For the latest gaggle of “It” starlets, acting naughty is paying off very nicely. 

For every cigarette she’s smoked and cleavage-cradling dress she’s squeezed into, barely-legal Lindsay Lohan has grown ever richer. Paris Hilton — who once brought a party to its knees by wearing nothing but pasties and a bikini bottom — has parlayed her savoir faire into a cottage industry. And only after dying her hair Morticia Adams black and casting off her cardigans in favor of corsets did pop princess Ashlee Simpson begin to sync up with choreographed destiny.

Dressing like a naughty girl now tops the to-do list of wannabe megastarlets. Once strictly the realm of the occasional vixen — think Madonna in her many incarnations — wicked wardrobes have become wicked-good business for a new generation of red-carpet walkers. 

The bigger the shock, the bigger the potential bucks. And knowing exactly when too much of the bad-girl thing becomes, well, a bad thing — that watershed moment when the tabloid headline writers are no longer laughing with them — is just as important. That’s when it’s time to pull the patented bad-girl-to-good-girl sartorial switcheroo. And these young women, along with their managers and publicists, know it.

Most starlets would rather eat their Manolos than admit what they wore to an awards show materialized after a strategy session with a team of advisers. But, says stylist Rachel Zoe Rosenzweig, who has helped transform the images of Lohan, Nicole Richie and Simpson, most of the time, that’s exactly what happens. 

According to Rosenzweig, “at least 75 percent of the time,” the transformation from bland Hollywood princess to miniskirted hellion — or vice versa — comes at the bidding of managers and the other regents behind a starlet’s throne.

This obsessive, committee-based approach to wardrobe can seem paranoid and vain until you take a look at the money at stake: Perhaps a piece of the $20 billion worldwide film market; or a deal within a textile and apparel market worth $82 billion in the U.S. alone, or the untold scratch to be made in endorsements, record sales, concert tickets and vanity lines of jewelry and perfume.

This story first appeared in the February 22, 2005 issue of WWD. Subscribe Today.

Even tween heroine Lohan has converted late-night partying and her much-ballyhooed twin assets, showcased in clingy slip dresses, into a respectable pile of cash. Reports of underage drinking and drug use — rumors fueled by Lohan’s estranged father — couldn’t stop the 18-year-old from successfully upping her asking price to $7 million per film. (Father Michael Lohan has dubbed his daughter a “money machine.”) Instead, the malicious tongue-wagging only fueled Lohan’s popularity; countless magazines lined up to let poor Lindsay answer “those rumors” and garner fresh public sympathy — just as her debut album hit the stores.

Lohan has also used the timing of “those rumors” to embark on a more elegant makeover, sealing her status as an innocent victim of an ugly parental breakup. She hired Rosenzweig in December and, at the stylist’s suggestion, wore a floor-length J. Mendel gown to a New Year’s Eve bash in New York.

Mischa Barton might be credited with taking a similar path. Denials to WWD of being a “wild person” aside, her very public, berobed canoodling with bad-boy oil heir Brandon Davis wouldn’t exactly thrill the older folks down in the O.C. Despite the scintillating press — or more likely because of it — Barton in December was cast as the lead in Dino De Laurentiis’ 14th-century period piece

“The Decameron.” And in a move that would make grandma proud, Barton recently signed on as the face of wholesome, rubber-soled Keds.

Hilton, meanwhile, could write a thesis on turning bad into bucks. Los Angeles jeansmaker Guess adopted her as a pitchwoman for its Marciano line, splashing her tanned gams across magazine spreads and billboards. Advertising expert Jonathan Holiff of Hollywood-Madison estimates the deal is worth $500,000 to $1 million.

Frank Ginsberg, chief executive officer of the New York advertising house Avrett Free Ginsberg, estimated Hilton’s worth could actually stretch into the tens of millions, if she’s getting a percentage of sales on any of the projects she’s inked.

Hilton has scored her own perfume line, which Holiff speculated could’ve earned the heiress $250,000 just for lending her name to the product. She’s also collected a music label, a jewelry line and a best-selling autobiography. It’s estimated Hilton made a combined $10 million last year; Ginsberg, citing an industry report, said that could double in 2005.

The X-factor that paved the way for those successes? In a bygone time, the terms “infamy” or “unmarketability” would have applied. But far from being shut out by corporate America, Hilton has steered each scandal — manufactured or not — into legions of worshippers and a growing stack of cash.

