HOOKT’S GROWING HIP-HOP EMPIRE
Byline: Peter Braunstein
NEW YORK — From today’s vantage point, music and fashion in the hip-hop world seem as inseparable as Salt ‘n’ Pepa, but it wasn’t always that way. Old-school rap groups like Run-D.M.C. initially shunned designer jeans and rapped “Don’t want nobody’s name on my behind,” — but soon afterward the duo signed a multimillion-dollar marketing deal with Adidas, a company they extolled in the Eighties rap anthem ‘My Adidas’.
Rappers were destined to fall prey to the lure of labels, as the desire to show that they had transcended ghetto squalor — materially or otherwise — necessarily involved a copious amount of designer name-dropping. Rap kingpin Jay-Z, on his most recent album “The Dynasty Roc La Familia,” proves why he’s hip-hop’s foremost apostle of luxury branding: “What do you say, me, you, and your Chloe glasses/ Go somewhere private where we can discuss fashion/ Like, Prada blouse, Gucci bra/ Filth Mart jeans, take that off.” Hip-hop’s luxury aficionados, blissfully oblivious to the LVMH-Gucci wars (which nonetheless resemble the East Coast-West Coast rap wars of the mid-Nineties), flit freely between references to Gucci-wear and their liquors of choice, which just happen to be Hennessy (aka ‘Henny’) and Moet (‘Mo’).
But hip-hop fashion isn’t limited to admiration of established luxury brands. As part of the bedrock hip-hop ethic of ‘keeping it real’ (not losing touch with one’s roots), Gucci and LVMH coexist with urban streetwear from firms like Fubu, Triple 5 Soul, Pimp Gear and Phat Farm. It’s this correspondence between the street and the penthouse, between an oversized Wu-Wear shirt and a Gucci visor or Rolex watch, that epitomizes the style known as “ghetto fabulous.” And while people in New York and Los Angeles can hip-shop at any number of off-line retail outfits, rap-enamored youth from smaller cities or outside urban areas have a tougher time locating that Swarovski crystal-studded feathered thong clip. That’s where the online hip-hop empire of Hookt.com enters the picture.
Emerging among a bevy of hip-hop “lifestyle” Web sites, Hookt.com has grown and consolidated since its online debut in August 1999. “We wanted to build a business from the Internet out,” said Chas Walker, Hookt.com’s chief strategic officer. “The idea was to center our revenue streams around the Internet, and then move the brand into other areas of media.” Heady plans, but — in contast to many dot-com grand schemes — Hookt.com has thus far remained on target. Having introduced e-commerce in August of last year, Hookt went on to forge a strategic partnership with Grammy-nominated rapper Eminem in May 2000 and with Puff Daddy’s Bad Boy Entertainment in September. Last month, Hookt merged with former rival site Platform.net. As a result, the current Hookt empire includes hookt.com, Platform.net, and SayShe.com (geared to hip-hop women), as well as hookt-hosted sites Badboyonline.com, Puffdaddy.com, Eminem’s Slimshadyworld.com, and Onthesneaktip.com. Hookt’s staying power can be attributed to two factors: the dynamic growth and resiliency of the urban online hip-hop youth market and a canny business strategy. “Hip-hop today is where rock music was in the 1950s,” said Walker. “The beauty of hip-hop is that it transcends race, class, geography and is far broader than the black urban male archetype.” Hookt’s own demographic information, conducted through online polling and surveys, indicates a diverse and ever-fluctuating constituency of users: currently, 70 percent of hookt’s audience is white or Asian, 30 percent black and Latino; 65 percent suburban, 35 percent urban; 60 percent male, 40 percent female; 60 percent American, 40 percent international.
The buying power of the online urban market is borne out by a recent market research report conducted by UrbanIQ, which publishes a quarterly, Urban Lifestyle Trends Research Analysis (ULTRA), related to marketing, fashion and music. The report found that, out of 45.3 million urban consumers, 22.5 million are currently online and estimates that the urban online population is growing at 17.3 percent a year. The report also found that over 10 percent of urban online consumers live in households with a $75,000 annual income. “The urban market is neither ethnic nor geographic,” said Guy Primus, executive director and senior analyst of UrbanIQ. “It is a consumer group with the power to influence mainstream culture both here and abroad.” One of the beneficiaries of this urban consumer base is Hookt. Although 65 percent of Hookt’s U.S. visitors are suburbanites, 70 percent of its shoppers come from urban areas, although those numbers tend to fluctuate during the year as many urban college-age shoppers migrate to and from nonurban universities. “On a retail level, we thought we would be strongest in, say, the Midwest, where there’s no access to what we carry,” said Walker. “We were surprised to find how strong we are in urban centers.” Currently, Hookt nets $100,000 in e-commerce sales per month through its two main hubs, Hookt and Platform.
