Brands prosper despite business difficulties
Updated: Feb 22, 2021
It’s a sad consequence of the COVID-19 pandemic and the lockdowns in many countries that retailers have lost business, and regrettably some have gone into administration. But one thing that’s been notable in many cases is that the brands have proved attractive to buyers, even when the rest of the business has not.
For example, Marks & Spencer recently bought the Jaeger fashion brand for an undisclosed fee after the company went into administration. It did not acquire any of the Jaeger stores; instead it plans to add the Jaeger brand to its own portfolio of brands (including Nobody’s Child and Ghost London), as part of its strategy to grow its online fashion business.
In a similar development, online retailer Boohoo has bought the Debenhams “online business and associated intellectual property”, for £55 million but will not acquire any stores or staff. Boohoo has previously added the Oasis, Coast and Karen Millen brands to its multi-brand online platform.
Meanwhile, Asos is said to be in negotiations to buy brands including Topshop, Topman, Miss Selfridge and HIIT after Arcadia Group went into administration last November.
One lesson from these deals is the growing importance of online fashion retailers, particularly multi-brand platforms such as Boohoo and Asos, as the high street declines. Consumers are buying more and more online and like to have a range of brands to choose between when they do so.
Another lesson is about the importance of strong IP rights. Even when businesses have failed, there can still be considerable value in the brand, provided it has been invested in and remains meaningful to consumers. In some cases, once the administrators have done their work, the brand may be the only asset worth something. Time and effort spent on protecting and enforcing IP rights clearly pays dividends.
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