A brand is your most valuable asset
After a somewhat quiet start to the year, March has brought a flurry of takeover activity. This week, that activity culminated in the sale of global brands Tommy Hilfiger and Nicole Farhi, while speculation mounted around the potential sales of businesses closer to home such as Phase Eight, Cath Kidston, department store Liberty and luxury etailer Net-a-Porter. Even the basket case branded fashion chain Envy found a buyer this week.
The sale of Tommy Hilfiger - once a brand damaged by spoof character Ali G but now a hugely commercial and credible premium lifestyle label - to US giant Phillips-Van Heusen was a triumph for its private equity owners netting them a €1.2bn (£1.08bn) profit. While it’s UK positioning lags slightly behind some of its other markets, this is a real lesson in branding at its best.
However, at Nicole Farhi business has not been so brisk. The sale of the label, which is thought to have in excess of 300 stockists and 20 stores, by parent company French Connection to a US private equity firm for £5m, will be an interesting one to watch. That a business with sales of £21.7m is losing £5.6m is seriously concerning given it is one of the bigger British brands at London Fashion Week. It has lost focus and needs to set out a clear market positioning with its pricing and product.
What all of these deals prove though is that there is a renewed appetite for fashion businesses. They also prove that a brand is your most valuable asset. Something that SuperGroup founder Julian Dunkerton certainly knows ahead of his £395m IPO scheduled for next week. Watch and admire.