Jessica Simpson revealed she used her house as collateral to buy back her namesake fashion brand two years ago after the company that held a majority share headed for bankruptcy.
“I talked to my mom in-depth about it, and I was like, ‘I think it’s time for us to do this on our own,’” she told Bustle of the billion-dollar company she runs with her mother Tina, 63. “We either sink with the ship, or we jump and hope to find a lifesaver. And really that lifesaver was ourselves.”
The 42-year-old started the Jessica Simpson Collection at the height of her fame in 2005 in a partnership with the Camuto Group. It was sold to Sequential Brands in 2015. The Simpsons kept 37% with conglomerate Sequential, holding a majority share.
The “Irresistible” singer’s original deal was with Nine West co-founder Vince Camuto, and the brand found so much success, it expanded from shoes into clothing, perfume, accessories, luggage and currently holds 22 licenses.
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However, by 2019, Sequential Brands was close to bankruptcy.
Simpson first told Bloomberg last year that her resolve was such that she was willing to risk her house. “We’ll borrow against our homes. Even if I have to go live in a little, tiny place in Ireland, I will.”
She added at the time, “My name was on it. I don’t ever move away from my name.”
She told Bustle that during her time with Sequential, the conglomerate cycled through five CEOs and left a trail of broken promises, including taking the brand global.
Simpson said she also found it “disrespectful” that the conglomerate wanted to furlough nearly all of their staff during the coronavirus pandemic.
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However, the decision to take back ownership was not easy.
Simpson said she confronted her then-business manager over her decision to buy back the company, saying, “You don’t believe in me,” before they eventually parted ways.
Along with putting her home up as collateral, the “A Little Bit” singer also liquidated her stock portfolio and had to ask her mother for money “not too long ago.”
Simpson was recently stuck while shopping at Louis Vuitton, waiting for employees to get a spending authorization from her mom, Bustle reported.
“Honestly, she did reach out to me to borrow money,” Tina said. “And I said to her, ‘Yeah, let’s talk about it.’ I’m her mom first, obviously.”
She said her “terms” for the loan “would be control your spending a little bit better.”
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“In buying the brand back, I told her, ‘if you’re sure you want to do this, you’re just going to have to tighten up your belt a little bit,'” the senior Simpson added. “‘You’re going to have to not live not quite as extravagantly. Because I am on a path to pay this off. I don’t want to keep the loan on the brand. Then we own it out 100%. It’s like paying off your house.'”
The company has plans to launching a haircare line in 2024 with a $67 million loan they got last year, according to Bustle.
“One of the great things about owning your own business is that you can choose categories like hair care and skin care and makeup. And water,” Tina told the outlet.
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“It’s a real joy and also challenging to work alongside your daughter,” she added. “In a good way, not in a negative way. I think we do a really great job of balancing that.”