David Peress is executive vice president of Hilco
Streambank, a specialist in the monetization and
valuation of intangible assets, including trademarks,
patents, and domain names. He has 20 years of
experience in the corporate restructuring and
distressed investing industry as both an advisor
and investment professional and has structured
and managed debt and equity investments in many
retailers and consumer products companies. Peress
has led sell-side engagements for such brands as
Borders, RadioShack, Berkline, Linens ‘N Things,
Brinkmann, A&P, Garden.org, and Sports Authority.
The repurposing of a retail brand is
often accompanied by a “liquidation”
transaction. To restructure, a retailer
will often need to close a material
number of stores and liquidate the
inventory in those stores through a
store closing or GOB sale. That said, if
this liquidation is managed with an eye
on preserving brand value, it need not
foreclose the opportunity to restructure.
Several recent examples illustrate how
a retail brand can be preserved and
restructured in a liquidation transaction.
In the apparel category, Coldwater
Creek and, in the past month, The
Limited have been transitioned into
catalog and e-commerce retailers
leveraging the Talbots sourcing and
distribution platform. Aéropostale was
acquired by a joint venture comprised
of brand licensing companies and large
mall developers and promptly split
into two companies: one that owns
and licenses the brand (IPCo), and
another that operates the sourcing and
retail distribution business (OpCo).
In consumer electronics, Sharper
Image was transitioned into a product
licensing brand coupled with an
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e-commerce distribution platform.
RadioShack closed thousands of
stores and terminated hundreds of
dealer relationships to emerge as a
co-branded outlet for the distribution
of cellular plans and mobility products,
with licensed operators using the
RadioShack brand in Mexico, South
America, Asia, and the Middle East.
Last month, Direct Buy, a home
furnishings retailer and buying club,
was acquired by a loyalty marketing
and e-commerce platform with the
goal of shifting it into an e-commerce
and store-within-a-store concept.
Each of these restructuring
transactions followed a liquidation
and a sale of assets to new operators
that valued the relationship between
the retail brand and its customers.
These new operators are looking to
leverage consumers’ affinity for the
brand and its brand promise to sell
their products through new channels.
Whether nameplates or product
brands, these retail brands will live on,
generating increased and additional
value for their new owners. J