A UK-based omnichannel 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 of dresses, footwear, bottoms and denim, as well as commanding 8% of the overall UK womenswear market and ranking no.2 brand overall.
- 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 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 - 10% of the customers driving 50% of revenue.
- Extensive data analytics, that delivered valuable customer insights which would preserve IP value, 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 identified and rated the core collateral for the lender:
- Extensive portfolio of international trademark filings protecting a well-established award-winning brand; and
- Critical customer database 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.