Bridging the Gap: As Asset-based Lenders Reduce LTVs for Retailers, IP can be Leveraged

There’s no question that the last twelve months have been challenging for retailers. As inflation impacts consumer spending and tariffs impact supply chains, asset-based lenders are reducing loan-to-value (LTV) for AR and Inventory, leaving retailers with limited options for much needed liquidity.

We are advising an increasing number of lenders that are looking to leverage the unsecured value of intellectual property (IP), to strategically offset this decline and bridge the LTV gap.

Asset-based lenders are focused, quite rightly, on one key question “what value can I realistically recover from the collateral?”. IP valuation in a downside scenario is not just a numbers’ game. Understanding key factors that preserve IP value in retail, such as brand loyalty, brand positioning, brand protection strategy and customer analytics, while ensuring the IP assets are well-managed and capable of being transferred/sold, is critical in arriving at a recoverable value for IP.

Lenders can trust third-party IP valuations that:

• are benchmarked against actual, market IP sales; and
• pinpoint the key IP factors that could widen the M&A buyer pool thereby creating competitive tension to drive value recovery in a downside scenario.

Realistic downside valuations give lenders confidence that they can lend against the IP, and bridge the LTV gap.

It’s important to note that IP can also retain value even if the operating company is dead. Prominent brands that achieved widespread brand awareness can be revived and relaunched to take advantage of the inherent brand loyalty and reconnect with a customer base/demographic:

• Gordon Brothers acquired IP rights of British heritage brand Laura Ashley’s from administration in April 2020, developed a licensing model and global ecommerce presence, and subsequently sold it to Marquee Brands in January 2025[1].
• Boohoo announced, in March 2025[2], it was rebranding to Debenhams as the brand name was prominent and known for appealing to an older customer base, likely prompted in some way by recent market disruptors that had swooped up Boohoo’s younger target customer base.

This is evidence that brand awareness & brand loyalty can drive M&A and retail strategy years after the operating business is dead, highlighting that IP value can be preserved.

Understanding that IP can be both flexible and resilient, can give lenders confidence that IP value can be recovered. There is evidence of cross-border monetization of IP, with emerging demand for Western European brands in APAC territories in recent years. Metis Partners has provided IP advice and IP valuation services to two global retailers who were looking at, and successful with, IP-expansion and monetization opportunities:

• International retailer, Superdry plc, sold its South Asian IP assets (including the Superdry brand and related trademarks in India, Sri Lanka and Bangladesh) to Reliance Retail for £40m[3].
• Authentic Brands Group (ABG) entered into a partnership with Baozun Inc., to license the Hunter Boot IP in China and Southeast Asia territories[4]. ABG purchased Hunter Boot’s IP a few months prior as part of its strategy to diversify its portfolio outside the US.

IP-related transactional evidence gives lenders and IP valuers comfort that IP value can be preserved and recovered, even in downside scenarios. Metis Partners understands the power of transactional data, which is why we benchmark all our downside valuations, both for restructuring & bankruptcy and for lenders, using our proprietary IP sales database, to deliver realistic downside IP valuations.