A UK-based omni-channel fashion retailer with a 50-year track record. The Company generates revenue circa £1bn annually through retail stores, ecommerce and third-party ecommerce. The Company offers broad-appeal, affordable clothing which has helped it reach multiple customer age segments, with each demographic being financially significant. This award-winning brand is a market leader in key womenswear product categories.
- Engaged by a Lender to provide our opinion on the valuation and quality of the IP Portfolio to support the lender’s appraisal process.
- Lender had an IP valuation from another appraiser (sell-side) but sought an opinion that delivered more than just the number, as the lender wanted insight on the IP as collateral and the factors that would positively/negatively impact the sale value of the IP. .
- We valued the IP assets - brand-related assets and customer database - on an OLV and FLV basis.
Our extensive IP and business diligence confirmed:
- A highly valuable, extensive customer database with rich transactional data, being utilized to inform product design & development, fulfilment decisions and marketing strategies, which drive forecast revenue.
- Significant customer loyalty driven cashflows – close to 10% of the customers driving a significant percentage of annual revenue.
- Extensive data analytics, that delivered valuable customer insights which would preserve IP value, crucially bringing FLV closer to OLV.
- The current IP and business strategies were not aligned. The international trademarks had been maintained but no trading in these territories for >10 years.
We benchmarked the IP Portfolio against our proprietary database of IP sales from distress scenarios, which provided additional comfort to the lender and ensured that we were providing a realistic valuation in a downside scenario.
We focused on key IP-related factors which in our opinion would positively influence value recovery in a downside scenario and rated the core IP collateral for the lender as follows:
- Extensive portfolio of UK and international trademark filings protecting a well-established award-winning brand; and
- Critical customer database (incl. analytics and insights) with 9m known customers that was actively monetized to secure revenue and future cash flows.
Whilst not material to the current strategy, international commercialization was a part of the future strategy, and we urged the lender to add the international trademark filings to the IP collateralized bundle as they may become important and recover value in a future downside exit scenario.
