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Influencers Transcript: Kathy Ireland, December 12, 2019

ANDY SERWER: Some treat fame as the ultimate goal. Kathy Ireland turned hers into a global multi-billion dollar brand. A supermodel in the 1980s and '90s, Ireland made her splash on the cover of the "Sports Illustrated" Swimsuit Edition. A couple of decades later, she graced the cover of Forbes as the chief executive of Kathy Ireland Worldwide, a brand empire with fashion and nutrition products, among many others. She's here to talk about how to make a name for yourself and grow a business once you do it.

Hello, everyone. I'm Andy Serwer and welcome to "Influencers." And welcome to our guest, Kathy Ireland, who is an entrepreneur and, of course, a model. And it's great to see you.

KATHY IRELAND: Well thank you, Andy. Great to see you.

ANDY SERWER: I usually see you, Kathy, at the Berkshire Hathaway annual meeting, which you go to for a number of years, I guess, as I have. And so it's nice to see you here in New York. But let's just start off and ask you about Berkshire Hathaway and Warren Buffett, because we have that in common. What do you find so appealing about Warren Buffett and the Berkshire Hathaway annual meeting?

KATHY IRELAND: He's genuine. You know, I met Warren Buffett through Irv Blumin. Irv Blumkin is the CEO of Nebraska Furniture Mart, our first retail partner in the home industry. And Warren and Charlie-- genuine people, it is always such an education. For years, we've competed in the annual newspaper toss, which is-- he is so competitive. Mr. Buffett is-- he takes-- I understand why he's so successful, because Deb, who works with him, she'll call me the night before-- he's practicing. It's like, I am too-- until the last minute.

But his work ethic is extraordinary. And the integrity-- I have to say my favorite part of the Berkshire Hathaway shareholders meeting is before the movie-- the video-- he always shows the Salomon Brothers incident and talks about that, you know, if you lose the company money, basically we'll forgive you. I'll earn it back.

But if you mess with one shred of our reputation, I will be ruthless. And I love that. And that is such strong leadership. And it's so protective. And it's understandable why he's so successful.

ANDY SERWER: Now, we're going to talk all about your business, But before we get into that, just another question about Buffett-- has he given you advice? Do you talk to him at all about what you're doing? Do you seek out his counsel?

KATHY IRELAND: Yes. And something about Mr. Buffett is he's so prolific. Anyone can be mentored by him. There is so much to learn from his life. The HBO special, "Becoming Warren Buffett"-- so many lessons there. We started our brand with a single pair of socks, went into the fashion apparel industry. And it was just a few words of him sharing that, you know, the home industry is-- it's more steady. Fashion is so cyclical. Every season, you need to come up with a new line.

And when Mr. Buffett speaks, you really listen and you really strongly consider and dig deeply. When we got into the home industry, there were not people who were known for other industries having home lines. Today, that's changed, but it was at a time when people actually laughed when we told them we were entering the home industry.

ANDY SERWER: Oh, that's so interesting, and it's so typical, you're right, in that it's, like, a simple observation, but, gee, I never thought of it kind of thing. Right?

KATHY IRELAND: Absolutely.

ANDY SERWER: Yeah. So talk about your evolution from a model to a business person, because I don't think people are necessarily so familiar with that, Kathy. How did that come about?

KATHY IRELAND: I began as a business person. As a child, four years old, I was that kid going door to door. I was selling painted rocks, making handbags--

ANDY SERWER: This is in California?

KATHY IRELAND: Yep, in Santa Barbara where I grew up. My mom made halter dresses she'd sell at beach fairs, and I would make jewelry and handbags to go along with them. When I was 11, I got a paper route-- which, great job training. And that trained me for the shareholders meetings and the newspaper competitions with Mr. Buffett and Mr. Gates.

Great lessons-- wonderful, wonderful lessons, but the modeling was not part of my plan. It came to me and I thought, this is an opportunity. I can save money for college or to start a business. The entire time I worked in that industry, I was trying and failing at businesses. I look at failure as education. So in that respect, I'm very well educated. The business just took a while to get started.

ANDY SERWER: Yeah, so Kathy Ireland Worldwide-- what does it encompass now, Kathy? Give us sort of the outline of the business right now.

KATHY IRELAND: We're celebrating our 25th year in business this year, which I do not take for granted. So grateful to the loyalty of our customer and my boss, who's very tough. And I love that. And our company encompasses everything from fashion apparel, intimate apparel and sleep wear, diamonds-- diamonds by Kathy Ireland are affordable luxury-- and then Kathleen Marie Paul wraps New York, which begins at $50,000 and goes into the multimillions.

