The fallout stems from revelations that Deen made racist comments, regularly used the n-word and treated African-Americans in a subservient fashion.
Deen’s business empire included 14 cookbooks, seven restaurants, her two Food Network shows and various branded products and endorsements.
Athough she’s tried to stem the damage through YouTube apologies and an appearance on the Today show, her business continues to erode. The damage so far has been estimate at $4.5 million in lost business, according to Forbes magazine. But the cost may actually be higher.
One of the biggest blows came when Wal-Mart just announced yesterday that it is cutting ties with Deen. The company will not place any new orders for Paula Deen merchandise, according to spokesman Dave Tovar, a spokesperson for the company. She sells branded products through the giant retailer.
Caesar’s Hotel and Casino in Las Vegas also announced that four buffet restaurants owned by the casino but branded under Deen’s name will no longer be associated with the chef.
The Food Network, which faces possible legal exposure because of Deen’s actions, canceled both of her shows, which it had aired for 11 years. Smithfield Foods also dumpted Deen as their spokesperson.
“You just can’t say it’s a one-time hit of $3 or $4 million dollars, I think it’s much more than that. I think its tens of millions of dollars when you look at it over time,” Howard Bragman, Vice Chairman of Reputation.com and a long-time crisis manager told Yahoo’s Daily Ticker.
The scandal was triggered by a lawsuit in which Deen, ironically, is only tangentially involved. Lisa Jackson, a former manager of Uncle Bubba’s Oyster House in Savannah, Ga., filed a racial and sexual harassment suit against Deen’s brother Earl ‘Bubba’ Heirs.
Deen was deposed in the case and admitted using the n-word and other racist remarks in the past. Lawyers for Jackson have filed a motion to obtain outtakes from Deen’s Food Network shows that they described as “obscene and vulgar.”
Deen the fourth highest earning Food Network chef, made an estimated $17 million in 2012, according to Forbes.
“Anything involving race, children, or animals is almost impossible to recover from,” says David E. Johnson, Chief Executive of Strategic Vision, LLC, a public relations and branding agency.
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