Steve Wynn is the name and face of Wynn Resorts.
In TV ads for his Las Vegas properties, he hobnobbed with the likes of Frank Sinatra and Dean Martin in the 1980s. During a Super Bowl commercial for a Wynn-branded hotel in 2005, he stood on its rooftop and declared the hotel “the only one I’ve ever signed my name to.”
With his smiling face and flamboyant personality, he became one of the avatars of Las Vegas and even a part of pop culture, as an inspiration for the casino owner portrayed by Andy Garcia in the trilogy of “Ocean’s” films.
But in the wake of Mr. Wynn’s recent resignation as the head of his hotel and casino empire after allegations of sexual misconduct, that kind of alignment between brand and personality presents a problem. (Mr. Wynn has denied the allegations.)
“The Wynn brand is going to take a hit, there’s no question about it,” said Paul Friederichsen, a partner at the Blake Project, a brand marketing and consulting firm. “The question is: How long?”
In general, when companies wrap a brand around a personality, whether the founder or a celebrity, there’s a risk, Mr. Friederichsen said. When that person does something that draws negative attention, he added, the brand needs to address it quickly and directly, offer up a remedy and communicate it to shareholders and consumers.
“Don’t push it off, put it to the side or wait to address it,” Mr. Friederichsen said. “You’re in damage control so you have to address it immediately, be specific about it and offer up a remedy.”
It is a predicament that companies connected with well-known figures as varied as Martha Stewart and Harvey Weinstein have faced. When the celebrity chef Paula Deen became embroiled in controversy over racial comments she had made, she stumbled, he said.
“She initially tried to deny it at first, then diminish it, and didn’t show up for critical interviews like the ‘Today’ show, and that cast suspicion on her and her brand,” Mr. Friederichsen said. “And she had a very difficult time recovering from that.”
Ms. Deen wound up losing endorsements and TV show contracts.
The repercussions for the Wynn brand could cut far deeper and last far longer than they have for other companies that have faced harassment allegations in recent months, such as NBC, which fired Matt Lauer, and Fox, which let Bill O’Reilly go.
“Steve Wynn is arguably the father of modern-day Las Vegas,” said Aaron Perlut, founder and managing partner of Elasticity, a brand consulting firm. “The fact that his name is, in and of itself, the brand makes it far more complicated, in a similar way that Harvey Weinstein’s personal brand was also the name of his company.”
Wynn Resorts relies heavily on corporate and group bookings for its revenue. And many big-name brands may be reluctant to book Wynn hotels, at least for the foreseeable future, to avoid getting caught up in the controversy.
“If I was PepsiCo, I would stay away right now,” said John Blank, chief equity strategist at Zacks Investment Research.
But industry experts believe this is temporary, perhaps something the company can get past in a few months.
“His decision to resign reduces the risk of brand tarnishing,” said Dan Wasiolek, senior equity analyst at Morningstar.
Still, branding experts say it’s critical that the company’s new leadership speak out loudly and soon against sexual misconduct.
“I see a huge opportunity for Wynn Resorts to now take a leadership role in this entire controversy by getting out in front of this and championing women’s rights and championing equality that is sorely needed in Las Vegas,” Mr. Friederichsen said.
Mr. Perlut said, “The new chief executive needs to be visible and to be vocal about the need to ensure that the kind of behavior that Steve Wynn is being accused of is not part of the Wynn corporate culture and is not part of how employees and customers are treated.”
Experts suggested that protests against the brand could be muted because the company is largely selling Las Vegas, where marketing often focuses on a party atmosphere.
“It’s the imagery: Come have a hot time with women wearing next to nothing with sex, liquor and rock ’n’ roll, plus a lot of gambling,” said Robert Passikoff, president of Brand Keys. “They’re not talking to you about 400-thread-count sheets. It’s chorus lines and good-looking people partying.”
Still, the allegations have resulted in multiple shareholder lawsuits and at least four separate investigations into Mr. Wynn and the Wynn Resorts operations.
“If you find that it was not only occurring with Steve Wynn but on level after level of his organization, then I think it could be devastating to the brand,” Mr. Perlut said. He added that the company would then likely need to be sold or change its name.
But, he said, “if the news cycle dries up very quickly, time will heal, and six months from now it will be a distant memory for better or worse.”
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