringing a product to market is that you have to have a big infrastructure I did at Phat Farm.
First, signing the brand, it starts even earlier with going on trips to get inspired. Then they sign it and then they have to go to Asia more often than not to have the first samples produced. It goes back and forth until you have the final sample and then lo behold, you have to go and buy a ton of inventory hope and pray to the fashion gods that the designers got it right and the product is in trend that they can actually sell. It’s a dated model and it's a very expensive model.
Licensing gets rid of a lot of those issues. What licensing does is it allows you to partner with best in class operators that use their resources. It's their design resources, it's their funding and capital that goes into creating the brand. You can open multiple product verticals at the same time, which would be very hard if you're doing it yourself in house. You can, in essence, go to market with the much larger footprints more quickly.
One of the reasons why that became a favored model when we were owning Star Branding is simply, we were creating very large celebrity brands. We didn't necessarily want it to be about one thing. When we did, for instance, the Jennifer Lopez and Marc Anthony deal, which has been billed as the largest celebrity deal ever done with $3.5 billion in purchasing guarantees, we didn't want to create Jennifer Lopez’s shoe or Marc Anthony's hats. We wanted the totality, the full impact of the brand.
By following or using your licensing model, we were able to have multiple best in class operators bringing their product to the marketplace at the same time. We were able to create these big footprints inside of Kohl's, which is where the program was launched and where you didn't have one or two pieces of the lifestyle. We had a full lifestyle. It’s very impactful.
Dustin
I can't help but think someone is reading knowing some of the names and the brands that you're mentioning and them saying, “That's Bernt Ullmann. That’s Kohl’s and J-Lo and all the different names.” Do you have to be a series of FUBU, a big name to benefit from licensing? Can an aspiring entrepreneur build a business around this?
Bernt
I would say yes to a large extent. What I think needs to be present in order for you to do and build a healthy licensing business is two things. You either have to have created something that's unique so you may own an IP that is attractive or interesting to someone else and they will license the rights to using your IP. They will go to markets with their products or their version of it using your IP.
All you technically need is to have a great idea and have it patented. When it comes to a brand, you need to have some level of brand equity. Brand equity is some form of brand recognition. As we call it, it is the intangible value of the brand and the mind of the consumer. As long as there is some of that, then you don't have to be a $100 million brand or a celebrity to have created something that has value in the mind of the consumer.
I have plenty of examples of smaller companies. One company that we are talking to as a very quick example, they had no intention of building a brand. They started out tagging sharks because that's what they're passionate about and they care about. They did that successfully for a few years and became known as the go-to guy in the shark tagging industry.
Lo and behold, they're driving millions of dollars in royalty income because there are a lot of companies that would like to be involved with shark conservations, the ocean or giving back. That is saying, “This brand has a Good Housekeeping stamp of approval. We are working with this company and it's a feel-good story and we have similar values without even trying to create significant brand equity that is leveraged into millions of dollars’ worth of business.”
Dustin
You mentioned the $3.5 billion deal with Kohls and J-Lo. Bernt, rumor has it that you spent two days in J-Lo's closet. I'm curious, did you get lost? Is her closet the size of a house?
Bernt
You know it was not the closet like the closet you and I are used to. This studio is pretty big and it was fully-catered. We suffered no pain in her closet.
Dustin
You’ve mentioned brand equity a lot and you add some clarification, you were in there and you mentioned this in the course you recorded, not looking how to create brand equity, but brand DNA. As part of that conversation, what was Bernt Ullmann doing in those two days when he was shopping in the closet?
Bernt
I wasn't alone in there because it was not my core competency. They are other people that are better at analyzing the product. If you stop and think for a second, “What determines? What a product should look for any celebrity or for any person? What is it supposed to look like? Should Jennifer's collection be all black and all skin-tight? Should it be all loose and fluffy, poofy and colorful? What should it be?” That's the first step of understanding what the Brand DNA is. Because if you don't emulate the public persona of the celebrity, you're missing the mark.
I often say this, all great brands in my mind, they are authentic, credible and aspirational. It has to be authentic. It has to be credible, it has to be aspirational. If it's not authentic or credible, meaning it doesn't look like Jennifer, it doesn't look like something she would have ever wanting to wear or affiliate herself with, why would the customers believe it? Why would they feel comfortable or good about buying the collection?
