How Sports Illustrated Swimsuit Model Kathy Ireland Became a $350 Million Mogul

This story appears in the Feb. 27 edition of Forbes magazine.

Kathy Ireland's Forbes Cover

It’s staff meeting time for the biggest retail brand you’ve never heard of, which at Kathy Ireland Worldwide means marching up the hills outside Santa Barbara to the eponymous founder’s mission-style home for a corporate version of “I’m OK, You’re OK.” As the coastal air tempers the bright California sun, 15 staffers dressed in casual black sprawl on the plush sofas or sit cross-legged on the floor. An Academy Award rests nonchalantly on an end table, lending a surreal touch. “Don’t ask about the Oscar,” one of Ireland’s confidants says to me furtively. (It was from another fashion diva with a flair for retail, Elizabeth Taylor.)

The group’s breathing golden idol sits, chin in hand, in the middle of this group. At 48 Kathy Ireland is still as stunning as when she appeared in 13 consecutive Sports Illustrated swimsuit issues, including three covers (albeit now with bigger hair). “Thank you,” she says in her small voice as the group kicks off a brainstorming session about social media. “Thank you,” she repeats as ideas fly about ways to gain her company a bigger presence on Twitter and Facebook. “Thank you,” the group responds, the only two words invoked more over the next hour than “excuse me” and “please.”

If this isn’t how America’s best-known licensor, the famously demanding Martha Stewart, might do business, so be it. Kathy Ireland sells more product—some $2 billion at retail—and she’s worth more, too. If Martha Stewart represents WASP perfection (and those who aspire to it), then Kathy Ireland rules flyover country (and those content to stay there), bequeathing her taste—and/or slapping her name—onto more than 15,000 products, few of which jibe with the image most people have of her.

This swimsuit model doesn’t sell swimsuits, and while many women may still associate her name with a clothing line at Kmart, she barely sells clothes anymore, either. The bulk of her success comes instead from the kind of stuff that has likely never seen a celebrity’s name adorning it: ceiling fans, flooring, mattresses. And above all there’s furniture: desks, end tables, media centers, beds, ottomans and bookcases. There are area rugs, carpets and headboards. And lots and lots of windows. One of the biggest pieces of the Kathy Ireland empire is her namesake vinyl and plastic replacement windows, which purportedly insulate heat inexpensively; a retail outfit called Window World moves $400 million of them a year.

If there’s any consistency to this grab bag that is Kathy Ireland Worldwide, it’s the target audience: Middle America’s moms. There’s a certain magic in placing a glamorous supermodel’s name on mundane products aimed at an everyday audience. “I can see your compassion for moms,” tweeted one fan. “Can’t wait to read your book!” (Ireland has published six.) With three children and four dogs, ­Ireland fronts the brand credibly. When I request a coaster before putting down a glass on a rustic wooden table at her house, Ireland waves her hand dismissively. Stewart might create a Thanksgiving dinner spread worthy of a magazine; at Ireland’s place dogs lounge on the furniture.

The ex-model’s elastic brand— based on what I saw, she would consider Kathy Ireland toilet plungers or Kathy Ireland roach motels if she could argue they help busy moms—proves a valuable trait in licensing, a strict volume business. That $2 billion at retail (for comparison, Martha Stewart sells about $900 million at retail, based on industry estimates) translated into about $850 million in wholesale sales last year, of which Ireland got a royalty payment of roughly 6%. That’s around $50 million in revenue for Ireland’s company, and with a meager staff of 42—the beauty of licensing, of course, is that everyone else has to actually make and sell the stuff—the vast majority of that is pure profit, flowing straight into pockets of Kathy Ireland Worldwide’s photogenic 100% owner.

Kathy Ireland was an entrepreneur long before she was a model. As a child in Santa Barbara, she painted stones, and rather than place them on her shelf to admire, she peddled them door-to-door (her grandmother carried one in her purse for protection) and eventually sold other art projects at weekly crafts fairs. At 11 Ireland noticed an ad beckoning newspaper deliverers: “Are you the boy for the job?” Ireland wrote a note to the editor saying she was the girl for the job, and she got it.

Ireland was earning $60 a month when she decided it was time to get her own bedroom. She rang up a contractor for an estimate on what it would cost to add a room to the modest house she shared with her parents and two sisters. “My mom found me in the driveway showing him where I wanted my room to be,” recalls Ireland. “I knew exactly what it was going to look like, what the furnishing would be. Then he gave me his bid, and it was something like $20,000.”

The room would have to wait—but not long. In 1980, at the age of 16, Ireland was discovered at a finishing school (where her parents were trying to clean up their tomboy daughter) by the Elite Modeling Agency. Within four years she was featured in the Sports Illustrated swimsuit issue, and in 1989, when she graced the cover for the first time, it became SI’s best seller ever. Internationally famous, she was one of the group, which included Christie Brinkley and Cindy Crawford, that spawned the term “supermodel.”