Today's Entrepreneur: Russell Simmons can't slow down

Russell Simmons strolls down Lexington Avenue in New York City. At 49, the man nicknamed "Rush" isn't slowing down.


By Mindy Fetterman, USA TODAY
NEW YORK — His white baseball cap pressed down on his head and tilted to the side, Russell Simmons sits behind his big mahogany desk. The rooftops of New York show in the window behind him.

His feet are propped up, his BlackBerry in hand, his land line within reach.


Rapid fire, he ticks off names of people he wants to talk to: Donald Trump; Diane Sawyer; Paula Zahn; Regis and Kelly. "Get a list of rappers in town," he tells an assistant. "Call Puffy."

From the leather couch comes a deep laugh.

"Watch the mogul mogul," says his brother, Joseph, known as Reverend Run, star of a reality TV show on MTV (Run's House) and part of the first big-selling hip-hop group, Run-DMC. Simmons produced both.

"I'm moguling now!" Simmons laughs back.

Twenty-five years after he helped found the hip-hop movement and turn it into a huge money-making machine — and an "aspirational lifestyle" for a generation of young people worldwide — his Rush Communications includes clothing lines, jewelry, fragrances, TV and movie production, even a Broadway show.

Simmons, at 49, isn't slowing down. He probably couldn't if he tried. His nickname is "Rush."

"He gives new meaning to the word ADD," says his friend and former business partner Donny Deutsch, an ad agency owner who hosts the talk show The Big Idea on CNBC. "He's got A-D-D-D-D."

Simmons' world is one where the vibe of the streets can be cleaned up — a bit —and sold to the masses. (Read: suburban kids.)

He co-founded, then sold one of the first successful rap record labels, Def Jam Records (Beastie Boys, LL Cool J). And he founded the first successful "urban clothing" company, Phat Farm, and its spinoff for women, Baby Phat, which is run by his wife, former model Kimora Lee Simmons. (They're separated.) He's since sold the lines, although he remains CEO.

He produced The Nutty Professor starring Eddie Murphy, the Def Comedy Jam series on HBO and other ventures. Black Enterprise magazine estimates that his company, privately owned Rush Communications, collected revenue of about $360 million in 2005, making it the 11th-largest black-owned firm in the country. Simmons' net worth has been variously estimated at somewhere between $325 million and $500 million.

"He's the Martha Stewart of the urban esthetic," says Wendy Liebman, president of WSL Strategic Retail, a consulting firm. "He brought a level of authenticity and sophistication to the marketing of rap."

Simmons' influence helped the fledgling trend of "urban" clothing explode from under $1 billion in U.S. sales five years ago to more than $3 billion today, says retail analyst Marshal Cohen of NPD Group. It's a crowded field now, as rappers such as Sean "Diddy" Combs, 50 Cent, Jay-Z, Nelly, Young Jeezy and others have launched their own lines.

"Every time I do something, a bunch of rappers do it, too," Simmons says.

Simmons' world isn't without controversy.

According to Jeffrey Kinwah Chang, author of Can't Stop Won't Stop: A History of the Hip-Hop Generation, Simmons has been criticized for a lot of his actions lately. Chang says Simmons has taken heat for seeming to support the De Beers diamond conglomerate, which supplies his jewelry line, and for emphasizing the good that diamond sales do for African economies, rather than exploitation of workers.

After the flap about Don Imus' crack about "nappy-headed hos" last month, Simmons was faulted, Chang says, for calling on record executives to bleep racist words from rap songs when they're played on the radio — rather than calling for no expletives at all.

And he's been faulted by some music fans for cleaning up rap and hip-hop too much to make it palatable for the masses. "He's taken hip-hop to the global economy," and that's meant "making compromises with the powers outside of hip-hop," says Chang, a former employee who remains a Simmons supporter.

"Longtime fans and lovers of the culture wish it hadn't happened," Chang says. "But you can't put the genie back in the bottle."

Further into the mainstream

Simmons is now pushing hip-hop further into the mainstream with a line of chunky aluminum "urban" jewelry called the Core Collection. It's just hitting some traditional jewelry stores in malls across the country, including Kay Jewelers and Zales. He's got new clothing lines aimed at the bigger wallets of hip-hop kids who've grown up, and another for Wall Street guys who want to appear hip.

And he has plans to open retail outlets across the USA and the world. Simmons has so many ideas, in fact, that it's hard for the rest of the world to keep track of them all. "Business doesn't know it's ready (for all of these ideas)," he says. "But I know it's ready."

