Dualstar Entertainment Group LLC

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Dualstar Entertainment Group LLC

3760 Robertson Boulevard
Culver City, California 90232
U.S.A.
Telephone: (310) 553-9000
Fax: (310) 553-9190
Web site: http://www.mary-kateandashley.com

Private Company
Incorporated: 1993
Employees: 220
Sales: $1.2 billion (2004 est.)
NAIC: 551112 Offices of Other Holding Companies; 315999 Other Apparel Accessories and Other Apparel Manufacturing; 511120 Periodical Publishers

Dualstar Entertainment Group LLC is the holding company for the entertainment and retail assets of twin actresses Mary-Kate and Ashley Olsen. The Olsen twins have been big-name entertainers since infancy, when they shared a role as the baby on the ABC family comedy show Full House. They are considered the most financially successful child stars Hollywood has ever seen. Dualstar began as the twins' corporate entity, handling their licensing, contracts, and entertainment projects. The company has evolved into a significant lifestyle retailer, along the lines of the Martha Stewart Living empire, with a popular web site, a magazine, dozens of books, music recordings, and movies, and mary-kateandashley-brand apparel, cosmetics, bed and bath products, furniture, school supplies, and fragrances. The company's goods are geared toward so-called "tween" girls, those between the ages of five and 12. This group has been a vibrantly growing demographic in terms of money spent, and the mary-kateandashley brand has been a top seller in this market. Dualstar markets many of its products exclusively through Wal-Mart stores, again paralleling the Martha Stewart connection with K-Mart. The brand has a global presence, with strong markets in the United States and in Great Britain, Australia, and Japan.

Television Stardom in the 1980s

Mary-Kate and Ashley Olsen, the principals of Dualstar Entertainment, were born on June 13, 1986. Before they reached a year old, they were earning money as television stars. The twins must have had pleasing looks even as newborns, and at five months old they were chosen for a part on a new ABC show called Full House. The twins shared one role, that of Michelle Tanner. By the time they were three, Mary-Kate and Ashley were being heavily promoted as the soul of the show.

When the twins were three years old, they were introduced to entertainment attorney Robert Thorne. Thorne took over negotiating the girls' Full House contract, and got them a raise from just above the industry standard to what they seemed to deserve based on their importance to the show. Thorne was then instrumental in seeing potential beyond entertainment contracts, to making a lifestyle company out of the sisters' popularity. In an interview with Hollywood Reporter (October 12, 2001), Thorne delineated a difference between "building the celebrity into something grand on the one hand and building it into a brand on the other." At first, Thorne concentrated on building up the Olsen twins' celebrity. In 1993, the Olsen family and Thorne set up Dualstar Entertainment as a legal vehicle for the girls' enterprises. At that point, Thorne claims he had not envisioned the girls as a brand. As their manager, he arranged for their first video (called Our First Video ) to debut when the twins were six years old. This was the first of more than 40 videos the girls made as they grew up. By 1993, the twins were among the most popular celebrities in the United States. Celebrity popularity is actually somewhat scientifically tracked, according to something called a "Q score." The Q score measures both name recognition and how favorable an impression an audience has of the subject. The Olsen twins ranked very high on their Q score, on par with beloved actor Michael J. Fox and the iconic star of the 1970s show Happy Days, Henry Winkler, who played "The Fonz." So even after Full House ended its eight-year run in 1994, the girls continued to draw the admiration of American fans. They starred in a movie called It Takes Two in 1995 for Warner. The movie brought in some $19 million in ticket sales, netting the girls $1.6 million. In home video sales, It Takes Two brought in roughly $75 million, and was one of the top-selling Warner Home Video titles in the family category.

At age ten, the twins released their first book, followed by many more in several series. The young girls were the fictional stars of juvenile mystery books such as The Case of the Candy Cane Clue and The Case of the Mall Mystery. Later they expanded into more teen-oriented series, again about twins, called So Little Time. With these books directly tied to other movies or home videos, the Olsen twins had sold some 29 million books by 2001.

Dualstar purveyed the twins' talent after Full House in a new show on ABC called Two of a Kind in 1998. Two of a Kind lasted only eight months, but it was popular in re-runs, especially in England. Two of a Kind was also popular in re-runs on the Fox Family channel, as was all the other Olsen material. In a profile of the girls in the Hollywood Reporter (October 12, 2001), the writer referred to the Fox Family channel as jokingly known within the television industry as the "Mary-Kate and Ashley Channel," because the Olsens were ubiquitous on it. Their television material included Adventures of Mary-Kate and Ashley, which were half-hour mysteries, and later an animated show called Mary-Kate and Ashley IN ACTION! A later show was called So Little Time. All of these television shows and home videos had books tied to them, and sometimes music recordings and videos as well. The girls also continued to star in made-for-the-big-screen movies such as Passport to Paris in 1999.

From Celebrities to Lifestyle Brand in the 1990s

Robert Thorne initially pushed the Olsen twins' fame hard, but he claimed that at first he did not see beyond promoting their images. Around 1998, Thorne's vision shifted, and he imagined the girls becoming the kind of living brand other female stars embodied, such as Oprah Winfrey and Martha Stewart. Both the Oprah Winfrey and Martha Stewart enterprises were significantly cross-marketed, with television, books, magazines, and in Winfrey's case, movies. The audiences who identified with one aspect of these powerful female figures were apparently ready to follow the star into branded goods. The Olsen twins were beacons to the "tweener" or "tweens" demographic, which was a rapidly growing market by the late 1990s. According to a marketing group quoted in Fortune (July 8, 2002), spending on tweens had grown at an annual rate of as much as 15 percent since the early 1990s. By 2001, total spending on that age group in the United States had reached $264 billion. So it was no wonder that the Olsen twins could sell approximately $800 million in retail sales, across many categories, in the early 2000s.

In 2001, Dualstar began moving beyond home video and other entertainment vehicles into branded apparel and domestic goods. Dualstar came out with a mary-kateandashley line of girls' clothing, Mary-Kate and Ashley dolls (licensed to Mattel), and a new magazine, also called mary-kateandashley. All the mary-kateandashley brand products were developed in-house by Dualstar, with close oversight from the twins, rather than being licensed products developed outside the company. By this time, Dualstar had grown to employ more than 200 people, at offices in New York, Los Angeles, and London. The company made a profit of close to $50 million, according to CEO Thorne, who also claimed that the company would come close to rivaling Martha Stewart's sales ($1.4 to $1.6 billion retail in the early 2000s) within the next few years.

Giant retailer Wal-Mart carried the mary-kateandashley line in 2001 with apparel, footwear, cosmetics, jewelry, and accessories. The brand initially sold very well, and some Wal-Marts developed a store-within-a-store to showcase the mary-kateandashley selections. According to Dualstar's own figures, mary-kateandashley was the fastest-growing line in girls' fashion, and the largest girls' book franchise and celebrity doll franchise. Dualstar quickly followed up the apparel and accessories lines with bedding and bath lines. These were licensed to WestPoint Stevens and sold exclusively through Wal-Mart stores. According to Home Textiles Today (June 4, 2001), some 95 percent of girls in the mary-kateandashley brand key demographic were involved in choosing their own bedding and bath products. Although tween girls were too young to have much buying power on their own, they were a powerful force in getting adults to spend money on them. Both licenser WestPoint Stevens and Dualstar thus had great hopes for the new home goods line.

The Olsen twins were closely involved with Dualstar's business arrangements, though they were still only teenagers and had to take time away from both corporation and acting jobs in order to meet their tutor, study, and take exams. They conferred with Thorne by phone several times a day, and had face-to-face meetings every few weeks. Thorne claimed that he talked to the girls about business decisions before talking to the Olsen parents. The girls had an unusual amount of power for people their age, employing hundreds of people and making multiple millions of dollars for themselves. "They hire; they don't get hired," Thorne told Hollywood Reporter in the aforementioned article.

Key Dates:

1990:: Robert Thorne becomes managers of Full House child stars Mary-Kate and Ashley Olsen.
1993:: Dualstar Entertainment is incorporated.
1994:: The twins move on to new entertainment ventures as Full House ends.
1998:: The Olsens star in a new show, Two of a Kind.
2000:: Dualstar launches a clothing line, magazine, and Mary-Kate and Ashley dolls.
2005:: The now 18-year-old twins buy out CEO Thorne's stake in Dualstar; clothing executive Diane Reichenberger is appointed to head the company.

Global Push in the 2000s

By 2002, the British edition of PR Week (November 1, 2002) claimed that mary-kateandashley was the "number one girl's brand in the U.S.," and the brand was on its way to being a juggernaut in Great Britain as well. The Jackie Cooper PR company launched an extensive campaign, building up British girls' awareness of the Olsens, who had long been shown in re-runs in the United Kingdom. The Olsens landed in England in April to do press appearances. Their clothing lines were sold in the United Kingdom at the chain George at Asda. (George at Asda is part of Asda, a British subsidiary of Wal-Mart.) The mary-kateandashley product launch won an award in the United Kingdom for the broad amount of media coverage the brand and the Olsen twins secured. The clothing line sold some £2 million worth of goods in just a few months.

By 2003, Dualstar's fashion lines were doing close to $1 billion in worldwide sales. The clothing and accessories lines were sold at Wal-Marts across the United States and in Canada, and other major retailers carried mary-kateandashley in Mexico, the United Kingdom, France, Australia, and New Zealand. The company planned to bring the brand next to Germany and Japan. The Olsens starred in a new Hollywood film in 2004, called New York Minute, and then brought out a new line of fragrance. The perfumes, called Mary-Kate and Ashley One and Mary-Kate and Ashley Two, were sold in many retail locations other than Wal-Mart. The two perfumes were best-sellers in the months after their introductions, selling better than all other women's scents on the market except for Elizabeth Taylor White Diamonds. Coty Beauty U.S. handled the U.S. distribution of the scents. The move into perfume seemed to mark something of a coming-of-age for the girls, who were just about to turn 18, and had matured from "cute little girls to beautiful young women," according to the women's fashion journal WWD (May 21, 2004). By 2004, Dualstar licensed some 50 different categories of products, from books to videos to socks to eau de toilette. Total retail sales for Dualstar were estimated at $1.2 billion for 2004. The twins still focused on entertainment, however. In 2003, they moved from acting to producing, signing a deal with ABC Family to executive produce a television pilot called Carly Shows It All, which would feature teen actors.

In January 2005, the Olsens bought out their longtime manager and Dualstar CEO Robert Thorne. This left the twins, now 18 and college students at New York University, as sole owners of Dualstar. Thorne's place at Dualstar was taken by Diane Reichenberger. Reichenberger had long experience in retail and fashion, having worked in management at Levi Strauss & Co., Joe Boxer Corp., The Gap, and other clothing companies. Reichenberger immediately oversaw a relaunch of the mary-kateandashley brand in some international markets. Reichenberger saw the brand as still in a formative stage, with much opportunity both abroad and domestically.

Thorne's replacement by fashion veteran Reichenberger seemed to symbolize a new era at Dualstar. The mary-kateandashley brand was still geared toward girls aged five to 12, but the Olsens were now college students. All their entertainment projects had highlighted the purity and fun of the twins, but by 2005, something of a darker side emerged, as celebrity gossip detailed Mary-Kate Olsen's eating disorder. Again the obvious parallel for Dualstar seemed to be with Martha Stewart, who lived on as a brand even as her personal life became less than wholesome when she was sentenced to prison. Thorne had moved the Olsen twins beyond celebrity, into a more corporate identity as a lifestyle brand. Dualstar was sure that the mary-kateandashley brand could prosper even as its namesakes were no longer the adorable children they had once been. The brand certainly had demonstrated remarkable staying power, continuing to grow as the girls moved from toddlerhood through their teen years. With a strong sales record and the staunch backing of the world's largest retailer, Wal-Mart, Dualstar seemed likely to be in a good position even as the twins aged into womanhood.