CoreBrand featured in Brandweek

15 June 2010

James Gregory, CEO, CoreBrand comments on the process of repurposing orphaned brand names and the advantages of doing so.

Opinion: Orphan Brands Need Good Corporate Homes

Original article at Brandweek

Solid brand equity that’s carefully built up over years or even decades is, of course, the commodity that every upstart hopes it will one day have. Chances are you still recognize legendary brand names such as Paine Webber or AlliedSignal. The chances are even better that you recall brand names like Handi Wrap from its having been in your own kitchen drawer. Now, I have a question: How can you build brand equity as strong and durable as that enjoyed by these names?

Here’s one way: You could just buy it.

Unbeknownst to most people, brand names like these are actually available for purchase, and for a lot less than what it would cost to build a reputation and name recognition from scratch. The opportunity to buy and resurrect existing brand equity is a trend that, surprisingly, is not getting much attention these days, but it’s one with considerable promise.

How is it that these names are even available in the first place? In many cases, it’s the result of recent economic conditions that have led hundreds of companies to merge, which in turn has knocked many once-great brands out of the public sphere. (The Paine Webber name, for example, disappeared three years after Swiss bank UBS AG purchased it in 2000.) As a result, the marketplace is populated with what are known as orphan brands.

And orphans, of course, need homes. So instead of investing significant amounts of one’s budget in building a new brand name, entrepreneurs would do well to consider exploiting the existing brand equity that resides in names we, as consumers, once favored and still remember fondly. More importantly, recycling brand equity can be a smart use of precious marketing dollars if the acquired name will give its new owner a boost in brand power while not detracting from the company’s core concept.

Once the orphan brand has a new owner, the possibilities are manifold. Some firms purchase them with an eye toward updating and relaunching the same kind of products once sold by the extinct companies. Others buy the brand name and introduce a completely new product by transferring the brand and its corresponding equity to their latest line of merchandise.

The orphan brands themselves fall into two categories — corporate brands and product brands. What many marketers don’t realize is that hundreds of orphaned brands are immediately available for acquisition or licensing at a fraction of the cost and time — and not to mention legal headaches — of creating a new name.

CompUSA is a case in point. The company went bankrupt, but the brand name was later sold for $30 million to Systemax, which also bought the defunct Circuit City store brand for $16 million. Both purchases are working extremely well for Systemax, which is using these brands for online services and 32 reopened CompUSA locations.

The resuscitation of still-potent brand trademarks is likewise a growing trend. Duck Head was a quirky fashion brand that started back in 1865 making trousers out of “duck cloth” (used mainly for tents) and eventually grew into a leading maker of khaki pants for prep schools. Bought and sold over the years, Duck Head landed in bankruptcy court in 2009, where apparel executive Ross Sternheimer snapped it up for the bargain price of $2.6 million. Cases like this, in which tens of millions of dollars were invested over decades by the original brand to build relationships with its consumer base, demonstrate the promise that orphan brands have for the consumer-goods category.

My company has gathered a considerable number of retired but stalwart brands (among them Short & Sassy, American Brands and even classics like DeSoto and Victrola), and many financial services and bank corporate brands (Bowery Savings Bank and European American Bancorp) are also on the market.

Our past experience demonstrates that it is often more cost effective to transfer the existing brand equity from a brand name to a new company or product rather than invest the sums necessary to build the requisite “familiarity and favorability” required to establish an entirely new identity. During the SBC/AT&T merger, my firm was asked to analyze the relative brand strengths of the two corporate brands. Usually, the acquiring company (SBC, in this case) becomes the surviving brand name. But the AT&T brand had significantly more familiarity to the public, with only slightly less favorability. The bottom line: It was a better investment to deal with AT&T’s favorability issue than to build the familiarity and favorability of SBC.

Recognizing the brand as a business asset will help senior management see the tremendous value that resides in heritage brand names. Certainly, acquiring a retired brand name isn’t the solution in every instance. If the brand name has been damaged by crisis or mismanagement, it makes no sense to associate it with your product line. There’s Enron, for example. Unquestionably, it has tremendous name recognition — but for all the wrong reasons. Obviously, thorough research is required before making any acquisition. Some companies prefer to invest the effort and time needed to build a brand from scratch. But for others, snapping up an orphaned brand might be the smartest purchase they’ll ever make.

James R. Gregory is the founder and CEO of CoreBrand. You can reach him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .