Many fashion retailers are taking a fresh look at their business strategies in the wake of the pandemic which has seen closures of many high street stores.
It has never been so important to have a strong online presence as well as adaptability to changes in trends. Most recently that has meant casualisation of our day-to-day wardrobes (particularly our bottom halves) and the introduction of new must-have products like face coverings.
That means, however, many retailers who rely on sales through bricks and mortar stores have become casualties of the crisis, with some going into administration or seeing parts of their business being acquired by third parties.
What are the brand protection considerations for fashion companies in this changing retail landscape?
Recent examples of acquisitions clearly show us the importance of brand, and brand protection, to any fashion business. Boohoo paid £55million for the Debenhams IP portfolio, including over 800 trade mark registrations for brands such as DEBENHAMS, MAINE and MANTARAY, the Debenhams website and customer data, choosing not to also buy their existing stock or stores. ASOS bought Topshop, Topman, Miss Selfridge and HIIT from Arcadia Group for £295million, of which £265million was spent on buying the brands and the related intellectual property rights, and £30million on existing stock. This shows the immense value that is attributed to brand and brand protection within the fashion retail sector (as well as the clear move away from needing a physical presence on the high street).
Even within this shift in strategy, the way that companies such as Boohoo and ASOS intend to use their new brand purchases shows interesting and differing business models.
Boohoo’s strategy appears to be to buy third party brands but to run them as separate concerns, with the brands retaining their own online retail presences, and separate websites, but using the same distribution network as the main Boohoo business. ASOS on the other hand intends to incorporate its recent Arcadia group brand purchases into its existing online retail platform. This is perhaps not unsurprising since ASOS’s strategy for the last year or so has been to try to increase the number of brands it sells. It has been selling Topshop products through its platform for some time, with sales of Topshop clothes increasing 41 per cent in P1 of 2021. These new brands should therefore readily integrate into the existing ASOS global warehouse and technology infrastructure.
For Boohoo and ASOS, the strategy appears to be to acquire third party brands to grow their own portfolio. Alternative models are emerging from other retailers.
Marks & Spencer recently announced it is “turbo-charging online growth through the launch of ‘MS2’, creating an integrated global digital, data and online business division within Clothing & Home with operating flexibility to compete with pure play competition and develop our growing portfolio of guest brands”. This is materialising in a mostly partnership-based approach, with Marks & Spencer partnering initially with brands Ghost and Nobody’s Child, but announcing this month that it will also add brands such as Joules, Triumph, Hobbs, Phase Eight, Seasalt Cornwall and White Stuff to its “Brands at M&S” online offering over the next three months. The exact basis of these partnerships has not been disclosed, but there seems to be some variation from wholesale agreements to exclusive collaborations.
Offering third-party brands is nothing new to Next which has sold a large fashion range through its online platform for many years. Rather than through acquisition, Next also takes a partnership approach, working with struggling brands such as Laura Ashley and Victoria’s Secret, and utilising Next’s established online and retail infrastructure to support and revitalise these brands.
And it is not just large UK retailers that are looking to diversify by bringing third party brands on board. Mango, the Spanish clothing brand, recently announced it too will sell third party brands through its online e-commerce platform in order to expand into complementary product categories. This will initially see products from the Italian lingerie brand Intimissimi for sale on the Mango website from Spring 2021. However, rather than this being a plan to become a multi-brand marketplace, Mango sees this as a way to offer added value to its existing customers.
Given the high value attached to brands and the rapidly changing landscape, what should fashion companies and retailers take away from these recent activities in fashion retail?
In particular, it’s important to look at three key elements:
- Is your trade mark protection up to date? Larger companies which acquire other businesses will have been busy with substantial housekeeping exercises to ensure the ownership of its valuable new IP is correct and that current versions of logos are registered.
- Will you be diversifying and expanding your range of products, for your own business or in partnership with another? Have you checked for any IP issues in your new product areas?
- Will retail’s shift online take you in to new geographic markets? Is your brand safely registered there?
Partnering in fashion retail is an exciting prospect. The big players’ established, reliable distribution channels and advanced digital presences are an appealing way for younger or smaller brands to get their products in front of a wider potential customer base. Thinking about these three aspects of trade mark protection can help all brand owners to avoid any nasty surprises and capitalise on the advantages of the “new normal”.