We spent those two days early on and Jennifer showed us all her favorite pieces and she told us why, “I love this because of this.” All we did was we spent two days taking pictures and taking notes, capturing the things that she cared about and the things that were authentic to her and we translated that into her collection. That's step one in the Brand DNA.
Dustin
It comes to the personal brand because a product brand is not around a person. I'm even thinking of Nike, the example that you brought up the shoe when it first came out. It is a reflection of the individual at that point or if someone's entering into this conversation, should they go talk to the market first and try to come up with this or is it better to be a product you would use and then try to embed that into the brand? How do you navigate this?
Bernt
I am a firm believer in talking to the market. However, I think if you tried to do that, you end up being very reactive. You need to be proactive. You need to start with an idea or a concept. You need to start by solving a problem. Because if you're going out listening to the markets, I don't necessarily know what you're going to hear. A lot of the markets does not necessarily have the ability to see the future. They see the past. When you go on and listen to the markets, they're going to tell you everything that was great.
In the fashion industry, there's a time lag of easily six months. Let’s say it was designed over six months ago. If you want to bring a new product to market, your product is not going to hit for another six to nine months unless you in the fashion space. You should listen to the market, but not so much. If you go off of all the data, it's like driving a car forward while looking in the rearview mirror. That's pretty high risk.
What I like is rather come up with a concept that rings true to you and solve the problem. Find a need. The market does not need another product. I don't care what industry you're in. There's no need for any more products or services unless you come up with something that's somewhat unique, somewhat new.
You have to have a new way of thinking or a smart way of doing something. There has to be a story and people like to connect with your brand. I would say come up with a strong personal point of view, build along with that and then rather check in with the markets along the way. Data is very important. Particularly at this day and age, a line of business is done in the direct to consumer space and you can get a lot more data a lot quicker than what you're used to.
I'm not advocating that you shouldn't be using it. I'm simply saying, realize that a lot of the people weighing in are not necessarily forward-looking. They're talking about what's happening now whereas if you want to be successful, you want to be able to anticipate and see what's going to happen sometime in the future.
Dustin
Have you heard of this Steve Jobs adage about the iPod? It was said that he said if you went to the market and asked people what do they need in terms of an MP3 player, “It needs to be bigger.” It was his strong point of view where he comes up with the iPod and completely revolutionized it. It sounds eerily familiar. It sounds very similar to that is that if you go to the market too much, there is a place to go. If you go, they’re not going to necessarily give you the forward-facing product, the new trend coming up.
I want to ask one more question about the big deal. I've often found when it comes to big deals like interviewing lots of different people or even big moments in life. There's always this backstory where it teetered on the brink of disaster or maybe it died, but then it came back to life. Was that the case here? This is an epic deal. Did it have its issues and struggles along the way?
Bernt
Most deals actually do. To be honest, more deals don't close than deals that close. Let's be honest. That's why when you end up doing a mega-deal, it's somewhat remarkable. I don't necessarily know over my career what's the close percentage is, but there's no question in my mind that a lot more deals have fizzled to your points that have closed successfully. It had this challenge as to where a number of them. It started by giving you one quick example.
The deal started originally with, “Jennifer Lopez, let's do something with her. That will be great.” Tommy, who is a big visionary, said, “No, let's not do Jennifer. Let's make it his and hers and do Jennifer and Marc.” It became this bigger opportunity. One of the reasons why we were so successful is everything in life is timing. It was the emergence of a Hispanic consumer demographic being very visible in the stores.
The stores were looking around seeing, “We have all these people in our stores shopping, but we don't have anything native organic specifically for them.” Maybe that would be a very good selling point if we did that. Hence, Jennifer Lopez, Marc Anthony became low-hanging fruits for the market. We are proceeding to do his and hers. We've got some way into the deal when someone says all of a sudden, “We have to stop all the conversations with Marc.” We're like, “Why stop? We're not stopping. We’re ruining the deal.”
It appears there's this other guy and he has a letter of agreement with Marc. If we're going to proceed, we need to start talking to him.
