January 26, 2006

DAVOS-UPDATE 1-Bono backs ‘Red’ brand with bold anti-AIDS goal

By Mark Trevelyan

DAVOS, Switzerland (Reuters) - Rock star Bono joined three
leading fashion groups and American Express on Thursday to
launch Product Red, an ambitious branding and fund-raising
scheme with the declared aim of beating AIDS.

"This is really sexy to me. It is sexy to want to change
the world," said Irish singer Bono, holding aloft a new Amex
'Red Card' whose reverse side carries the statement: "This card
is designed to eliminate HIV in Africa."

One percent of money that customers spend on the card will
go to the Global Fund to Fight AIDS, Tuberculosis and Malaria,
which supports nearly half a million people on AIDS treatment
and a similar number of children orphaned by the disease.

Fellow launch partners Gap, Giorgio Armani and Converse, a
subsidiary of Nike, will channel a portion of profits to the
fund from selected 'Red-branded' goods -- including,
respectively, T-shirts, wraparound sunglasses and training
shoes made from African mudcloth.

"We sought out iconic companies who make iconic products,"
Product Red Chief Executive Bobby Shriver told a news
conference at the World Economic Forum in Davos, Switzerland.

The scheme is designed to dramatically increase funds for
fighting disease, drawing on the spending power of so-called
"conscience consumers" in affluent Western societies.

"An ordinary person can simply walk into a shop and feel
that they can participate in helping the needy by simply buying
a perfume," said Armani, one of the world's top fashion

"And cynically I would add, without us changing the price
of the product."


The companies stressed the scheme will only succeed and be
sustainable if it also generates money for the businesses
taking part.

John Hayes, chief marketing officer at American Express,
said: "It's conscientious commerce, and it's our hope it will
both reward our shareholders and the global community."

The companies will roll out the Red brand in different
markets at different stages, mainly targeting Britain at first,
where Amex expects a market of some 4 million 'conscience
consumers' by 2009. It will launch its card in the UK in March.

But the participants were vague on some points.

They declined to reveal projections for how much money the
scheme could raise, saying it would depend on consumer response
and the speed with which the brand could be expanded to other
corporations and countries.

Nor could they say what proportion of sales from
Red-branded consumer goods would go to the Global Fund, saying
this would depend on sales and on whether the products were
sold directly or through a retailer.

Issues may also arise over which companies to approve for
the scheme, both ethically and on competitive grounds as rivals
of the launch partners may apply to join.

"Of course, Red will set standards about which brands,
which corporations we will welcome into this family. Some could
end up being turned down," Global Fund Executive Director
Richard Feachem told Reuters.

Bono, asked if he was being used by big business, replied
that he was not a "cheap date."

"We're not endorsing these products. I think these products
are endorsing us," he said, referring to his long-running
anti-AIDS and anti-poverty campaigning.