Then, he shakes his head impatiently. "The industry is slow — so slow!"

"What else? What else?" Simmons asks whenever conversation lags. What else have you got? Any ideas? Any questions? Anything?

He wants to keep the talk and ideas flowing. He has a million ideas and uses a million words. Ideas spout while he's talking fast. See these new clothing lines? Waddaya think? See this cashmere? Waddaya think?

"I have a young man's brain," he says.

Focus can be an issue for him, says his former partner, Deutsch. "Sometimes I just had to say, 'Shut the (expletive) up, Russell!' "

The two created an advertising company that targeted the youth culture. It failed, Deutsch says, because corporate ad budgets are separated by race. Companies tried to pigeon-hole the team's work into smaller minority ad budgets.

"We kept saying, 'No!' " Deutsch says. "There's no such thing as a minority. Youth is colorblind."

Simmons' world isn't perfect right now. Sales of urban clothing are slowing, says analyst Cohen, and new competitors are crowding him.

"He's going to be in trouble, because people are running after him," says Patricia Pao, a retail specialist. "There's nowhere to go when you're No. 1 other than down. His challenge is to keep the machine going."

Sales of hip-hop music are slowing, too. According to Nielsen SoundScan, which tracks the music industry, sales of hip-hop and rap albums are down 44% from 2000 to 59.5 million in 2006.

Simmons isn't worried. He's confident that the youth culture is "the most brand-building culture in the world. If they say Versace is cool, Versace is cool. And it's not a black/white thing. Eighty percent are not people of color. People just have race on the brain. It's an obstacle.

"Hip-hop," Simmons says, "is not fully exploited."

He has three Phat Farm clothing stores in Dubai, one in Abu Dhabi, one in Madrid, one in Montreal, one in Shanghai and one in Taipei. By the end of 2008, he'll have 20 stores worldwide. He has a flagship store in the SoHo neighborhood of New York and has signed licensing deals to open 29 more U.S. stores.

Meantime, he's extending his brands and cross-marketing them on all his TV shows and websites. When Simmons shows up on Run's House, he talks about and wears Phat Farm clothes.

When he launches a new website this summer, called Global Grind, he'll cross-promote his jewelry, fragrance and clothes. When Kimora launched a fragrance, she named it Fabulosity, the same as her book published last year.

She talks about her fragrance, clothes and book on a new reality show she's pitching to MTV.

Reverend Run had an idea for a line of brown diamond jewelry called "Brown Sugar." He talks about it on his show. He mentions it when he's with Simmons. "We'll get to it! We'll get to it!" Simmons says.

Simmons is continuing to build the Phat Farm line, extending it into three new lines: XV, a casual line aimed at the hip older guy; Atma, an expensive line with such items as cashmere hoodies embroidered with Yoga images in silk; and Russell Simmons, a line of pinstripe suits with style.

He walks into Kimora's office; she rises to her height of more than 6 feet.

"Don't hate me because I'm beautiful," she laughs.

The two live apart. But, "We still work together 14 hours a day," he says.

They're trying to extend her Baby Phat line into more upscale clothing with a women's line called TLS. Retail analyst Pao says Kimora's "biggest struggle is going upscale into that range like Juicy Couture," which was started by rock 'n' roll wives including Gela Nash Taylor, whose husband, John Taylor, is in the band Duran Duran.

Kimora doesn't seem worried. "Hey! I should start a camp called Kamp Kimora, where I mentor girls!" she spouts. Simmons seems to like the idea.

"We are all Russell's protégés," his partner says.

He kisses her cheek and rushes out of the room.

Contributing: Thomas Ankner


ABOUT RUSSELL SIMMONS
Age: 49.
Family: Separated from former Chanel model Kimora Lee Simmons, partner in his businesses; two daughters.

Career: Born in New York. Co-founded hip-hop label Def Jam Records, signing Beastie Boys, LL Cool J, Run-DMC and others. Formed Rush Communications, which includes a clothing company, a film production group, a sneaker company and a prepaid credit card company. Sold Phat Farm in 2004 to Kellwood Co. but is still its CEO. Sold Def Jam Records, now part of Universal Music.

Education: Attended City College of New York but left to promote rappers.

Hobbies: Yoga is Simmons' obsession. He meditates and does 11/2 hours of grueling yoga workouts every day, no matter where he is in the world.

Social cause:Hip-Hop Summit Action Network, which sponsors financial planning seminars for young people and advocates for voter registration.
Books: Do You! 12 Laws to Access the Power In You to Achieve Happiness and Success. Autobiography, Life and Def.