Hookt’s smartest move, however, was not to pin all its hopes on e-commerce alone. “We structured the company based on the assumption of a shakeout. So we devised multiple revenue streams, figuring that e-commerce would be the cornerstone,” said Walker. “We expected e-commerce to be 80 percent of the business, but right now we derive 45 percent of our revenue from e-commerce, 45 percent from ads and sponsorships, and the remaining 10 percent from original content licensing.” Hookt has fashioned a multichannel approach to its sponsors, often by videotaping off-line fashion shows — like the recent one for PNB Nation or the Sean John show during Fashion Week — and uploading them for online viewing. Hookt’s sponsors, in turn, support the site by any means necessary. “We have tremendous access to Bad Boy Entertainment content, exclusive tracks and lots of co-branding opportunities,” said Hookt marketing director Kovasciar Myvett. And Puff Daddy himself, being one of Hookt’s advisory directors, plugs his online protege whenever possible. “Puffy mentioned us when he appeared on the celebrity ‘Who Wants to Be a Millionaire?’,” said Walker.
Last September, Hookt reached out to the female hip-hop audience with “sista” site SayShe.com, which plans to relaunch its e-commerce store in early March after an abortive attempt last year. According to SayShe president Lynne McDaniel, a specialized site for hip-hop women is part of Hookt’s overall strategy of coralling the urban, single, working-women demographic. “We wanted to separate the female market, and felt that we’d lose out on a major demographic if we didn’t — but when we launched last September, the online market had already fallen,” said McDaniel. McDaniel is heartened by surveys like Urban IQ which demonstrate the buying power of the urban market. “I think the urban market is underserved online, but when retailers find out who it is they’ll be surprised. Uptown kids might inspire the look, but suburban kids are buying it — and they’re online.”
McDaniel furnished more details on SayShe’s target customer. “She’s the girl who’ll wear Lady Enyce and a Gucci belt, who wants to dress like Mary J [Blige] but can’t afford it, who wants to look like that Jennifer Lopez cover of W last year. She’s that girl in Atlanta who’s like ‘I am Destiny’s Child, I am Lil’ Kim.’,” McDaniel said. “We felt that we had to separate women’s wear because urban men’s wear lines are too sports oriented, and women want something dressier.” Which raises the question: Why do hip-hop women out at clubs tend to dress so much better than men, who usually look like they just came from playing ball? “Well, you like your guy a little street, you know?” said McDaniel. “Plus, how many guys do you see going out in suits anymore?”
Hookt’s latest milestone is last month’s merger with Platform.net, an established hip-hop site with a distinctive online brand image and loyal following. Originally launched in 1995 as a fashion portal for streetwear, Platform evolved into a content and commerce site serving diverse subcultures in the urban teen market. “We didn’t want to be a shopping mall, but a real forum for urban culture that wasn’t being voiced on MTV,” said Platform veteran and Hookt vice president of business development Tina Imm. “We ended up being like a cross between Vibe magazine and Delia’s.” The site, whose home page banners include subtitles such as “We shot Reagan” and “The kid ain’t mine,” has an edginess that continues to attract young shoppers and content surfers alike.
Last year’s market downturn led Platform, like many other urban lifestyle sites, to partner off. “We want to build Platform as a preeminent brand in urban culture. We talked to a lot of prospective partners, and found that we shared with Hookt a complementary business model,” said Imm. Indeed, the provocative Platform.net adds “flava” to the Hookt kingdom, while representing many of the same labels — Triple 5, Echo, PNB — offered at the Hookt store. Hookt hopes to lower burn rates and customer acquisition costs through the merger with Platform, having now merged marketing, production, and e-commerce under one roof — at the cost of 20 jobs, labeled “redundancies” by Walker at Hookt. Platform’s shopping channel features 25 streetwear labels. Like the Hooktstore, which features men’s and women’s departments for certain labels, Platform also mixes it up. “We don’t designate a ‘girl’ area, because the urban female mind-set is elusive,” said Imm. “We have a universal audience.” Imm points to one label, Undergirl, which features ladies’ thongs and men’s boxers with raunchy slogans and imagery prominently displayed on them, as one example of Platform’s gender-blending approach to fashion. Having recently closed a third round of financing for $5 million from venture capital firm Warburg Pincus, Hookt is hoping for a future made even “phatter” by merger-related efficiencies.