There’s a new trend in the branding world (well, not entirely new, but certainly growing in popularity lately) — reviving brand names from the depths of bankruptcy (via the New York Times). Recently, Linens ‘n Things, Sharper Image, Bombay, Halston, and CompUSA have all been given a second chance at life — albeit a shadowy version of their former lives — thanks to liquidators (they prefer to be called “asset recovery specialists”).
So what exactly is going on?
Well-known brands that are victims of corporate bankruptcy are being sold for millions of dollars to help pay creditors as part of the bankruptcy process. Liquidators see value in buying these brand names (Fortunoff and Circuit City are rumored to be next on the list), and then slapping them on new merchandise from different manufacturers. They’re trying to leverage the intrinsic value in the brand names in consumers’ minds.
The ethical question is this — is it fair to offer consumers products with a brand name on them that they associate with a certain value and expectation, which might not actually have the same quality, etc.?
Bankruptcy courts claim the process of selling brand names is valid, because creditors should have every opportunity available to them to recoup their money. So far, consumer rights activists aren’t stepping up to oppose the practice of transferring brand names in this way. What do you think?
Image: Flickr
Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more.
She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
