Wal-Mart Stores, Inc. (WMT), Novo Nordisk A/S (ADR) (NVO): Paula Deen Cooks Up Controversy With Corporate Backers

There is a price companies do pay for dropping a celebrity endorser, and Advertising Age notes that Wal-Mart Stores, Inc. (NYSE:WMT)’s indoor living division, where product lines are heavily tilted in Deen’s direction, was one of the few bright spots in the retailer’s last quarter, posting positive comps last month. Novo Nordisk A/S (ADR) (NYSE:NVO) also enjoyed a 35% increase in revenues to nearly $500 million on its diabetes drug Victoza last quarter, presumably partly as a result of its association with Deen, who became a spokeswoman for the drug after she was diagnosed with type 2 diabetes.

Some estimates suggest Deen generated nearly $100 million a year across her portfolio of TV shows, books, and cookware, and Forbes ranked her as the fourth-highest-earning celebrity chef in 2012.

But as we’ve seen time and again, as long as companies choose to develop relationships with celebrities who live in the public eye, we’re going to have these recurring scandals, manufactured or not. Whereas some companies like NIKE, Inc. (NYSE:NKE) go out of their way to court controversy, others are thrust into the spotlight. And then there are those like Paula Deen’s partners, who make themselves part of the story by feeding the frenzy that surrounds it.

They just shouldn’t be shocked when it happens to them again next time.

The article Paula Deen Cooks Up Controversy With Corporate Backers originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey owns shares of Nike. The Motley Fool recommends Accenture, Amazon.com, Home Depot, Nike, and PepsiCo. The Motley Fool owns shares of Amazon.com, Nike, and PepsiCo.

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