For fashion changelings, the road to transformation is typically paved with brand-building stunts like the one Hilton sprung in May 2003. Just days after taping the first season of Fox’s “The Simple Life,” she arrived at a pre-MTV Movie Awards party wearing a pair of butterfly pasties, a pink string-bikini bottom and not much else. Photographers snapped compulsively. Scenesters buzzed. “The Simple Life” was already looking like a ratings juggernaut. 

But then came a potential deal-breaker for the aspiring dynasty builder. By November, Web images of Hilton romping naked with then-boyfriend Rick Salomon had crisscrossed the globe, steering the starlet dangerously close to slutdom. The notorious sex tape promised even greater ratings for Fox. But for Hilton, the inevitable bad-girl backlash had arrived. 

Someone at Dan Klores, Hilton’s new publicist, called designer Richard Tyler the week of the reality show’s premiere, asking him to participate in the rescue attempt. “They said they wanted to change her image,” Tyler says.

The result: A ladylike pink pantsuit, sugary pink lips and a ribbon in Hilton’s newly bobbed hair. She appeared at the premiere with daddy Rick Hilton on her arm, and a glittering cross around her neck. 

The switcheroo was on. In an instant, a bad-girl reputation had been parlayed into a money-spinning guessing game. Just how naughty was Miss Hilton, anyway? 

“The timing of the tape coming out was actually good publicity,” Tyler observes. “A negative was used in a positive way. The change — the suit, the hairstyle, the makeup — beautiful but demure, it worked very well.” 

Very, very well. The Marcianos came calling. By last summer, Hilton was named the official face of the company’s new contemporary line. A Guess press release described Hilton as “sweet yet sultry… still just a girl, but not afraid of expressing her sexy side.” A fragrance deal with Parlux came at roughly the same time. And the offers haven’t let up since.

Best runner-up prize goes to little sister Nicky Hilton, whose well-covered 10-minute Vegas marriage to Todd Meister timed perfectly with the release of her new Chick fashion collection. (“I didn’t know it would be such a big deal,” she told WWD in August.) Nicky Hilton has also toned down her look and darkened her hair, perhaps so buyers will take Chick and the handbag line she has designed for Samantha Thavasa since 2001 more seriously. Gone are the days of the early millennium, when Hilton would wear a leather blazer with nothing underneath for a Lloyd Kline catwalk spectacular, or a see-through tank top to a movie premiere.

Even marketing experts have to hand it to Paris and her peers. 

“Celebrities are, in fact, brands and are managed as such,” says David Stewart, professor of marketing at the Marshall School of Business at the University of Southern California in Los Angeles. “And what we try to do with brands is regularly create news, to make them stand out from the crowd, to say they are new and improved. What a celebrity does with her image and dress is to create that sense of news value. In other words, they’re new and improved.”

Other starlets have been studying at the Paris Hilton Image Academy, with lucrative results. Her pal, onetime bad girl Richie, recently underwent a self-imposed good-girl makeover, dropping the peekaboo dresses and some pounds. The result? Her first endorsement deal, as the pitch celeb for Bongo. Ginsberg estimates that Richie earned a cool $250,000 to $500,000 for the photo shoots.

Boob-flashing, table-dancing actress Tara Reid, whose dress failed her so tragically during her arrival at P.Diddy’s 35th birthday bash last year, has gained only more fame because of what she has called an accident. She’s even spun her antics into her own planned Fox sitcom. The main character is a Hollywood bad girl working to get her image back on track.

Ashlee Simpson has also steered a bad-girl image into a very good income. Before launching her “Autobiography” album in July, a then-blond Simpson took pride in mirroring her wholesome older sister, Jessica, gracing red carpets in argyles and cardigans. But there was a problem: The good girl thing wasn’t working.

Frank Galasso of Frank.Studio, the Santa Monica-based salon, remembers how things were for the younger Simpson before she amped up the vamp quotient. “She was blonde when she came in, and every [other phrase] was, ‘I am Jessica Simpson’s sister,’” Galasso said. “Nobody knew who she was. She was just as blonde as her sister. She had the same style, same extensions, same everything.” 

Simpson begged Galasso to make her a brunette, but he refused, saying the look wouldn’t flatter her. So, according to her MTV reality show, she did it herself. Then she called up Rosenzweig to punk up her look for major events. A rock star was born. 

“With the launch of her album, she really wanted to go the opposite way [from Jessica],” said Rosenzweig, who put Simpson in a corseted Jennifer Nicholson dress for the MTV Video Music Awards in Miami last August. “Jessica is so blonde-Barbie-beautiful that, for Ashlee to distance herself from her sister, it was the natural, and smart, thing to do.”