That was how I was introduced to a great gentleman by the name of Charles Koppelman. He’s a brilliant guy, ex-massive music mogul with some of the biggest acts in the world. Barbara Streisand was his act. He has been the CEO of Martha Stewart. He’s a great guy, but a big hiccup because we were looking to close and lo and behold, we have negotiated with this big guy who holds all the rights to Marc. It worked out but clearly, it was a big hiccup when it happened.
Dustin
Bernt, I'm always fascinated by the journey. The next point in your career is you get a call from Eddie Lampert who was formerly the CEO of Sears and the Sears Holdings. I got to imagine it's hard to say no to a billionaire, but I'm curious as to what attracted you to come on board and help him take in Adam Levine, that brand and Nicki Minaj, their fashion brand into a Sears subsidiary or to a new company. What attracted you to want to do that deal?
Bernt
Quite frankly, Eddie Lampert does not necessarily get enough credits in his journey with Sears Holdings. Back then, he was looking to create something quite unique.
He was anticipating what was happening and has been happening with the migration to direct to consumer away from brick and mortar. He created something called Shop Your Way. His vision for it was a combination of Amazon and Facebook. Come on, have your social, share your pictures, even share pictures of what you are contemplating buying, but you can transact right here as well through Shop Your Way. In order to successfully kick that off, you needed eyeballs to validate the deal.
It’s a big company and in order for it to matter, you have to have a significant user group like any platform. His thought process was, “I need a couple of celebrities with literally millions of followers to come on board and in essence, validates the platform and lend their trusts to the platforms so their followers can engage with us.
It will take Shop Your Way to the next level.” I think it's a very nice idea. However, for various reasons the execution wasn't 100% there. We still ended up launching Nicki Minaj and Adam Levine in 500 fully-featured Kmart doors. The execution was great and we had the beautiful run there. I would say driving over $200 million worth of revenue. That part was great. I don't think Eddie ever got to realize his vision fully, but that was what was attractive and that was the exciting part. He is a visionary.
Dustin
We talk about innovation and here is innovation right here. It is interesting because you see these big mega-companies, these tech companies and in particular entertainment. There are seems to be this convergence and there's already been this. Here’s Eddie with Sears Holdings thinking of this, but I see that as a tech venture but yet a company still needs to innovate and do it. I find it fascinating that you can have an idea, try to execute on it and not get there, but someone's going to come after and execute on this.
Bernt
We're seeing it. Social commerce is becoming bigger and bigger. We're going back several years already, so he was very early in my opinion when it comes to social commerce, but what has happened is that the bigger social platforms had more seamless access to adding the commerce part. They already have the followers, the users, and the eyeballs You have to build it all from scratch. It was a much bigger lift.
Dustin
Bernt, I'm excited that you created a course with us here at WealthFit. You talked about brand equity, which we've touched on here a little bit. One area I want to give people reading into is this idea of a brand evoking an emotional response.
In this day and age of Amazon and Walmart, it seems to be like, “Let's sell it cheap. Let's get it to them fast.” Think of the smaller entrepreneur, maybe they have just been starting out or someone that's been in business for a short time, how do they create this emotional response to the company that they're building?
Bernt
There's no cookie-cutter answer to that. Each individual conversation probably ends up being a little different. I'd rather take it back for a second and say, “Let's stop for a second and think. What is the reason why anyone buys anything?” I think the hard and fast answer is it has to be because it evokes an emotion.
The reality is in this economy, there is no one that physically has a need to say in the fashion industry, a clothing item. Shy of going to climb in the Himalayas. I'm going to Mount Everest and I don't want to freeze to death. There’s a highly technical product that I feel I have to have. Other than that, there's nothing you have to have.
People are buying because of the feeling, because of how the product or how the brand makes them feel. If you are out there and you're looking to bring your product to market, you have to stop, think and say, “What is the reason? What problem am I solving? What reason am I giving for someone to buy it?” That’s branding.
Branding is something that sets you apart from the competition in the mind of the consumer. Why wouldn't you want to do that? Because if you bring something and it does not have any distinguishing factor, what are you left to compete on? You're then a commodity and you're left to compete on price. That's a terrible place to be.
I don't know if I've said it already because I say this so often. I always say that if you don't have something that sets you apart in the mind of the consumer, you're going to end up finding yourself in a debt spiral race to the bottom because there's always someone willing to work with a lower margin. That's not a good place to end up.
