Many businesses, particularly those most vulnerable in such areas as travel, sport, entertainment, hotels, restaurants, leisure, fashion and retail have spent years successfully building their brands and now face insolvency if they can’t navigate their way through the crisis. But the value of their brands will remain intact. Leveraging this value could help you ride out the storm.
Brands have value – likely much more than you think
Over the last 30-40 years, the shape of business has changed unrecognisably. Rather than factories, plant and machinery, now the majority of Enterprise Value comes from Intangible Assets (Times Raconteur 2019), and over half of this comes from brands (Millward Brown 2014).
The likelihood is that you have no idea about the value of your brands.
And why would you? There’s currently no requirement to review this as part of standard accounting standards. So, only if you’ve restricted your tax arrangements, or been part of an acquisition, there’s been no obligation as to why you would need to. Historically, these exercises have been expensive exercises, so have only been conducted on an event-driven basis.
Disconnect between brand value and brand investment
At Stobbs, we’ve worked with over 2,000 companies over the last 5 years and we often see that brands are chronically under-invested in. For something that is the biggest asset in the company, how come so little investment is based on protecting and maximising its value?
In normal circumstances, at Stobbs, we’d advise you to understand the value of your brands so that you allocate your budgets effectively and maximise their value with the right interventions.
For right now, though, it could be that all the time, blood, sweat and tears that has gone into building your brand could start paying back. They can support you get through the massive financial challenges we are facing by being a source of cash and working capital:
Value of our brands represent valuable collateral for loans to secure working capital
The government loan-support scheme will guarantee loans up to 80%, but the banks still have to approve it.
Non-strategic brands could be sold to raise cash
We can help you unlock it
We have a focused, expert team of RICS valuers to understand the value of your assets. We have the brand expertise to explore how to maximise their value. Armed with this knowledge, we can help you leverage your brands to survive this crisis and come out stronger on the other side. Get in touch with Julius (
) to explore how your brands can start paying back.