For almost three decades, film buffs have poked fun at product placement in the film Blade Runner. In the years that followed its release, many of the featured brands ran into commercial difficulties, with two of them – PanAm Airways and kitchenware maker Cuisinart – filing for bankruptcy. Fans suggested that a curse was afoot, and that many of the companies that had licensed their logos to the film wouldn’t survive to witness its 2019 setting. Some even called the film a brands’ graveyard.
In 2013, there are similar mutterings about the UK high street. Already this year, two high-profile chain stores have gone into administration. Camera merchant Jessops collapsed in the face of consumers’ changed photographic habits, now mainly based around mobile devices. And media retailer HMV has struggled to compete with cheaper, online competitors who don’t have to employ as many staff – or maintain expensive leases on town-centre premises.
On 7 February, HMV announced plans to close 66 stores – one quarter of its UK premises – making 930 of its 4,000-strong staff redundant. In that sense, its trajectory as a business is remarkably similar to that of a similar chain, Zaavi. Founded from the ashes of Virgin Megastore, Zaavi traded for just two years prior to liquidation, leaving HMV as the sole, remaining mainstream name in town-centre music and DVD retail. The survivor promptly absorbed Zaavi’s liquid assets.
But even though HMV’s high-street businesses are on shaky ground, its cache of intangibles may yet provide a lifeline.
They call him Nipper
Soon after HMV entered administration, commentators speculated that the amount of goodwill and commercial clout stored up in its trademark holdings could form the basis for a commercial comeback – most likely as a pure-play, online-retail platform. Bloomberg noted that in 2011, HMV’s marks were valued at some £48.7 million, and included a host of sub-brands such as overseas operations, plus spin offs linked with social networking and headphones.
While Virgin Megastore was just one of many avenues for Sir Richard Branson’s prolific branding efforts, and Zaavi’s name seemed to have been conjured out of nowhere, HMV has always had a distinct advantage: the symbolic rendering of a dog staring pensively into the horn of a gramophone. Based upon the 1899 oil painting His Master’s Voice – featuring a dog called Nipper – HMV’s logo is effectively the Mickey Mouse of the music-retail world, carrying on a tradition of specialist knowledge that stretches back decades to its original owner: the Gramophone Company of Britain.
Industry experts in the fields of bankruptcy and brand management rallied to Nipper’s side time and again in a round of January blogs mourning HMV’s apparent demise. Kelly Burton, insolvency practitioner at corporate-recovery specialists Wilson Field, wrote that the ‘trademark dog-and-gramophone image … is one of the first things that springs to mind when I think of HMV’. Matthew Wheeldon, senior consultant at branding consultancy Value Engineers, reminisced about an old set of 78-rpm records that were piled up in a cupboard in his childhood home: ‘The artwork in the central label of each disc was beautiful – a deep-red background with gold script, and the image of Nipper the Dog listening to a gramophone, above the words “His Master’s Voice.”’
However, in another blog, Norwich Business School researcher Richard Rutter noted that HMV ‘seems to have fallen into the trap of an ossified brand, in which traditional trading models are associated with the business itself’. Branding, he stressed, ‘only works in relationship with a sound business strategy’. Clearly, the challenge for HMV is to retain the charm and power that stems from its logo by linking that device to what is publicly perceived as a successful new enterprise. A demanding task – but by no means impossible.
‘A great affection’
By any assessment, the 2009 entry into administration of consumer-goods retailer Woolworths was the first, major high-street bombshell of the downturn era. Active for almost a century, the chain’s bright – almost tabloid – signage had become a leading signifier of town-centre retail, but the company proved unable to manage debts of £385m. Nonetheless, in the view of administrators Deloitte, Woolworths not only had significant brand recognition in its own right, but had conferred that goodwill upon several sub-brands that it had cultivated for specific product lines, such as the children’s clothing label Ladybird.
Having taken on Woolworths’ assets, Deloitte began to parcel them off – and in that process, the trademark holdings were addressed as a separate issue. Not long after administration proceedings began, online-retail specialists Shop Direct purchased the Woolworths and Ladybird brands for a reported £10m – a significant sum for the vestiges of a defunct business. At the time, Deloitte Partner and Joint Administrator Neville Kahn said: ‘We are pleased to have achieved a deal that will enable the Woolworths and Ladybird children’s-wear brand names to continue. It is clear that the British public has a great affection for Woolworths, and we are delighted that the Shop Direct group will be keeping the name alive.’
In June 2009, Shop Direct formally re-launched the brand as woolworths.co.uk, with Ladybird goods on sale through the outlet. In its first half-day of trading, the site attracted 100,000 visitors. Shop Direct chief executive Mark Newton-Jones explained that, while the new-look Woolworths was a ‘very different proposition’ to the high-street version, it would keep the spirit of the original branches alive. ‘We’ve listened to many customers,’ he said. ‘Four categories are very important to them: children’s wear, toys, entertainment and party [outfits] … you will certainly be able to buy children’s clothing [from] Ladybird.’
From marks to domains?
The site is still trading today – proving that Deloitte selected an effective new custodian for the Woolworths brands. As if to underline that point, Shop Direct launched infringement proceedings over the assets in October 2010. The action stemmed from a decision by former Dorchester, Dorset branch manager Claire Robertson to reopen her old store as ‘Wellworths’, complete with the punning tagline, ‘Well worth the money’.
Robertson’s venture was one of several such attempts to keep branches going independently during the administration period – but in the wake of the branding transaction, her store’s identity was no longer compatible with Shop Direct’s commercial aims. ‘Protecting your brand is of paramount importance to every business,’ Newton-Jones commented, ‘and no less so to us with our Woolworths brand.’ Robertson subsequently agreed to a two-year deadline by which she would change the name of her store to ‘Wellchester’. The branch was acquired in August last year by budget-commodities chain Poundland.
Interestingly, Jessops looks set to follow Woolworths’ lead, with news emerging in late January that administrator PwC had sold the brand to Dragons’ Den star Peter Jones. While the price was not disclosed, Jones signalled his commitment to reworking Jessops as a pure-play, online service. Meanwhile, insolvency specialists Begbies Traynor are monitoring 140 further retailers that they consider vulnerable to current market conditions. But the afterlives of Woolworths and Jessops beg the question: will the high-street brands that are continuing to struggle be better known in the future by their domain names?
It’s certainly helpful to have that option. As Catherine LaRooy, Head of trademark watching and domains at leading IP management specialist CPA Global, explains: ‘In such a rapidly changing and volatile retail sector, it’s increasingly important for retail brand owners to be reviewing and assessing their trademark portfolios to ensure they are adequately protected as they move into new channels and face new challenges. What was adequate 10 years ago may not be adequate for a retailer who has developed a stronger online presence or expanded their product offerings to what was beyond their core. It also means that they need to evolve their trademark strategies to better manage and protect the value of their brands in the different retail environments in which they need to operate – and to be increasingly alert to potential trademark infringement in those different environments.’
Of course, any trademark has an inherent value. UK Intellectual Property Office (UK-IPO) spokeswoman Veena Mapara-Popescu told NewLegal Review: ‘When you register a UK trademark, that’s for 10 years. The new company that’s acquiring the trademark is able to renew it. In the end, having a trademark is already value in itself.’
Regardless of whether a company is the originator, administrator or purchaser of a brand, the renewal process is identical – and exists to keep brands with potential from expiring. That process, and the refuge provided by the internet, may also keep Nipper glued to that gramophone for many years to come.
Image of His Master’s Voice painting courtesy of Wikipedia, and the public domain