NAME GAME: DOLLARS & SENSE
Byline: Sidney Rutberg
NEW YORK — What’s the Macy’s name worth?
Ask Weston Anson, chairman of Trademark & Licensing Associates, and he’ll tell you.
The question came up in the R.H. Macy & Co. bankruptcy proceedings last year. At the heart of any plan to be proposed was the value of the firm. The higher the value, the larger the payout for unsecured creditors. The lower the value, the bigger the share of equity the secured creditors would get.
“The secured creditors came up with an evaluation of the Macy’s name and other intellectual property of less than $100 million,” Anson recalled. “The unsecured creditors evaluated the same property at over $1 billion.
“We were called in by the attorneys for Federated Department Stores, which ultimately took over Macy’s, and requested to do an independent evaluation. Our value was about $400 million, which turned out to be within 10 percent of the figure used in the final transaction.”
In a recent interview, Anson conceded that evaluating trademarks and trade names involves a certain amount of guesswork, but “in my case, it’s guesswork based on 25 years of experience and over 2,000 licensing agreements that I’ve negotiated.”
He noted that he doesn’t use “any of that econometric mumbo jumbo based on regression modeling where after all the assumptions and assumptions based on other assumptions, the end result is just a guess.”
The first step in the evaluation process, he said, is to identify all the intellectual property. In addition to trademarks and trade names, there are product names, copyrights, logos and labeling and packaging designs.
Anson said his appraisals were based on a matrix that applies values for such criteria as market share, growth potential, competitive position, margins, the amount of money spent on promotion, prior licensing and an assessment of the potential. Each of 20 criteria is given a rating from one to 10.
“A rating of 200 is perfect, but anything that comes in at 150, you know you have a good property. The next step is to use our data base that identifies specific prior transactions with royalty rates and other financial information.”
He added that after an income stream is determined “that stream is converted into a current value.”
Anson said that in recent years, bankruptcies have been an increasing source of business for him. In addition to Macy’s, he said he was called in to evaluate the Perry Ellis name and trademarks in the Salant Corp. Chapter 11 bankruptcy in 1991 and some of the old Kayser-Roth trademarks, including Excello and Pandora in the liquidation of Wingspread Corp. in bankruptcy court. Anson said the Wingspread trademarks were valued as of 1985 at “less than $5 million.” He declined to disclose the Perry Ellis value because of restrictions in his retainer that barred disclosure, he said.
Anson got involved with the licensing and intellectual property field with Playboy Enterprises. After graduating from the Harvard Business School at the age of 31 (“I worked for nine years before enrolling at the business school.”), Anson joined Booz Allen & Hamilton and did general consulting work. Playboy was one of Booz Allen’s clients, and Anson went with the publishing firm as a vice president in 1975. He spent the next three years building up Playboy’s licensing operation internationally.
“Licensing became the biggest source of cash flow for Playboy,” he said.
In the late Seventies, Anson says he was recruited by Hang Ten as chief operating officer, where he helped convert the firm from a manufacturer to a licensor. “By 1980, Hang Ten was out of the manufacturing business and had over 100 licenses in 45 countries. In addition to Hang Ten, the company licensed out the Lightning Bolt mark. This mark was much more successful overseas than here.”
Anson started his own company about 12 years ago to consult on the strategic use of intellectual property both domestically and overseas, to sell licenses to third parties and to evaluate trademarks and other intangibles.
He has a staff of 14, four in New York and 10 in the La Jolla, Calif. office. He would not disclose financial information, but said revenues of the firm are “under $10 million.”
He says he spends a good part of his time traveling, so it doesn’t make much difference where his headquarters are.
In one recent week, he spent a day in Cincinnati, another in New York, a third in Washington, D.C., and then a day in London and then on to Brussels.
So why is he headquartered in La Jolla?
“I like the climate there.” — Fairchild News Service