tag:blogger.com,1999:blog-7923005810906159036.post8499834863837928225..comments2024-03-27T12:49:05.975+00:00Comments on IP finance: Billabong zeroed as surf-and-skate business skids off courseAnne Fairpohttp://www.blogger.com/profile/02579190868405783459noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7923005810906159036.post-77254251633187507232013-09-03T09:10:27.842+01:002013-09-03T09:10:27.842+01:00Valuing the Billabong brand at zero appears to be ...Valuing the Billabong brand at zero appears to be the product of accounting principles more than a true reflection of its real-world value; although its financial performance may have "bombed" in the last few years, it is still a widely recognised brand with years of accrued goodwill, customer loyalty and proprietary designs. We recently wrote about the value of brands in distressed and insolvent scenarios on the Metis blog, and what we found was that it was typically operational and management inefficiencies which caused businesses to suffer rather than a defect in a company's brand.<br /><br />Perhaps the problem with Billabong - as with so many companies before it - is that it failed to adapt to a changing market landscape. Its rapid expansion via acquisition of new brands and retail outlets, which were largely debt-financed, certainly contributed to its current financial position. But as consumer brands such as HMV have demonstrated, it's possible to revamp a business model and trade on the back of a strong brand name. We've seen this very scenario play out first-hand - having helped arrange the sale of the MFI Group's IP assets, it has since had a successful relaunch as an online-only retailer selling furniture, beds and bathroom suites. It seems then that it's Billabong's business operations which need an overhaul rather than the brand itself. <br /><br />For more comment on the disconnect between brand value and company value, feel free to pop over to our blog at: http://metispartners.typepad.com/the-musings-of-metis/2013/08/insolvency-and-the-hidden-brand-benefit.htmlMichelle Kormanhttp://metispartners.co.uk/noreply@blogger.comtag:blogger.com,1999:blog-7923005810906159036.post-71559674965385893582013-09-02T08:39:18.526+01:002013-09-02T08:39:18.526+01:00There is nothing strange about this zero valuation...There is nothing strange about this zero valuation--any asset can be worth nothing, including an intangible one. There is nothing "holy" about a brand, especially a virtually defunct one like Billabong.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7923005810906159036.post-22254342210542528022013-09-01T12:22:39.740+01:002013-09-01T12:22:39.740+01:00This has nothing to do with reality, it is financi...This has nothing to do with reality, it is financial jiggery-pokery. The two prospective purchasers clearly have the company over a barrel and are looking to pick up a business - which nobody else seems want - for a song.<br /><br />Writing off your principal asset(s) is tantamount to saying that your business is worthless. Is this what they mean by 'creative destruction'?<br /><br />Tom BlackettTom Blackettnoreply@blogger.comtag:blogger.com,1999:blog-7923005810906159036.post-3549925821642896912013-08-29T15:55:00.497+01:002013-08-29T15:55:00.497+01:00I was also puzzled at this news.
If Billabong w...I was also puzzled at this news. <br /><br />If Billabong wants to put its money where its mouth is, I will happily take the Billabong trade marks off their hands at their current value! Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7923005810906159036.post-16601562273143219872013-08-27T18:14:57.041+01:002013-08-27T18:14:57.041+01:00Transaction costs>value => value =zeroTransaction costs>value => value =zeroAnonymousnoreply@blogger.com