Destinations, travel, fintech, working in entertainment-- the entertainment segment of our company just signed Vanessa Williams, working with her career-- extraordinary-- I mean, just extraordinary, genius, talented individual. And there is a sports segment of our company, and there'll be more announcements coming they're publishing.

Someone asked me recently, they said, you dabble in many fields. And my response is that I don't dabble, but rather, we expand and we grow. And it's cohesive, because our vision is teach, inspire, empower, make our world better. And the how to that is that we-- the first part of our vetting process when we're considering a new partner is that they must support one of our Millennium Development Goals.

Many years ago worked with the UN and their youth program on the Millennium Development Goals-- many things I disagree with the UN, but this is something I think we can all come together on-- supporting everything from ending hunger, poverty, supporting education. Our companies added two initiatives-- the fight against human trafficking and supporting our vets-- our military families. And so knowing that each of our partners are going to support these initiatives in powerful ways-- we don't demand a monetary amount. It could be volunteer days with your team. But it's got to make a difference. And that makes it exciting to get up out of bed in the morning. And I feel like we are a baby brand and we're just getting started.

ANDY SERWER: So it's-- everything's got to sort of match that core vision, Kathy, and then sort of touch some of these-- I don't know if they're philanthropic, but just sort of humanitarian goals as well. Is that how you sort of analyze how you want to expand things?

KATHY IRELAND: We have-- I mean, we have promises for our brand. And it's fashion, quality, value, safety. So it's got to meet those. My dad worked in labor relations-- he worked with Cesar Chavez in the farms. And so as a child, we were not allowed to eat grapes. And how people are treated has always been at the forefront of my mind.

When we started our brand with a single pair of socks, we began by conducting surprise factory inspections. You know, anybody can clean up if they know you're coming, but you learn a lot when you show up unexpectedly. Great partners-- John and Marilyn Moretz in North Carolina are partners that continue to this day-- just amazing people. But so how people are treated is of critical importance.

We have the toughest human rights clauses and contracts that I'm aware of. I'm always sharing with people if you have better information, better contracts, please share it so we can get better and grow. And there's some who say you shouldn't even talk about that, because you're going to have issues where people are going to break the law, they're going to break your contract, they'll be-- it could happen in a different country.

And my response to that is if someone finds someone doing something-- breaking the law, breaking our contract-- maybe it's not illegal in that country-- my response isn't whether it was good motives or not. It's, thank you. If we can get information that can initiate a positive change, really grateful for that.

ANDY SERWER: Right. And I have to ask you-- why socks? Why did you start there?

KATHY IRELAND: OK. Well, truthfully, socks-- I was offered an opportunity to model those socks.

ANDY SERWER: OK. Foot model.

KATHY IRELAND: Foot-- it was. They didn't know if they were going to-- it might have just been cropped here and had my feet in the socks-- not even going to see my feet, just the socks. And this was John and Marilyn Moretz in North Carolina. This was as my modeling career was winding down.

And I had saved my money in modeling. People used to say I was cheap. And I wanted to buy a better car or nicer clothes, but I prefer to think of it as fiscally frugal. I think that's another connection with Mr. Buffett. And I was investing in people, in a team. I love sports, and the idea of a diverse group of people with different gifts and talents-- maybe strengths in areas where I didn't have them-- coming together for a common goal.

And so I had this little team that we'd put together. And I thought, you know what? These are great socks and these are really nice people. But I don't want to model anymore and I don't want to work for you, but I'd like to be in business with you-- a partnership. And so that's how we began.

ANDY SERWER: Right. And talk about-- you mentioned your team. So how many people work directly with you kind of running the business? How big is your team? Is it 1,000 people? Or 10 people? Or five people?

KATHY IRELAND: There's 123 people in our company, and then it expands when you get into different countries. And, I mean, so many people are responsible for the work that's done.

ANDY SERWER: Right. And you're not only the CEO, but you're the chief designer at this point still?

KATHY IRELAND: Yes, chief designer and chair. And I work with our global creative director is John Carrasco. He is-- he's become my brother. He's just amazing. We've been together for 30 years. And when you are fortunate to work with great people, you hang on to them.

ANDY SERWER: Right. And you partner with a lot of bigger companies. What do you look for in a partner and what are some of the companies that you've partnered with?

KATHY IRELAND: You know, some people say it's counterintuitive and some people say it's stupid, but it works for us. When we're meeting with a potential partner, I want to see what can we bring to you? How can partnering with us make you more successful? How can it increase your bottom line? How can it make your life better? What can we bring to you?

I don't want to do it if it's not going to be successful for-- that's not a partnership. It doesn't feel right or good or fun. And I want it to be enjoyable. So seeing if it's a good fit-- you can be a great company, a great business, but it might not be a great fit. So that's, you know, first of all, really the getting to know you process. It takes time. It's-- you know, we tell them kick the tires with us. Just ask all the tough questions. And we go through it. And after we've just crossed every T, dotted every I on those contracts, we put them away and we treat each other like family.

ANDY SERWER: Right. Do you talk about how big your company is in terms of sales?

KATHY IRELAND: One of the joys of being a private company, we don't. There's others who report on us-- it's-- going public is something that comes up a lot.

ANDY SERWER: You're in the right place here. We're at the NASDAQ. I'm sure there's someone standing by ready to help you with an IPO here.

KATHY IRELAND: I love the-- I'm a private person, and having a private company suits me very well. I mean, Wall Street, understandably, they expect results every 90 days. And many of the decisions that I make, that our team makes, they're more long term. And so I really like that luxury of being able to do that.

ANDY SERWER: What about CBD, which is kind of a hot category right now? Have you gotten-- I understand you've kind of gotten into that a little bit.

KATHY IRELAND: Yeah. It was wonderful to serve as the first woman chair emeritus and chief brand strategist for a reggae-plus company and to work with Level Brands and get that company going. And I love being able to work with great teams, being mentored by such wonderful people and then being able to mentor others and watch them go into success. It's wonderful and it's rewarding and fulfilling.

ANDY SERWER: Is this marijuana cannabis kind of interesting to you? I mean, are you for legalization?

KATHY IRELAND: CBD without THC-- it's like giving a child a grape versus a glass of wine. And so we started our brand with hemp CBD-- with that single pair of socks 25 years ago. So I like to bring transparency to what it is and how we're involved in it and the benefits of it. We've seen benefits of it-- I mean, our rugs, our flooring, so many different products from the beginning have been made with this.

ANDY SERWER: Right. Let's talk about retailing a little bit, Kathy, in terms of brick and mortar versus digital. Obviously, brick and mortar has been challenged and is under pressure. What is your take on the future of stores, retailing?

KATHY IRELAND: Change has been incredible. And I think we recognize that we've got to offer-- when people make the effort to go shop, to go somewhere-- to really give them an experience. And I'm loving experiencing retailers who are working in innovative, creative ways. And we come up with ways to support our retail partners in brick and mortar where we see that, you know, a customer goes in-- a client goes in, and they spend an hour with the associates-- their infrastructure, their dime, their everything-- they look at the product.

And then they go and they purchase it online. And so we've come up with some really tangible solutions that really help profit sharing and help with our partners, because we see the value in brick and mortar that I believe will always be there. People will want to go and experience and touch and see.

And I'm also seeing Gen Z loves the shopping experience. They shop online. They can do that. But maybe because they've grown up with it their whole life, going to the mall, going to shops is an experience for them and it's fun for them.

ANDY SERWER: Interesting-- maybe the flipside for people of my generation, where it's novel to shop online, those guys like the novelty of going to a store.

KATHY IRELAND: They do, they love it.

ANDY SERWER: That's great. Do you sell directly online from your company? Or do you just sell through partners online?

KATHY IRELAND: With our partners, we sell.

ANDY SERWER: OK. And have you ever had discussions with Amazon and some of those big retailing giants-- the digital retailers?

KATHY IRELAND: We do-- I mean, we love Amazon. We work with Amazon. And what a great example of a company with such growth and such vision.

ANDY SERWER: Right. You have a book coming out. Do you want to talk about that?

KATHY IRELAND: Sure. We've collaborated with "New York Times" number one best-selling author Rachel Van Dyken, and the book is called "Fashion Jungle." And it is-- it's fiction. And it's the first fiction that I've been involved with. While it's not my story, you write what you know and your experiences. So--

ANDY SERWER: What made you want to do fiction, Kathy? That's interesting.

KATHY IRELAND: This is a story that I've wanted to tell for a very long time, because there is-- people look at the glossy images on a magazine. They look at the retouching, and they don't experience what goes on behind the scenes. And they don't experience-- you know, it's interesting, because when we're talking about business, top of mind is sustainability, cruelty processes-- cruelty to animals, child labor, all these things we look at.

But when a girl is made up and dressed up and she gets behind the camera lens, it's very easy to objectify a person. And everything from statutory rape, sexual exploitation, drugs-- there's so much that goes on that I believe most people are not aware of. Now, there's wonderful people in that industry, of course.

There's also many that-- there needs to be more awareness. And something that I share, particularly with young people, but of every age, is how important boundaries are and to really understand your values, what you believe, why you believe it, have conviction, and put boundaries in place to protect them.

ANDY SERWER: And you spoke up about an incident that happened in your modeling career when you were younger-- in 2014, you talked about it in an interview, which was sort of before MeToo was mainstream-- talking about harassment by a photographer and the difficulty you had. Was that difficult for you to talk about?

KATHY IRELAND: No, it wasn't difficult to talk about. It was difficult knowing that there's people out there and there's young girls and boys being hurt by this. I mean, that's what's difficult.

When I first came to New York when I was 17 years old, I naively thought that all adults were basically good people like my parents, and my eyes were really opened. And people who then I considered to be perverts, today I would call them predators-- I didn't realize they were actually breaking the law.

But it's-- you know, tragically, there's a lot of predators in this industry-- in fashion and in modeling. And it's important to have that awareness and to protect yourself.

ANDY SERWER: Somewhat related I guess, Kathy, you tweeted support of the First Lady Melania Trump tweeting that her-- she was a model, that she shouldn't be bullied for that-- that people have given her sort of a hard time about that. How would you grade her Be Best campaign? And what's your take on her status at this point?

KATHY IRELAND: I think she's doing a wonderful job. I don't think there is any time that bullying is OK for anybody. There's never a time when that's OK. And it's irrelevant whether or not somebody agrees with someone or not. It doesn't give anyone the right to mistreat someone and treat them as less than human.

ANDY SERWER: Right. Do you get into politics at all? Because, you know, some people would say President Trump has bullied people on Twitter. So I don't know-- would you agree with that?

KATHY IRELAND: You know, personally, I don't-- when I'm in my business capacity, I don't get into politics because our team is wonderfully diverse and made up of people of every belief and thought. And so to honor that, I don't. But I will say that bullying of any kind, I just-- I strongly disagree with it. And I think we all must be careful with our words.

And I mean, of course it's-- you know, I've been guilty of having words come out that I wish didn't come out. You know, I believe in being quick to think, slow to speak, slow to become angry I think is really good advice.

ANDY SERWER: Right. Let me ask you a little bit about your advocacy for the state-- the country of Israel. Where does that come from? And what's your current take on things in terms of the United States and Israel?

KATHY IRELAND: My love for Israel, it's-- I mean, it's the only democracy in the Middle East. And my love from Israel comes from my faith. I mean, I read about it every day. So it's hard not to just have a deep connection-- just the people, the land, the history. And I get angry when I experience revisionist History. And when--

ANDY SERWER: What is that? What kind of revisionist history?

KATHY IRELAND: Revisionist history-- changing what has been fact and rewriting it-- rewriting history. And I think it's interesting when-- I mean, you asked where my love for Israel came from. And the Abrahamic covenant, which is a forever unconditional covenant where God says to Abraham, I will bless those who bless you and curse those who curse you, and through you all the families of the earth will be blessed. So it's-- love is everyone.

Loving Israel is in no way anti-Arab, anti any other nation. It's not that at all. Israel is less than one-sixth of 1% of the entire Middle East. And yes, in recent times oil has been found, but my goodness-- in comparison to the neighboring countries and the bullying and the abuse that it takes-- it goes back to bullying. I don't like that.

And so when I see that, I want to call it out. When we look at the Balfour Declaration of 1917 and that the land was to be both sides of the Jordan River and then going-- Great Britain going against its own mandate-- I think it was about 23% that Israel took. And they were fine with that. But I don't believe it's about the land. It's never been about the land. They were attacked less than 24 hours after becoming a nation. It's about a hatred. And that's what's got to end.

ANDY SERWER: Right. And you sound like you're pretty well versed on the subject. Have you gone to Israel before?

KATHY IRELAND: Yes. Yes, I love it.

ANDY SERWER: So I'm just curious, Kathy-- I mean, at this point in your life, you could obviously dial back and lie on a beach or whatever you choose to lie on in terms of relaxation. But you just keep going. And why do you just keep-- what motivates you right now at this point?

KATHY IRELAND: I feel so blessed and fortunate to be exposed to needs that are so much bigger than me and to opportunities that are so much bigger than me. I love what we do. I love the people I work with. We've got a lot of work to do. There's just a lot to do. And I hope I live long enough to get a lot more accomplished, because I feel like we're a baby brand just getting started.

ANDY SERWER: Last question-- are you going to go to Berkshire Hathaway next spring?

KATHY IRELAND: Oh yes, of course. Look forward to it all year, yeah.

ANDY SERWER: Great. I hope to see you there. Kathy Ireland, thank you so much for joining us today.

KATHY IRELAND: Thank you. Thank you very much.