The Homa Files

Excerpted from New York Times, “Brand Names Live After Stores Close”, by Amy Zipkin, April 14, 2009

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In the last year, a string of retailers have gone into bankruptcy — Sharper Image, Linens ’n Things, Circuit City and Fortunoff among them. But while the stores have disappeared, their names live on.

And the companies that have breathed new life into these brand names are, paradoxically, some of the same ones that had led the stores through their dying days — the liquidators.

Liquidators have bought the rights to use the names of Sharper Image, Linens ’n Things and Bombay, the onetime furniture retailer. The liquidators — who prefer to be known as asset recovery specialists — have also expressed an interest in buying the Circuit City and Fortunoff names.

Already, new merchandise with the Sharper Image name is available at retailers like Macy’s, J. C. Penney and Bed, Bath & Beyond. A new Web site for the Linens ’n Things brand, lnt.com, is up and running. In addition to the bedding and bath products the chain was known for, the site also carries toys, pet products and baby accouterments.

Liquidators spent about $175 million to acquire the Sharper Image, Linens ’n Things and Bombay names and predict a billion dollars a year in sales for Sharper Image and Linens ’n Things in each of the next five years.

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The value of brand names is being redefined, as “the liquidators are taking the definition of assets and extending them to the brands themselves.” 

The liquidators say they see themselves as brand licensing experts who will receive royalties for the products without the need to pay rent or a sales staff. “It’s not a capital-intensive business. It’s a royalty-driven business. It’s like an annuity.”

Those familiar with intellectual property rights say there is no guarantee that a revived brand will be successful after a retailer has gone under. The brands will compete with others that do not have troubled histories.  Still, with the recession continuing, merchandise with a familiar name may prove attractive to consumers.

Edit by DAF

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Full article:
http://www.nytimes.com/2009/04/14/business/14liquidate.html?ref=business&pagewanted=print

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