Dustin
Here's Amazon as an example or any company that's incredibly well-funded, what may be your bread and butter and maybe profitable to you, they don't care about because they have different objectives and different missions. They can move into your lane, sell it and lose money, but make money in the other ventures that they have on.
I 100% agree with you that you've got to create that brand equity, the Brand DNA, the things that you talk about to set yourself apart. Are there any deals in your lifetime that got away from you? Maybe one you wanted to do, you were hanging onto and it got away or anyone you wanted to work with?
Bernt
It happens all the time. The reality is I am fortunate because of what I have done, some of the successes. I do get to see a lot of deals. I have a very significant deal pipeline. I get a lot of offers and opportunities that I have to imagine a lot of other people don't get. Clearly, every now and then, something comes along and you get excited about it. There can be many different reasons. It doesn't end up getting to close whether that's too complex. You're trying to do different things.
Some deals, in order for it to work, you have to do multiple deals simultaneously or culturally. As much as it looked great on the surface, you start looking under the hood and it feels like, “We don't share the same values at all.” Creating a bright brand partnership, that's what it is. You have to think, “I need to be able to do this long-term and want to do this long-term.” Clearly, there are reasons why things don't happen.
Dustin
Do you have any advice for saying no with the amount of deal flow that you see that you could be involved in? I would want to say yes to everything, but it's not possible.
Bernt
I don't think the challenge is saying no. I think the challenge is to know what to say no to. You need to have a vision what do you want to do with yourself and your company and then you need to execute on that. There are many examples, take Russell Simmons for instance. He created the Phat Farm brand and the brand ethos was classic with a twist. That's fairly clear. The business grew, the brand became important.\
Along came someone that offered him a massive order for hockey jerseys. It was at least 50,000 jerseys. Back then, easily $50 per jersey. This was a multimillion-dollar order. It would have been very easy. Russell looked at it, thought about it and said, “It is not consistent with my brand values.” He said no to the deal.
Ultimately, as we know, he ended up having a very successful exit selling the intellectual property rights to Phat Fashions for $140 million. I think sticking to his guns was exactly the right thing to do. There are many examples like that.
Dustin
Bernt, I'm gracious that you've come on the show and that you've created a course with us here at WealthFit. I'm curious to know, what are you working on? What's most exciting to you? What's in your future?
Bernt
They're probably the two things that are exciting to me. Number one, Celebrity Lifestyle Brands. We spend some time talking about star branding. We formed that and we said, “Stars can be brands.” This was in 2009 and there was no social media following. While we did some amazing deals, they were all done into the traditional brick and mortar retail stores. The reality is the retail stores are not what they used to be.
If you wanted to bring your brand to market, you had to go to the large national retailers. If they didn't pick up your brand, you were done. You couldn't go to markets, you are locked out. The power has shifted away from the large national retailers to us, the consumers and we’re obviously not giving it back anytime soon.
You can go to the market, you can bring product directly to the consumer, which is why we were talking about Amazon. It’s why all of that exists and it keeps on growing very dramatically. The excitement with Celebrity Lifestyle Brands, to me it's Star Branding 2.0, but it's built for the direct to consumer space.
What we do at Celebrity Lifestyle Brands is we help celebrities, influencers and brands, CIBs, as we call them, monetize their social media following through eCommerce. That's exciting to me because I know that space is going to continue to grow.
The other thing is I've come full circle. I am back to working with Daymond John with my book. He was kind enough to write the foreword for my book. I am working with him both. He's the people shark on Shark Tank. I am helping with some of the Shark Tank deals. Maybe something exciting is happening with FUBU. Lastly, he has partnered with Catherine Zeta-Jones married to Michael Douglas, Hollywood royalty and she has created her own brand, Casa Zeta-Jones. We're working on that as well. There's a lot of fun stuff going on.
Dustin
Bernt, if people want to keep tabs on you and what you're up to, where's the best place online to find you?
Bernt
I would say go to BerntUllmann.com.
Dustin
Bernt, I truly appreciate you being on the show and spending time with us here at WealthFit. I'm excited for people to dive into the course, dive into the book, dive into your social media presence, follow you online. Thanks for being on the show.
Bernt
Thank you so much for having me.

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