Building Shareholder Value Through Strategic Brand Licensing
Brand-name companies suffer an invisible drag on shareholder value
A brand can be a powerful marketing platform for whole new categories of products that its company lacks the expertise and infrastructure to develop and take to market.
The cost of not harnessing that brand power can be high. Some brand owners could generate royalty income in excess of 20% of their pre-tax operating income by lending their trademarks to product categories that lie outside their sphere of expertise.
That foregone income isn’t captured by conventional accounting measures, and as many companies are focused on leveraging their existing expertise and infrastructure significant opportunities to build their brands and enhance shareholder value lie obscured.
The cost of not harnessing that brand power can be high. Some brand owners could generate royalty income in excess of 20% of their pre-tax operating income by lending their trademarks to product categories that lie outside their sphere of expertise.
That foregone income isn’t captured by conventional accounting measures, and as many companies are focused on leveraging their existing expertise and infrastructure significant opportunities to build their brands and enhance shareholder value lie obscured.
Highgate Partners unlocks that value
By focusing on a brand’s core equities instead of its company’s core competencies we identify new product opportunities that have long-remained hidden.
We craft strategic trademark license agreements between our clients and third-party companies who operate in carefully selected non-core businesses, and who possess the expertise, strategic intent and wherewithal to build successful new product lines under our clients’ brands.
Our clients monetize value that was trapped within their brands and can achieve a host of non-financial objectives for their core business, while keeping internal resources focused on what they do best.
Our principals have developed some of the most successful trademark licensing alliances yet created, and our work includes such legendary brands as: Frigidaire®, Westinghouse®, Bobcat®, Winchester®, California Closets® and Channellock®
Licensing alliances arranged by our management currently generate product sales in excess of US $1 Billion annually.
As a manufacturer, why should I be interested in licensing a brand?
Trademark licensing is for companies who want to market more effectively, by harnessing brands that enjoy instant recognition and acceptance among distributors, retailers and end-users.
The strategic motivations to acquire a trademark license are wide-ranging:
- Launch new products at price points above those which your existing brand(s) can support.
- Launch new products at price points below those of your existing brands, to grow sales without deleteriously impacting the image of your own brands.
- Penetrate new territories where your brands are not well-recognized.
- Replace your existing brand(s) in existing territories with more powerful trademarks to achieve higher market penetration.
- Penetrate whole new categories of products for which your existing brand is not relevant, or not recognized by consumers and resellers.
Licensed trademarks help you grow far more quickly and profitably than would otherwise occur:
- Access a critical marketing tool that would be uneconomic and time-consuming to build in-house, and keep your resources focused on what you do best: developing and marketing new products--not inventing new brands.
- Speed your sell-in to distribution. Retailers and distributors want more products from brands that consumers ask for by name and that perform for them through good times and bad.
- Leverage your existing operational infrastructure in a way that wouldn’t otherwise occur: added sales bring higher plant utilization rates, lower per unit cost, and economies in distribution, etc.
- By directly and more rapidly increasing sales and profits, licensed trademarks raise a company’s market capitalization and attract the investor community.
Licensing also provides you a tool to better manage several types of business risk :
- Proven, trusted brands reduce the risk of new product failure
- You don’t have to share trade secrets and proprietary technology with a venture partner who can later become a direct competitor
- You can test relationships before entering, potentially, into deeper relationships
To Learn More
If the notion of growing shareholder value while keeping your company’s resources focused on what you do best is worthy of further consideration, please call Dennis Anastos or email to dahighgateprtnrs@aol.com to schedule an exploratory conversation.
Address 23 Merwin Lane Wilton, CT 06897
Phone (203) 762-2174
Address 23 Merwin Lane Wilton, CT 06897
Phone (203) 762-2174