UK-based online retailer of luxury clothing, shoes and accessories with >35-year track record and product range of >600 third party brands, as well as owning its own luxury fashion brand. The Company generates annual revenues in excess of £350m. The brand has secured a strong international presence across the UK, US, Middle East, Far East and Australia with more than 100m visits to its ecommerce platform.
We were engaged by a potential buyer who required IP valuation advice in relation to the Company’s IP portfolio to support an M&A bid for the business. We conducted a desk-based appraisal and provided our opinion on the valuation and quality of brand-related assets on an OLV basis to support the buyer’s likely bidding price.
We recognized this was a dynamic and commercially competitive M&A process and, despite having no direct access to Management, our opinion was delivered to the client on a highly accelerated basis (within 2 days) providing additional comfort to the Client in formulating a bid.
Using our Metisology® approach we identified significant brand loyalty with more than 70% of customers being referred as annual recurring customers over the previous years. We identified valuable, long-standing supplier relationships with leading luxury brands/partners that had been built over decades, and which provided the Company with a competitive advantage over any new market entrants.
We identified a highly valuable, extensive customer database of over 500k customers, with evidence of rich transactional data. Through our extensive experience in the retail sector, this type of rich transactional data is used to inform fulfilment decisions and marketing strategies, which drive forecast revenue and help predict cash flows more precisely. We advised the potential buyer that this was a key IP asset and driver of revenue.
There was evidence that the brand had earned significant trust amongst its customer base which had enabled it to launch its own label luxury brand. Among over 600 luxury third party brands sold on the Company’s platform, its own-label luxury fashion brand product line was the largest revenue generating brand, demonstrating significant brand value.
Having assessed the current status of the trading entity, we delivered our assessment of IP Value on an OLV basis, which we benchmarked to our proprietary database of IP sales from distress scenarios, which provided additional comfort to the Client and ensured that we were providing a realistic valuation that could be confidently relied upon in an M&A scenario.
The OLV valuation assisted the Client in its bidding process. We delivered a discrete valuation, having no access to Management, and delivered to the Client in less than 24-hours from kick-off, due to highly accelerated nature of the process.
IP Assets Valued: Brand-related Assets, including customer database.
