Boohoo buys Oasis and Warehouse: The intellectual property implications
With the news that the retail arm of Victoria’s Secret has gone into administration and that Boohoo has bought the Oasis and Warehouse brands, we are beginning to see greater consolidation and some entrepreneurial acquisitions in the retail sector: this may follow through into other sectors of the economy. What many are not aware of is that behind many of these acquisitions is intellectual property.
Reports in the press explain that Boohoo’s acquisitions were merely of the intellectual property and the online businesses of Oasis and Warehouse. In other words, Boohoo has not acquired the shops (if they were owned rather than leased) or any of the inventory. It is possible that this will be sold separately. This follows Bohoo’s previous acquisition of Coast and Karen Millen, and for many years all four brands were owned together by a single entity.
For Boohoo this represents an interesting acquisition as these brands have a significantly different profile to the Boohoo brand. This means Boohoo can potentially migrate its client base to other brands in its portfolio as the client base matures and perhaps its core fast fashion becomes less attractive to their tastes. Boohoo can also leverage its operations to potentially manage a much larger inventory and reduce the incremental costs of delivery. Finally, the combined data will give it very interesting insights into consumer behaviour, enabling it to learn more about customer trends and have even greater success in designing for the consumer.
The intellectual property across the businesses will include the trade marks, the clothing designs, copyright in the imagery, videos, text, marketing materials and customer data. For Boohoo these are effectively the recipe for further success.
As some businesses struggle in the current economic climate and others succeed, one option for future success is the acquisition of businesses or trading lines from others in the industry (or even new industries), or divestment if the business is struggling and needs to bring in cash.
The reasons for such acquisitions are plentiful and could include:
- Using a particular capacity in one aspect of the business to improve the acquired business (for example Boohoo’s strength in online retailing and marketing may bring more out of the Oasis and Warehouse brands).
- Hedging risk by getting involved in other parts of the market (historically it has been thought that Oasis, Warehouse, Coast and Karen Millen all served slightly different parts of the ladies fashion market and that not all parts of the market would be affected in the same way).
For divesting companies sometimes it can be about more than just money. For example, when GlaxoSmithKline divested the Ribena brand to Suntory, they explained that this was because Suntory could serve the market better and had other strategic advantages, whilst the proceeds from the sale would allow GSK to invest more in other key markets as their corporate strategy and focus changed.
Advice for businesses seeking to acquire another company
For those seeking to acquire, one step which would be valuable is to undertake an audit of the potential target: if your plans for their business mean an extension into new products or territories then a key consideration is whether you would be free to do so or whether others have intellectual property assets (particularly trade marks) which would mean that you would not be able to develop the business in that way. This may affect the price you are willing to pay for the business or make it an unattractive proposition. The audit can also identify skeletons in the cupboard and future risks which may not come out as part of the usual due diligence process.
For those thinking of divesting, a key issue is showing a sufficiently developed portfolio of rights to underpin the business. With a little time to plan, we can put in place a programme of identification and protection of the intellectual property which will help extract the greatest value from these powerful assets when you do come to sell.
How Blaser Mills Law can help
Blaser Mills Law’s Corporate and Commercial team are experienced in intellectual property and are able to help put such audits in place and to develop and deliver a plan to shore up your business with the intellectual property you will need.
If you would like further information on the contents of this article, or on intellectual property in general, please contact Aaron Wood on 01494 478 676 or at email@example.com.